Examining the Effect of Marketing Promotional strategies of Pharmaceutical Companies on Doctors’ Prescription Behaviour

 

Madhusudan Narayan¹, Dr. Birajit Mohanty², Mahesh Kumar¹

¹Research Scholar, Department of Business Administration, Manipal University Jaipur.

²Associate Professor, Department of Business Administration, Manipal University Jaipur.

 

ABSTRACT:

This research focuses on the marketing promotional tools used by pharmaceutical companies in India and how doctors respond to all these marketing strategies in terms of their prescription behaviour. Simple random sampling method was chosen for selection of samples. Out of a total of 180 questionnaires sent to different cadres of physicians/ doctors in the city of Rajasthan either in person or through e-mail and only 152 responses were received in complete form. The gathered data were processed through SPSS. The detailed analysis of the study revealed that about 62% of doctors admit to being influenced by promotional strategies employed by pharmaceutical companies. Further, irrespective of forms of marketing and drug promotion by pharmaceutical companies, the socioeconomic status of the patient remained a key consideration in the prescription of medication. The results of chi-square test revealed a significant difference in the perception of different cadre of doctors on need for drug presentation as a marketing promotion tool and benefit for attending drug presentation/product launches.

 

 

 

1.    INTRODUCTION:

Marketing promotion basically refers to diverse marketing communication, both verbal and visual, intended to inform or persuade target audiences of the relative merits of a product, service, brand or issue. The basic purpose of marketing promotion aims at increased awareness, creating interest that results in generating sales and ultimately create brand loyalty. It is, in fact, one of the basic elements of the marketing mix, which includes the four Ps, i.e., product, price, place, and promotion (McCarthy 1964). Therefore, promotion is one of the elements in the promotional mix. These can be categorized as personal selling, advertising, sales promotion, direct marketing, publicity, event marketing, exhibitions and trade shows (Rajagopal, 2007). Indian economy has brought many challenges and opportunities for different business houses in post LPG era.

 

Technological innovation, fierce competition at global arena coupled with varying needs of the consumers are continuously changing the competitive paradigms. This compels all enterprises to understand the complexities and requisites of market forces to constantly innovate and stay competitive in the market.

 

1.1 Overview of Indian Pharmaceutical Market and Marketing Promotion:

The Indian pharmaceuticals market is the third largest in terms of sales and thirteenth largest in terms of market value (Equity Master Report, 2017). India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume. Of late, consolidation has become an important characteristic of the Indian pharmaceutical market as the industry is highly fragmented. India is one of the important players in the global pharmaceuticals market. The country also has a large pool of scientists and engineers who have the potential to take the industry to a higher level. The Indian pharmaceutical companies basically follow the drug promotion strategy defined by the World Health Organisation. Drug promotion has a significant bearing on the prudent use of drugs; on drug price-control mechanisms, the manufacture, availability and use of essential drugs, on equity of drug distribution and the cost of health care services. Therefore, it becomes an issue of public health. As pharmaceutical companies invest a large sums of money promoting their products, they employ a multipronged approach for drug promotion, incorporating techniques such as product detailing by medical representatives of pharmaceutical companies. Although these practices have been in practice, there is little evidence about the attitude of physicians concerning their interaction with the pharmaceutical industry. In India, pharmaceutical companies, especially those that deal with prescription drugs operate in a very competitive environment because of the existence of various brands of generic drugs. The competitive nature of the business environment makes it mandatory for them to develop and implement strong promotional strategies in order to gain and maintain a reasonable share of the market. Pharmaceutical companies in India basically follow “Below the line” marketing strategy where they are not focusing on direct user instead they target the doctors. Generally, pharma companies use following tools as their marketing strategy, such as Product Samples, Product Literature, Product related give away, etc. Besides, Sales Promotional Officers (SPOs) are the most important tools for the promotion of the product directly to the prescriber (Landau R, 1999). The expenses in this regard hovers around 15-20 per cent of the product budget. With the changing global order, this old trend has been changing very fast and in significant manner in order to decrease the fixed cost that is occurring in terms of sales compensation. In addition to this old practice, digital promotion through Internet and other online platforms has become the need of the changing world. This paper examined the marketing promotional strategies of the pharmaceutical companies with particular emphasis on the ones targeted at the doctors to ascertain their effect on the prescription habits of the doctors.

