Among medical mistakes, drug interactions are said to be the seventh leading cause of death, but a company new to the Princeton area is actively doing something about that.

Epocrates Inc., a California-based medical software technology firm, develops mobile clinical reference tools to help reduce medical errors. Employing PDAs or pocket PCs, it makes “point of care” information available to more than 500,000 healthcare professionals worldwide. The company claims that about 200,000 doctors, one-fourth of the doctors in the United States, use the Epocrates programs.

Currently on Inc. magazine’s list of the 500 fastest growing private corporations, Epocrates has more than 100 people in its San Mateo headquarters, headed by CEO Kirk Loevner. The east coast office opened in northern New Jersey six years ago, led by Matthew Campion, senior vice president. It moved to Nottingham Way in 2005, and expanded to Windsor Corporate Park on Millstone Road earlier this year.

“The Princeton area is centrally located and it is where a lot of our best people want to live,” says co-founder Jeffrey Tangney, executive vice president of sales and marketing. Of the current location: “I wanted something more professional.” GMH Capital Partners designed the company’s 3,700-square foot space, and Princeton Overlook-based Triad Properties was the leasing agent. Nine people work here now and Campion expects to add from 10 to 15 employees.

Epocrates software can help determine dangerous drug interactions; it offers formularies (lists of preferred drugs used by health plans) and provides up-to-date information on disease reference and treatment or symptom assessment. In a field flooded with constant changes and new reports, Epocrates receives the alerts about policy changes and new drugs, and it updates its content weekly.

From 80 to 90 percent of graduating medical students sign up for Epocrates products. Some use the free version of the PDA, but most pay $150 per year for Epocrates Essentials. “We do charge low prices. . . but we make it up in volume,” says Tangney.

Epocrates Essentials, the most utilized product, is a software suite that includes tools for drug reference, disease reference, lab test reference, and also a symptom checker. Age, gender, and symptoms can be entered and “it will actually give you a pretty smart list of possible diagnoses,” Tangney says. A special edition of Epocrates Essentials is available for nurses, which includes IV compatibility and drip rate.

The drug reference database can also be downloaded at no charge online. Users have access to more than 3,300 brand and generic drugs. “It’s like a PDR (Physicians Desk Reference) but better, in that it’s always up to date. On average, two new drugs get approved every week. The book is already six months out of date when you purchase it,” Tangney explains. Up to 30 different drugs can be entered. While most people would never take that many drugs, patients taking 5 to 10 drugs have become common.

The symptom checker is based on DXplain, developed at Massachusetts General Hospital over a 15-year period. Epocrates refined it and made it mobile, putting it on the PDAs.

One of Epocrates’ partners is Allscripts, which helps doctors write E-prescriptions. In November Allscripts licensed its electronic prescription software, TouchWorks, to Horizon Blue Cross Blue Shield of New Jersey and to Atlantic Health, a leading healthcare system in New Jersey. Epocrates also partners with Mysis, an electronic medical records firm, and DrFirst, an electronic prescribing firm.

In addition to offering the software subscriptions and hosting formularies for managed care organizations, Epocrates hosts continuing medical education, delivered on the handheld devices.

Tangney is certain that print represents the most daunting competition for Epocrates. “Our main competitors in the eyes of doctors right now are books that they have been using for many years,” he says. In other words, the Physician’s Desk Reference (PDR), owned by Montvale-based Thomson Healthcare.

He also feels that, in the digital field, Epocrates is leading its competitors. Skyscape, a 40-person Massachusetts firm, has medical references available for digital downloads and offers an alternative to PDR.

Not to be outdone, Thomson Healthcare is trying to distribute the PDR on hand helds. It launched its first hand-held version in 2002, two years after Epocrates launched. Thomson has 16,000 users so far, according to spokesperson Kyle Christensen, but he notes that a new version has just been released. Unlike the Epocrates software, it is available only to doctors who can prescribe. “We are not mixing in non prescribers,” Christensen says.

In part because it owns the PDR, Thomson also owns a database containing 650,000 of the country’s prescribing doctors, which number from 750,000 to 800,000. Christensen claims it is “the most highly refined targetable list” of doctors, sorted by alma maters, practice types, and geography. It can send electronic messages to 180,000 of them.

