November 17, 2008
Life sciences companies typically buy biotechnology firms and makers of drugs or medical devices, but New Brunswick’s Johnson & Johnson pushed a new marketing frontier last month when it bought HealthMedia Inc., an Ann Arbor, Mich., firm that maintains an online health and wellness coach.
HealthMedia.com, the Web site that caught J&J’s fancy, promotes health, wellness and medication compliance through programs and information posts. It funds those activities with partners that are a mix of pharmaceutical and health care companies — including J&J — insurance providers, health care research firms and educational institutions, according to the site.
Johnson & Johnson Chairman William Weldon said the acquisition of HealthMedia will “deliver new growth” while helping customers cut health care costs. Jeffrey Leebaw, a Johnson & Johnson spokesman, said it is the company’s “first step in the establishment of a wellness and prevention platform.” But some have questioned whether the acquisition will create a conflict of interest when it comes to marketing new products.
Leebaw said HealthMedia promotes products and services “that can reduce the incidence of preventable chronic disease, sustain good health and well-being, and restore faculties to otherwise healthy aging populations.”
In other words, HealthMedia’s programs get patients to take their prescription and other drugs more diligently, or improve medication compliance, according to Mark Bard, president of Manhattan Research, a health care research and advisory services firm in New York.
“Marketing is probably not the best way to describe it, but it’s going to help them engage with consumers,” Bard said. Sizeable increases in patient compliance with their drug prescriptions would be equivalent to the gains from new drugs, he added.
Johnson & Johnson’s purchase of HealthMedia goes well with its fondness for the potential of online media. Two years ago it launched a blog, www.jnjbtw.com (short for J&J By the Way), separate from its corporate Web site, where it informally talks about company and industry developments, stripped of the formality of press releases. It also carries links to several independent pharmaceutical blog sites that are openly critical of government regulation and policy makers.
J&J declined to discuss HealthMedia’s revenue or the price it paid for the firm, but Bard said HealthMedia grossed $23 million in revenue last year, and “the price is at least that.”
Bard said J&J’s HealthMedia purchase marks a departure from earlier attempts by makers of drugs and medical devices to sell their wares. He recalls that in the 1990s, many drug makers invested in disease management firms that urged patients to take their prescription medications regularly by “wrap[ping] programs around pills.”
By marketing their drugs as part of disease management programs, pharmaceutical companies strayed into gray areas, Bard said. “It seems very altruistic, but the reality is if I have a product for allergy and I offer a disease management program for it, there is a huge conflict of interest,” he said.
J&J’s latest strategy, by contrast, is not linked to any specific drug, Bard said, but there still could be conflicts of interest when pharmaceutical companies use health information sites to promote their therapies and drugs. “It’s all paid for by advertising,” he said. “How do you maintain separation between church and state?”
Leebaw said he sees no conflicts, as J&J’s pharmaceutical business and HealthMedia are separate operations. He also expects other pharmaceutical companies that partner with HealthMedia to continue that association, even if some of them are J&J competitors. “The decentralized management philosophy of Johnson & Johnson will enable HealthMedia to manage its business locally, closest to its customers,” he said.
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