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Is Your Marketing Strategy Sabotaging Your Pharmacy?

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Your pharmacy’s marketing strategy is the lifeblood of the longevity of your business. Here’s what to look for in a marketer or agency.

In the recent past, the Department of Justice (DOJ), the Office Inspector General (OIG), and different state attorney generals’ (AG) offices have looked into the issue of marketing fraud around pharmacists. There have been several multi-million dollar fines (here, here, and here) that have been recently been levied upon pharmacists and marketers. The accused are facing serious consequences, including heavy fines and sometimes jail sentences.

Neither marketers nor pharmacists intend to become involved in fraud. However, in the long-term, people tend to slip through the cracks. This can be because the pharmacist simply did not know how to ensure that the marketing practices were compliant, or because the pharmacist didn’t look into their marketing efforts closely enough. Although the marketing operations are likely executed by a non-pharmacist marketing specialist, the pharmacist is ultimately responsible for the marketing activities that promote his or her business.

Pharmacists did not go to pharmacy school to become marketers and didn’t learn the difference between stereospecific and stereoselective reactions because of an interest in Google AdWords. Because of that, they reach out to marketers. The marketer would demonstrate value by helping pharmacies find customers through compliant marketing. However, marketers who take shortcuts to demonstrate value can cause big problems.

5 Tips on How to Find the Right Marketer for You:

1. Explore Previous Pharmacy Marketing Experience

You will need to ask your prospective marketing expert: Is this the first time your agency is working with a pharmacy? It does not have to be a deal-breaker if it is the first time, but you will need to feel comfortable that their previous experience is relevant.

Keep in mind that pharmacies selling a highly-regulated product that affects health and safety are different from a local 7-11 which is hoping to sell toothbrushes. Marketers who think of this as just another widget may risk putting you into trouble.

2. Discover Their Customer Acquisition Methods

When pharmacy owners discuss their marketing practices, it’s not uncommon to find out that their marketers aren’t guiding their pharmacies. More often than not, the pharmacy owner thinks that the solution to customer acquisition is to knock on more doors and talk to more people. Although that may be part of your marketing mix, a marketer worth his wages will guide a pharmacy owner to pursue targeted but compliant marketing practices.

Questions to consider when looking for a marketer or agency:

  • Are they building relationships with doctor’s offices or are they seen as a nuisance to the staff?
  • Have they considered other avenues like veterinarian offices or long-term care facilities or are they close-minded about specific patient demographics?
  • Do they know what your different service areas are, or are they pitching off-label use?
  • Are they able to demonstrate knowledge about the business environment of the local area surrounding your pharmacy location or are they providing you with a one-size-fits-all marketing plan?

Every pharmacist and every pharmacy is a bit different, so a marketer or agency who approaches you with a templated business plan saying, we have something right for every pharmacist, may not be the right fit. However, someone who comes in with a business plan that has researched your services and has discovered what’s right in and for your area may be worth considering. The right marketer for you must know your business goals and demonstrate knowledge of the foundation of your business.

Hiring a marketer does not absolve you of staying involved in your marketing practices. After all, it is your business that is being promoted to your community. Why wouldn’t you want to ensure that you are familiar with the marketing efforts made on your behalf? Keep in mind that just they may have more marketing experience than you does not mean that they’re always right. It’s important to hear more about what they think is right and why, and for you to ask questions if you need to clarify their reasoning. You know what your patient population is, so find out more about what they think about how that could affect your marketing.

3. What Kind of Deals Have They Structured

Find out how they tried to bring prescribers in the fold because this is where things often go wrong. The marketers that get into trouble often offer incentives to doctors for funneling prescriptions to your pharmacy. They propose deals like Dr. Smith — If you give me five prescriptions, I’ll make sure you get $10 each time that happens. An extreme example might be, Dr. Smith, if you make sure that we’re happy with the number of patients coming to us, we can arrange for a nice gift – maybe you and your wife can go for a nice vacation. Obviously, that’s a kickback. You’d be alarmed to find out how often these types of relationships get structured.

People think that these never happen, but some people make the wrong deals. In general, the wrong deals are characterized by things that people aren’t being billed for, but medications are being delivered.

Another scenario to consider is with a marketing firm that has a connection with a pharmaceutical company that’s leveraging the marketing firm to push their product. If you agree to work with the marketing firm, and they use you as one of those avenues, that could potentially be a form of kickback.

4. Are They Bluffing?

If a marketer is coming to the table with promises of “deals” in their back pocket, it’s important to find out what these deals actually are. You cannot enter into business with someone who is not forthcoming about what they are bringing to the table. Just because they claim they have a deal, does not mean that they actually do. It’s important to make sure that the marketer is not overstating their accomplishments.

5. Ask Your Attorney

It goes without saying that an attorney should look at the deals you’re structuring. This means the arrangements between you and your marketer, and any deals they bring to the table with outside entities. I’ve seen pharmacists attempt to wing marketing deals by saying something along the lines of, we’ll put something together in terms of a contract or legal agreement. This mindset can lead to situations that become hugely problematic later on. 

If you decide to work with an independent marketer, you will need to decide if the marketer will be an employee or a 1099 contractor. Each relationship structure has its own benefits and drawbacks for your business in the short and long term that you should consider. (Necessary disclaimer: This is not tax advice. Please consult with a tax professional for questions related to your tax situation and how this applies to you.)

Being a pharmacist, you already have an attorney acting as a fiduciary pipeline that reviews deals that come in. That said, please, pharmacists, you are notoriously busy. There’s a lot being thrown at you, and as a human being, you’re only able to accept and process a certain amount. When marketing comes out of left field and you think, I don’t want to deal with this paperwork. Where’s my legal guy? — that is your best move. Contact your legal representative. 

We’ve gone over the ways in which pharmacists are most likely to commit fraudulent marketing practices, and proposed some tools that you can use to ensure your marketers are helping you grow your business in a compliant manner. If you have any other questions about how to find a marketer or want to review your current marketing practices, reach out to me on Twitter, LinkedIn, or send me a message here.

I also host a podcast called Gavel and Pestle, a show dedicated to the fusion of law and pharmacy. You can listen to it here or search for the Pharmacy Podcast Network wherever you listen to your favorite podcasts.

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