Christensen says that the Thomson advantage is that it can draw content from across the Thomson Corporation, “integrated and accessible through information systems at 86 percent of U.S. hospitals.”

Epocrates’ Senior Vice President Campion replies that his company’s clients prefer a more individual approach. “Thomson can install a system-wide network for logging in,” says Campion, “but our clients can have Epocrates on their PDAs or on the web. Doctors are getting what they need, whereas Thomson is saying ‘This is what we are making available to our doctors.’”

Epocrates also has the advantage of a head start — 200,000 doctors enrolled compared to 16,000. And at least for now, its products seem more user-friendly: They provide information in an easy, bullet-pointed format, rather requiring the user to scroll through countless pages of downloaded text.

Epocrates was founded in 1998 in San Mateo by Tangney and board member Richard Fiedotin MD when they were MBA students at Stanford University’s Graduate School of Business. Tangney, who is married and will continue to live in California, is a Wisconsin native and has a University of Wisconsin bachelor’s degree. His career in pharmaceutical marketing, healthcare investment banking, and business development included stints at ZS Associates (formerly of Chicago and currently located at 150 College Road), Goldman Sachs, and the biotech start-up, Pangene Corporation.

At Stanford, both Tangney and Fiedotin wanted to start companies, says Tangney. “I was the ‘technogeek.’ He was the doctor who recognized that the volume of information doctors were expected to remember was unmanageable. Imagine seeing another patient every eight minutes. That has been the mission of the company from the start: to be that source of answers for doctors at the point of care.”

One day, while looking at his PDA, Tangney realized that, “This could be a good place to get that information.”

The Stanford Student Health Care Center agreed to do a pilot study of their first attempts to create the software, using donated PDAs. Skepticism gave way to unexpected acceptance. “They loved it. We sensed that we had a hit on our hands,” Tangney says. Their first sales were to Pfizer and Warner Lambert. “I have to say that we never expected in any of our business projections that we would have one in four U.S. doctors actively using our products after only a few years. It has struck a nerve, filled a needed niche,” he says.

The company’s three-year-growth rate was 654 percent and gross revenue was $37.7 million, according to Inc. Magazine. From 2005 to 2006, its Inc. 500 ranking rose 81 places from number 257 to 176. Its investors include the Sprout Group, Interwest Partners, Three Arch Partners, Draper Fisher Jurvetson, and Bay City Capital.

Leveraging Princeton’s expertise in market research and its proximity to pharmaceutical clients, Campion’s office recruits doctors to take online surveys for market research firms, and it also sells communication services to pharmaceutical companies. Campion is a native of Spring Lake, where his father was in the food business. He majored in marketing at Boston University, Class of 1983, and his first job was at Schrader Research and Ratings in Cranbury. Then he worked at Total Research Corporation for 14 years, most recently as executive vice president in charge of TRC’s global life science division. His experience spans all types of domestic and international research across just about every therapeutic area.

“Our clients tend to be full service market research companies who need physicians to come to the web surveys,” says Campion. “Our clients buy reliability. When we say we can complete 1,200 interviews in five days, they know that the work will get done.”

Doctors get from $25 to $185 for completing a survey, and the money is added to their account by way of an Epocrates-branded Visa debit card. “When they pull out their wallet to buy their son a baseball glove, and Epocrates pays for that glove, it has to make an impression,” says Campion.

The Epocrates services, called Epocrates Honors, are “virally” marketed from one doctor to another. Says Campion: “That’s the greatest endorsement you can get. Doctors are a skeptical and cynical bunch.”

For the pharmaceutical companies, Epocrates distributes clinical information in a non-promotional form, with no ads. “We send out DocAlert messages to targeted groups of specialists — a clinical message about the benefits and uses of a product,” says Campion. “When they synchronize the device, which they do about once a week, the DocAlert will appear on the message.”

For instance, if a company discovers an “off label” use for a drug, it could use the DocAlert channel as a way of “messaging” physicians. Traditional means of communication, such as publication in medical journals, are laboriously slow, Campion points out. “We have an uncluttered, well-read communication channel. If the physicians are interested in additional information, they tap yes at the bottom of the message, and the next time they synchronize that request comes back to us, and we send an E-mail that can have links to the company’s website.”

