The Holmes Report's six-part trends forecast looks at how trends in consumer marketing, corporate reputation, public affairs, technology, healthcare and digital are shaping the public relations industry.
Historically, healthcare has been seen as something of a hedge against the recessionary forces that can impact activity in other sectors. In past recessions, pharmaceutical manufacturers have emerged relatively unscathed, and the public relations firms focused on serving them have escape the worst of the ravages visited upon their consumer, corporate or technology counterparts.
But the most recent recession has been different. The troubled economy has been compounded by a range of industry-specific issues to dampen healthcare sector spending and present industry communicators with new challenges—challenges that are likely to continue through the year ahead.
Says Amanda Sefton, managing director of Ketchum’s healthcare practice: “Not new in 2012 are the combination of challenges facing the pharmaceutical sector for some years: increasingly complex regulatory environment, loss of patent exclusivity across major brands, biosimilars bringing cheaper alternatives to many cutting edge targeted therapies and government cost cutting.”
One response is that pharmaceutical companies are “asking for integrated responses from holding companies, making agencies from across the marketing mix come together to address their strategic needs. This is driven by a need for capturing efficiencies, seamless integration across channels and the desire to build strong global brands.”
In the face of such uncertainty, there’s no consensus among healthcare PR experts about what the year ahead will hold.
On the one hand, “Health is at the top of the public agenda as an economic, social and security issue, and the needs for stakeholder engagement strategies are diversifying and globalizing rapidly, in the pharma industry, other health care verticals, and other industries are expected to make health part of their business strategy,” says Nancy Turett, global chair of Edelman’s healthcare practice.
On the other hand, “The combination of aging populations, new medical technologies and patient demand is putting increasing pressure on government budgets ravaged by the debt crisis,” says Jeanine O'Kane, outgoing head of the North American healthcare practice at MSLGroup. “As a result, many countries have slashed pharma prices and introduced regulations to encourage the use of generic drugs. In Europe, pharma sales to fall marginally again in 2012, marking the fourth straight year of decline for the region.”
As in any time of dramatic changes, there are likely to be winners and losers.
“The health and healthy lifestyles sector will be a Jekyll and Hyde during the next couple of years,” says Mark Raper, chairman and chief executive of CRT/tanaka. “We believe much of traditional healthcare revenues will be flat for small to mid-size agencies who maintain traditional approaches to pharma and healthcare providers, because of the questionable new drug pipeline of major pharma; blockbuster drugs coming off patent; community hospitals unable to survive; regulatory questions and changing healthcare policies; and pressure upon health insurers and other health-related companies.”
On the other hand, he sees some non-traditional opportunities arising from aggressive consolidation among hospital systems; branding and change management caused by consolidation; transparency within healthcare outcomes data; the aging of baby boomers; reform and the shifting emphasis on preventive care and wellness; and consumer education to address massive chronic health issues like diabetes and childhood obesity.
The Aging Population
If there is one global trend that all healthcare communicators can agree upon, it’s the impact of an aging global population.
“We expect home healthcare and ambulatory monitoring to be a growth opportunity in 2012,” says O’Kane “There is a massive wave of aging across the globe that's been coined the ‘Silver Tsunami.’” The global over-65 population is projected to triple to more than 1.5 billion in 2050, and “the aging population’s desire for independence is driving the shift from hospital care to home healthcare.”
As a result, “pharma and medical device companies are stepping up to meet the needs of this huge cohort of older people living with chronic conditions that require ongoing medical care. Companies are introducing patient-friendly technologies that offer ease of use, portability and simplified dosing. And as patients are becoming increasingly deft with mobile-computing and wireless devices industry is responding with more intuitive technologies that seamlessly interconnect with other devices to give patients access to health data and services.”
The medical device sector will be a major beneficiary of this trend, says Sherri Jaffe, head of Chandler Chicco West. “Technological advances have, and will continue to result, in new and better devices to treat disease,” she suggests. “And with the aging population continuing to grow, it will result in more patients who can benefit from many of these devices, such as joint replacement, and cardiac stents and defibrillators.”
The trend is particularly evident in Asian markets such as Korea—which has invested heavily in social marketing campaigns targeting an older population—and Japan. That presents an opportunity to global healthcare PR firms, for whom Asia has traditionally been a much smaller market than either North America or Europe—although the same trend is driving growth in Eastern Europe.
“With our aging world population, our seniors with extra cash and an expectation for high-quality experiences, everything from healthcare to wellness to non-perscription health enhanced products and services will grow,“ says Pavlína Rieselová, head of Czech public relations and public affairs firm Ewing Public Relations.
Localization and Personalization
If demographics are creating one major opportunity, new technologies are creating another.
“Products based on high science and targeted to very specific patient populations beyond North America and Europe will be a catalyst for more sophisticated communications,” says Olga Fleming, managing director of the New York healthcare practice at Cohn & Wolfe.
“As more one-size-doesn’t-fit-all blockbusters are introduced, pharma marketers will require a keen understanding of global communications dynamics that result in programs influencing audiences of various demographics on a national and hyper-local level,” she says. “These public relations campaigns will need to influence the right stakeholders at the right time, while navigating increased regulation and cost containment pressures.
“The strategic implications and complexities of this new world of healthcare communications will lead to increased spending geared at maximizing communications channels such as digital and social media, executing targeted campaigns in emerging markets and aligning PR with other activities in the marketing mix, such as medical education and advertising.”
The diagnostics industry will be a major beneficiary, experts say.
