GSK's digital transformation strategy is bigger than tech for tech’s sake: exec

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GlaxoSmithKline’s digital transformation isn’t driven by a desire to go digital. Instead, it’s driven by the pharma company’s decision to evolve its business model to move with its customers, one exec says.

That distinction may seem like splitting hairs, but it’s the difference between adopting technology for technology sake’s and legitimate change that evolves with customers, Matt Lasmanis, chief information officer at GSK USA, told FiercePharma. And while pharma is often accusing of lagging behind when it comes to digital, industry leaders are realizing the importance of being there and being relevant as healthcare professionals and consumers adopt digital and mobile-first lifestyles.

“We don’t do digital because digital is cool and it’s the new thing. Honestly, digital is not that new. I was in publishing before this, and guess what? We were trying to figure out in publishing in 1999 and 2000 ... how to digitize the product, how to do digital marketing, how to build websites, and how to work with Amazon.com,” he said.

He frames GSK’s transformation as a business model change “to continue to meet and evolve societal expectations.” Part of the company’s goal in doing that is building trust and creating transparency across the customer experience.

GSK undertook three key steps to do that, Lasmanis said. The first, begun about five years ago, was changing how sales reps were incentivized. Glaxo was the first Big Pharma to pay bonuses based on scientific knowledge and healthcare provider relationships built in person and through digital connections, instead of number of prescriptions. The payoff? Lasmanis said GSK has ranked first in its peer group in customer trust with sales reps for the past five years.

The second initiative began a few years ago, but was just completed on January 1. GSK stopped paying healthcare providers to speak on its behalf about its products. Instead, it now uses internal expert sources. The switch connects to the company's digital strategy in that in the process of switching over, GSK launched new digital platforms and also now lets doctors “dial in” for information on their own time.

The third part of GSK’s digital change is delivering a “frictionless ecommerce experience,” Lasmanis said. Currently only in its U.S. vaccine business, GSK has upgraded its direct business-to-business purchasing system to add multi-device access and new elements that make purchasing vaccines more similar to a consumer shopping experience.

“Our business-to-business customers are using those kinds of platforms and portals outside of work and they’re now expecting them in their day-to-day work life as well,” he said.

While putting the kibosh on sales quotas and doctor speaking fees may help further the company's digital agenda, though, Glaxo has taken some heat from industry-watchers about the practices in a broader marketing sense. Analysts in 2014 speculated that CEO Andrew Witty's reforms were responsible for the slow start of respiratory newcomers Breo and Anoro, while industry players and reps have said the measures may be hobbling sales in China, where doctors eager for incentives will only prescribe the British pharma giant's meds if they have to. The switches also haven't completely cleaned up the drugmaker's corruption reputation GSK earned with 2014's $489 million China bribery scandal; since then, bribery accusations have popped up in countries including Iraq, Syria, Jordan, Poland, Romania, and, most recently, Yemen. 

Meanwhile, the digital remake is a continuing journey. While GSK and others are leading industry change, digital spending still remains low compared with other industries. IMS Health noted a 30% increase in U.S. pharma marketing spend in 2015, but that was still only 3.2% of total marketing spend by pharma.

“If you look at other sectors that have been through the change—publishing, financial services, retail—a lot have gone through digital transformation already and you can see even by that investment figure that pharma is still at the beginning of that journey,” Lasmanis said. “…We’re trying to get there from a digital perspective, but we’re also thinking about what are the broader things we need to address in our business model to meet future-looking societal expectations even beyond digital.”