Are All Pharma CEOs Martin Shkrelis?

Martin Shkreli claims he was arrested because he tried to maximize his company's profits by raising the price of a life-saving drug. There is no doubt that may have been a factor in the timing of the arrest, which resulted in even more attention to common practices employed by the drug industry to keep drug prices high and maximize profits as this NYT editorial points out.

NYT Editors: Shkreli No Different Than Other Pharma Leaders

Pharma Wars: Meet Shkreli the Hutt

Not such a long time ago in a pharma company pretty close by...

Looking Back on My 2015 New Year's Resolutions for Pharma

Before I publish my recommendations for 2016, let me review my 2015 New Year's Resolutions for pharma to see how many were actually achieved.

2015 Resolution #1: Forget about using Twitter to promote brand name drugs to consumers.

I don't know if pharma marketers have forgotten about doing branded tweets, but I haven't come across any nor have I heard many laments about how hard it is to overcome FDA's social media regulatory hurdles.

But there was one failed attempt to bypass the FDA via a promotional post on Instagram. Of course that was a post on Instagram by Kim Kardashian promoting Diclegis.

Before the Instagram ink was even dry the FDA sent a Warning Letter to Duchesnay, the drug’s maker. That letter put the kibosh on the “one-click rule”:

“We note the statement, ‘[F]ind out more www.diclegis.com; www.DiclegisImportantSafetyInfo.com[,]’ appears at the end of the social media post; however, this does not mitigate the misleading omission of risk information. By omitting the risks associated with DICLEGIS, the social media post misleadingly fails to provide material information about the consequences that may result from the use of the drug and suggests that it is safer than has been demonstrated.”

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My Twitter Audience as of Dec 2105

The following is an "Audience Insights" analysis of my Twitter account (@pharmaguy). You can also learn more about my audience from results to date of my reader survey.

Click on image for an enlarged view.

Gallery of Drug Advertising Mascots

These are my all-time favorite drug “mascots” (I call them critters) seen in direct-to consumer ads. Along with the gallery of images, I offer links to more information and the ads themselves (at least in a few cases).

If you know of any that I have missed, please tell me about it in comments to this post or contact me via Twitter: @pharmaguy.

Pharmaguy's Gallery of Drug Advertising Mascots from PharmaGuy.com

What the Drug Industry Can Learn from FDA's Social Media Policy

The FDA recently posted a new social media policy, but it's not for the pharmaceutical industry. The policy is for its own employees (read "FDA Releases a Long-Awaited Social Media Policy").

Like similar policies developed by pharma companies such as Roche (here), FDA's SM policy provides guidance to their employees about how to use social media for personal and professional purposes.

"The FDA encourages the use of social media technologies to enhance communication, collaboration, and information exchange in support of FDA’s mission to protect and promote public health," states the introduction. "This policy applies to FDA employees, contractors, and other personnel acting in an official capacity when using social media to communicate with the public regarding FDA-related matters."

I read "between the lines" to determine if this policy offers any hints as to how the FDA may further regulate pharma's use of social media in the future, especially with regard to correcting/deleting comments posted to its own sites and linking to external third-party sites.

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How to Use Pricing Psychology to Generate Sales

No matter the market, developing a pricing strategy is essential for ensuring something sells. However, the price can't be determined based solely on what the seller hopes to get for it; there are a variety of factors that come into play, including demand and the current market atmosphere. There are a number of psychological tricks that come into play, as well.

Pricing Based on Market

In some situations, you can price a product as high as you want -- and no one will buy it unless they are stupid. For example, a real estate agent would advise homeowners against pricing a home $200,000 over the market price. If the homes on a street are identical, but one is priced much higher, it may attract more initial interest; after all, buyers are curious. However, once they realize it has no advantage over any of the competitors, they will certainly settle on the lower priced options.

Pricing Based on Competition

Another strategy for pricing something to sell is based on the price the competition sells for. This is a common retail strategy; store A will offer a product for one price, while store B offers it for several dollars less. In most cases, store B will have the market for that product because of the pricing difference. The only time customers would choose to buy at Store A would be due to convenience. Of course, there are downsides to this: the profit margins usually end up being very narrow. The 'race to the bottom' tactics only benefit consumers, not businesses.

Pricing Based on Loyalty

This is often called a penetration strategy. A company will sell a very high-quality product at a price much lower than the competition would. This is most often used for smaller companies trying to break into an industry dominated by giants; it allows them to get a wedge of the market share without offering any initial innovation, but through building customer loyalty, they're able to build slowly until they can compete with the bigger players.

Loss Leaders

This price strategy definition is sometimes called promotional pricing. Because the business doesn't make any profit off the initial sale, it's called a 'loss leader' -- it brings customers in to purchase other products that will turn a profit. The initial purchase is just to capture their interest. As a result, the original product is usually priced much lower than the market is asking.

Using an 'Almost' Price

This tactic is exceedingly common. Companies will price a product at $4.99 instead of $5, but because it isn't quite $5, customers don't see it as so great an expense. It's a simple way to trick the brain into believing a product actually costs significantly less than it does, even if the actual price difference is only one cent off.

These four pricing strategies in marketing examples should help you better understand how to implement them into your own business. By using smart pricing strategies and psychologies, you can begin to generate sales even if there are far stronger competitors against you.

This post comes from Sarah, an inspirational writer who is taking QLD real estate course online at NREL Australia to grow her marketing career. She is part of crews at a specialized training center for the real estate industry, working with entrepreneurs and small business owner to upskills and achieve results that raise the standards of professionalism and respect in the Real Estate industry.