 

2.     REVIEW OF LITERATURES:

There are also few available literatures which establishes a direct link between promotional measures of pharmaceutical companies and prescription behaviour of physicians. These studies found marketing strategies of pharmaceutical companies positively influencing prescription behaviour of the physicians as frequent visits by MRs provide information on potency and side–effects of the drug to the physician. These promotion tools provide knowledge, increase product awareness, and helps in information acquisition. Further, free drug samples also seems to produce a positive and meaningful influence on the drug prescribing decision.

 

Taneja (2008) in a cross sectional study with a sample of 523 physicians observed that various marketing tools has positively influenced the prescription habit of physicians which ultimately helped the companies to increase sale. Naik et al. (2009) observed detailing by MRs and direct promotion tools influencing the prescribing behaviors of the physicians which is mediated through formative training and guidelines in USA with a sample of 25 physicians. Kotwani et al. (2010) in their study with 36 Physicians in the public and private sectors in India found marketing by pharma companies through Medical Representatives (MRs) as one of the important factors identified for antibiotic prescriptions by physicians. Lieb and Scheurich (2014) in a study with a sample of 160 doctors in Germany found less than half of the doctors believed that they received adequate and accurate information through drug detailing by MRs and other promotional tools like drug samples, dinner invitations, sponsoring events that influences their prescribing attitude. De Ferrari et al. (2014) in their study of five different departments, clinical and public hospital found that 88% of respondents disclosed that they believe receiving gifts or going for company sponsored lunches do not affect their prescribing behaviour. Drug samples are the most received and ethically accepted benefit. Ibrahim et al. (2015) in a study in South Arabia with 106 physicians found media advertising and frequent visits from pharmaceutical sales representatives are the most influencing prescription behaviour practices. Negash and Adamu (2017) observed sales promotion and personal selling strongly influencing prescription attitude of the physicians from among a host of promotional tools used by companies in Ethiopia. There are few studies that were carried out in developing countries, which examined the frequency of visits by MRs, effectiveness of MRs visit, promotion tools (gifts and others) that influences the prescription habit of doctors. A study conducted by Pinckney et al. revealed 72% of American physicians received free drug samples. The results also reported that 94% of doctors working in for-profit clinics and 50% of prescribers in non-profit hospitals have free drug samples in their offices. Both prescribers and manufacturers in the US believe that sample drugs provide a financial benefit to patients and largely serve to help patients who are unable to afford their drugs. ICT promotional tools such as information formulary and other ICT marketing tools that include advert placements in clinical software and emailed information influenced prescribing behaviour of the physicians; however, their impact was found to be relatively moderate in a study in Australia (Henderson et al. 2008).

 

There are also few literatures which examined no clear cut evidence of direct link between promotional measures of pharmaceutical companies and prescription behaviour of physicians. It means interaction with the pharmaceutical industry does not influence their prescription behaviour. Some studies found that, while doctors may acknowledge that such interaction may influence others, they believe it does not influence them personally. Despite that, MRs consists of the key promotional tool of the pharmaceutical industry receiving one-third of total marketing expenses (Gagnon and Lexchin, 2008). In another study by Oshikoya et al., (2011), physicians considered the medical representatives as “information providers” and physicians’ expectations about promotional programs from drug companies included reliable educational publications, medical equipment, free drug samples, financial support for training courses, social events (e.g., dinners, trips) and gifts for private use. Further, Wang and Adelman (2009) stated that MRs has a minimal effect on physicians’ prescribing in the US.

 

2.1 Problem Statement and Research Questions:

The empirical results are, however, inconclusive. Empirical evidence relating to the association between marketing promotional strategies and prescription habits of the physicians is very limited. However, none of the studies has empirically analyzed relationship between marketing promotional strategies and prescription habits. This gap in the existing literature calls for a study to examine whether the marketing promotional strategies influence prescription habits of physicians. This study was motivated by two reasons: the lack of consistent evidence due to mixed results in previous literature and the scarcity of research in Indian context. Therefore, this study intends to focus on the following research questions;

·       What are the current marketing promotion by pharmaceutical companies in India?

·       How is it influencing prescribing habits of physicians?

 

2.2 Objective of the Study:

·       To study the current marketing promotional strategies used by Pharmaceutical Companies in India

·       To examine the effect of marketing promotional strategies of these companies on doctors’ prescription behaviour.

