Events
in the pharmaceutical industry A report by Grupo eventoplus – 2009
Maybe this is why they fascinate us so much: pharmaceutical companies base their communication mostly on events, which results in figures which make us dream: yearly budgets over 10 million euros, event managers planning 200 or 300 events a year. A tempting pie for anyone‌ But no such thing as business as usual in this industry: the ethical code, pressure on budgets and revisions in the ways of working make pharma companies go through complicated times. Here is everything about an industry which sees meetings and events as really strategic.
1 An essential communication tool......................................................................................pg.3 2 Types of events: participation in congresses still rules, but new formats appear..................pg.4 3 An industry not that rich anymore....................................................................................pg.6 4 The trend of outsourcing congress departments.............................................................pg.7 5 The ethical code: a key limitation......................................................................................pg.8 6 An ever-more international event management..................................................................pg.9 7 Agencies: need for know-how and fresh ideas...............................................................pg.10 8 Tight procurement processes.........................................................................................pg.11 9 Pharma companies prisonners of congresses?...............................................................pg.12 10 Technology to communicate and educate.......................................................................pg.13
An essential communication tool Events and meetings usually represent between 40 and 70% of marketing budgets
If one industry sees meetings and events as strategic in its communication, this is probably the one. As Carlos Mateos from Com Salud (communication agency specialised in healthcare) states, “events have always been essential in the communication strategy of pharmaceutical companiesâ€?. This importance can be just seen in the weight of meetings in marketing budgets in this sector: according to our contacts, the share of marketing budgets dedicated to events is close to 50%, and generally between 40 and 70%, depending on the companies. And according to the British association Eventia, 2% of the sales of pharma companies are invested in events. But obviously, this share changes radically depending on the type of activity: events are the main tool to communicate in the hospital sector, something logical as communication is directed to very specific groups which you reach better in events than any other way. The opposite example would be OTC, whose marketing is closer to consumer goods with in-store promotions or communication, product branding, advertising, etc.). Why this importance? First, this is due to limits in traditional advertising in this industry. But also, and above all, because the type of messages to be transmitted is basically scientific: the company has to explain a complex product, investigation processes, ways to cure diseases‌ and we all know face-to-face is ideal for a good communication of complex messages.
According to Eventia, pharma companies dedicate about 2% of their sales to meetings and events
The last reason is that the interest of pharmaceutical companies (to communicate their products, sponsor industry events, build relationships with doctors) has met with the interest of the health industry which needs a lot of ongoing education. Pharma companies bear part of the cost of this education, inviting doctors to congresses and paying for most of the cost of attending. Everybody wins: pharma companies communicate their products and meet with doctors, who in turn can get access to good education about the latest medical findings.
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Types of events: participation in congresses still rules, but new formats appear They represent a great opportunity to make contacts, build relationships, provide value (and therefore improve relations...) to their prescribers: the doctors.
Congress is the king
The star event is the participation in congresses, which serves as a platform for the organisation of various types of events by pharma companies: from taking a stand in the exhibition area to organising a gala dinner with doctors or planning a product presentation. They represent a great opportunity to make contacts, build relationships, provide value (and therefore improve relations...) to their prescribers: the doctors. As says Christoph Tessmar (Sanofi Aventis), “it is clear that the congress is a good opportunity for communication with physicians. Usually they last several days, which makes it easier to contact professionals you are interested in.” Another event manager in a laboratory adds: “the importance of the congress is high in some specialties (Dermatology and Angiology) and low in others (Primary Care), but in general, they are still the main way of communicating with physicians, and it will be like this for long.” There are various ways to be present in conferences, from inviting a group of doctors of one specialty, to taking a stand, to sponsoring a rest area or service, or participating in the scientific content (eg round table.) etc.
Proprietary events
In addition to participating in congresses, some laboratories develop their own actions. Mayte Sabone (Lilly) says that, besides participating in congresses, “we organise scientific meetings whose purpose is the transmission of scientific knowledge and training. I do not see them as an alternative, but rather as a complement to the official conference organised by medical associations. They become excellent networking forums where professionals can exchange experiences and also of course access important information to develop their work.” Another corporate meeting planner (anonymous) says: “We have also organised our own congress. It can be considered a complement to the major medical congresses that are organised at national level.” As far a Christoph Tessmar, he says they organise “product presentations or meetings with scientific content, but not a whole conference.”
