Hoping to give the pharmaceutical industry a new channel for promoting its products, MedExact Inc. is launching a series of country-specific reference sites for doctors. The sites will combine treatment information aggregated from a variety of credible sources with detailed promotional material supplied by MedExact's pharma clients.

When correctly used, Internet-based communication channels are overall potentially more cost-effective per minute of interaction than physical details. Their value added, however, is in many instances not an overall cost reduction of pharma-physician interaction, but a means to complement physical detail effectively by tailoring the message and medium not only to the physician, but also according to the product, therapeutic area and lifecycle stage.European markets are poised for exploiting those channels more systematically: physicians in many countries are increasingly open to receiving web-based communications from drug companies. In addition, the technological conditions (bandwidth, Internet usage) are close to being fully in place, with many technology providers gearing up to penetrate the European territory. But to take full advantage of these tools, European drug firms must properly integrate them within the current marketing mix and in doing so effectively leverage the valuable information about physician behavior that can be acquired via e-detailing transaction. In addition, companies will need to contemplate significant changes in their sales and marketing organizations that will integrate e-detailing with traditional sales rep activities and with the overall sales and marketing effort.

If ever an industry needed to find new ways of marketing itself, the currently floundering CRO business certainly fills the bill. A number of industry observers and insiders argue that Internet technologies could play a crucial rule in transforming R&D outsourcing from its role as a temporary means of boosting capacity to that of drug development partners. Each of the top three CROs have, in fact, devoted significant resources to building Internet capabilities. But the most publicized and ambitious such effort from Quintiles Transnational Corp., which is attempting to leverage its substantial financial resources, as well as the advantages of having a major commercialization outsourcing business that complements its drug development operations, to create an Internet platform whose scope the competition simply cannot match.

Medsite has built a steadily growing revenue stream and customer base, primarily through online sales of books and medical supplies. It also leverages those e-commerce offerings to provide pharmaceutical and other product companies with a means of promoting themselves to physicians by using incentives, such as discounted books or supplies. With further growth in mind, the company filed a $100 million IPO earlier this year--only to withdraw it a few months later when the bottom fell out of the e-health public markets. Facing a suddenly hostile financing environment, Medsite's management re-engineered their business plan, with the goal of accelerating the company's drive to profitability by emphasizing the higher-margin end of its business that derives income from promotional deals with product companies. A key element of this effort is an ambitious package of customizable Internet tools for physician practices that is intended to bring in lucrative sponsorship contracts from product companies. In entering this arena, Medsite will find itself up against some major players with significantly greater resources. And to fund their ambitious new initiative, Medsite will have to convince a wary investment community that, in an industry apparently headed for domination by a few billion-dollar companies, they will be one of the survivors. But Medsite's management expresses confidence that its higher-profile competition has yet to make any deep inroads into the physician market, which they argue remains quite open. The task now is to persuade investors, product companies, and physicians that they can succeed---where others have largely failed--in getting doctors to make the Internet an integral part of their practices.