Open Banking And FinTech Firms: To Clash Or Collaborate? –

Open banking in the United Kingdom is a bit more than a year old, fostering data-sharing by financial institutions and a collaborative mindset between financial services firms that might at first glance seem the fiercest of competitors.

And increasingly, for traditional finance firms, even the largest among them, eyeing smaller nimble tech upstarts can be a case of “If you can’t beat ’em, join ’em” and “Put your money where your mouth is.”

To that end, U.K. FinTech Bud said this past week that it had raised $20 million in funding through a Series A round. The investment came through a consortium of backers, including HSBC (whose First Direct is also a Bud customer) ANZ and Goldman Sachs, among others.

The firm’s platform, combining open banking data artificial intelligence (AI) and an online marketplace, makes a range of financial offerings from different financial service providers available through a single interface and app. Features span account information, financial goal tracking and bill payment information.

An interview between PYMNTS and Alan Walsh, Bud’s head of network and partnerships, revealed that the company’s fundraising and positioning in the market spotlight larger trends in a banking industry gone increasingly digital.

He noted that in Bud’s model financial services are provided as the firm positions itself as the “middle layer” between financial firms and the FinTech providers that are signed up within a firm’s marketplace.

In bringing far-flung financial services together at a single point of contact, Walsh told PYMNTS, “From a competitive landscape position it really comes down to one word, which is ‘collaboration.’ Open banking is allowing us to understand more about a user and to therefore serve them better by connecting them to journeys that are more relevant to them.”

Collaboration, of course, represents a shift in mindset and in strategy for traditional financial institutions (FIs) like banks. Walsh offered an example: A customer going on holiday (vacation) may opt to explore foreign exchange providers — and traditionally the bank would offer up one or two services housed under its own umbrella of products and services.

But now, the executive continued, open banking can bring a host of competitive offerings to that same consumer. Those offerings may compete with the bank that is the original point of contact for the user, but nonetheless may be a better fit for the consumer’s need at that point in time.

“This really is where traditional players are now starting to sell and position third-party products within their own ecosystem,” said Walsh. Initially, “what is right for the customer may not actually be your product,” he said of the banks, though “that may come in time. It’s not for the short-term gain — how we sell as much product as possible. It’s a matter of ‘I want to understand the customer as much as possible … and to be the facilitator or the enabler in allowing that to happen.” This can benefit the bank, too, fostering trust from consumers that the FI will continue to help them find what they need.

The Evolving Relationship

At the most basic level, he said, collaboration makes financial life a bit simpler for users, as bank accounts, savings accounts, credit cards and mortgages may be spread out through client relationships with different institutions.

He said that as Bud and other firms start to get significant volume they can begin to understand the personas, the types of individuals or the demographics — through data and modeling — that can best be served by certain financial products and services. The bank that knows a consumer’s pay raise and bonus structure have changed for the better may be able to suggest a mortgage that can save that consumer significant amounts of money every month.

Beyond the collaborative model serving end users, Walsh took note of the fact that investment capital is flowing to his FinTech — and of course other FinTechs — from banks.

“There’s not a day that goes past where you don’t see another mainstream bank has made another investment,” he said. “Whether it’s here in the U.K. or globally and I guess for us it’s a huge credibility stamp … [the banks and traditional FIs] are buying into the vision and also hedging their bets.”

He told PYMNTS a majority of the $20 million in hand will go toward recruitment of new tech talent as the company targets markets beyond the U.K., including Australia, Canada and Singapore.

As open banking evolves, Walsh noted that there’s “a huge amount of work to be done in the industry both in financial services and other areas to get APIs to the standard that they are in other industries,” and he pointed to web mapping services as an example of such standardization. There also exists the need for further education of the population at large — witness a PwC survey that recently found that of 2,000 people surveyed, only one in four had heard of open banking and only one in five knew what it meant.

Nonetheless, maintained Walsh, “Once you start to show a user and the customer the value of why [open banking] is a benefit, people will start to engage with it more, and like any platform the more you engage with it the more it gets to know you better.”

He predicted that “in just a few years “we will look back and think ‘What were we doing before this happened? this is so much more powerful and so much more relevant and personalized to me as an individual.’”


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Financial Invisibles Report

Is Blockchain Technology Still Interesting for Banks in 2019? – U.Today


Blockchain is mainly known as the currency that powers Bitcoin. The technology made its grand debut in Satoshi’s legendary white paper, but there were also many precursors to its appearance. Despite the fact that Bitcoin remains its most famous use case, there are plenty of other applications of the DLT technology in a slew of other industries. Not surprisingly, the traditional banking sector was the among the first industries that Blockchain took by storm. However, after the crypto rout, many naysayers still wonder whether banks are still interested in Blockchain in 2019. In this article, U.Today explains why it could be the case.

banking sector

Major benefits of Blockchain

Here’s how banking institutions can benefit from utilizing the disruptive Blockchain technology:

  • High transaction speed. The major reason why many banks around the world are jumping on the Blockchain bandwagon is the speed of bank transfers. An ordinary bank transfer takes up to three days to be verified, but Blockchain helps to eliminate this long wait by reducing the transfer time to minutes or even seconds. For example, a Switzerland-based startup called Liquineq has managed to design a Blockchain-powered bank transfer platform that is able to process up to 50,000 transactions per second with the help of sharding. In the long-term perspective, Blockchain would allow exchanging money with the speed information moves at today.

  • Top-notch security. Apart from an impressive-speed, Blockchain technology also offers a high level of security. Reduced transaction time means that there are fewer possibilities for someone to intervene with the transactions. Each transaction is secured with the help of keys (the private key, as the name suggests, is only revealed to those parties that conduct the transaction).

    One should also keep in mind the fact that Blockchain is an immutable ledger, which cannot be tampered with. Blockchains cannot be hackers (hypothetically, it would take a quantum computer to do so, but there are already quantum-proof Blockchains in the likes of IOTA). Considering that 40 percent of financial bodies face economic crimes that lead to significant losses. At the same time, Blockchain’s mechanism is extremely difficult to corrupt.

  • Greater efficiency. Blockchain would be able to cut the operational costs of major banks by 50 percent. The technology will allow banks to drastically reduce the cost of transactions while simultaneously bringing more transparency to the table. Another study, which was conducted by consultancy firm Bain, shows that Blockchain could reduce trade finance operating costs by up to 80 percent if implemented right. The cost reduction would be primarily the result of faster transactions — according to their estimations, the speed of settlements, billings and payments by four times could experience a three-fold increase.

Use cases for banks

International transactions

Sending money to another country is not an easy feat. For instance, Wells Fargo clients have to pay a $45 fee in order to perform an international wire transfer. This is objectively a huge waste of money considering the yearly volume of cross-border transactions reached $180 trln last year.

Ripple, for instance, is viewed as an alternative to mainstream bank transfer systems (SWIFT remains the main target for disruption). There have been numerous rumors about a potential partnership between the two, with some suggesting that SWIFT could eventually buy Ripple. However, Ripple CEO Brad Garlinghouse dispelled these rumors back in November, stating that they are hell-bent on taking over SWIFT. Garlinghouse also reveals that almost ‘at least’ 100 SWIFT-connected banks are already utilizing their xCurrent product. In other news, Euro Exim Bank, the very first bank that started using Ripple’s xRapid, is testing its new trade finance system with the help of the Ripple Blockchain.

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Smart contracts

The cost of commercial claims resolved through litigation around the world reaches a staggering $870 bln (and that sum of money doesn’t take into account contract mismanagement). Smart contracts debuted with Ethereum in 2015. This feature allows encoding information about the terms and conditions of a contract on a Blockchain, and they cannot be tampered with due to its immutability.

It is worth mentioning that smart contracts are also self-enforcing, which means that there are no financial intermediaries. Money is only released from an escrow when the terms of the contract are met. Blockchain could cut the red herring in the banking industry, completely eradicating complicated legal documentation. Smart contracts could be used for loan servicing, insurance, etc.

Know Your Customer (KYC)

Each financial institution has to shell out on average $48 mln in order to conduct KYC for their customers. Back in 2017, Thomson Reuters reported that reported that KYC-related procedures for banking giants with annual revenue of $10 bln exceeded $142 mln. Notably, the cost of such procedures tends to go higher each year.

With Blockchain, storing data that pertains to the customer’s financial history is much easier. An immutable ledger could keep all information about the source of funds, loan history, and the customer’s business activity. The information is securely stored on a Blockchain, and it can be shared with other banks.