As in other corporate events, sponsorship is increasingly supplemented by (or replaced by) the organisation of the company’s own events
So, just like in other types of corporate events, sponsorship is increasingly supplemented by (or replaced by) the organisation of the company’s own events, which give the company all the visibility and complete freedom as to how to communicate. Companies are gradually developing their own events scientific training.
Novelty: events to reach patients
Traditionally, event in this industry are targeted to doctors, but an emerging trend (a necessary one, after all, although with control) is to involve patient groups in events, to provide them with the necessary information and raise awareness. It just has to be very careful in the tone: do not sell the “promotion of the day”, but health information. Messages have to be very informative and not commercial.
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An emerging trend is to involve patients in events, to provide them with the necessary information and raise awareness
Christian Martinell (Saatchi & Saatchi Healthcare) believes that “events are increasingly multitarget: actions that are aimed at both physicians and patients. CardioAlert is a campaign that Saatchi & Saatchi has done for Bayer Healthcare, a road show which aims to measure the cardiovascular health of the Spanish population, while also conducting training for pharmacists. Carlos Mateos (Com Salud) sees a trend of “increasing the participation of patients, despite legal restrictions. It is inevitable, taking into account their growing role in deciding their treatment. Therefore, collaboration with scientific societies and patient organizations is critical to the success of these events.” The event planner for a large laboratory confirms that “pharma companies are getting closer to associations of patient to provide them with technical training on products and information on diseases through websites or training, but always from a non-commercial and educational point of view”.
Virtual events and Web 2.0 complements
Still, more than a habit, virtual events are “an option [of new income], although many people think that it will take time before we can give up on the face-to-face dimension,” explains Keith Spencer (director of the association of pharma meeting planners IPCAA). Others comment on this new possibility, such as Anna Frick (global meeting manager for AstraZeneca), “All of us [pharma meeting planners] are looking into virtual meetings as one way of delivering our communication.” Meanwhile, other uses of the web (especially Web 2.0 applications) are emerging.
“All of us are looking into virtual meetings as one way of delivering our communication” (Anna Frick, AstraZeneca)
Taking into account the cost of inviting a doctor to a conference (generally thousands of euros), these solutions are an alternative to consider seriously. Carlos Mateos (Com Salud) believes that “many meetings are expanding their online presence through formulas which allow for greater interactivity and a wider audience. It is no longer necessary to invest in costly satellite transmissions to ensure that a doctor can participate in a meeting, thousands of miles away, with good image and sound.” Josep Llobet, general director of special events at Grupo Pacifico believes this industry is extremely competitive and their event planners are likely to implement technologies, trends and strategies that are as innovative and impressive as possible in their events. No doubt IT is the name of the game now (mobile applications, virtual events, etc.).”
… besides being also an industry like all others
Beyond these pharma-specific events, companies are like all others and organise more common events, like Ana Sanpere (Bayer) recalls: “product launches, teambuilding, corporate sales training sessions, educational events for clients, etc.” Cerstin Steindorf (head of global accounts of the corporate division of MCI), describes the events that pharma companies organise. The internal ones include sales force trainings, annual meetings, marketing meetings. And for external ones (with doctors): medical training, research meetings, symposiums, product launches, meetings ad-board (board of directors of an association). We remain in a serious style of events.
Creativity?
Traditionally, this is not the strong point of this industry: in order to provide an anti-diabetic medicine, one uses a scientific tone rather than original setup with a video-jockey... Steindorf Cerstin explains that “the word ‘event’ may not be the most appropriate since it sounds too much like fun encounters. Due to the pharmaceutical code, the priority is on science and education.” In fact, Christoph Tessmar (Sanofi Aventis) underlines the “seriousness” in their events: “there is no social program for the congresses. We occasionally organise symposia or a dinner, but nothing more.” The very nature of the sector, but also and especially the code of conduct, limit the creativity and spectacular events.
