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The Factors That Affect The Prescription Behavior

4500 words (18 pages) Essay in Marketing

21/04/17 Marketing Reference this

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The aim of the study is to investigate the factors that affect the prescription behavior of doctors. As generic medicines are taking the market share of big branded one, the latter is trying to review their strategies in order to get back their market share. Mauritians are price conscious nowadays, they will look for better prices for the purchase of their needs and wants and even doctors would prefer to prescribe cheaper medicines in order to attract more of their customers. But what innovator firms are trying to do, is to eliminate generic firms from the market by hook or by crook. So this study will be more focus on the possible alternative Marketing mix strategies that can be adopted by generic firms in Mauritius in order to survive in this fierce pharmaceutical market. The research objectives were to analyze the factors that influence prescription behavior of doctors and to identify if mobile marketing and digital platforms (social media) are means for staying in this competition. Conceptual frameworks will be used. Both exploratory and descriptive studies will be used. The population would be consisted of general practitioners and some pharmacists. The sampling method would be stratified sampling. Data analysis would be done using SPSS 20 statistical software. Descriptive statistics, cross-tabulation, hypothesis testing will be done.

1.0 INTRODUCTION

1.1 Introduction of the study

The pharmaceutical industry is an important sector in the worldwide economy. Indeed, it is considered as one of the most dynamic and fast growing industries. The pharmaceutical industry consists of numerous players, all of whom hold only a small market share of the industry. The 2009 global 500 lists 12 international pharmaceutical companies (table 1.1).

The fortune global 500 report also shows that Milan is the highest profit achiever with 48.4 % profit change from 2009. Eli Lilly was ranked as the second highest with 17.1% followed by Johnson & Johnson with 8.7% and Biogen Idec with 3.6% and so on. Consequently, big firms Pfizer and Merck had encountered a decreased in the percentage change from 2009.

The Pharmaceutical industry is now facing a lot of serious challenges. Patents on major drugs continue to expire while companies struggle to produce innovative break through to offset the impact of generic substitutes. The regulative environment is becoming more intense as the food and drug administration

(FDA) looks to impose more effective safety standards in approving new drugs. In addition, rising anger over the price of prescription drugs and calls for lower prices may lead to further reduction in revenue growth. These challenges facing the brand name pharmaceuticals are considered as promising opportunities to grow for another sector in the pharmaceutical industry, the generics. Patents expiration means the ability of generics to produce and sell more and more pharmaceutical products at lower prices. The increased focus on generic drugs as cost effective alternatives to the expensive brand name drugs along with the very high growth rates of generics have made the Federal Trade Commission in cooperation with the FDA to put new rules that ensure timely access of consumers to generic pharmaceutical products and to ensure that consumers are protected from potentially anti-competitive arrangements between brand name and generic drug makers. These rules are widely known as the Hatch – Waxman act. Lately, in the pharmaceutical industry, there are many trends taking place. One of them is the generic drugs and the other being the globalization of generic medicine. Generic Medicines are taking the market share of branded medicines around the world, so big Pharmaceutical companies have turned to underhanded practices to get these cheaper drugs out of the market

1.2 Background of the study

The Pharmaceutical industry plays an important role in the world’s economy, as well as in ensuring the welfare of its citizens. It is apart from other industries since it offers the world population cure and alleviation from disease and contributes to the economies of many nations.

In Mauritius, the pharmaceutical industry consists of a public sector as well as a private sector. The Public sector comprises of hospitals, dispensaries, area heath sectors and medi-clinics. The latter is free of charge and accessible to the public. Moreover the medication is free of charge for the patients. Doctors working in the public sector do not have the right to do private practices expect specialist doctors who are authorized to do so after working hours (4 p.m). The public sectors buys all drugs through tenders and the doctors working there cannot prescribe drugs other than that available in the hospital. Hospitals usually look forward to have business with generic pharmaceutical companies because of cheaper quotations. On the contrary, in the private sector, the patients have to pay to consult a doctor, whether it is a specialist of a general practitioner. These doctors are free to prescribe drugs of their choice that the patient can buy in any drug house. Most Pharmaceutical companies focus their marketing mix on these doctors for prescription drugs and on pharmacies of OTC products so as to conquer the maximum market share as well to be more profitable. POM and OTC drugs are the two major types of pharmaceutical products. POMs are licensed medicines regulated by legislation, and requiring a prescription for purchase. On the other hand, OTC drugs are medicines directly sold to patients without any prescription from doctors.