“We have a unique relationship with physicians,” says Campion. “They come to us to acquire software to be better and safer physicians. When their trusted friend Epocrates asks them to participate, they have the opportunity to opt in. A highly targeted physician might do several E-surveys a month.”

The corporate name, chosen by venture capitalist Gil Kliman MD, is a clever play on words based on the name of the father of modern medicine, “Hippocrates.” In this “E-age,” says Tangney, “the name refers to the father of modern medicine, and we are bringing medicine into the modern digital age.”

Epocrates Inc., 50 Millstone Road, Windsor Corporate Park, Building 400, Suite 100, East Windsor 08520; 609-632-1040; fax, 609-632-1050. www.epocrates.com

Digital Account

Managers

Every year doctors in the United States write 1.5 million incorrect or illegible prescriptions, and these mistakes result in 8,000 fatalities. It’s no wonder that experts are pushing for all prescriptions to be written electronically by 2010.

That’s one reason why Peter H. Nalen sees a very bright future for digital healthcare delivery: “The personal data assistant (PDA) will be the tool of choice. Doctors will write a prescription, send it to your drugstore, and annotate your medical file.”

Nalen is nudging his pharmaceutical, biopharma, and medical device clients into the 21st century. As more healthcare gets delivered in a digital manner, pharmas need to use E-marketing and branding tools.

In the fall of 2003, with Kristin Marvin Keller and Jack Bilson III, Nalen founded Compass Healthcare Communications. In November he doubled his space, expanding from 1,500 square feet on Chambers Street to 3,000 feet in two floors at 14 Nassau Street, and he has 11 employees.

His target: Brands with limited sales coverage and big information needs. “They have a point of difference that is unique and it is meaningful for a core group — which is perfect for online,” says Nalen. “They want to do more with less.”

His firm functions as E-marketing account managers for its clients who buy coverage on Epocrates, which offers the prescription database for PDAs (page 38). It also works with many other electronic media, including R.L. Lewis of e-Healthcare Solutions, a vertical advertising network for healthcare (page 42).

Nalen started out focusing on patient compliance — providing the online materials to nudge patients into taking the pills prescribed for them. Now 35 percent of his business is communicating directly to doctors.

“We perform or enable anything that happens online,” says Nalen. “None to One” is his motto, because he aims to take a brand from no digital program to its first digital program. That requires lots of education. “If our clients don’t understand the E-marketing space, it is easy for them to say no,” says Nalen. “We make it easy for them to say yes.” Compass’ own training modules educate a company’s legal staff well before Nalen brings in the contract to be signed. “We understand how intimidating it can be. Clients who have been with us for three years — we are still educating them.”

After the client dips its toe into the Internet, it usually finds “the water’s fine.” But one time Nalen’s business plan backfired. A client, King Pharmaceuticals, liked its Internet program so much that it revamped its whole marketing plan and hired a big agency to implement that. “We’re the ones that got them excited about the Internet,” says Nalen. But he lost the account to a mega firm.

Still, the reason for Compass Healthcare’s expansions is that most of its novice clients have stayed. They include Reliant Pharmaceuticals, Kos Pharmaceuticals, Valiant, Boston Scientific, and Novartis.

Nalen grew up near Minneapolis, where his father was a marketing executive, and graduated in 1983 from Middlebury College with a double major in American literature and marine biology. The latter involved a term at the Marine Biological Laboratory in Woods Hole, Massachusetts, and a trip on a 120-foot schooner to the Bahamas. He worked for General Mills while earning his marketing MBA from Kellogg in 1987, then did consumer product brand management at Proctor & Gamble in Cincinnati; Johnson & Johnson, working on Purpose skin care and Clean & Clear; and at the Sawtooth Group in Woodbridge.

Nalen took a hiatus from the corporate world and spent two years in Vermont, where he ran marketing for a snowboard company, before moving back to Princeton to work at Simstar (now known as Rosetta). He left there to start his own firm in the fall of 2003 (U.S. 1, March 24, 2004). His wife, Lisa, an actress who cohosted a Discovery Channel television show, started a premium chocolate company, Sweet Assets (www.FinancialCrunch.com). They have three schoolage children, and he serves on the board of Womanspace. The Internet’s unparalleled capacity to offer information is what drove Nalen into starting this business.