Auditing and reporting

Just like in the previous case, Blockchain could significantly reduce the cost of auditing and reporting information to regulatory authorities. Undoubtedly, regulatory compliance is crucially important, but it doesn’t necessarily have to be that expensive.

U.Today already reported that Big-Four auditors are trilling Blockchain technology within a consortium with 20 Taiwanese banks. The tamper-proof technology is the perfect choice for verifying the authenticity of transactions.

Cryptographic wallets

Digital wallets represent a huge threat to the banking industry. Hence, banks take matters into their own hands while the industry is still nascent. The total number of people with a credit card is 1 bln, which is 40 times bigger than the size of the public with a cryptographic wallet (25 mln). Rabobank, a major Dutch multinational banking company, already planned to integrate a cryptocurrency wallet into its online banking system. Bank of America, for instance, was awarded a patent for secure crypto storage, which gave ground to many speculations that it’s going to operate a crypto wallet.

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Syndicated lending

It may come as a surprise, but in the age of bleeding-edge technologies, people still mainly rely on fax for syndicated lending (when multiple institutions join forces in order to provide a loan). On average, it takes 19 days for a bank to approve your loan, and your loan amount will most likely get disbursed in 5-7 working days.

Yes, you guessed it – Blockchain could substantially alleviate the process of taking out a loan. That’s exactly why global banking giant Credit Suisse launched a commercial platform for Blockchain-powered syndicated loans in 2019.

Blockchain disrupting the banking sector worldwide

Literally, almost every bank under the sun. Currently, up to 99 percent of banks and investment firms are either exploring the new technology or already utilizing it. CEOs of the biggest banking institutions in the world recognize the disruptive potential of Blockchain, and they are actively working on new use cases that are based on the new technology in order not to be left behind if it indeed explodes and becomes bigger than the Internet.

North America

As U.Today reported earlier, Bank of America (BofA) is one of the leading companies by the amount of Blockchain-related patents, along with such behemoths as IBM and Alibaba. On the flip side, the fact that BofA is fighting tooth and nail in order to become the leader in the Blockchain race doesn’t necessarily mean that it’s going to use all of its patents. It’s more likely that the second largest bank in America is simply reserving a spot for the future. The trend is seen worldwide — only 10 percent of banks have actually implemented Blockchain.

North AmericaNorth America

Meanwhile, JPMorgan Chase went as far as creating a separate division for exploring the potential of Blockchain (the Quorum division). Similarly, Goldman Sachs enjoys a reputation as one of the most crypto-friendly banks. The Bank of Montreal also debuted a Blockchain-powered system for fixed-income transactions.


In June 2018, Deutsche Bank collaborated with US tech giant IBM to test bank transfers that are powered by Blockchain. Earlier, Deutsche Bank’s CIO also claimed that Blockchain’s potential is huge. IBM’s Martin Schroeter explained that major financial institutions in the likes of Deutsche Bank are using Blockchain to enhance the level of security and scalability.

Santander Group, a multinational commercial bank in Spain, was among the first to roll out the Ripple-Net powered service ‘Santander One Pay FX’ for conducting cross-border transactions.


Eight of the biggest Polish banks are currently testing a Blockchain-based platform designed by Billon Group for storing and managing the customer’s personal data. In the future, Billon Group plans to introduce Blockchain-powered solutions for other major banks, including transferring fiat money.

Russian banking giant Sberbank has been on the Blockchain train since 2017. Sberbank CEO Herman Gref recently predicted that industrial-level adoption of Blockchain will take place in one or two years. Raiffeisen Bank also announced that it would use the DLT technology for issuing digital mortgages.


China is already jumping feet-first into the Blockchain industry in spite of its infamous crackdown on crypto. On Dec. 29, the China Banking Association (CBA) signed over ten major Chinese banks (including HSBC and Bank of China) to a new Blockchain-powered trading platform. In the nearest future, CBA expects that smaller-caliber banks will follow suit. While China strives to be at the forefront of Blockchain innovations, it would be rather challenging for the country to make this transition given that its local trade ecosystem is still paper-based and labor-centric.


On Jan. 29, the Economic Times reported that major Indian banks, including ICICI Bank, HDFC bank and Axis Bank, have formed a consortium to launch the very first Blockchain-powered funding platform for small and medium-size businesses. When it comes to cryptocurrency, however, a hostile line persists.

The Middle East

The Gulf Region channels China’s ambitions when it comes to adopting Blockchain in banking. Remarkably, the UAE, Saudi Arabia, and other countries are also not big fans of crypto, but they recognize the aforementioned advantages of decentralization in the banking industry.

On Dec. 27, U.Today reported about the National Bank of Kuwait (NBK) teaming up with Ripple in order to launch a cross-border remittance service dubbed ‘NBK Direct Remit’. Jordanian citizens will be able to send transactions in a matter of seconds.

The Middle East The Middle East


African banks are also warming up to Blockchain. Namely, Barclays Africa Group, the third biggest bank in South Africa, became the first financial institution in the country to join other 45 R3 members. The South African Reserve Bank (SARB) spearheaded the collaboration of the country’s biggest eight banks for Project Khokha, which utilizes the Ethereum-based Quorum Blockchain for performing fast bank-to-bank payments. Still, the pace of adoption remains sporadic across the country.


Latin America

On Dec. 15, Reutersreported about Brazil’s Itaú Unibanco becoming the very first bank to close its club loan. That was conducted with the help of R3 Corda Connect, which cuts the red herring, helping banks approve club deals digitally. It is worth mentioning that the country’s central bank started dipping its toes into the Blockchain technology long before that by starting to test Ethereum and Quorum back in 2017.

Central Bank of the Argentine RepublicCentral Bank of the Argentine Republic

Back in July, the Central Bank of the Argentine Republic also requested 42 books in order to understand Blockchain technology in a better way, which shows that they are ready to openly accept the currency.

Blockchain as a replacement for banks

The abovementioned use cases show how much potential the technology has, but it doesn’t mean that we should write off the world’s banking industry (at least for now). Some experts predict that it would take a very long time for Blockchain to replace traditional banking, and it would have to undergo years (or even decades) of additional transformations to come up as a viable replacement. The technology is still facing the so-called ‘scalability trilemma’, which refers to the tradeoff between scalability and security for the sake of optimization.

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The issues that have to be resolved

Blockchain is currently in the very early stages of its development. In the future, there could be global coordination between multiple banks that could utilize the technology for the common good. As of now, the major challenge is to come up with common standards for financial institutions, which are necessary for implementing new solutions.

Another obstacle that currently hinders the adoption is lack of awareness about Blockchain. According to a PwC report, only 24 percent of executives in the banking industry are familiar with the technology.

Key stakeholders within a certain financial institution have to realize the benefits of Blockchain.

Lastly, we cannot ignore the elephant in the room – regulations. Mainstream adoption won’t happen without a proper legal framework. However, as of recently, it seems like lawmakers are finally warming up to the new-fangled technology. Case in point: Wyoming, a crypto-friendly US state that recently unanimously passed a Blockchain bill that would give a huge push to Blockchain integration in the cowboy state. On Jan. 29, they passed yet another Blockchain bill.

Blockchain is not an expense-saving machine

Umar Farooq, who spearheads the Blockchain department at JPMorgan, believes that DLT technology can indeed offer applications for banks, but its cost-saving abilities are largely exaggerated. Blockchain, according to Farooq, is mainly about creating new products. Meanwhile, simply using it as a tool for cutting expenses and labor force significantly limits its possibilities.

Blockchain banking for the unbanked

Yes, the adoption rate is still rather slow, and major banks are not going anywhere, but there is one sector where Blockchain is already making waves: banking the unbanked. About 2 mln people around the world still remain unbanked. That issue is not restricted to third-world countries – nationwide, almost 8 percent of households in the US remain unbanked. Not surprisingly, things are getting much worse in regions with a low level of financial inclusion, as 34 percent of people in sub-Saharan Africa remain without a bank account.

Blockchain banking for the unbankedBlockchain banking for the unbanked

CNBC earlier reported that people in South Africa (one of the most developed regions) still transfer funds with the help of a bus driver given the inefficiency of bank transfers, which is why it’s becoming one of the focal points of the crypto gold rush. As of now, there are plenty of Ethereum-based projects that are designed to tackle the issue.