The study will be focused mainly on prescription drugs where the market involves a complex buying and decision making process. So, private doctors will be my main focus since they are the ones to prescribe drugs and followed by Pharmacists who are also responsible for the success of some generic pharmaceutical firms. Moreover, this study will mainly focused on the marketing mixed strategies used by Generic pharmaceutical firms and how they influence the prescription behavior of doctors in Mauritius.

1.3 Statement of problem

Since Generic pharmaceutical market is getting bigger day by day, they will be more competitors in the pharmaceutical market. This in turn resulted in very tough competition both against brand name manufacturers and within the generic industry itself. Of course, this highly competitive environment relies mainly on price differences and will definitely lead to price wars among all Generic Pharmaceutical Companies. The problem is that for generics to rely on cost leadership and hence lower selling prices as a sole competitive strategy will lead definitely to industry exit by many companies due to low profitability.

Moreover, physicians and pharmacists prefer to dispense generic medicines and this has a great negative impact on the innovators companies where their sales, profits and market share were affected. Consequently the innovator companies will decrease their expenditure, budget, reduce headcounts and spend a lot of money in implementing new strategies and conduct various promotional activities in order to keep their market share and maintain their profits.

So, Generic Companies must find other competitive marketing mixed strategies to differentiate themselves if they are to survive in this highly competitive environment.

1.4 Significance of the study

1.4.1 Objectives

To study some of the various marketing activities related to the pharmaceutical market in Mauritius and in particular

Branding strategies

Pricing strategies

Promotion strategies (sponsorship, gifts etc)

Analyze the appropriate marketing mix strategies for generic companies working in Mauritius.

To study the cost leadership as a generic strategy and its effectiveness for generic companies working in Mauritius.

From the doctors’ responses, identify if the use of mobile marketing and other social Medias (Facebook, msn, yahoo, Skype…) will be a competitive advantage.

From the doctors’ responses, formulate other generic strategies that can be adopted by generic Pharmaceutical companies working in Mauritius.

1.4.2 Research Questions

To serve the purpose of this study we shall address the following research questions:

What are the possible marketing mix tools that can be used by the Generic Pharmaceuticals?

Is the cost leadership as a competitive strategy sufficient alone for generics to survive in this highly competitive industry in Mauritius?

What other Marketing mix strategies that can be adopted by generic pharmaceuticals working in Mauritian Market?

1.5 Hypothesis (Assumptions)

The following hypotheses based on the objectives of the study have been formulated:

Hypothesis I

Ho: Prescription behavior is not affected by distribution Characteristics

HA: Prescription behavior of doctors is affected by characteristics

Hypothesis II

Ho: Prescription behavior of doctors is not affected by promotion

HA: Prescription behavior of doctors is affected by promotion

Hypothesis III

Ho: Prescription behavior of doctors is not affected by medical representative skills and relationship characteristics.

HA: Prescription behavior of doctors is affected by medical representative skills and relationship characteristics

Hypothesis IV

Ho: Prescription behavior of doctors is not affected by product characteristics

HA: Prescription behavior of doctors is affected by product characteristics

Hypothesis V

Ho: Prescription behavior of doctors is not affected by drug cost

HA: Prescription behavior of doctors is affected by drug cost.

Hypothesis VI

Ho: Prescription behavior of doctors is not affected by sampling

HA: Prescription behavior of doctors is affected by sampling

Hypothesis VII

Ho: Prescription behavior of doctors is not affected by frequency of visit of medical representative

HA: Prescription behavior of doctors is affected by frequency of visit of medical representative

Hypothesis VIII

Ho: It is not important to implement mobile marketing in the pharmaceutical marketing mix strategy

HA: It is important to implement mobile marketing in the pharmaceutical marketing mix strategy.

Hypothesis IX

Ho: It is not important to implement social platform and other digital platforms in the marketing mix strategy.

HA: It is important to implement social platform and other digital platforms in the marketing mix strategy.

2.0 LITERATURE REVIEW

This chapter presents theories pertaining to the stated research questions. The theories will cover the most important elements of the marketing mix and their implication on the generic pharmaceutical industry. This chapter will also discuss the different competitive strategies and the possibility to adopt them to the generic pharmaceutical industry.

