Losing a loved one to a disease can cause people to re-evaluate their career choices. Some people go into medicine, research, or charity to try to make a difference to help others. When Peter Nalen lost his brother to cancer, he decided to start an ad agency.
“My brother felt a lump in his neck and went to the doctor, who told him ‘Don’t worry, it’s the size of a pea, come back in six months,’” Nalen says. “But six months later it was the size of a lemon. It was a malignant sarcoma.” He died after six years of treatment. The disease is curable in some cases, but his brother would have had better odds if he had treated it earlier. Nalen believes it wasn’t a shortcoming of medical technology that caused his brother to die, but a lack of information.
“I wanted to start an agency based on the principle that if patients had access to better information, they might be empowered to make better decisions and have better outcomes,” Nalen says.
For the last 11 years, Compass Healthcare Marketers has been in the business of pharmaceutical marketing. Unlike traditional pharmaceutical marketing, which focuses on selling drugs to healthcare providers to prescribe to patients, Compass focuses on patients themselves.
After more than a decade and several office changes, the growing 35-person company recently moved from Princeton South Corporate Center to 200 American Metro Boulevard in Hamilton, the redeveloped office center fashioned out of the old American Standard toilet factory.
Nalen grew up in Minnesota, where his father was a marketer for General Mills. Later he headed marketing for a company that made an oil treatment product called STP. (Anyone who watched NASCAR races in the last 40 years has seen the STP logo on the cars of Richard Petty and other drivers. That’s Nalen’s dad’s handiwork.) His mother was a homemaker.
Nalen graduated from Middlebury College and got his MBA at Kellogg Graduate School of Business. He worked at P&G for five years before moving to Princeton in 1990 to work for Johnson & Johnson. He started Compass in 2003 in the basement of a downtown Princeton office building. He painted the walls himself and put together the five IKEA desks where his first employees worked. The company outgrew its old office space and moved to a location on Nassau Street, which required 20 more IKEA desks. It then moved to Princeton South Corporate Center, subletting space from Computer Associates.
Last year Nalen said he couldn’t agree with the landlord on a new lease, and decided to move to custom space in Hamilton instead. The new space is within the former American Standard factory, a World War I-era building that was re-opened as a 450,000-square-foot office building in 2006. The new location has room to expand, and Nalen can have up to 57 IKEA desks if necessary. The company has been on Inc. Magazine’s list of the 5,000 fastest-growing companies for the past four years.
Nalen says the key to the company’s growth has been focusing on patient marketing. For short-term drugs, Nalen says, patients usually just take whatever their doctor prescribes for them until their condition goes away. But for chronic, long-term diseases, he says, more patient understanding is required. Someone with a chronic disease might spend a lot of time on the Internet, researching their condition and discussing treatments and side effects with other patients.
More specifically, Compass focuses on marketing drugs that are for small populations of less than 225,000 people.
Compass reaches out to patients in several ways. One of them is to find the patient advocacy communities, get insights from what they are saying to each other, and take those insights back to the drug maker. Another is by creating disease education programs, which inform patients about potential treatments for their conditions. They also help companies create adherence and persistency programs, which are designed to encourage patients to properly follow the course of medication that a physician has given them.
The FDA places very strict limits on what drugmakers are allowed to say to patients, Nalen says, and his company does not try to “directly influence” patients to take his clients’ products. But with a looming primary care doctor shortage — there will be more than 91,000 fewer doctors than needed by 2020, according to a report by the American Association of Medical Colleges — Nalen predicts more patients will turn to the Internet first for figuring out how to treat minor ailments.
“A study in 2012 said that people would rather diagnose themselves online than go to a doctor. About 40 percent of people trust a peer over a doctor, and it’s understandable,” Nalen says.
An “average peer” lacks medical training, so self-diagnosis is always a sketchy proposition at best. “We’re not saying ‘don’t go to a physician,’” Nalen says. “A physician is a smart step along the way. It is dangerous to self-diagnose.” However, Nalen says well-informed patients tend to treat their doctors more like a trusted advisor than a be-all and end-all arbiter of information. “I think that at the end of the day, a physician would rather have an engaged patient,” he says.
For the drug makers, that means providing good and accurate information about their products. Rather than exaggerating a drug’s benefits, Nalen believes it is important to make sure patients know about all of a drug’s potential negative side effects as well, so they can make an informed decision.
Nalen’s company has focused on the Internet from the beginning. Back in 2003, he says, few pharmaceutical companies understood how important the Internet was going to be for marketing drugs. Nalen saw it as a way to provide more accessible information to patients, and has built his company around that principle. He believes it is only going to be more important as time goes on.
“What’s happening in medicine now is what happened in the travel industry years ago,” he says. “Everyone used to book their travel through their travel agent, and never went directly through airlines.” Then travel websites came along and virtually destroyed the travel agent business. “I think what’s happening in this space is kind of the same. As more information becomes available, patients are going to become more empowered. Those companies that really understand these conversations and understand how to work with patients are going to be better off.”
Compass Healthcare Marketers, 200 American Metro Boulevard, Suite 122, Hamilton, 08619; 609-688-8440; Peter H. Nalen, CEO. www.compasshc.com.