Capturing the Practitioner Market:

Capturing the Practitioner Market:
Relate and Educate

by Gina L. Nick, Ph.D., N.D., and Noah S. Miller

U.S. demand for nutraceuticals is steadily increasing, with a projected7-percent rise to $2.7 billion in sales for 2004, according to the FreedoniaGroup (Chem Week, 163, 3:27, 2001). This demand signals a grand opportunity fornutritional supplement companies, particularly those whose sights are alreadyshifting toward the qualified health care practitioner market.

The practitioner channel is made up of more than 1.1 million M.D.s,complementary care physicians and allied health care professionals, includingosteopaths, naturopaths, chiropractors, physicians assistants, nursepractitioners, acupuncturists, pharmacists, Ayurvedic doctors, TraditionalChinese Medicine practitioners, nutritionists and dietitians. Analysis ofstatistics provided by Nutrition Business Journal indicates growth innutraceutical sales in the practitioner market has surpassed traditional,consumer-focused channels, with an average increase in sales to practitioners of14 percent from 1997 to 2001, as compared to a 7-percent growth rate for theentire supplement market during that same time period. Further, the practitionermarket is estimated to grow at a rate of 9 percent to 10 percent over the nextthree years.

While the majority of supplement companies have shied away from this marketin the past for fear that the group, as a whole, was less open to nutritionalsupplements than consumers, they now have the opportunity to face their fearsand profit from this increasingly viable distribution channel. Beyond thetraditional practitioners lack of education in the field of nutraceuticalsupplementation, supplement companies have feared the research costs necessaryto support and market their products, given an unclear return on investment (ROI)and an uncertain timeframe to realize profits. Health care practitioners willgenerally pass over a companys products, regardless of the anecdotal supportpatients offer, unless the company has invested in valid clinical trialssupporting their usea luxury to which traditional practitioners have grownaccustomed with pharmaceutical companies. A quality research study starts at$25,000 and can cost upwards of $100,000. Further, federal law prohibitseffective use of data collected from clinical trials in marketing claims, beyondthe structure/function and health claims already being made. The time lineassociated with completing and using the results of a clinical trial to sellproduct presents another significant drawback, with published studies typicallytaking between two and 10 years to complete, depending upon the study design.Perhaps most daunting is the threat that, without a durable patent, a competitorwill use your research to develop and market products at a fraction of yourcost, with minimal investment and minimal risk.

Maximizing ROI With Peer Discussion Groups

Despite the traditional arguments against investing in research, solidscience is a prerequisite to gaining practitioner market share in thenutraceutical industry. The solution to gaining a timely return on researchinvestment lies in the use of peer-to-peer discussion groups, ameans of educating and relating to practitioners that is employed by leadingpharmaceutical companies such as GlaxoSmithKline and Eli Lily. Big Pharmahas been successfully using these marketing/sales sessions for more than 20years as a means of capitalizing on the research money it spends, sometimes evenbefore a clinical trial of products is published.

These one- to two-hour regional sessions typically involve no more than 20doctors who are invited to join as members of an advisory group.Participants are chosen based on their ability to influence peersso-calledthought leaders. They are mailed reprints of monographs, published orunpublished clinical trial data, and supportive sales literature about two weeksprior to the session. The doctors are wined, dined, compensated and encouragedby a highly trained and knowledgeable moderator to discuss the product, its usesand indications, competitor products and (very carefully) off-label uses.Advisory sessions typically take place over dinner, offering a casual atmospherethat breeds relaxation and a general acceptance of presented material. Thisstrategy has proved invaluable to Big Pharma for increasing sales andexecuting targeted marketing campaigns with little to no risk. According tospecialists in this field, the ROI to companies employing peer-to-peerdiscussion groups is estimated at roughly 120 percent, after 10 months of use,though no one knows for sure, since all data associated with these prizedadvisory sessions are held in strict confidence.

It all makes perfect sense when you compare these sessions with traditionalsales calls to the health care practitioner. On average, a sales representativecalls a targeted practitioner six times per year. The sales call typically lastsabout five minutes and occurs within the context of a fastpaced, busy medicaloffice. This translates to a total of 30 minutes of exposure per year. On theother hand, one peer-to-peer discussion group session with 20 practitionersguarantees at least 60 minutes of their dedicated, uninterrupted attention. Asimple calculation shows that one product session equals approximately two yearsof concentrated sales calls to a single practitioner.