2.1 Introduction

The pharmaceutical industry is a large and important industry worldwide, where its practices have direct impact on the welfare of patients in specific and the society in general (Manchanda & Honka, 2005). The pharmaceutical market is characterized by the phenomena of derived demand, where the end consumer of the product is not necessarily the decision maker in the purchase process. The process is controlled by the patients‟ physicians, where physicians act as gatekeepers or intermediaries who decide whether or not a purchase will be made and if so, which drug will be purchased through prescriptions (Zelnio, 1982). Thus, the pharmaceutical industry is characterized by multiplicity of market players including physicians, medical representatives, patients, insurance companies, government, health organizations etc. Moreover, the industry is highly regulated and monitored by various institutions including health organizations on a national and international level (Carter & Chitturi, 2009).

There are two major types of pharmaceutical products, prescription only medicines (POM) and over-the-counter drugs (OTC). POMs are licensed medicine regulated by legislation, and requiring a prescription for purchase. On the contrary, OTC drugs are medicines directly sold to patients and not requiring a prescription from a healthcare professional, i.e. physician. This paper will solely study marketing techniques tailored for POMs. The researcher chose to study the POM market because it constitutes the main sector of the international pharmaceutical industry; and it is challenging for research because it involves a complex buying and decision making process where patients can only dispense POMs with a physician’s‟ prescription (British Medical Association, 2006). The pharmaceutical industry is characterized by multiplicity of market players including physicians, medical representatives, patients, insurance companies, government, health organizations etc. Since physicians are a key determinant for the prescription of POMs (Huh & Langteau, 2007); hence the literature review will discuss all the marketing mix strategies used by pharmaceutical firms to influence the Doctors’ prescription behavior.

2.2 The followings are some of the findings done by researchers on the traditional marketing mix strategies used by pharmaceutical firms:

Irin P. et al (2009) emphasized the need for continuous marketing research .There is a real need of continuous pharmaceutical analysis, because it is essential for success to understand the uniqueness of the pharmaceutical industry benefiting of the complex and iterative process that carefully builds a pharmaceutical data warehouse, this being considered a necessity to the strategic direction of any pharmaceutical company facing increased competition and external pressure.

The study done by Morgan M.A. et al (2006) shows that Acceptance of drug samples was judged to be ethical by almost all respondents and acceptance of a lucrative consultant ship by just over a half. Respondent s seem to believe that the average doctor is more likely to accept most items and is more likely to be influenced in his or her prescribing practices by accepting an item than they are.

A useful study by Gonul et al. (2001) explored the impact of visits by sales representatives and samples, on prescribing. However, the study also showed that excessive detailing or samples did not increase sales further, and that doctors who saw a high proportion of Medicare or Health Maintenance Organization patients were less influenced by promotion.

Garima Malik (2011) Said in their study of sales promotion of Dabur India Limited in Indian rural market that the success of business in India will be decided in the future by its success in the heart of India that is the rural market.

Harris G., (2009) said that Overall, there is clearly a substantial, though variable, effect from one-to-one drug information delivery. This study adds to our knowledge of the subject and reminds us that there is no such thing as a free lunch; these visits really do result in increased sales.

Dr Rajan T. D. believes that the regular visit by a medical representative as per him, ―Name is not all what it takes to get into the mind space of a busy doctor. Every product, old or new, requires extensive marketing. Any busy consultant will vouch that if a particular company’s medical representative (MR) fails to show up for over a month, he suspects the availability of the products of that manufacturer.

Charlene Prounis (2003) has excellently expressed that the relationship between pharma field force and doctors is very important and crucial part Major changes are in the works for sales force and pharma company relations with doctors. If companies fail to address sales reps’negative image, physicians-and possibly governments-are likely to further restrict, or even terminate, the doctor- rep relationship. But companies can take steps to strengthen that bond. Doctors may be unhappy about pharma’s huge field force, but they understand that reps have a job to do. Better pharma marketing will make doctors and reps happier. And both sides will benefit. As per Jayakumar, (2008) usual marketing practices followed by most of the large and mid-sized companies include valuable gifts, arranging foreign trips with family and complimentary tickets and memberships for social activities to doctors.

Verma (2004) has highlighted one of the important points of give and take relationship as per study, Social scientists describe and the pharmaceutical industry follows the, “norm of reciprocity” i.e., the obligation to help those who have helped you, as one of the fundamental guiding principle of human interactions. It is not surprising, therefore, that pharmaceutical companies rely on this principle of human nature by giving gifts to doctors in hope that they will prescribe their firm’s product in return.