Thursday, February 14, 2019 – Kaiser Health News

State Highlights: Transgender Prison Nurse Wins Discrimination Suit In Iowa; New York City Introducing Bill To Change Ambulance Sirens To ‘Hi Lo’ System

Media outlets report on news from Iowa, New Mexico, Ohio, California, Maryland, Massachusetts, Rhode Island, Texas, Georgia, Florida, Colorado, Connecticut, Washington, Minnesota, Wisconsin and Missouri.

The Associated Press: Jury Sides With Transgender Employee In ‘Historic’ Iowa Case

A jury ruled Wednesday that an Iowa prison warden discriminated against a transgender employee by denying him the use of men’s restrooms and locker rooms in a verdict that advocates call “historic.” Jurors also found that the state executive branch discriminated against Jesse Vroegh by offering medical benefits that would not cover his gender reassignment surgery. After making those findings, the eight-member jury awarded $120,000 in damages for emotional distress to Vroegh, 37, a former nurse at the Iowa Correctional Institution for Women in Mitchellville. (Foley, 2/13)

Des Moines Register: Transgender Prison Nurse Wins Suit Against State Of Iowa

Gender identity — or the gender a person identifies as, no matter what sex organs he or she was born with — has been included in the Iowa Civil Rights Act since 2007, meaning transgender Iowans have legal protections against discrimination in education, employment, housing and public accommodations. (Crowder, 2/13)

The Associated Press: New Mexico Reverses Course On Medicaid Charges For Patients

New Mexico reversed course Wednesday on its plans to charge some patients covered by Medicaid a monthly insurance premium of $10 and co-payments of $8 on certain brand-name drugs and visits to the emergency room for routine medical care. Democratic Gov. Michelle Lujan Grisham announced in a new release that the state will seek federal approval to reverse cost-sharing and enrollment provisions instituted by her Republican predecessor that were designed to conserve state spending on Medicaid. (Lee, 2/13)

Cleveland Plain Dealer: Summa Health Among Top Five Percent Of U.S. Hospitals, According To Healthgrades Health Care Rating Service

Akron’s Summa Health System announced this week it achieved the Healthgrades 2019 America’s 250 Best Hospitals Award. The distinction places Summa Health’s clinical performance in the top five percent of more than 4,500 hospitals assessed nationwide as measured by Healthgrades, a Denver-based online resource for information about physicians and hospitals. (Goist, 2/13)

California Healthline: Can California Beat The Federal Government In Lowering Drug Prices?

California Gov. Gavin Newsom says he’s done waiting for the federal government to curtail the rising cost of prescription drugs. Newsom has his own plan to ease that financial burden — one he hopes other states can join or replicate. The Democratic governor said he intends to use California’s might as the world’s fifth-largest economy to demand lower prices directly from drug companies for millions of Medicaid enrollees, state government workers and, eventually, Californians in the private sector. (Young, 2/14)

The Baltimore Sun: Hospital Accreditation Agency Seeks Review Of Shooting Outside University Of Maryland Medical Center

The agency that accredits the nation’s hospitals has asked the University of Maryland Medical Center for a review of the Feb. 4 shooting of an employee in the affiliated School of Medicine just outside the hospital. The 24-year-old victim was near an ambulance bay off Redwood Street when he was shot in the face and buttocks by a man police say he knew. He was taken into the medical center’s Shock Trauma Center in critical condition, roiling both the university and hospital staffs as well as the larger Baltimore medical community. (Cohn, 2/14)

Boston Globe: Mass. Won’t Conduct Rigorous Review Of Partners’ R.I. Proposal

Officials at Massachusetts’ health care watchdog agency Wednesday indicated that they will not conduct a rigorous review of Partners HealthCare’s latest proposed acquisition, saying the deal would have little effect on residents in the state.Partners, Massachusetts’s largest network of doctors and hospitals, is seeking a takeover of Care New England Health System of Providence. The Massachusetts Health Policy Commission has studied — and has criticized — Partners’ past expansion plans. But this transaction is different because its greatest effects would be felt in Rhode Island. (Dayal McCluskey, 2/13)

Texas Tribune: Texas Legislature Eyes State Jail Reform In 2019

In the run-up to the 2019 legislative session, the leaders of both the House and the Senate asked committees to study the state jail system, which holds around 21,500 inmates in 17 jails, according to the House Committee on Corrections. That led to a report from the House Committee on Criminal Jurisprudence that referred to the system as a “complete failure,” and lawmakers in both chambers listed bolstering local pretrial and probation initiatives as a top priority. (Marfin, 2/14)

Georgia Health News: House Panel Backs Curbs On ‘Step Therapy’ Rules For Medications

The insurer drug protocols that the Atlanta family faced are known as “step therapy.’’ They require that a patient “try and fail” on one or more meds before insurers provide coverage for a drug that was originally prescribed. The House Insurance Committee on Wednesday passed legislation that would help patients obtain exceptions to these drug requirements. (Miller, 2/13)

Health News Florida: Lawmakers Weigh ‘Advanced’ Birth Centers

Despite concerns about safety and potential effects of competition on hospitals, the Senate Health Policy Committee this week unanimously passed a measure (SB 448) by Chairwoman Gayle Harrell, R-Stuart, that would authorize “advanced birth centers” and allow them to offer certain women access to Caesarean deliveries and epidurals. The bill would allow the facilities to keep women for up to three days. (Rodriguez, 2/13)

Denver Post: Colorado Childbirth Deaths Bill Seeks To Reduce Maternal Mortality Rates

House Bill 19-1122 would make several significant changes to Colorado’s Maternal Mortality Review Committee. The most important change, according to the bill’s sponsors, is giving committee members protection from being subpoenaed in malpractice lawsuits, which means they could get better, more honest answers and review deaths as they happen rather than waiting at least three years to investigate. (Staver, 2/13)

The CT Mirror: Like Its Neighbor, CT Purdue Suit Targets Sacklers

Connecticut is taking a slightly different approach in its litigation against Purdue Pharma than Massachusetts, whose amended lawsuit against the Stamford-based company detailed scandalous allegations against its owners, saying they personally contributed to the nation’s opioid epidemic. But both states say they are after the same thing– they want to hold Purdue Pharma and the enormously wealthy Sackler family accountable for their role in a national epidemic. (Radelat, 2/13)

Seattle Times: People With Disabilities Can Save For College, Life Expenses With New Washington State Savings Plan

Called the ABLE Savings Plan, it allows parents and adults to set aside money in a special account for a broad range of living and educational expenses without jeopardizing disability funding, such as Medicaid, Supplemental Security and other federal benefits. The account’s growth is tax-free, and the money is invested in the account-holder’s choice of a blend of stocks and bonds. Starting in June, the plan will charge a $35 annual maintenance fee. State legislation required that ABLE had to be self-supporting, and the money goes to the state and the company that runs the program, Sumday, for administrative costs. (Long, 2/13)

The Star Tribune: UnitedHealth Group Names Former Mayo CEO Noseworthy To Board Of Directors

Dr. John Noseworthy, the Mayo Clinic chief executive who retired in December, has been named to the board of directors at UnitedHealth Group, the Minnetonka-based company that stands alongside Mayo as one of Minnesota’s most prominent health care organizations. UnitedHealth Group made the announcement Wednesday morning. In a statement, the board’s Executive Chairman Stephen Hemsley called Noseworthy “an exceptionally talented and compassionate physician.” (Snowbeck, 2/13)

Milwaukee Journal Sentinel: Unreimbursed Special Ed Expenses Cost Schools $1 Billion Annually

Wisconsin school districts spend about $1 billion a year on special education costs not reimbursed by the state, forcing them to dip into general funds intended for all students, according to a new report by the Wisconsin Policy Forum. The low reimbursement rates, it said, place “a considerable burden on local districts,” particularly those with high numbers of poor and minority students, where they exacerbate already existing inequities. (Johnson, 2/13)

Miami Herald: Florida Psychotherapist Gets 3 Years For $3.1 Million Fraud

A Dania Beach licensed mental health counselor with memberships in multiple national professional organizations became a multilevel healthcare fraudster. And for keeping the fraud rolling at Margate’s Reflections Treatment Center, Tina Marie Barbuto was sentenced in federal court in West Palm Beach to three years in federal prison for attempt and conspiracy to commit mail fraud. (Neal, 2/13)

Sacramento Bee: Camp Fire, Woolsey Fire Cleanups In California Underway

Thrown together as disaster-response teammates in the new era of wildfires, California and federal officials have not exactly gotten along. The state’s emergency services chief last summer accused the feds of “re-victimizing” wildfire survivors in Sonoma and Napa counties by allowing cleanup crews to damage property and over-scrape the remnants of homes destroyed in the blazes. (Bizjak, 2/13)

California Governor Gavin Newsom delivers first State of the State address – KMVU Fox 26 Medford

Governor Gavin Newsom

State of the State Address

February 12, 2019

Mr. Speaker, thank you for being a champion for all Californians – and for welcoming Jen and me into your house today.