 

2.3 Hypotheses of the study:

H₀₁: There is no difference in the perception of different cadre of doctors on need for drug presentation as a marketing promotion tool.

 

H₀₂: There is no difference in the perception of cadre of doctors on benefit for attending drug presentation/product launches.

 

2.4 Scope of the Study:

This study examines the association between marketing promotional strategies and physician prescription behavior in the pink city of Jaipur in India.

 

3.    RESEARCH METHODOLOGY:

3.1 Sampling Technique and Study Design:

Random Sampling technique was used to select the samples. This study is based on both qualitative and quantitative method of research. Questionnaire methods have been used for collecting data for research. Observation has been conducted through semi-participant methods.

 

3.2 Population:

The frame of reference includes both male and female medical practitioners in the city of Jaipur

 

3.3 Sampling Procedure and Sample Size:

The simple random sampling method was chosen for selection of samples. A total of 180 questionnaires were sent to different cadres of physicians/ doctors in the city of Rajasthan either in person or through e-mail and only 152 responses were received in complete form. Thus, the sample size of the proposed study is 152. Data was collected through survey and interviews depending upon the time and availability of the resources and respondents.

 

3.4 Sources and Tools of Data Collection:

The data for the study were collected from both primary and secondary sources. The data collection from the primary sources include interview with respondents through a semi-structured pre-tested questionnaire. The questionnaire covered personal, demographic, social and economic information, details of participants’ perception. The secondary sources include reports and documents, articles, journals, books and Internet.

 

3.5 Data Analysis:

The data collected from primary and secondary sources were analyzed by using both qualitative and quantitative methods. The data has been presented in the most lucid manner i.e. in tabular format with percentage. Appropriate statistical tools were also used depending upon the quality and nature of the data and interpretations thereof was made accordingly. SPSS package was used to analyze the data.

 

4.    RESULT AND DISCUSSION:

4.1 Distribution of Respondents by Cadre of Doctors:

A total of 152 questionnaires were returned duly completed out of 180 questionnaires and the response rate was 84 per cent. The distribution of respondents by cadres is presented at Table-1. A perusal of the data presented in the table revealed that 75 per cent of the respondents were males while 25 per cent were females. A probe into the cadres of respondents revealed that 51.33 per cent of the respondents were Resident Doctors, 22.33 percent were House Surgeons, 18.42 per cent were Medical Officer and 7.89 per cent were Consultants. Further, a glance at the gender-wise distribution of respondents, it was found that maximum number of respondents belonged to Resident Doctors category and the minimum was noticed in case of Consultants. A gender-wise comparison of samples across cadres of doctors reveals the same pattern.

 

Table 1: Distribution of Respondents by Cadre of Doctors

Cadre of Physicians/Doctors	No. of Sample (%)		Total (in %)
	Male	Female
Consultants	10 (6.58)	2 (5.26)	12 (7.89)
Medical Officers	18 (11.84)	10 (26.32)	28 (18.42)
House Surgeons	32 (28.07)	12 (31.58)	34 (22.36)
Resident Doctors	54 (47.37)	14 (36.84)	78 (51.33)
Total	114 (75%)	38 (25%)	152 (100%)

 

4.2 Perception of Respondents on Most Targeted Cadre of doctors by Pharmaceutical Companies:

Perception of Respondents on Most Targeted Cadre of Doctors by Pharmaceutical Companies is presented in Figure-1. A bird’s eye view of the data revealed that most targeted cadre of doctors were found to be Consultants (45%), followed by Resident Doctors (43%) and the least targeted were House Surgeons in most of the hospitals in the study area. The respondents believed that the

 

Consultants who are at the highest level of medical hierarchy, were the most targeted group by the pharmaceutical companies. Because they are considered as key professionals who can influence the medicine fraternity (colleagues, juniors and staff) through their experience, position and expertise. Further, it is interesting to observe that there is not much difference in the target by pharmaceutical companies between Consultants and Resident Doctors as the latter category of respondents are mostly available for longer hours in the hospitals as compared to other cadres of respondents.