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An industry not that rich anymore Delayed decisions of participating in congresses, lower financial support, more impact measurement: the reduction in this industry’s profitability impacts meetings
If a sector has an image of being wealthy, this is the one. But the situation is not as rosy: generic medicines and the cost and time of investigation have greatly reduced their profitability. If we add, as Simon Cope (Generation for Growth) says, “the difficulty of proving the profitability of events” the result is that there is “a little pressure on budgets and a reduction of investment in events.” Thus, these companies tend to reduce the number of events they sponsor or their exhibition space. Anna Frick says that “the return of each event has to be explained. We are going to fewer events and sponsor fewer delegates.” Paula Fuster (Atlanta-Unicongres) sees as a key the “containment of budgets which results in, for example, the regionalization of destinations.” Between financial pressures and code of ethics, “ the days of “exotic” locations, lavish entertainment, sponsorship of accompanying persons, excursions, opera tickets etc are well and truly behind us and are specifically forbidden by pharmaceutical industry codes”, as Keith Spencer recalls. According to him, the economic situation impacts the events sector in several ways: - Deferred decisions regarding sponsorship or participation at conferences - Financial support that may lead to reduced ability to invite doctors - Greater concern for the evaluation of conferences and more effort in this area In this environment, event decisions are subject to increasing control (from ethics code to financial control) and as Keith Spencer puts it, budgets are subject to validation of the purchasing department rather than marketing. And outsourcing appears as a solution. Result: no El Dorado any more...
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The trend of outsourcing congress departments
Increased outsourcing of event management is one of the most commented topics in our sector at international level
It is one of the topics discussed in the pharmaceutical sector at international level. Simon Cope (founder of Generation for Growth) says that “with the economic pressures that exist in all sectors, cutting costs will be on the agenda in 2009.” According to Simon, “AstraZeneca outsourced its internal events team to two agencies in 2008, and another decision to optimise costs has been Pfizer’s decision to move his team of international events to its European purchasing department.” “If agencies can continue to demonstrate their ability to monitor and reduce the costs of meetings and events, and demonstrate savings, then it could be the way forward,” he adds. Others confirm the trend: Carlos de Sebastián (Tilesa) is “definitely a trend towards outsourcing while Cerstin Steindorf (MCI) said “a development of the outsourcing of departmental conferences, slowly but surely.” Obviously, some form of outsourcing has always been done, but it is grows, as Cerstin Steindorf says: “several pharmaceutical firms are at various stages of outsourcing - the level of outsourcing goes from a purely logistics one to outsourcing strategic services, a trend that has been seen over the last 3-4 years. The main reasons, according to her: reducing personnel costs, internal restructuring, the pressure of the purchasing department, or even recommendations of consulting firms. Anna Frick (AstraZeneca) adds: “It is a clear trend.” “Personally, I do not believe in a 100% outsourced model, but some activities that used to be performed by the department will be outsourced. I think most laboratories have already outsourced their delegate management and their logistics.” HICP Keith Spencer adds that “with the budget pressures, outsourcing of logistics functions can obviously reduce the number of employees.” Not everyone in Spain notices this trend, as several companies have long outsourced a significant part of this activity. Ana Sanpere Bayer explains that “It is true: we have an agency that acts as an out-plant for daily business, and several ones are approved, which we invite to bid for specific congresses.” And if it does, as always when companies live organisational change, outsourcing is not easy: “in order to maintain the corporate culture, maintain their contacts and meet the ethical code, companies will require strong management capabilities of these outsourced functions “adds Keith Spencer.
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The ethical code: a key limitation Although the limits seem tight and behaviours have been corrected, easing the rules is not on the agenda. Many underline the possibility of change, especially hardening of the Code, both in Spain and abroad.
It all started with some abuses, such as doctors getting their vacations or PDA’s paid for by pharma firms, in cases widely published some years ago. Since then, across Europe, very strict codes have been defined. Problem? The laws are not harmonised among countries. Simon Cope reminded us in the EIBTM Daily Show: The legal environments are very different from country to country in the European Union, in terms of entertainment of the delegates at medical congresses: France: spending up to €60 per person in restaurants Germany: a list of maximum contributions in a number of European cities has been developed United Kingdom: the code is more vague, talking about a “reasonable amount” Switzerland: congressmen have to pay one third of the total cost of attendance In addition, the European Code says that you have to follow the doctor’s country, in addition to the country in which organised the conference. Very simple... The code is already known in Spain, and hinders the use of 5-star hotels, “vacations” destination (difficult to organise something in the Canary Islands), and clear limits to the financial gifts (see box). One thing is certain: the code is something that laboratories take very seriously. Mayte Sabone says: “The industry is very committed to this framework and it is a priority when conducting our activities,” a view that is seen in almost all the interviewees. The training content has come back and taken power. Ana Sanpere emphasises for instance that “CSR is very important, we have our own CSR-related program, called COMPLIANCE and still most effectively.”