Madam Pro Tem – thank you for your commitment to collaboration, which has helped make our first month together so productive.

I also have the honor of saying for the first time ever in this chamber: thank you Madam Lieutenant Governor for that very kind and short introduction.

To all the constitutional officers and legislators assembled here today – thank you for your service to our state.

And let me reassure everyone: our son Dutch is not here. We learned our lesson at the inauguration.

It was just over four weeks ago that I stood in front of this Capitol and pledged to defend not just the California constitution but the California dream.

Today, I want to talk about how we can do that together.

By every traditional measure, the state of our state is strong.

We have a record-breaking surplus.

We’ve added 3 million jobs since the depths of the recession.

Wages are rising.

We have more scientists, researchers, and engineers, more Nobel laureates, and the finest system of higher education anywhere in the world.

But along with that prosperity and progress, there are problems that have been deferred for too long and that threaten to put the California dream out of reach for too many.

We face hard decisions that are coming due.

The choices we make will shape our future for decades.

This is what I want to talk about today, as frankly and directly as I can:

The tough calls we must make together on rail, water, and energy. How we protect migrants, care for seniors, and help the homeless, and how we will tackle the affordability crisis that is coming to define life in this state.

I won’t pretend to have all the answers. But the only way to find them is to face these issues honestly.

Let’s start with the fear mongering from the White House about the so-called “emergency” at our border.

For me, this is an echo from 15 years ago.

I was a new mayor sitting in the gallery at the State of the Union when President Bush said LGBT Americans should not be able to get married.

It was an attack on our friends and neighbors, and on California’s values.

I was so proud to watch brave Californians answer those attacks with love and courage. Phyllis Lyon and Del Martin made history when they were married 15 years ago to this very day.

Now, just like back then, we must stand up for those maligned, marginalized, and scapegoated.

Because last week, we heard another president stand up at the State of the Union and offer a vision of an America fundamentally at odds with California values.

He described a country where inequality doesn’t seem to be a problem, where climate change doesn’t exist, and where the greatest threat we face comes from families seeking asylum.

Just last night, he went down to El Paso and said it again.

Let us state the facts. We are currently experiencing the lowest number of border crossings since 1971.

In California, like our nation, our undocumented population is at its lowest level in more than a decade.

Some 550,000 fewer in our state alone.

Immigrants, both those here legally and those without documentation, commit crime at a lower rate than native-born citizens.

And those families, women and children, seeking asylum at our borders, are doing so lawfully.

Those are the facts. The border “emergency” is a manufactured crisis and California will not be part of this political theater.

We’re not backing down. Just yesterday, I gave the National Guard a new mission – one that will refocus on the real threats facing our state.

A third of our forces currently on the border will be redeployed to help prepare for the upcoming fire season by joining CAL FIRE in prevention and suppression. Work, ironically, the federal government curtailed during the recent shutdown.

Another third will boost the National Guard’s statewide Counterdrug Task Force by redeploying up north to go after illegal cannabis farms, many of which are run by cartels, are devastating our pristine forests, and are increasingly becoming fire hazards themselves.

The remaining third of our Guard will focus on stopping criminals smuggling drugs and guns through existing border checkpoints.

A wall that stretches thousands of miles through the wilderness will do nothing to stop this threat.

This is our answer to the White House: No more division, no more xenophobia and no more nativism. We suffered enough from that in the nineties with Props 187 and 227.

Next, let’s level about High-Speed Rail. I have nothing but respect for Governor Brown’s and Governor Schwarzenegger’s ambitious vision. I share it. And there’s no doubt that our state’s economy and quality of life depend on improving transportation.

But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency.

Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA. I wish there were.

However, we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.

I know that some critics will say this is a “train to nowhere.” But that’s wrong and offensive. The people of the Central Valley endure the worst air pollution in America as well as some of the longest commutes. And they have suffered too many years of neglect from policymakers here in Sacramento. They deserve better.

High-Speed Rail is much more than a train project. It’s about economic transformation and unlocking the enormous potential of the Valley.

We can align our economic and workforce development strategies, anchored by High-Speed Rail, and pair them with tools like opportunity zones, to form the backbone of a reinvigorated Central Valley economy.

Merced, Fresno, Bakersfield, and communities in between are more dynamic than many realize.

The Valley may be known around the world for agriculture, but there is another story ready to be told. A story of a region hungry for investment, a workforce eager for more training and good jobs, Californians who deserve a fair share of our state’s prosperity.

Look, we will continue our regional projects north and south. We’ll finish Phase 1 environmental work. We’ll connect the revitalized Central Valley to other parts of the state, and continue to push for more federal funding and private dollars. But let’s just get something done.

For those who want to walk away from this whole endeavor, I offer you this:

Abandoning high-speed rail entirely means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it.

And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.

Nor am I interested in repeating the same old mistakes.

Today I am ordering new transparency measures.

We’re going to hold contractors and consultants accountable to explain how taxpayer dollars are spent – including change orders, cost overruns, even travel expenses. It’s going online, for everybody to see.

You’re also going to see some governance changes, starting with my pick for the next chair of the High-Speed Rail Authority, Lenny Mendonca, my Economic Development Director. Because, at the end of the day, transportation and economic development must go hand in hand.

We also need a fresh approach when it comes to meeting California’s massive water challenges.

We have a big state with diverse water needs. Cities that need clean water to drink, farms that need irrigation to keep feeding the world, fragile ecosystems that must be protected.

Our water supply is becoming less reliable because of climate change. And our population is growing because of a strong economy. That means a lot of demand on an unpredictable supply. There are no easy answers. But let me be direct about where I stand:

I do not support the Water Fix as currently configured. Meaning, I do not support the twin tunnels. But we can build on the important work that’s already been done. That’s why I do support a single tunnel.

The status quo is not an option.

We need to protect our water supply from earthquakes and rising sea levels, preserve delta fisheries, and meet the needs of cities and farms.

We have to get past the old binaries, like farmers versus environmentalists, or North versus South. Our approach can’t be “either/or.” It must be “yes/and.”

Conveyance and efficiency. And recycling projects like we’re seeing in Southern California’s Met Water District, expanding floodplains in the Central Valley, groundwater recharge, like farmers are doing in Fresno County. We need a portfolio approach to building water infrastructure and meeting long-term demand.

To help bring this balance, I’m appointing a new chair of the California water board, Joaquin Esquivel.

Our first task is to cross the finish line on real agreements to save the Sacramento-San Joaquin Bay Delta.

We must get this done – for the resilience of our mighty rivers, the stability of our agriculture sector, and the millions who depend on this water every day.

Now, let’s talk honestly about clean drinking water.

Just this morning, more than a million Californians woke up without clean water to bathe in or drink. Some schools have shut down drinking fountains due to contamination. Some poorer communities, like those I visited recently in Stanislaus County, are paying more for undrinkable water than Beverly Hills pays for its pristine water.

This is a moral disgrace and a medical emergency. There are literally hundreds of water systems across the state contaminated by lead, arsenic, or uranium.

Solving this crisis demands sustained funding. It demands political will.

Next, let’s talk about our energy future – and PG&E’s bankruptcy.

We are all frustrated and angry that it’s come to this. PG&E didn’t do enough to secure dangerous equipment or plan for the future. My administration will work to make sure PG&E upholds its obligations. I have convened a team of the nation’s best bankruptcy lawyers and financial experts from the energy sector.

They will work with my strike team to develop a comprehensive strategy that we will present within 60 days. We will ensure continued access to safe affordable power. We will seek justice for fire victims, fairness for employees, and protection for ratepayers. We will continue to invest in safety, and we will never waver on achieving the nation’s most ambitious clean energy goals.

The problems we face are far greater than PG&E. Climate change is putting pressure on all of our utilities—public and private, north and south. Edison and San Diego Gas & Electric both recently had their credit ratings downgraded.

This pressure comes at a time when the entire energy market is evolving. From roof-top solar and wind generation to smart grid technologies. From Community Choice Aggregators to direct access service. More and more of our electricity now is procured outside of investor-owned utilities.