2.3 Digital Plateform

Pharmaceutical companies need to employ a multichannel approach to fulfill their Physician’ marketing objective in 2012. Digital in this scenario is becoming the big trend with innovative and integrated solutions. The vast majority of physicians today are digitally active, accessing multiple devices and networks as part of their day-to-day activities. Physicians are increasingly interested in video and social media for personal and professional usage. According to Manhattan Research, 81% of Physicians are expected to own a smart phone by 2012, 79% of Physicians have watched Video clips online and 72% of the Physicians engage in social media, either for personal purposes, professional or both.(UBM Medica-HCPs and social media) (Source: Manhattan Research, 2012)

3.0 RESEARCH METHODOLOGY

This section describes the methodology that will be followed to address the hypotheses or research questions. It includes the research design, sampling method, data collection procedures, research instrumentation and related data analysis

3.1 Research Design

Research design provides the basic direction for carrying out a research project so as to obtain answers to research questions. A descriptive research design will be adopted for this study as it involves a collection of quantitative information by conducting a survey. The descriptive research design will thus make predictions and analyse the behaviour of Mauritian consumers with respect to the survey.

3.2 Population and Sample

3.2.1 Target population

A research population is a well-defined collection of individuals or objects known to have similar characteristics. All individuals or objects within a certain population usually have a common, binding characteristic or trait. (http://www.experiment-resources.com/research-population.html) The target population for the study will include a representative sample of the Mauritian population. This sample will include Mauritian consumers within different age groups, different locality and different professional backgrounds.

3.2.2 Sampling Method

A sample is simply a subset of the population. The concept of sample arises from the inability of the researchers to test all the individuals in a given population. The sample must be representative of the population from which it was drawn and it must have good size to warrant statistical analysis. (http://www.experiment-resources.com/research-population.html)

Thus, it is of great importance of ensuring that the appropriate sampling techniques and to design the sampling method to minimize any error or response bias.

The appropriate sampling technique that will be adopted for this study will be a quota sampling so as to be able to achieve surveys with consumers of different age groups, different regions and professional backgrounds.

3.2.3 Sample Size

To determine the sample size we will need to calculate the necessary sample size for a different combination of levels of precision, confidence level (95%), and variability. The confidence level tells you how sure you can be. It is expressed as a percentage and represents how often the true percentage of the population who would pick an answer lies within the confidence interval.

The level of precision also known as the sampling error is the range in which the true value of the population is estimated to be. The 95% confidence level means you can be 95% certain. This range is often expressed in percentage points, (e.g., ±5 percent). A proportion of 0.5 indicates the maximum variability in a population. Slovin’s formula is used to calculate the sample size (n) given the population size (N) and a margin of error (e).Therefore the Solvin’s formula, as described below, will be used to calculate the sample size at 5% level of precision.

n = N / (1 + Ne^2)

Hence the sample size for this study will be 200.

3.3 The research Instrument

The research instrument for this research study will consist of a structured questionnaire so as to prompt relevant information from the respondents, which will constitute primary and secondary sources of data.

Through the means of structured questionnaires, responses can be gathered in a standardized way and furthermore it is quicker to collect information using a questionnaire; potentially useful information can be collected from a large portion of a group. It’s cost-effective, easy to analyse, reduces bias and is less intrusive than other survey methods. People participating in surveys can complete them whenever they want. They’re also more likely to respond honestly to questions if they know their answers are anonymous.

An open-ended question will encourage the respondents to give a full, meaningful answer while using his knowledge and/or feelings. Whereas, a closed-ended question provides the respondents with a list of answer choices from which they must choice to answer the question. For this particular study, the questionnaire will include both open ended and closed ended questions. The close ended will comprise of dichotomous, multiple choice response, as well as likert scaled information and ratings.

The questionnaire will consist of four main sections where:

Section A will illustrate the about the factors affecting the Prescription behaviour. (Promotional sources, relationship, price, product characteristics and distribution channels)

Section B will illustrate the traditional detailing, skill of detailing of medical representative and the promotional incentives offered by pharmaceutical firm

Section C will be focused only if whether or not doctors use digital platforms for medical research. (I-pad, smart phone and social media)

Section D will be mainly on Demographic characteristics of the respondents.