Standards behind the code of ethics Holding congresses in touristy cities, or gifts in excess of 30 euros, these are some prohibitions laid down by the Spanish code of ethics, whose function is to enhance the trust in the pharmaceutical industry. It is not meant to limit the contact between pharmaceutical companies and health professionals (essential for the continuous education of doctors), but to set standards across the industry. Examples of rules:
Gifts One may accept gifts not exceeding 30 euros, if they are related to their practice, such as tools for professional use or desktop.
Hospitality at conferences and meetings • Travel expenses, registration and accommodation paid by the laboratory can not extend beyond the event, and not exceed the cost of the recipients would normally be willing to pay in the same circumstances. Hard times for 5-star hotels or post-conference holiday... • Hospitality must be secondary compared to the purpose of the meeting, excluding any type of organisation or sponsorship of entertainment events. • For adequate image, try to avoid tourist places tied solely or predominantly to leisure, entertainment and sports. Avoid sun and beach destinations... • Hospitality should not extend to people other than health care professionals: do not invite the wife... • It is not possible to offer money to offset the time spent by health professionals to attend the event. • In conferences and meetings, the scientific content should take up a minimum of 60% of each day. In case of doubt, take a eighthour day.
Communication events Laboratories shall report to the Monitoring Unit of Conduct, prior to their conclusion, the events they organise or sponsor, which include at least one overnight stay and involve the participation of at least 20 health care professionals practicing in Spain.
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An ever-more international event management Participation in congresses, but also agency sourcing, is increasingly managed at international level
If in our industry, borders are increasingly blurred, pharma companies are really thinking internationally. Keith Spencer argues that “the pharmaceutical industry has been managing their events internationally for quite some time”, fact confirmed by most interviewed laboratories. In addition to improving quality, the idea is to streamline processes, align ways of working and achieve economies of scale (see box, the benefits of centralized management of events”). This is due, among other things, to the fact that these companies have internationalised their purchasing processes, and that attendance at international congresses involves, in essence, several countries in the company. As recalled by Carlos Sebastián (Tilesa), “event management is increasingly international, due to agreements between procurement managers of these companies and agencies that operate their events.” As a result, as Mayte Sabone says: “increasingly companies consider centralising and managing regionally the management of all European and transcontinental conferences attended. We are trying to identify processes that are duplicated in each of our subsidiaries to try to unify them across Europe, This would include from the procurement process all the way to attendance, ie from beginning to end.” And Christoph Tessmar confirms: “The trend is undoubtedly there. Attendance at international conferences is decided from the department of international conferences in Paris. At local level, we locally mostly manage travel.”
The benefits of centralised event management
One of the 10 major laboratories in the World wanted to centralise and consolidate event management. All countries that used to organise at the local level (35 countries in total) were required to work with one agency, MCI. MCI has developed standardised procedures that are communicated to all countries. They also developed forms and codes to help in the allocation of costs, both locally and internationally. They reviewed the logistics processes of each country to make them more efficient. According to the agency, the result was a savings of 33% of the cost of meetings, by improving the efficiency and bargaining power that brought this centralisation.
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Agencies: need for knowhow and fresh ideas The ability to communicate, to transmit complex messages, increasingly emerges as a necessary knowledge to serve pharma companies
It may look like these companies need first and foremost hotel and air transport, but it is a very specific industry, which requires their agencies to have a good knowledge of the pharmaceutical world, from the code of ethics to the speakers to contact or the terms of the industry. In the words of Carlos Sebastian (Tilesa), clients are seeking “great knowledge of medical specialties. Agencies often have to look for speakers.” And in this changing industry, companies expect that experience from their agencies, and above all new ideas “Forget all about how it used to be and get a good in-depth understanding of how the industry is shifting and what there new needs might be. Be creative in supporting the focus on science,” advises Anna Frick (AstraZeneca) to agencies. Knowledge of communication that Carlos Mateos (Com Salud) is another requirement, beyond logistics: “it is no longer enough to be expert in organisation. You want the best expert on medical events and also someone capable of setting up an internal television channel, a press strategist or a specialist in communication that can coordinate everything.” Agencies are starting to innovate to serve this segment better. For example, Grupo Pacifico has developed an online tool to manage events that can be managed by the customers and can be incorporated into their corporate websites. As says Josep Llobet, “We have changed from being suppliers to being partners with specialised in pharma companies’ business strategy and promotion.”