While there are many classic fears associated with investing in clinicalresearch on nutraceutical products, peer-to-peer discussion groups can addresseach of these. (See table below for more information.) Investing in researchmakes sense, now that nutraceutical companies have access to viable means ofcapitalizing on research dollars spent without the lag time traditionallyassociated with this marketing/sales strategy. Further incentive to invest inthis strategy comes from statistics regarding practitioner exposure tonutraceutical information that demonstrate increased usage of product afterexposure. This opportunity is available to nutraceutical companies willing tofill the practitioners need for quality education.

It is comforting to note that one third of all Americans are tryingcomplementary and alternative medicine (CAM), primarily nutraceutical products,thereby forcing practitioners to take a closer look at this treatment modality.The Wall Street Journal recently released a report stating that, in thepast two years, the number of medical centers with CAM clinics rose to nearly100, up from fewer than 12 in 2000. Additionally, hospital profits dropped 38percent between 1997 and 2001, forcing these health care institutions to takenote of public demand and new revenue sources. CAM therapies are generatingsubstantial profit, with nutraceuticals leading the way. Interestingly, 91 ofthe 125 U.S. medical schools now offer some form of CAM as part of a requiredcurriculum, with leading medical colleges such as Yale, the University ofCalifornia and Columbia University taking this trend toward CAM use in thegeneral population quite seriously.

Education = Market Share

The level of CAM education among traditional health care practitioners isincreasing. However, knowledge about the proper use of nutraceutical productsamong this group is still lacking. So, while 85 percent of the generalpopulation is influenced by their doctors position on the use of naturalproducts (according to the Natural Marketing Institutes 2003 Health andWellness Trends Report), only 8 percent actually make a specific naturalproduct purchasing decision based on their doctors recommendations. Thereason? Health care practitioners lack the education to confidently recommendspecific nutraceutical products. Now, more then ever, nutritional supplementcompanies have the opportunity to fill the immediate educational need of thepractitioner for accurate and clinically relevant information on the use ofnatural products.

The relative upsurge in media reports on nutritional supplements has beenboth a blessing and a curse for the nutraceutical industry. While increasingexposure for the industry, the information that consumers and practitionersreceive is both contradictory and confusing. Further, sales of specific productsare directly affected by these media reports, usually adversely. As varyingstudies are publicized on the effects (or lack thereof) of nutritionalsupplements, nutraceutical companies experience a dramatic fluctuation inproduct sales, which ultimately leads to loss rather than profit.

This increase in media reports, while posing a serious threat, also affords aunique opportunity to provide quality, accurate and reliable education topractitioners who are faced with answering consumer questions with confidenceand ease and who desire to fill the role of knowledgeable authority fortheir patients. Practitioners, by nature, are seekers of truth and are alwayshungry for more information. The confusion as to the safety and efficacy ofnutritional supplements projected by the media translates into an opportunityfor nutritional supplement companies to offer these practitioners the qualityeducation they need, which inevitably breeds loyal and long-lastingrelationships between educator (the nutraceutical company) and practitioner.

Peer-to-peer discussion groups offer an effective means of educatingpractitioners with quality and accurate information that is not limited by theDietary Supplement Health and Education Act (DSHEA), while at the same timefostering loyalty and demonstrating that the host company is committed toresearch and education.

Now, more then ever, nutritional supplement companies have a significantincentive to market their existing products, or a complementary line of productsexclusive to the health care practitioner market. Peer-topeer discussion groupsoffer an intelligible means of establishing a nutraceutical company as onerooted in science, known for marketing scientifically sound products and therebycapturing the attention of the growing health care practitioner market. Thesesessions foster lasting relationships between practitioner and nutraceuticalcompany by filling the practitioners increasing need for education, withoutbeing limited to the marketing jargon companies are forced to use within thelimitations imposed by the government. Likewise, practitioners are forever insearch of quality information on how best to help their patients. Peer-to-peerdiscussion groups offer practitioners the opportunity to interact with oneanother and share their knowledge while at the same time receiving from the hostcompany quality information about key nutraceuticals that promote health. Thebottom line? Peer-to-peer discussion groups build genuine partnerships betweencompanies and practitioners, which translates into increased sales in the healthcare practitioner market.

Gina Nick, Ph.D., and Noah Miller are chief scientific officer andpresident, respectively, at Longevity Through Prevention, a business-tobusinessconsulting firm that offers turnkey solutions to the nutraceutical industry.They can be reached at (866) 587-4622 or at www.ltponline.com.