“Diagnostics are at the center of the move towards personalized medicine or tailored therapeutics,” says Jaffe. “The ability to develop medicines that can deliver the ‘right dose to the right patient at the right time’ is dependent on diagnostics. Because diagnostics are the mechanism by which genetic traits and biomarkers can be identified in humans—as we have seen in certain cancers—they enable the pairing of the medicine to the patient. This personalization or tailoring will continue to build momentum because of the benefits to patients, physicians and payors.”
The Policy Arena
Healthcare was one of the first priorities for the incoming Obama administration four years ago, and with the President now facing a re-election campaign, his controversial reforms are likely to be the subject of much debate in the year ahead.
“It is not clear how much will get done in 2012,” says Al Jackson, head of the ChandlerChicco operation in Washington, DC. “Divided government, enhanced by upcoming presidential and congressional elections, will contribute to policy inertia. There is the looming prospect of a Supreme Court decision that could dramatically alter the healthcare landscape. And legislators face increasing pressure to find ways to reduce federal and state healthcare spending.”
But that doesn’t mean pharmaceutical companies can ignore what’s going on in Washington, or other policy-making centers.
“While we don’t yet know what the Court will say or what might happen if the GOP takes control of the White House and Congress in 2013, we do know that HHS, CMS, FDA and other agencies are moving forward with implementation of healthcare reform,” Jackson says. “FDA is moving forward with its agenda; states are preparing legislation to implement health reform. Our clients must be ready for the coming changes.’
Another source of concern, not just for pharmaceutical companies but for biotech firms, device manufacturers, payors and providers, and eve patient advocacy organizations, is the Patient Centered Outcomes Research Institute, which is focused on comparative effectiveness studies that could lead to dramatic shifts in the way many diseases are treated.
The bottom line: “Government is now—or will soon be—our clients’ biggest payor,” says Jackson. “Our smartest clients already recognize this trend and are beginning to think of policymakers and Washington healthcare influencers as important to market success of the offering. And, especially in an environment focused first on reducing costs, companies will need to reinforce the value of their offering as governments choose what and what not to pay for.”
Telling the Corporate Story
Beyond the public policy arena, healthcare companies are also giving more consideration to telling their corporate story to multiple stakeholders.
Laura Schoen, president of the global healthcare practice at Weber Shandwick, says she expects more interest in corporate reputation. “The business impact of the loss of exclusivity of major blockbuster products is driving CEOs to look for opportunities to reaffirm the value and growth potential of pharmaceutical or biotech companies,” Schoen says.
According to Paul Graves and Christie Anbar, co-leads of ChandlerChicco in New York: “Issues management is a major part of almost every communications budget within the device and pharmaceutical industries, and, with the decline in blockbuster brands that support large proactive marketing and sales efforts, it will most definitely be a growth area in 2012 and beyond.”
Among the chief concerns, they say: handling communications around patent cliffs and other cost pressures; managing missteps as pharma expands engagement in social media conversations; navigating the fallout of equivocal data and resulting product label changes, shortages and continued risk aversion by regulatory authorities; and responding to internal angst resulting from ongoing mergers, acquisitions and restructuring caused by the reshaping of the healthcare industry overall.
The changing healthcare landscape demands that health systems and physician organizations build closer, more transparent, more mutually beneficial relationships with employers in their communities, says Brandon Edwards, chief executive of healthcare specialist Revive PR.
“The focus in healthcare right now is on coordinated care, yet employers still need help understanding what it means for them and how it really works,” he says. “Employers want to know that their healthcare dollars are going toward better management of chronic conditions, fewer lost days of work, healthier employees, and lower healthcare costs in the long-term. That means speaking the language of employers who want to know that the people being paid to help keep their employees healthy are focused on the same issues they care about: ‘cost’ and ‘value.’”
That means healthcare providers will need both good communications and a well-conceived story, Edwards says.
“Over the next few years, PR firms will play an important role in educating key constituencies, as well as driving employer, physician, employee and patient engagement. And that engagement will require creative strategies, carefully honed messages, keen insights, and a deep understanding of the business relationships and incentives that work in health care. This is uncharted territory, and only healthcare PR experts will be able to create value from the tough challenges and big opportunities in the market right now.”
The Social Media Opportunity
Finally, if there’s one area that ought to be an opportunity for growth, it’s the adoption of social media to connect healthcare companies with patient communities. But with regulators the world over focused on “protecting” consumers from healthcare information, few industry observers expect a dramatic explosion of social media activity in 2012.
“Blame it on the FDA. Blame it on a highly conservative industry. Blame it on the ‘soft’ ROI of social media,” says John Bell, managing director of the social media practice at Ogilvy Public Relations. “Whatever you blame it on, the pharmaceutical industry will not make any significant advances in using digital and social media to serve their various customers and constituents. US-based efforts will continue to use the FDA’s lack of urgency and clarity as the excuse. What could have emerged as a period of innovation with industry and regulators cooperating in defining the rules as they go has turned into a kind of stalemate of excuses.
:Other markets won’t fare any better held back by their own consumer protection bodies or by a marketing machine not highly motivated to change. There are so many distractions in the pharma space right now from the boom or bust nature of patent medicines to the eroding permission for ‘detailing’ practices to international debates on healthcare. Without a big revelation from outside the industry as to the efficacy and ROI of digital and social media marketing, the industry isn’t likely to prioritize innovation through social media. They feel they have bigger things to worry about.”