Tight procurement processes Price per hotel booking, per attendant... pharma companies are standardising in great detail of their procurement
If someone complains of having very elusive briefs by their clients or systematic bids, one should work for this sector, which often organises an annual validation process of agencies, getting to 5-6 agencies which will work throughout the year and with which rules of work are clearly defined (see box “Procurement processes”). According Cerstin Steindorf, “this process works well, the purchasing department have understood they are buying a service and not screws.” Christian Martinell, Director of Public Relations and Events at Saatchi & Saatchi Healthcare, says “most laboratories have a rating agency (rather than approval). It is important that they know you for the services you offer”. He also stresses the important role of purchasing departments. Payment systems have also been clearly defined, with agencies being paid per delegate, or by time spent, but generally avoiding commissions, which are so common in other sectors (and so absurd in our view). But this rejection of the commission usually goes with some awareness that the work the agency requires a reward (though often low).
The emerging purchasing process in this sector 1 RFI (Request For Information) to the agency, asking for references, staff,
processes, RSC policy and level of price. Note that the CSR policy may be particularly important in this phase.
2 Initial selection, according to these criteria. 3 RFP (Request For Proposal), with detailed service rates (cost per delegate registration, hotel room by management, etc.).
4 Negotiation and signature of the partnership agreement. The agencies
selected (3-6) are to be used throughout the year in the financial terms agreed upon. Obviously, if services required go beyond those agreed, they are quoted separately. Some laboratories perform this process at international and local levels, and define 3-4 agencies at international level and the same at local level.
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Pharma companies prisonners of congresses? Pharma companies finance congresses but have little say in decisions: they want more involvement, easier logistics, and fairer prices
If congresses are still a must-attend for most pharma companies, their frustration at what appears like a sometimes poor collaboration is clear. Several laboratories express their complaints about prices and above all, about the impression of being a captive market, with many limitations and little right to say or ask. Thus, Mayte Sabone (Lilly) says “we would need all parties, hotels, congress centres, technical offices of congresses, to work closer to the client and involve us in this process because we often feel like a captive market and we have too many limitations. It is a very high investment area for us and we have been asking for long for more transparency in the management.” Other event managers for a large laboratory says that congresses must improve several things: technical secretariats, be more professional, take into account the infrastructure of the city of the congress (for instance, taking cities with sufficient taxis)... and then adds: “we pay a lot of money for the floor space of the booth in a medical congress, up to 8,000€ for 6sqm...” Christoph Tessmar (Sanofi Aventis) asks for fewer calls “abuses” in prices: “costs for a booth, for inscriptions or symposia are ever higher. Another problem we often find is the venues for the congress: setup times, available space, etc.).” For Keith Spencer (IPCAA), the message for medical societies and organisers is to “keep a good dialogue with your colleagues in the industry, understand the value they need and work with them to realise this value. Their decision to participate depends on the analysis of the value they take, rather than emotional factors.”
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Technology to communicate and educate If this phenomenon is not widespread yet (how many sessions are still done with a basic projector?), using the best technologies is a natural development for this sector: due to the need of communicating complex messages, this sector is concerned and interested in audio-visual tools simulation, 3D, videoconferencing and streaming. The launch of Multiview Display (3D Display) was held in the American Congress of Cardiology in New Orleans, as a tool in the visualisation of medical problems. Rosa Suanzes (Ultramar Event Management) explains: “The technological tools required by pharmaceutical companies are vital to the development of scientific events. This includes many innovations, from interactive voting systems in several languages to control arches in sessions to record education credits, to broadcasts via satellite or webcasting.
But... what do they organise? A typology of the events of laboratories according to Christian Martinell from Saatchi & Saatchi Healthcare 1. Purely commercial events, that aim to promote relations between the network of medical representatives and doctors, might include working lunches or medical training sessions. Usually organised by the marketing department or congress department. 2. Scientific events: usually symposiums and technical working days, attendance at conferences, in which the laboratory has a presence through sponsorship of the congress or part of it. Usually organised by the department of marketing and conferences. 3. Institutional events: both internally and externally, we are talking about conventions for new product launches or gala / corporate meetings to celebrate institutional anniversaries, awards, etc. Involving all departments, from PR to communication and congress departments. 4. Event marketing / communication integrated in global communication campaigns. Normally developed by the communications department and an external agency.
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