Regulations and insurance practices created decades ago didn’t anticipate these changes. We must map out longer-term strategies, not just for the utilities’ future, but for California’s energy future, to ensure that the cost of climate change doesn’t fall on those least able to afford it.

Now let me turn to education.

The teachers’ strike in LA is over — but the need to confront its underlying causes has only just begun. Understaffed schools, overcrowded classrooms, pension pressures, the achievement gap, and charter school growth — these stressors are showing up all over the state, right here in Sacramento, in Fresno, and Oakland.

Districts across the state are challenged to balance budgets even in this strong economy, and at a time when we’re spending more on schools than ever before.

Seven years ago, we invested $47.3 billion in our schools. Next year, with your support, we’ll invest more than $80 billion — that includes $576 million for special education.

But it’s not enough. We’re still 41st in the nation in per pupil funding. Something needs to change. We need to have an honest conversation about how we fund our schools at a state and local level.

But at the same time, let’s remember that the measure of a school system’s excellence is more than the sum of its budgets.

We need clear and achievable standards of transparency, more information sharing, and accountability for all public schools … traditional and charter.

We need a new President for the State Board of Education, to lead the way and work alongside State Superintendent Tony Thurmond, and to lift up all of our students. And my pick for that position is nationally recognized education expert Linda Darling-Hammond.

There’s another urgent moral issue we must confront: the homelessness epidemic.

So many of California’s homeless – whether they’re families, veterans, victims of rent spikes, or survivors fleeing domestic violence – are invisible and left behind by our society. Too many on the streets are suffering from bipolar disorder, schizophrenia or paranoia. Many are self-medicating with drug or alcohol as a consequence. Our homelessness crisis has increasingly become a public health crisis.

Last year, there was a Hepatitis-A outbreak in San Diego. Recently, there was an outbreak of Syphilis in Sonoma. And now, typhus in Los Angeles. Typhus. That’s a Medieval disease. In California. In 2019.

Mayors, county supervisors, and city councils around the state are working hard to reduce homelessness and its underlying causes. We’ve got to have their backs.

But they can’t do it alone. To help lead this discussion, I’m appointing a new Commission on Homelessness & Supportive Housing, led by Sacramento Mayor Darrell Steinberg.

With your support, let’s put half a billion dollars into immediate funding for navigation centers — emergency shelters with services on site, and another hundred million for Whole Person Care to replace a fragmented approach to services with one that’s more integrated and comprehensive.

And while cities and counties are on the front lines, this challenge will only be solved regionally. We need to work together as a state to focus on prevention, rapid rehousing, mental health, and more permanent supportive housing — because while shelter solves sleep, only permanent supportive housing solves homelessness.

Now, let’s talk about something too often overlooked:

The Golden State is getting grayer. We need to get ready for the major demographic challenge headed our way.

For the first time in our history, older Californians will outnumber young children. Over the next decade, our statewide senior population will increase by 4 million. In 25 years, it will double. And more than half will require some form of long-term care.

Growing old knows no boundaries – aging doesn’t care what race you are, your economic status, or if you’re single with no other family support.

I’ve had some personal – and painful – experience with this recently. I lost my father over the holidays, after years of declining physical health and dementia. He was determined to live out his days with dignity. He also happened to be a retired public official with a pension and a support circle of family and friends.

Even with all those advantages, it was a daily challenge to meet his needs so he could live in place and maintain a good quality of life. Millions of Californians share a similar story, and the numbers will only grow.

It’s time for a new Master Plan on Aging. It must address: person-centered care, the patchwork of public services, social isolation, bed-locked seniors in need of transportation, the nursing shortage, and demand for In-Home Supportive Services that far outpaces its capacity.

And we can’t talk about aging without focusing on Alzheimer’s.

Too many of us have seen the crushing grip this disease has on our loved ones – and especially on our wives and mothers – two-thirds of new Alzheimer’s cases are women.

Today, I am launching the Alzheimer’s Prevention and Preparedness Task Force, bringing the most renowned scientists and thinkers together to develop first-of-its-kind research in this area. It will be headed by a leading advocate for families dealing with Alzheimer’s, our former first lady, Maria Shriver. She is here today and we are grateful for her continued service.

Tying together many of the hard challenges we face is the broader cost crisis. In a recent survey, 61 percent of young adults in California said they can’t afford to live here. California should never be a place where only the well-off can lead a good life.

It starts with housing, perhaps our most overwhelming challenge right now. We all know the problem. There’s too much demand and too little supply. And that is happening in large part because too many cities and counties aren’t even planning for how to build. Some are flat out refusing to do anything at all.

That’s why I have committed $750 million for a major new incentive package for communities to do the right thing. $250 million in support to cities and counties to update their housing plans, revamp their zoning process, and get more housing entitled. $500 million more in grants when they achieve these milestones.

If we want a California for All, we have to build housing for all.

I want to support local governments that do what’s right, like Anaheim and Santa Rosa. But there must be accountability for those that don’t.

Two weeks ago, the state of California sued the city of Huntington Beach for failing to meet its obligations on affordable housing. Let me tell you, as a former mayor, the last thing I wanted to do was start my term by suing a city. But they left us no choice.

This isn’t about picking on Huntington Beach, they happened to be first because of a statute of limitations. There are 47 other cities across California that are not complying with their planning requirements in one way or another.

Some cities are trying, like Clovis. But others are not, like Wheatland, Huntington Park, and Montebello. I am inviting these cities’ leaders to sit down next week for a candid conversation. I don’t intend to file suit against all 47, but I’m not going to preside over neglect and denial. These cities need to summon the political courage to build their fair share of housing.

I also want to acknowledge other factors beyond city planning that have limited our ability to provide housing.

In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.

I want to applaud the efforts by home builders and labor leaders, who together are working to forge a compromise to accelerate production.

But there is no way we can achieve our ambitious targets unless we train a skilled workforce big enough to meet this challenge … and those workers deserve wages high enough to support their families.

Let’s encourage this progress, bring more people to the table, and get something big done. And while we’re at it, let’s not forget the commitments many of us made after Prop 10 failed last year.

The pressures on vulnerable renters didn’t go away after the election. We need new rules to stabilize neighborhoods and prevent evictions, without putting small landlords out of business. I want the best ideas from everyone in this chamber. Here is my promise to you, get me a good package on rent stability this year and I will sign it.

Next, if we’re serious about taming the cost crisis we need affordable healthcare for all Californians.

Our ability to invest in everything we care about is constrained by the pressure of rising health care costs. It impacts everything else we want to do.

The White House is laser-focused on destroying the Affordable Care Act. The vandalism they’ve already done to the individual mandate has had consequences. This year’s Covered California premiums increased almost twice as much as we expected. This is just what we feared, and it’s just what they wanted.

That’s why, when it comes to the individual mandate, California must act where Washington failed.

If we do, we will be able to deepen subsidies for those earning up to $48,000 and extend subsidies to families earning up to $150,000, something no other state in America has done. We all know California has among the lowest Medicaid reimbursement rates in America.

That’s why our budget devotes more than $1 billion to increase rates and address the provider shortage.

This investment will also allow us to increase access to preventative health measures like -immunizations, trauma screenings, and mental health services. And it provides $100 million for reproductive health and family planning.

As we pursue the long-term goal of single payer financing, let us make a down-payment now by expanding Medi-Cal coverage to all Californians up to age 26, regardless of their immigration status.

But access is only part of the solution. Cost is another.

We must address rising costs throughout the system, like the consolidation of hospitals and other health providers, which limits patient choice and makes care more expensive. And we must continue to bring down the cost of prescription drugs.

My first act as Governor was to lay the foundation for a single-purchasing system – the largest such system in the nation, which will save hundreds of millions of dollars a year for the people of California.

I want to thank President Trump for calling attention to prescription drug prices in his State of the Union. Yes, you heard that right. I hope he follows through. After all, this should be a bipartisan issue. But with or without the Federal government, California will lead.

Finally, we must ask ourselves, how do we create a future with more good jobs and higher wages.

Because when it comes to making life in California more affordable, cost is only one side of the equation, the other is income.

Despite our rising wages, working families in California today barely earn more than they did a decade ago. Many working parents are making less than their parents did at the same age.

That’s why, with your support, we will provide a cost of living refund by expanding the earned income tax credit to a million more Californians who need it the most. For families with kids under the age of six, they’ll see their benefit go up by as much as three times.

