HCA: Five years of change in healthcare communications

pharmafile | March 4, 2010 | Feature | Medical Communications |  HCA, industry reputation 

In 2005 the Healthcare Communications Association (HCA) conducted its first ever benchmarking survey, exploring trends in the provision of communications services to the healthcare industry.

Five years on, the organisation now has collated all the data for both communications agencies/consultancies and pharma industry communications functions, into a report.

This summary feature looks at how health-care communications have changed over the last five years, comparing findings from the 2004-5 survey (conducted in 2009 to benchmark 2008 practice and assess trends that were emerging in 2009). The HCA benchmarking programme gives unique insights into a period of radical change in healthcare communications. In just half a decade we have seen a proliferation of new customers and communication channels, along with changes in the political, regulatory and financial environment, all leading to diversification of activities and new ways of working.

REPORT’S KEY FINDINGS

• Communications are of growing importance for pharma companies

• Financial/budget constraints and associated pressures are evident

• Modest salary increases but introduction of more flexibility in the workplace, e.g., working from home

• Unsuccessful pitches with no agency appointed down 13% to 6%

• Increasing importance in relation to industry compliance (ABPI)

Five years ago pharma companies were just beginning to appreciate the value of PR and give it increased priority as a valued part of the communications mix, but the focus was still on ‘traditional PR’ activities such as media relations and key opinion leader activity.

The ABPI Code revisions (2006 and 2008) and the Pharmacuetical Price and Regulation Scheme (PPRS) review had yet to take place, but their potential to constrain activities was already a cause for concern.

Then as pharma companies’ marketing budgets started to come under pressure, the attention of procurement began turning to communications and agencies starting feel the pressure on profit margins.

A key theme of this time was recognising the importance of having skilled teams in place to face future challenges, and in pursuit of this we saw the recruitment and retention of staff at all levels emerge as a business critical issue.

Now let’s look comparitively at 2010 – communications are a core component of pharma companies’ brand and corporate strategies, with increased commitment to that conducted in-house as well as through consultancies.

ABPI Code changes have impacted significantly on various types of activity, including notably media relations.

The importance of ensuring compliance with regulatory requirements is now even more established, though no less time-consuming.

As a result, a much broader range of activities is now being conducted and commissioned, with expansion into new areas such as digital media and market access. Government affairs/policy are becoming key areas of focus for pharma companies, and consultancies are doing more medical education work.

Consultancies are working in closer partner-ship with pharma, offering increased levels of strategic guidance as well as tactical implementation. The recession has exacerbated the financial squeeze that was already starting five years ago. Budgets have fallen and discounted pricing is more widespread.

In-house teams are having to deliver more with limited resources and consultancies are finding it a tough challenge to maintain margins and secure new business.

The role of procurement is developing and their involvement in ensuring a fair selection process may be starting to foster more transparency and lead to win-win outcomes for all.

The fight for talent is as fierce as ever, and working practices have evolved to offer more flexibility, in order to help retain staff in an economic environment that precludes big financial rewards and limits spend on training.

Here we can see the five key areas of the survey, and compare what has changed over the years:

1. Building new areas of expertise and diversification of activity patterns:

2004 to 2005 – A quarter of the pharma companies surveyed did not have any dedicated communications staff.

2008 to 2009 – For pharma companies, corporate communications and internal communications – already major areas of activity – are continuing to grow in importance, whilst ‘traditional PR’ is static or declining.

2. Sticking to the rules – the increasing importance of compliance:

2004 to 2005 – The Health Select Committee Inquiry was at the fore, and healthcare comm-unicators were also looking ahead to predict the impact of the new (2006) ABPI Code of Practice.

2008 to 2009 – The complexity and time involved in developing ABPI Code compliant materials and consequent effect on timescales in which projects can be delivered are now a fact of life for industry and agencies alike.

3. Making choices and delivering value. Consultancy selection and the procurement process:

2004 to 2005 – 13% of unsuccessful pitches were unsuccessful because no agency was appointed, a significant waste of resource for all involved. An example of this situation included: “When one of the agencies is already the appointed agency but company protocol requires a pitch.”

2008 to 2009 – In a positive development, the percentage of pitches failing to lead to business for any agency, has fallen (now 6% of unsuccessful pitches), perhaps a positive outcome of more transparent procurement processes.

4. Getting the right people. The challenge of recruitment and retention:

2004 to 2005 – Flexible working arrangements were starting to become more important, as organisations looked for ways to address work-life balance, particularly as it started to emerge that many quality staff were leaving to go freelance or change careers, rather than switching companies.

2008 to 2009 – The agency survey shows that, whilst salary band increases have been modest over the five year period, and training budgets have not increased, more organisations are now offering pension contributions and life assurance. There have been enhancements to maternity/paternity benefit provision and the introduction of more flexibility – in particular with respect to working hours and working from home options.

5. Protecting the bottom line. Budget constraints and pressure on margins:

2004 to 2005 – 50% of agencies mentioned financial pressure (client budgets/margins/procurement) and/or pressure to secure new business issues as one of their top three internal issues for the coming year.

2008 to 2009 – 86% of agencies mentioned financial/new business pressure in their top three internal issues.

About the HCA benchmarking survey

For seven years the HCA has been successfully running a Benchmarking Survey as a service to communications consultancies. The 2008–9 survey, conducted in May–July 2009, attracted participation from 24 HCA member companies, with broad representation across the spectrum of those providing PR and medical education services.

As well as the topics commented on in this report, the survey included in-depth sections on financial performance & billing and salaries & benefits, the findings of which are shared only with participants, due to the sensitivity of the information and to recognise their commitment to the process.