3.4 Data Collection Method

The choice of data collection mode influences the extent to which the data are affected by each type of non-sampling error and is influenced by the data collection strategy, the type of variables involved, the accuracy required and the data collection points. (http://eprints.ncrm.ac.uk/418/1/MethodsReviewPaperNCRM-008.pdf) Therefore, a survey method will be adopted for the data collection as this particular research will involve a quantitative phase which will involve the use of a structured questionnaire. Coverage error (also known as sampling frame bias) occurs when not all members of a target population have an equal chance of being selected in the survey sample. This type of error tends to be lower for survey methods that are able to make use of more comprehensive lists for sampling purposes.

Data will be collected by scheduling meetings with the different targeted persons identified for the quota based sampling where the questionnaires will be either distributed to the targeted respondents, to be ultimately collected a few days later or will be filled on the spot by the respondents with the help of the interviewer.

3.5 Validity and Reliability

Validity is the extent to which a test measures what it claims to measure. It is vital for a test to be valid in order for the results to be accurately applied and interpreted, whereas Reliability has to do with the quality of measurement. In its everyday sense, reliability is the “consistency” or “repeatability” of your measures. Validity and Reality will be taken into serious consideration for this study

3.5.1 Pre Testing

For a pilot test for many surveys is done for the purpose of testing the full implementation procedures. Pilot tests are usually conducted well in advance of when the survey will be fielded so as to identify and eliminate problems prior to the field phase. 10% of the sample size will be used for pilot testing prior to the data collection phase. The pilot testing will be used for pilot testing prior to the data collection phase. The pilot test will be used to check questions relevancy, by that respondent understands all questions and its rationale behind.

3.5.2 Reliability of data

Reliability of data is used to check for internal consistency of data which is measured using ‘coefficient alpha’. A reliability coefficient of .70 or higher is considered “acceptable” for research study. Therefore, for the purpose of this study a Cronbach’s alpha of 0.7 or higher will be considered acceptable, and that below 0.75 was regarded as multidimensional. The standardized Cronbach’s alpha is as follows:

3.6 Data analysis and interpretation

The data file will then be organized and analysed employing the SPSS software version 16.0. Both descriptive and inferential statistics will be used for analysis where descriptive statistics will include frequency, percentage, mean and standard deviation. Inferential statistics will include regression analysis, correlation, chi square, T-test, ANOVA. Significant tests will be conducted at 5% level using p-value as indicator for both significance and hypothesis testing where;

Indicator for significance:

P-value less than 0.05 = statistical significance

P-value greater than 0.05 = no significance

Indicators to be used for hypothesis testing:

P-value less or equal to 0.05 = reject Null hypothesis (H0)

P-value greater than 0.05 = do not reject Null hypothesis (H0)

4.0 EXPECTED OUTPUTS

The following results might be expected:

Personal selling through medical representative visits and detailing as a powerful tool do influence doctors’ prescription behaviour.

Factors like packaging, availability, stock and expiry date of products also influence doctors’ dispensing behaviour.

Product characteristics (efficacy, side effect, etc…) do influence the prescription behaviour of doctors.

The frequencies of visit of medical representatives do influence the doctors ‘prescription behaviour.

Sampling has a great impact on doctors’ prescription behaviour

Tools like clinical trials and studies regarding a certain medicine do have a great impact on doctors; prescription behaviour.

Doctors are interested in the publication of generic medicines in medical journals.

Building close relations with doctors through public relations activities like table meetings, seminars and presentations are considered as an effective promotional activity.

The use of ipad for detailing is an innovative tool to grab doctors’ attention and is much appreciated by doctors.

Doctors prefer to dispense cheaper medicines to Mauritians.

Nowadays, Most of the doctors are using smart phones and ipad for medical updates.

Many doctors use social media for queries and update about medicines.

5.0 ETHICAL CONSIDERATIONS

In order to protect confidentiality, the data collected will not be revealed to others expect in the form of processed data/information without detailing the identity of the individual responses. Relevant permission will be sought from the concerned authorities prior to administering the questionnaires.

6.0 LIMITATION OF THE STUDY

The limitation of the study is that not all the targeted doctors will respond due to time constraints. However, the data collected from respondents will be analysed and interpreted within the limited framework allowed.

7.0 CONCLUSION

This study will try to identify the key factors of the marketing mix that really has a great impact on doctors’ prescription behaviour. It will also help generic companies to identify the main influencing factors which might make them be competitive. Personal questions concerning the type of mobile phone used and for which purpose, will try to find out if mobile marketing could be implemented as an important tool for the marketing mix strategies.

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