At least one of Compass Healthcare’s clients is buying coverage from Epocrates, but Nalen remains agnostic about his marketing picks. “Epocrates systems have their place,” he says, “effective with physicians that use it. But there is no one killer marketing vehicle.”

If the PDA will be the tool of choice, as Nalen has claimed, it also represents the field of battle for pharmaceutical marketers. “PDAs have a small screen, and we are all fighting for real estate on that screen.”

Compass Healthcare Communications, 14 Nassau Street, Princeton 08542; 609-688-8440; fax, 609-688-8399. Peter H. Nalen, president/CEO. Home page: www.compasshc.com

Healthcare Ad Man

R.J. Lewis founded e-Healthcare Solutions as a vertical Internet advertising network dedicated to healthcare. His firm provides specialty online advertising opportunities for marketers of medical and pharmaceutical products who want to reach consumers, physicians, and other health professionals.

This unusual advertising distribution network delivers more than 35 million page views per month. It has more than 350 healthcare sites includes sites for doctors, disease-specific sites for consumers, and those for particular medical communications. Lewis has just signed a contract for his firm to be the exclusive online advertising representative for the American College of Surgeons.

He employs just under a dozen people, including four sales people, and needs to expand; he is looking for a building to buy. As an advertising representation firm for the Internet, his business model differs from the traditional print model, which requires the company to sell the ad and let the publishing company do most of the work.

“Their responsibility begins and ends with the sale. It’s up to the publisher to do the mechanicals, layout, press, distribution, tear sheets, billing, collection,” he says. “On the web we do all of that.” His firm rotates in different ads, meets targeting requirements and frequency caps, provides screen shots or click throughs to data, and does billing and collection. Whenever a trade group’s website wants an ad, it codes the website to reach out to Lewis’s server. “If a company wants a million impressions of its heart drug on the American Heart Association website between January and December, we would rotate them in. If there will be 3 million impressions, we rotate others in.”

Professional societies make up half of his commission-based business. On his impressive client list — the American Medical Association (AMA), JAMA, American Medical News, Thomson’s PDR, the American Heart Association, the American Academy of Neurology, and 15 journals published by Elsevier, Lippincott’s Williams & Wilkins medical division. The remainder of his business comes from low profile consumer-oriented healthcare websites.

Lewis grew up on Long Beach Island, where his father was a principal and his mother a teacher. They now own and operate the Education Academy, based in Fork River, for disturbed or neurotically impaired children. His sister is an oncologist at Fox Chase. After majoring in marketing at the University of Delaware, Class of 1990, he spent two years traveling around the world, living in Australia for seven months, where he worked in an agency and had his first exposure to the advertising industry.

Such extended stays, he says, “allow you to take off the American filters and see the world from a different perspective. Plus you get a sense for the size of the world, sometimes incredibly small (you run into people that you went to college with) and, at other times, feels quite large.”

He believes the journey helped him to develop an appreciation for other cultures, which is critical when working on the Internet. “The Web is a global medium, first and foremost.” And he polished his ability to deal with other people.

What pushed Lewis to do his round-the-world trip right away was when his parents arrived in Hawaii, where he was spending his junior year “abroad.” “I had been doing Hawaii in a convertible Jeep, surfing and scuba diving. They enjoyed it in a different way; they rode around with the windows up and the air conditioning on.” Lewis eventually earned an MBA from NYU. He worked at the medical education division of the Grey Healthcare Group. Most recently Lewis was vice president of sales for Physicians’ Online and personally generated more than $7.5 million in advertising and sponsorship sales. He dismisses the notion that Internet ads will cannibalize the budget for print ads. “Print revenues in general are flat or in decline. We are trying to grow the online revenue for publishers at a pace to make up the losses. And if money has been allocated to the Internet, you can’t swim against the tide.”

Internet advertising also turns out to have different buyers with different skill sets. “The AMA has 15 sales reps in Parsippany and we don’t step on each others’ toes — we coordinate and do lead sharing.” An unusual sideline to the business is a market in E-health articles. “After less than a year, we have uploaded more than 3,000 articles to our database,” he says. The sole payment to the author is a link to his or her own website. “They are either selling advertising or have a subscription model.”

e-Healthcare Solutions Inc., 548 Grand Avenue, Ewing 08628; 609-882-8887; fax, 425-671-7796. R. J. Lewis, CEO. www.e-healthcaresolutions.com

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