Political Uncertainty and the Impact on Healthcare and Life Science Marketing Budgets
A recent article in Fox Business on the biotech industry and the national elections, titled “Why Biotech Investors Are Terrified of the Upcoming Election,” calls attention to the growth uncertainty in the biotech sector. Whether you are a life science or healthcare marketer, or in purchasing, it’s clear how the political landscape is causing everyone pause.
You have Hillary attacking “predatory pricing” and promising a better healthcare platform.
The Donald wants greater competition, hinting at more pharmaceuticals being manufactured abroad.
And both prospects have biotech investors terrified.
Regardless of who wins the White House, these investors are hedging for material policy changes, ones that will affect the biotech, pharmaceutical, and even the medical device industries.
Look, I don’t claim to be an expert on policy or can extrapolate the impact it will have on our industry. I personally feel this is just a lot of political rhetoric. But the street doesn’t view it that way. They can’t. So what do we do?
First, don’t panic. Regardless of who gets into the office, widespread policy changes take time to implement and often require buy-in from Congress. But, if investors are less bullish, it can have a domino effect, leading corporations to advocate for reductions in SG&A expenses to offset (potential) topline revenue loss. As you know, sales and marketing budgets live in this line item.
Second, DO NOT shut it all down. One of the worst things you can do is pull back way too fast and way too hard. You’ve spent a lot of time and energy building your brand. Completely cutting your presence in the market will hurt the equity you’ve created. In the end, it will cost you a lot more to get back to where you are now.
Third, be a vigilant marketer. Take a look at your budget line item and model two additional plans. Specifically, one model at 50 percent of your current budget and one at 25 percent. This way you can maintain a smart presence in the market, while meeting the new possible budget parameters.
Fourth, honestly audit your tactics. Marketing is an investment and it should yield an ROI. If your budgets are cut, you may need to do more with less. Look at your marketing mix and really hold each tactic accountable to the projected results. That will give you the direction to allocate your dollars appropriately.
Fifth, communicate with your partners. Schedule meetings with your media partners, your media planning agencies, and your agency of record (AOR). Like you, your partners do not want to be blind-sided. Discuss the budget implications and ask them to help develop a more optimized marketing mix. If you get push back, it’s time to re-evaluate agencies.
Again, I am hoping that all this policy rhetoric is exactly that, rhetoric. But I guarantee you’re going to feel it, if you haven’t already. Use this uncertainty to your advantage and optimize your entire communication program and hold it accountable.
In the end, regardless of who will be elected, he or she cannot dismiss the current technologies and innovation that are already driving a “better healthcare platform.” Short-term cost savings measures always have an adverse impact on brand and market-share. We just need to have foresight and prepare.