 

4.3 Perception of Respondents on Presentation and Product Launches Influencing Drug Prescription Behaviour of Doctors:

Figure-2 presents the perception of respondents on presentation and product launches influencing prescription behaviour of doctors. It was found that 62% of doctors who attended drug presentations/ product launches by pharmaceutical companies were influenced to prescribe the drugs. Whereas 34% of doctors opined that drug presentations/ product launches should not occur and it did not influence their prescription behaviour and 6% of doctors had no opinion on this.

 

Fig 1: Most Targeted Cadre of doctors by Pharmaceutical Companies

 

 

Fig 2: Presentations and Product launches influences Doctor's Prescription Bahaviour

 

4.4 Perception of Respondents on Marketing Promotion of Drugs Pharmaceutical Companies:

The perception of respondents on marketing promotion strategy employed by pharmaceutical companies is presented in Table-2. A probe into the empirical data presented in the table revealed that about 74% of doctors opined that the pharmaceutical companies should communicate about the drugs through marketing promotion measure to its users, whereas only 20% of sample doctors opined it to be inappropriate on part of companies to advertise drugs. About 6.5% of the doctors found to be indifferent and preferred to tick do not know option.

 

Table 2: Perception of Respondents on Marketing Promotion of Drugs

Cadre of Physicians/ Doctors	Opinion of Respondents
	Yes (%)	No (%)	Don’t Know (%)	Total (%)
Consultants	11 (9.82)	1 (3.33)	0 (0)	12 (7.89)
Medical Officers	21 (18.75)	6 (20)	1 (10)	28 (18.42)
House Surgeons	24 (21.43)	9 (30)	1 (10)	34 (22.36)
Resident Doctors	56 (50)	14 (46.67)	8 (80)	78 (51.33)
Total	112 (100)	30 (100)	10 (100)	152 (100%)

 

4.5 Major Marketing Promotion Tools used by Pharmaceutical Companies:

The details of major marketing promotional tools used by pharmaceutical companies is presented in Table-3. An insight into the empirical data in the table revealed that use of stickers (36.85%) was the most common promotional strategy employed by pharmaceutical companies followed by drug samples (29.6%), drug presentations / product launch (21.71%) and then gift items given as souvenirs to the doctors (10.53%) and leaflets (1.31%) respectively. It was observed that the pharmaceutical companies resort to different promotional measures such as research support, sponsoring conferences, drug lunch/dinner meetings, etc. to convince the doctors to prescribe their drugs. Besides, there are other less expensive methods such as use of stickers, free drug samples and gift items to the doctors. The findings are in conformity with earlier studies (Chew et al., 2000; Madhavan et al., 1997 and Ziegler, et al., 1995).

 

Table 3: Marketing Promotion Tools used by Pharmaceutical Companies

Promotional Tools	No. of responses	Percentage (%)
Drug Presentation /Product Launch	33	21.71
Stickers	56	36.85
Drug Samples	45	29.60
Souvenirs	16	10.53
Leaflets	2	1.31
Total	152	100

 

4.6 Perception of the Respondents’ on Need for Drug Promotion:

The perception of respondents on need for drug promotion is presented in Table-4. A quick glance through the data revealed that a group of 117 (78%) doctors of different cadres opined that there is a need for drug promotion/ product launch and the same should be advertised in different ways while another group of 21 (14%) doctors felt there is no need for drug promotion/ product launch and considered it to be inappropriate to advertise drugs. But only 14 (8%) doctors preferred not to comment either in favour or against drug promotion and thus were indifferent to the whole idea of drug promotion /product launch. The chi-square test revealed that there is statistically significant difference between the two groups (p<0.05).

 

Table 4: Perception of Respondents’ on Need for Drug Promotion

Cadre of Physicians/Doctors	No. of responses (%)					Total (%)
	Strongly agree	Agree	Indifferent	Disagree	Strongly disagree
Consultants	2 (5.55)	5 (6.17)	3 (21.43)	1 (8.33)	1 (11.11)	12 (7.89)
Medical Officers	10 (27.77)	12 (14.81)	2 (14.28)	2 (16.67)	2 (22.22)	28 (18.42)
House Surgeons	12 (33.33)	14 (17.28)	3 (21.43)	3 (25)	2 (22.22)	34 (22.36)
Resident Doctors	12 (33.33)	50 (61.72)	6 (42.86)	6 (50)	4 (44.45)	78 (51.33)
Total	36 (100)	81 (100)	14 (100)	12 (100)	9 (100)	152 (100%)

χ2=26.270, P=0.010 (Significant)

