Brad G. Philbrick & Company

Marketing and Sales to the Biomedical Industries

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Biomedical companies spend millions of dollars on and vast amount of time on research and development to create a new device, drug, or diagnostic tool. The new products bring excitement and vast amount of enthusiasm to the team as they prepare to launch their newly approved pharmaceutical or device.

Marketing and sales to biomedical arena falls into two main categories, laboratory sales to researchers in the biomedical industry or academia and selling to the healthcare industry. Gaining a researcher’s time and interest to present a new product has far fewer challenges than it is to get a healthcare provider’s time and attention. There are a number of reasons for that. 

Researchers working in the biomedical industry by their own volition are curious individuals, are innovators, are tinkerers, are pioneers, and ultimate discoverers. It is who they are and what they like to do and what has drawn them into a career as a research scientist.

A researcher will often grant time to the sales representative to see an innovative new product. The challenge is to determine that the researcher has a need for his product and if so, then detailing the benefits of his product to the researcher. Then too of course, the representative has competition. Discussing the benefits of his or her company’s product or service compared to the competitor is common. Then the company if it has created an innovative product might use conceptual selling strategies and the business will apply strategic marketing strategies as they move their product forward.

If only selling to the healthcare industry was as simple as marketing to the research scientists in industry or academia. 

Businesses in Europe struggle to get their products seen by health systems. Socialized medicine dictates buying whatever is the lowest cost. Companies spend vast amounts of capital to develop a new product and of course, need to recover costs and are to earn a profit. Still, healthcare leaders are only interested in cost savings and seldom see beyond their own bottom line.

Sales and marketing endeavors in the United States market faces its own obstacles and barriers. Let us start first with the small company working steadily to get his new innovative product that improves patient outcomes, mitigates risk to patients, and even reduces cost into the hands of the physician. Small companies often cannot afford to hire their own sales force and thus use rep groups who employ contracted individuals to market their product on a totally commission basis. 

Small biomedical companies and their manufacturers’ representatives consider independent healthcare providers “the low hanging fruit.” Those physicians that are their own sole proprietor and not associated with a health system are seen as an easier person to approach with their novel device as there is no health system involved. But still getting to see the podiatrist, dentist, cardiologist, or endocrinologist is difficult. Inevitably the clinic office staff require the self-employed representative to buy lunch for the whole office, anywhere from a dozen to twenty people or more. The appreciative and gregarious rep gets at most fifteen minutes to make his pitch to the provider. Getting in the door is only the first hurdle.

A healthcare provider does not see a new product or service or as innovative or cost effective or improved outcomes—they see the new product as change. And most physicians hate change. Why? Change introduces something else doctors do not like, the potential for risk. Doctors and all healthcare providers are in the risk management business. Often their first goal is to avoid risk or reduce it whenever possible. Thus, a major goal of a company and its new product is to demonstrate and prove it reduces risk. Still, the challenge remains.

The new product or service requires introduction to the entire staff, medical assistants, nurses, and the office business manager. Medical sales are not easy. Gaining approval with the gate keepers and all the staff often takes numerous visits and time to finally gain approval and seeing a representative’s efforts come to fruition.

Most healthcare providers now work for a health system. A health system of course needs to maintain uniformity throughout their network. This means policies and procedures for vendors who wish to do business with them. Most health systems contract with a company that provides guidance in healthcare operations and services.

Vendors and independent representatives require credentialing to allow vendors to market their devices and services to the health system. Fees are involved to subscribe costing a company or representative hundreds of dollars. Then too, not all health systems use the same operations company. Companies often need to become credentialed by numerous organizations, a timely and costly endeavor.

Often with health systems, there is still more. Even though credentialed one still cannot make an appointment with a doctor. The product must go through a product review board and then of course, earn acceptance as a new product or service. This entire effort often takes months and sometimes years to come to fruition.

What can a small business do? Sometimes the best recourse is to sell the technology and patent rights to a larger company. A company that employs its own direct sales force, is more financially stable, and already has market penetration into several health systems.

Still, large corporations in the medical market face challenges too. Depending on the products, a pharmaceutical for example, needs approval by the hospital Pharmacy & Therapeutics committee (P&T), from there, it needs to get on contract with a buying group. The vendor hopeful of doing business submits negotiations and bids to gain approval. This protocol is an ongoing process as competitors too, want their products on contract. It is all part of the world of business in the healthcare arena. But does it need to be this difficult?

What is even more concerning healthcare focus is not always what is best for the patient. Health system C-Suite administrators are concerned with profitability and cost containment. Then too, insurance companies often dictate providers actions and choice of therapy. 

What is even more troubling is that patients often need to make a financial decision about their healthcare. A new effective drug, a biomarker, the use of a novel device may improve the patient’s outcomes, but the insurance company does not offer payment. The product is not on their formulary of items paid. Choosing the new and proven therapy a patient must pay out of their pocket. Often the choice is to forego improved outcomes and go with the lower cost.

The healthcare industry and the health insurance industry must be open to review new products and services and to make a concerted effort to stay abreast of recent technologies, new research and new procedures that help provide better outcomes for patients and cost savings for the insurance industry and healthcare providers. 

Health industry forums, medical device associations, and coalitions need to lobby for businesses who work diligently to develop a new product that produces improved outcomes, lowers risk, and proves to be a cost-effective treatment saving insurance companies and healthcare providers money. 

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Brad G. Philbrick

A grant proposal writer of biotechnology and healthcare

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