But, in an economy where the world of work is in a perpetual state of flu, where workers are too often displaced, devalued and disconnected from the social safety net, we must also think bigger.

It’s time to develop a new modern compact for California’s changing workforce. This is much bigger than Dynamex.

California needs a comprehensive statewide strategy to uplift and upskill our workers, to ensure technological advancements in AI, blockchain, big data, are creating jobs, not destroying them, and to reform our institutions so that more workers have an ownership stake in their sweat equity.

We will appoint a new Commission on California’s Workforce & Future of Work. We will bring together leaders from labor and business – both the public and private sectors. Their assignment is to come up with new ideas to expand worker opportunity without extinguishing innovation or flexibility.

California is proud to be home to technology companies determined to change the world. But companies that make billions of dollars collecting, curating and monetizing our personal data have a duty to protect it. Consumers have a right to know and control how their data is being used.

I applaud this legislature for passing the first-in-the-nation digital privacy law last year. But California’s consumers should also be able to share in the wealth that is created from their data. And so I’ve asked my team to develop a proposal for a new Data Dividend for Californians, because we recognize that your data has value and it belongs to you.

Now, we’ve covered a lot of ground today, but there is so much more that deserves our focus. Climate change. Reforming our tax code and our criminal justice system. Major initiatives like paid family leave, universal pre-school, free community college, re-imagining the DMV…there’s so much more. And I’ll be talking a lot about those issues in the coming months.

At my inauguration, I quoted the Sermon on the Mount about a house that did not fall in the face of floods and storms, because it was founded upon a rock.

I promised that, together, “We will build one house for one California.”

We’ve started drawing the blueprint for that house, and together we will finish it.

This goes deeper than budget numbers or program details. This is about the bonds between us as human beings.

As St. Paul said, “we are many parts but one body.” We are all diminished when one of us struggles to lead a good life.

The problems we face are as hard as they come, and decades in the making. But I truly believe we have the tools to solve them. We have the technology and the know-how.

Most importantly, we have the generosity of our people.

Remember the story of the registered nurse in Paradise who was sitting in traffic, trying to escape the fire, as flames started to engulf his car. He thought, “this is it.” He recorded a goodbye video for his family. Then a miracle occurred: a bulldozer cleared burning cars out of his path. At that point, he could have driven away as fast as possible. That’s what a lot of people would have done.

Instead, he turned his car around and drove straight to the hospital in the middle of town, where he worked in the ICU. He and his colleagues started treating injured people. Then the hospital caught fire. They moved patients to a helipad 100 yards away as fast as they could.

Every single one of them was safely evacuated.

When he was asked why he did this – why he drove back through the fire when he could have saved himself – he shrugged and said, “This is what we do.”

His name is Allyn Pierce and he’s here with us today.

Allyn is right. Taking care of each other, showing courage when it matters most – this is what we do in California.

Yes, we have so much left to do.

But I believe in the remarkable talent assembled here.

I believe in our state. And I know that the best is yet to come.

Thank you.

Hillicon Valley: Lawmakers press officials on 2020 election security | T-Mobile, Sprint execs defend merger before Congress | Officials charge alleged Iranian spy | Senate panel kicks off talks on data security bill | TheHill – The Hill

Welcome to Hillicon Valley, The Hill’s newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley. If you don’t already, be sure to sign up for our newsletter with this LINK.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Jacqueline Thomsen (@jacq_thomsen), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).

IS IT 2020 ALREADY?: Lawmakers questioned officials over the importance of passing election security measures ahead of the 2020 presidential contest during a hearing Thursday.

Christopher Krebs, the director of the Cybersecurity and Infrastructure Security Agency (CISA) in the Department of Homeland Security, testified during the House Homeland Security Committee hearing Tuesday that the federal government is “light years ahead” of where it was in 2016 when it comes to communicating with state and local officials.


However, he said that improving outreach and communication with those officials is a top priority for his department ahead of the 2020 election.

And Krebs said that being able to audit elections is also a pressing issue for his agency. He said that records of votes, like a paper trail, will help officials confirm the results of elections.

The DHS official also said that basic cyber hygiene for election officials remains a crucial issue, adding that he fears those gaps could expose vulnerabilities in systems that could be abused by bad actors. Read more here.

DEMS GRILL T-MOBILE, SPRINT EXECS: House Democrats on Wednesday pressed executives for T-Mobile and Sprint about their proposed $26 billion merger for the two wireless carriers, raising concerns about the impact on workers and consumers.

In the hearing before a House Energy and Commerce subcommittee, T-Mobile CEO John Legere and Sprint executive chairman Marcelo Claure tried to convince Democrats of the benefits of the deal, which would combine two of the country’s four largest wireless operators. But lawmakers were skeptical of their pitch.

“I appreciate both executives’ statements that they believe that this merger will benefit consumers and result in lower prices — and their commitments to an accelerated deployment of 5G and promises of expanded rural broadband,” said Rep. Mike DoyleMichael (Mike) F. DoyleHillicon Valley: Lawmakers press officials on 2020 election security | T-Mobile, Sprint execs defend merger before Congress | Officials charge alleged Iranian spy | Senate panel kicks off talks on data security billHouse Dems grill T-Mobile, Sprint execs on merger House members hint at bipartisan net neutrality billMORE (D-Pa.), who chairs the Energy and Commerce Subcommittee on Communications and Technology.

“However, I’ve seen a lot of mergers in this industry and others, and it’s hard to think of one where consolidation didn’t result in people losing their jobs, prices going up and innovation being stifled,” Doyle continued.

When asked by Doyle what was different about this merger, Legere argued that the “complementary nature” of the two networks will help expand access and lower prices.

“This is a unique merger where the outcome of this merger will be a significant increase in supply in the form of eight times the capacity that our network will make available,” Legere said. We’ve got more from the contentious hearing here.

SPYING SPIES WHO SPY: The Trump administration on Wednesday unveiled criminal charges against a former Air Force intelligence specialist who was allegedly recruited by the Iranian government to spy on the United States.

The indictment unsealed Wednesday charges Monica Witt, who officials say worked for a U.S. defense contractor after leaving the Air Force and handled highly classified information, with two counts of delivering national defense information to a foreign government and one count of conspiracy. Witt is accused of revealing a top-secret U.S. intelligence program to Iran, as well as disclosing the identity of a U.S. counterintelligence agent.

The indictment also charges four of Witt’s alleged Iranian co-conspirators with cyber crimes for targeting Witt’s former U.S. government colleagues on behalf of Iran’s Islamic Revolutionary Guards Corps.

Officials with the Justice Department, FBI and Air Force announced the charges Wednesday in Washington, describing them as a result of a years-long investigation.

“This case underscores the dangers to our intelligence professionals and the lengths our adversaries will go to identify them, expose them, target them, and, in a few rare cases, ultimately turn them against the nation they swore to protect,” Assistant Attorney General for National Security John Demers said. Read more here.

TEEING UP THE PRIVACY DEBATE: A House panel will hold a hearing later this month on data privacy legislation, set to take place one day before the Senate holds a hearing on the same topic.

House Energy and Commerce Chairman Frank Pallone, Jr. (D-N.J.) on Wednesday announced that the consumer protection subcommittee will hold the hearing on Feb. 26.

The committee has not yet announced witnesses for the hearing.

The Senate Commerce Committee is set to hold a similar hearing titled “Policy Principles for a Federal Data Privacy Framework in the United States” a day later on Feb. 27.

Along with the hearing announcement, Pallone released a Government Accountability Office (GAO) report that suggests Congress should consider “developing comprehensive legislation on Internet privacy that would enhance consumer protections and provide flexibility to address a rapidly evolving Internet environment.”

“Since I requested this report, the need for comprehensive data privacy and security legislation at the federal level has only become more apparent,” Pallone said in a statement. “From the Cambridge Analytica scandal to the unauthorized disclosures of real-time location data, consumers’ privacy is being violated online and offline in alarming and dangerous ways.” More on the upcoming hearings here.

SAY CHEESE: Family entertainment chain Chuck E. Cheese’s in a statement on Tuesday denied a conspiracy theory amplified on YouTube this week.

Chuck E. Cheese’s is responding after mega-popular YouTuber Shane Dawson mentioned the conspiracy theory – which claims Chuck E. Cheese’s serves reheated leftover pizza – in a video on Monday.

“The claims made in this video about Chuck E. Cheese’s and our pizza are unequivocally false,” a spokesperson for the company said in a statement to The Hill. “No conspiracies here – our pizzas are made to order and we prepare our dough fresh in restaurant, which means that they’re not always perfectly uniform in shape, but always delicious.”