 

4.7 Factor that Account Most for Choice of Drug Prescribed:

Table-5 presents the perception of respondents’ choice of drug prescribed. A glace through the empirical data revealed that 102 (67.10) respondents considered the patient’s economic status the most important factor while 41 (26.98) believed drug availability was more important. This is primarily because majority of the patients pay directly for the medications. The health insurance schemes managed by Government of India as well as by State Governments still has a narrow coverage, and as a result, the patient has to still bear the cost of the medication from his own source. In contrast, the efficiency of the health insurance scheme reduces or removes the effect of cost on medication in developed counties because of Government’s committed emphasis on social security measure/schemes and as a result, drug availability assumes a more important role. Further, only 9 (5.92) doctors believed other reasons such as efficacy of drugs and already tested drugs are the criteria for prescribing drugs by doctors.

 

Table 5: Perception of Respondents’ Choice of Drug Prescribed

Cadre of Physicians/Doctors	No. of responses (%)			Total (%)
	Patient’s status	Drug availability	Others
Consultants	7 (6.86)	5 (12.20)	-	12 (7.89)
Medical Officers	18 (17.65)	8 (19.51)	2 (22.22)	28 (18.42)
House Surgeons	20 (17.61)	12 (29.27)	2 (22.22)	34 (22.36)
Resident Doctors	57 (55.88)	16 (39.02)	5 (55.56)	78 (51.33)
Total	102 (100)	41 (100)	9 (100)	152 (100%)

 

4.8 Perception of Respondents on Benefit of Attending Drug Presentations:

The perception of respondents on benefit of attending drug presentations is presented in Table-6. About 62 (40.8%) of respondents believed that promotional strategies were useful to broaden their knowledge base while 42 (27.63%) doctors were of the opinion that these strategies made drugs names and doses easier to remember. About 26 (17.11) doctors thought these were primarily aimed at direct prescriptions and 22 (14.47%) felt such strategies were of little or no benefit and thus had impact on their prescription habits. The difference between those who saw a benefit and those who didn’t was statistically significant (p<0.05). The major reasons adduced for pharmaceutical marketing were to educate hospital management in general and doctors in particular and to outsmart other competitors.

 

Table 6: Perception of Respondents on Benefit of Attending Drug Presentations

Cadre of Physicians/Doctors	No. of responses (%)				Total (%)
	Broaden scope of knowledge	Makes it easy to remember	Direct prescription	Little or no benefit
Consultants	4 (6.45)	4 (9.52)	1 (3.84)	3 (13.63)	12 (7.89)
Medical Officers	14 (22.58)	8 (19.05)	3 (11.54)	3 (13.63)	28 (18.42)
House Surgeons	20 (32.26)	8 (19.05)	4 (15.39)	2 (9.11)	34 (22.36)
Resident Doctors	24 (38.71)	22 (52.39)	18 (69.23)	14 (63.63)	78 (51.33)
Total	62 (40.79)	42 (27.63)	26 (17.11)	22 (14.47)	152 (100)

χ2=62.637, P<0.001 (Significant)

 

5.     CONCLUSION AND RECOMMENDATION:

The pharmaceutical industry in India depends heavily on prescription from doctors because the patients here do not make a choice, rather depend on the opinion of the doctors. Therefore, the key to drug sales lies on influencing the doctors/physicians. About 62% of doctors admit to being influenced by promotional strategies employed by pharmaceutical companies. Irrespective of forms of marketing and drug promotion by pharmaceutical companies, the socioeconomic status of the patient remained a key consideration in the prescription of medication. There is a still a need for more large scale studies to further ascertain the effect of such marketing practices. Therefore, to ensure rational use of drugs and integrity, there is a need for regulatory policies and guidelines in health sector of Indian to protect the consumer and offer the best treatment options to patients without falling to the pray of the pharmaceutical companies. There is also a need to educate doctors about drug promotion and its influences on prescribing attitude aiming at improving the doctors’ skill in dealing with these promotional strategies.

 

ACKNOWLEDGEMENT:

The persons/ Intuitions/ Organization which are directly associated with this project have been duly acknowledged.

 

CONFLICT OF INTEREST:

The authors declare no conflict of interest.

 

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Received on 17.10.2019           Modified on 28.11.2019

Accepted on 09.01.2020         © RJPT All right reserved