tl;dr Com­pared to other indus­tries, health­care and phar­ma­ceu­ti­cal com­pa­nies have his­tor­i­cally been slow to mar­ket online, partly because of strict adver­tis­ing reg­u­la­tions (FDA) and patient-privacy (HIPAA) laws. How­ever, as new mar­ket real­i­ties push pharma com­pa­nies online, these firms will find that social media sup­ports the more agile busi­ness model some will pursue.

By 2016, the world’s pharma firms will lose over $140 bil­lion in annual sales from major drugs as key patents expire and cheaper generic ver­sions hit the shelves. This upcom­ing “patent cliff” is a legacy of the block­buster drug man­u­fac­tur­ing and mar­ket­ing model, where mas­sive R&D led to billion-dollar drugs. The cur­rent crop of expir­ing patents include well-known brands such as Pfizer’s Lip­i­tor, GlaxoSmithKline’s Advair, AstraZeneca’s Sero­quel, and Sanofi-Aventis and Bristol-Myer’s Plavix.

This wouldn’t be much of a prob­lem for drug­mak­ers if new mon­ster prod­ucts could take up the slack. How­ever, the dis­cov­ery rate of new drugs have declined even while reg­u­la­tory hur­dles for new drug approvals have increased over the past decade, mak­ing it impos­si­ble for big pharma to sus­tain his­tor­i­cally high, double-digit growth rates.

In addi­tion to acquir­ing new mol­e­cules, part­ner­ing with aca­d­e­mic groups, and diver­si­fy­ing their core busi­ness, drug com­pa­nies are respond­ing to these new real­i­ties by cut­ting head­count, increas­ing DTC mar­ket­ing, and launch­ing dig­i­tal and social media ini­tia­tives. Bud­gets are mov­ing to the web, with increased activ­ity in online recruit­ing, mar­ket­ing, mar­ket research, social media mon­i­tor­ing, com­mu­nity man­age­ment, app devel­op­ment, and more. As they move online, pharma firms will find that social media will pos­i­tively con­tribute to their prod­ucts’ life­cy­cles in at least three ways:

Mar­ket Research: As of March 2011, the Inter­net counts over 2 bil­lion users. These include key opin­ion lead­ers, patient opin­ion lead­ers, health­care providers, and indi­vid­u­als across hun­dreds of ther­a­peu­tic areas who have joined branded and unbranded com­mu­ni­ties to dis­cuss symp­toms and treat­ments. These plat­forms are chang­ing phar­ma­ceu­ti­cal firms’ approach to mar­ket research, since they can now track and mon­i­tor these dis­cus­sions to draw new con­clu­sions. These plat­forms facil­i­tate new qual­i­ta­tive and quan­ti­ta­tive mar­ket research tech­niques, includ­ing asyn­chro­nous, pri­vate, and anony­mous forums between physi­cians and/or patients, sen­ti­ment analy­sis, adverse event mon­i­tor­ing, and more.

Big data: Patient infor­ma­tion is being shared and aggre­gated online through blogs, social net­works, patient, physi­cian, and asso­ci­a­tion com­mu­ni­ties, health-tracking devices and appli­ca­tions, and elec­tronic med­ical and health records. This is akin to large unstruc­tured clin­i­cal tri­als, where peo­ple world­wide are record­ing and dis­cussing the results of mil­lions of trial and error exper­i­ments asso­ci­ated with the man­age­ment of their health and med­ical con­di­tions. With the use of data-mining tech­nol­ogy, such data will uncover vast oppor­tu­ni­ties to improve trat­ment pro­to­cols and patient outcomes.

Comu­ni­ca­tions: The embed­ded slide pre­sen­ta­tion below com­pares the legacy block­buster model with a more agile spe­cialty model, high­light­ing how social media mar­ket research, com­mu­ni­ca­tion, and com­mu­nity man­age­ment com­ple­ments the prod­uct life­cy­cle. The spe­cialty model includes prod­uct exten­sions and new deliv­ery meth­ods which can be more quickly tested and brought to mar­ket. Such exten­sions require con­tin­u­ous adjust­ments of strat­egy and mar­ket­ing, which are more eas­ily facil­i­tated by social media. Through com­mu­nity engage­ment and rela­tion­ship build­ing, social media can effec­tively com­ple­ment quick adjust­ments and changes to brand strategies.

Pur­su­ing these strate­gies will require a new mind­set and a more agile men­tal­ity. These types of activ­i­ties are prob­a­bly bet­ter pur­sued by cre­at­ing “incu­ba­tors” within pharma com­pa­nies, where ded­i­cated resources can exper­i­ment with new online tech­nolo­gies and plat­forms before rolling them into oper­a­tions. For those that take the leap, the future is social.