Dawson is one of YouTube’s most popular creators, boasting a devoted fanbase and more than 20 million followers. The video about conspiracy theories by Tuesday had accrued more than 10 million views.

Following the release of Dawson’s video, “Chuck E. Cheese’s” became a top-searched phrase on Google, with hundreds of thousands of people seeking more information about the theory.

YouTube in recent weeks has been seeking to fight the rapid-fire spread of conspiracy theories on its platform. The Google-owned company at the end of January announced that it will no longer recommend videos that promote conspiracy theories, or “content that could misinform users in harmful ways.” More on YouTube’s fight against conspiracy theories here.

BLOCKING OUT THE HATERS: The majority of respondents to a new poll released Wednesday said they experienced hate and harassment online in 2018.

The Anti-Defamation League (ADL), a nonprofit that tracks and fights anti-Semitism, found that 53 percent of respondents had experienced some sort of harassment on the internet last year. Thirty-seven percent reported severe attacks, like sexual harassment or stalking.

“It’s deeply disturbing to see how prevalent online hate is, and how it affects so many Americans,” said ADL CEO Jonathan Greenblatt.

“Cyberhate is not limited to what’s solely behind a screen; it can have grave effects on the quality of everyday lives – both online and offline. People are experiencing hate and harassment online every day and some are even changing their habits to avoid contact with their harassers.”

Fifty-six percent of those were said they had been harassed said at least some of it occurred on Facebook. Nineteen percent experienced harassment or hate on Twitter, 17 percent on Youtube and 16 percent on Instagram.

ADL said they oversampled respondents who identified as Jewish, Muslim, African American, Asian American or LGBTQ to understand experiences of people who might be “especially targeted because of their group identity.”

More here. And click here for the actual survey.

BACK TO THE ADVISORY BOARD: The heads of Apple, IBM and Walmart are among the new members of a White House advisory board on workforce issues, the Commerce Department announced Wednesday.

Commerce Secretary Wilbur RossWilbur Louis RossHillicon Valley: Lawmakers press officials on 2020 election security | T-Mobile, Sprint execs defend merger before Congress | Officials charge alleged Iranian spy | Senate panel kicks off talks on data security billApple, IBM, Walmart join White House advisory boardSupreme Court’s ‘10th justice’ favors unusual tactic for Trump casesMORE and White House adviser Ivanka TrumpIvana (Ivanka) Marie TrumpOn The Money: Trump to sign border deal, declare emergency to build wall | Senate passes funding bill, House to follow | Dems promise challenge to emergency declarationThe Hill’s Morning Report – Presented by the American Academy of HIV Medicine – Will there be any last-minute shutdown drama?Push for paid family leave heats up ahead of 2020MORE named the 25 presidents and CEOs of major corporations joining the American Workforce Policy Advisory Board. The list includes Apple’s Tim Cook, IBM’s Ginni Rometty and Walmart’s Doug McMillon.

The board, co-chaired by Ross and Trump, is tasked with working alongside the National Council for the American Worker to develop a “21st century workforce” plan that’s likely to include technology skills training.

Rometty, IBM’s CEO and president, said in a statement that “emerging technologies like artificial intelligence will change the way every job is done.”

The president has had a rocky past with previous business councils.

Almost a dozen CEOs dropped out of two advisory business panels in 2017 after Trump said there were “fine people” on “both sides” of the Charlottesville, Va., white supremacist rally that left one counterprotester dead.

Trump abruptly disbanded the forums following the exodus and said he was ending the two councils in order to relieve the business leaders from the intense public pressure.

More on the workforce panel here.

GOOGLE KEEPS GETTING BIGGER: Tech giant Google will invest $13 billion in data centers and offices in the United States over the course of 2019 as the company expands its U.S. operations and breaks ground for the first time in four states.

In a blog post Wednesday Google CEO Sundar Pichai wrote that the investments would include “major expansions in 14 states” including Ohio, Texas, Nebraska, and Nevada, which CNBC reports will be the first time the company has built facilities in those states.

The company will have a presence of some type in 24 states following the expansion, according to Google’s blog, and will be upgrading and expanding facilities in Virginia, where the company will double its workforce according to CNBC.

Read more here.

NO MORE OPPORTUNITY: NASA on Wednesday declared that its Opportunity rover, one of its missions to explore Mars, is officially over.

NASA hasn’t been able to contact Opportunity since June of last year and declared the mission dead after making a final attempt on Tuesday, the space agency said in a statement.

The mission lasted more than 15 years after it initially landed on Mars in January 2004 NASA said the rover was originally expected to explore the planet for 90 days.

NASA Administrator Jim BridenstineJames (Jim) Frederick BridenstineHillicon Valley: Lawmakers press officials on 2020 election security | T-Mobile, Sprint execs defend merger before Congress | Officials charge alleged Iranian spy | Senate panel kicks off talks on data security billNASA declares Mars rover Opportunity dead after 15 yearsGreen New Deal will only happen if we go back to the moonMORE said in a statement that it is “because of trailblazing missions such as Opportunity” that astronauts will one day be able to travel to Mars.

More on commemorating Opportunity here.

BANKING PANEL TAKING ON PRIVACY: The leaders of the Senate Banking Committee on Wednesday kicked off a push to write stricter data collection and security standards for financial institutions.

Sen. Mike CrapoMichael (Mike) Dean CrapoOn The Money: Lawmakers race to pass border deal | Trump rips ‘stingy’ Democrats, but says shutdown would be ‘terrible’ | Battle over contractor back pay | Banking panel kicks off data security talksHillicon Valley: Lawmakers press officials on 2020 election security | T-Mobile, Sprint execs defend merger before Congress | Officials charge alleged Iranian spy | Senate panel kicks off talks on data security billSenate Banking panel kicks off talks on data security billMORE (R-Idaho), the panel’s chairman, and Sen. Sherrod BrownSherrod Campbell BrownShep Smith: Signing funding bill is a ‘loss’ for Trump no matter how it’s packagedExclusive: Biden almost certain to enter 2020 raceTim Ryan ‘seriously considering’ 2020 bidMORE (Ohio), the ranking Democrat, on Wednesday asked for input on ways to give consumers more control of personally identifiable information collected by financial firms and regulators.

Data security, privacy and collection issues are among the top bipartisan priorities for the Banking Committee, which has broad oversight over U.S. banks, lenders, insurers, traders and credit reporting agencies.

Crapo and Brown’s call for feedback is one of the first steps toward proposing a bipartisan bill to address those concerns.


Crapo said he’s focused on “what data is contained in modern consumer reports, how the information is gathered, who compiles it, how it is protected, how consumers can access it and correct it, and how privacy is respected.”

The Banking panel first seized on the issue in the wake of the Equifax data breach in 2017, when the credit company revealed that hackers accessed the personal information of 143 million Americans.

Read more here.

AN OP-ED TO CHEW ON: Countering China’s tech assault: Trump could learn from Sun Tzu.

A LIGHTER CLICK: I wish I had died on Mars.


The White House released the American Broadband Initiative Milestones Report. (NTIA)

Why Amazon is caught in an unexpected brawl in New York. (The New York Times)

Pope discusses ethics of artificial intelligence with Microsoft chief. (Reuters)

NASA is saying goodbye to its Opportunity rover on Mars after eight months of radio silence. (The Verge)

Facebook’s most intriguing new hires aren’t in Silicon Valley — they’re in Washington. (Gizmodo)

How Tech Innovators Are Enabling Contextual Commerce Experiences –

In the highly connected digital age, consumers are interacting with a multitude of social media sites as well as apps and connected devices. During this time, retailers and tech companies are bringing integrated shopping experiences into the sites and apps where consumers spend the most time. Retailers, then, can make the sale in the moment — with the help of contextual commerce.

Simply said, contextual commerce occurs when a consumer sees a product on a smart device or social media feed (and even a recommendation from a friend) and buys the product. About 60 percent of consumers today have engaged in contextual commerce, the latest PYMNTS Digital Consumer Report found, and most of them are said to be happy to have the experience again.

