PR agencies warn of ‘race to the bottom’
pharmafile | February 10, 2012 | News story | Medical Communications | HCA, PR
A new survey of PR agencies working in healthcare has highlighted concerns about cost-cutting which they say could lower standards in the field.
The HCA conducts a benchmarking survey of its members every year, but this year it says concerns are mounting about the squeeze on budgets and resources, which they say resembles a ‘race to the bottom.’
The survey acknowledges that patent expiries and other pressures are forcing pharma to cut costs, but warns: “The logical extension of a cost-containment approach could result in a world where healthcare communications is generally devalued and there are no winners.”
The HCA says pharma companies must appreciate the value of the specialised skills and creative thinking that specialist agencies can bring. It says consultancies must also “stand up for their own worth and not allow their services to become commoditised.”
The survey says the shift towards digital communications has meant consultancies must up-skill current staff and bring in new talent. Other changes have been the shift from PR towards the non-branded/medical education end of the communications spectrum, and the need to increase global expertise, and strengthen market access and public affairs offerings.
The HCA says all of these require time and financial resource to implement, stretching agency resources. It adds that agencies must invest time to ensure their staff are fully conversant with the ABPI Code, but finds that some clients expect Code advice to be provided as ‘part of the service’ without further cost.The survey also found a clear trend towards agencies managing a greater number of lower value client accounts – meaning staff are spread more thinly, making it a more difficult to meet all their clients’ needs.
‘Worrying new developments’
The HCA says there seems to be a trend for clients to expect more services to be provided as ‘goodwill’ gestures. For example, planning and programme development and even, on occasion, strategic counsel are being seen as add-ons to the service being paid for. It says this undermines budgets and could potentially devalue the most highly skilled services.
Jo Taylor, communications director, Daiichi Sankyo UK, lent her support to the reports conclusions: “Communications agencies should expect to receive a suitable level of reimbursement in acknowledgement of their expertise and experience,” said Taylor.
“Legal firms are not expected to haggle over their rates, and reducing communications agencies to this level threatens to devalue the entire profession. Normal competition will ensure that rates are maintained at a price the market can bear, with uncompetitive agencies pricing themselves out of the marketplace.”
Finally the HCA also highlight the rise of online auctions as a way of choosing an agency, which it says are welcomed neither by agencies or the handful of in-house communicators, to whom the HCA has spoken. “Here the aim is to identify a shortlist of the lowest bidders – a true ‘race for the bottom’,” it says.
The association says online auctions present little opportunity to demonstrate the value, and with as many as 17 participants in the average auction, few agencies see any benefit in taking part. Nevertheless, the survey found almost half of respondents had taken part in an online auction at least once before.
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