For the past five years, pharma industry views have been sought in a separate survey, conducted as a self-completion questionnaire in the same way as the consultancy survey, to which eight companies responded in 2009. A key objective is to gain insights that will enhance the HCA’s role in promoting best practice and fostering productive working relationships between individuals and organisations.

The benchmarking exercise is handled according to the strictest codes of confidentiality, carried out by a specially commissioned, independent market researcher in order to guarantee anonymity and confidentiality, with no data being attributed to individuals/companies or even seen or shared with anyone else from the HCA.

Participants in both surveys have received detailed reports covering all aspects of the findings.

HCA initiatives that have addressed the challenges identified over the last five years:

2006: Careers Working Group Sub-Committee set up to encourage a greater number of candidates to enter the healthcare comm-unications industry and improve the efficiency of recruiting healthcare communications candidates to consultancy and industry positions.

2006: Standards Sub-Committee set up to ensure the highest standards of practice are maintained by healthcare communicators, thus helping to protect the reputation of the industry.

2007: Good Practice Guide on Working with the Media published.

2008: White Paper ‘Guiding Principles of Best Practice for Selecting and Working with Communications Consultancies’ published.

2009: Good Practice Guide on Working with Patient Organisations published.

2009: ‘On the Spot’ resource launched – addresses the need for compelling messaging and a consistent position relating to the pharmaceutical industry and the role of healthcare communications.

The March 2008 white paper listed these key principles for selecting and working with communications consultancies:

1. All relevent parties should be involved from the start and throughout the process.

2. Transparency is important, but within limits.

3. Pitches should only be conducted when absolutely necessary.

4. There should be a commitment to the longer term.

5. Procurement arrangements should look for the win-win.

6. Companies and consultancies should work together to make savings by buying ‘commodities’ at the best price.

Fiona Hall, EU MD of Chandler Chicco Companies, notes: “We’ve seen a significant shift in understanding of the increasingly diverse multiple stakeholder groups. This has led to a desire for a more tailored approach to communications with a decrease in traditional broad media outreach and recognition of the need for more specific skill sets focused on target audiences and delivery of tailored programmes.

“The generalist in healthcare communications is giving way to the ‘specialist’, with various skills and disciplines coming together to create bespoke teams which are client focused and developed to deliver solutions to meet specific challenges.”

Further findings from the five-year report

• Pharma company emphasis on government affairs/policy is increasing significantly (with increased resources and sometimes a separate department being set up).

• More than half the HCA member agencies surveyed now see themselves as ‘communications consultancies’ rather than being PR or medical education specific.

• The ‘digital revolution’ has changed the way communications activities are conducted, with all agencies now offering web-based communications.

• Pharma companies are now operating in an increasingly reactive environment, with the need for confidence in responding to challenges to corporate/product reputation.

• The challenges of differing regulations across the EU region are also starting to become increasingly important.

• Staffing is also an issue for industry – both in terms of communications staff and med-ical/legal staff for approvals – but there seems to be less concern about recruitment and more about how to run a communications function with a limited number of staff – i.e., being asked to do an increasingly diverse range of activities without necessarily an increase in headcount (and with declining budgets).

• The recession appears to have exacerbated the financial squeeze that was already being exerted on communications overall, and specifically on agencies by the procurement process.

What of the future?

Looking at how consultancy respondents have viewed the general economic outlook for healthcare communications over the year ahead, compared with the past five years, there’s an apparently pessimistic picture, with little expectation of any improvement in the short-term. The biggest single issue, mentioned by two-thirds of consultancy respondents in the most recent HCA survey, is the general economic downturn and associated fall in budgets.

This means there will be fewer big communications programmes, and consultancies will have to work harder to maintain a flow of new business. Likewise, industry respondents also commented on the continued recession/budget constraints and the additional pressures added by the increased need for compliance, needing to take into account regulatory requirements across the EU, and new ABPI Code of Practice requirements.

Whilst there is no doubt that further challenges lie ahead, this is also a time of great opportunity for healthcare communications to build on existing skills, develop new areas of expertise and to play a key role in enhancing and defending the reputation of the industry.

Sarah Mathieson, who heads Global Pipeline Communications for GSK, notes: “The world of medicines development has become ever more scrutinised and politicised over the past five years, in line with a general decline in trust for business.

“Mistrust creates a significant barrier to how we operate and deliver our promise to patients and broader society. Communicators have a clear role in increasing transparency and openness to our key stakeholders, including the general public. We will continue to challenge practices that counter transparency and ensure the highest ethical standards in all that we say and do.

“The next five years will see our role become ever more focused on demonstrating that we have the best interests of the patient at the heart of every decision we make. Underpinning all our communications activities must be an ethos of transparency.”

Sarah Matthew, joint chief executive, Virgo Health and Chair, HCA on the findings adds: “This review clearly shows the significant degree of change that has occurred in a relatively short period in the healthcare communications industry, driven by specific challenges and opportunities within the pharma industry and also within the broader operating environment.

“The retrospective review clearly shows a very real diversification in terms of healthcare communications services, and all communications specialists will be aware of the need to continually evolve – probably faster than ever before – in order to predict and continue to deliver the seemingly increasing requirements from communications in the future.”

The HCA was founded in 2001 as an independent, not-for-profit organsiation with the stated aim of promoting excellence and best practice in the field of healthcare communications. Their mission is to provide an independent forum to promote best practice. For any information about the report released by the HCA, visit the HCA website: www.hca-uk.org

HCA Benchmarking Sub-Committee: Chrissie Ashley, Ashley Communications. Aline Beresford, Independent market researcher (Sub-Committee Chair). Diane Wass, Merck Sharp & Dohme (Consultant to the Sub-Comittee for development of the Industry Survey). Julia Cook, Stepback Healthcare (HCA Deputy Chair). Fiona Hall, Chandler Chicco Companies. Angie Wiles, Virgo Health.