From digital marketplaces like SeatGeek to tech firms such as Google, innovators are introducing new ways for consumers to buy products and services through social media sites and smart devices. These are some of the ways that firms are tapping into contextual commerce features in the digital age of shopping:

One billion devices are now supported by Google Assistant. Moreover, Google announced in mid-October that Google Assistant developers could earn money by bringing their users premium experiences. In an October blog post, Google Group Product Manager Tarun Jain said, “While we’ve offered transactions for physical goods for some time, starting today, you will also be able to offer digital goods, including one-time purchases like upgrades — expansion packs or new levels, for example — and even recurring subscriptions directly within your Action.” Users, in turn, will be able to talk with the Actions through speakers, Smart Displays and phones.

Nearly six in 10 consumers — or 58 percent — are engaging in contextual commerce. And some social media platforms have rolled out payment functionality through pages of sites. In May, for instance, news surfaced that Instagram had quietly introduced a native payment feature. As a result, users could register a debit or credit card and make payments after they created a security PIN. At the time, it was reported that users could make payments to some businesses. But the company reportedly said that it would allow users to pay for items such as movie tickets in the future.

And more than eight in 10 customers — or 81 percent — engaged through contextual commerce do so through social media. In 2018, SeatGeek worked with Snapchat to let consumers buy live event tickets directly within the social media platform’s app. Athletes and performers could sell tickets directly to their fans through the platform through the integration. At the time, it was reported that Champion boxer Errol Spence Jr. posted tickets in his Snapchat Story for an upcoming bout. SeatGeek Director of Partnerships Lee Moulton said in a prior interview with PYMNTS that Snapchat “is the messaging platform and the social platform for the future sports-goers of the world.”

Nearly 60 percent of U.S. adults consume the majority of their movie and television content through streaming services. And eCommerce retailers are launching live content of their own. News recently surfaced that Amazon rolled out a brand-new video streaming service dubbed Amazon Live. The service taps into Amazon’s talent pool for live shows and brands through the Amazon Live Creator app. It was reported that shows work similar to QVC and hosts discuss as well as demonstrate products. Customers can also view product details and make purchases under the video. The offering comes roughly two years after the company ran a program called Style Code Live that focused on style and beauty tips.

One in 10 queries on Chinese search engine Baidu are made by voice, with half of them expected to be made via that method by 2020. As it stands, Baidu is homing in on autonomous vehicles and artificial intelligence (AI). The internet company commands a strong presence in China, where it has 70 percent of internet searches. (The company’s Chinese search platform already ranks among the most trafficked websites in the world.) Baidu has reportedly inked partnerships with companies such as Microsoft, Intel, Ford, Daimler and BMW. The company is also looking beyond China for its AI and self-driving technologies.

From SeatGeek to Amazon, retail innovators are constantly testing out new hardware to simplify the shopping experience. In fact, the continued rise of contextual commerce is dependent on these firms as retailers and manufacturers integrate devices and experiences through the internet of things (IoT).


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Financial Invisibles Report

Dynamic Friction, Keeping Consumers Safe Amid Contextual Commerce –

Contextual commerce is everywhere, and much desired by consumers (just check out some of the latest stats from the Digital Consumer Report). But merchants need to keep an eye on fraud, even as they endeavor to keep the (digital) wheels of commerce humming. Fighting fraud takes teamwork – a set of brains and eyes (several of them) working in tandem with technology to stop the bad guys in their tracks. Savvy fraud prevention teams can gather up the “digital bread crumbs” – behavioral clues – that can separate bad actors from legitimate consumers, according to Kevin Lee, trust and safety architect at Sift. Rules help, but they are only part of the battle. The trick is putting just the right amount of friction in place as part of a holistic approach, which can stop fraud but also build stronger relationships with those who genuinely want to transact with a merchant.


Six in 10: Share of shoppers who shop contextually.

81 percent: Share of consumers who engage in contextual commerce through social media.

1 billion: Number of devices supported by Google Assistant.

16 percent: Share of MoneyGram’s money transfer sales done digitally.

37 percent: Growth in online transactions, cited by MoneyGram.


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Financial Invisibles Report

Agenda 2019 Special Feature: Hungry AIs – PharmaLive

Artificial intelligence generated plenty of chatter amongst the pharma marketing intelligentsia in 2018. Will 2019 be the year when the industry fully embraces it as more than just a tactic?

Artificial intelligence may not be the answer to every question about pharma marketing in 2019, but it seems to be lurking underneath the answers to most of them. Efficient analytics for big data? AI will make it possible. Getting the right content to the sales force at the right time? AI can do it. Figuring out where customers are in their journeys and how to best reach them there? AI will find them. The growth in voice search? Gotta have AI for that, of course. What’s next in patient services? AI. Down the hall in the R&D department? AI. Even the industry’s political issue du jour, pricing transparency and reform, has an AI angle, since payers are surely using it to determine whether their spend is being justified by outcomes.

All that said, for all that pharma marketers talk about how AI will transform their business, the answer to the question of when is a little less clear. As the babysitter always said if you asked when your parents would be home … “Soon.”

Med Ad News: What was the word of the year in pharma marketing for 2018? What will the word of the year be in 2019? Why?

Harrison Boulay, digital strategist, Butler/Till Health Group: 2018: Interactivity. This year saw pharma marketing implement proven CPG strategies like chatbots and messaging campaigns that engage directly with both HCPs and patients, along with advanced social media campaigns designed to create meaningful dialogues between brands and their consumer base.

2019: Artificial Intelligence. Pharma marketing has serious hurdles when targeting potential patients directly. The use of big data, machine learning, and consolidating insights leveraging AI will represent the cutting edge for teams in 2019.

Susan Dorfman, chief commercial officer, CMI/Compas: 2018: Genuine. In 2018, pharma really took on earned and shared media as part of its overall paid and owned tactics. The industry owned it for the first time, where it was a lot more genuine; the integration of true social. Pharma was part of the customers’ journey.

2019: Daring. In 2019, daring will be the leading theme of the year, and this is the year for pharma advertisers to be daring. Our stakeholders – particularly the patients – need us to be more daring in helping them get access to medication and making that medication more available, and we can do the right thing by supporting them. This includes sharing information, pushing the envelope in how we interact, listening to them, and helping by providing affordability and availability of medication.

Matt Nespoli, digital media director, Butler/Till Health Group: 2018: Efficiency. Efficiency is a priority when technology is in place to make things happen smarter and faster. The idea of personalization in marketing is not new, but can be scary in the Pharma marketplace. 2018 was a year of not missing out on opportunities to create tailored experiences within patient and HCP marketing. Data plays a key role in defining accessibility and automation of that data is helping provide the best patient and physician outcomes.

2019: Disruption. The need to focus on improving the customer experience has always played a key role for commerce providers. In 2019, the likes of Amazon, CVS, Walmart, and Walgreens will look to focus on their futures within the Healthcare space competing not only against each other, but with Google and Facebook. This disruption has come into focus recently when acquisitions started to occur causing patients, physicians and insurers to look at these companies more seriously. Amazon bought a small online pharmacy called PillPack, CVS and Aetna formed a union, and big box stores like Walgreens and Walmart have opportunities to differentiate themselves from independent pharmacies. Disruption will continue to grow when technology and data continues to scale for these leading healthcare players.

Andrew Schirmer, CEO, Ogilvy Health: The word of the year for 2018 is a toss-up between data and technology. The words aren’t interchangeable, but you’d have to look pretty hard to find one without the other in any recent treatise, thought piece or POV. That said, for 2018, I have to give the toss-up to data. Last year was the year that the entire industry embraced the idea of using quantifiable data sources to drive insight, opportunity, channel strategy, and performance, leading to more effective and efficient marketing and communications programs.

While data has always been at the core of the life sciences and biopharmaceutical industries, we saw great strides last year in marketers deploying the same rigor around data science, measurement and analytics to drive all manner of multichannel efforts reaching healthcare providers, payers and patient-consumers alike. This work will continue to accelerate, but with the added influence of companies from outside of the industry bringing tools, platforms and approaches into both the pharmaceutical and broader health space. 2019 will be the year that technology finally takes its rightful seat at the table, enabling data to create more firepower in and out of the advertising, marketing and communications realms. So, the word for 2019 is HealthTech.

Big tech companies’ move into healthcare will continue this year with new offerings ranging from Amazon’s PillPack to Apple’s EKG interface to UberHealth’s ER ride service. These, and other non-traditional healthcare companies, will continue to develop technology that addresses health and wellness needs across a wide range of demographics, from GenZ and Millennials through an aging but technologically savvy population who actually utilizes the lion’s share of the healthcare provided in this country. Voice tech, AI, and machine learning will all become part of the discussion for marketers and agencies alike as all players form partnerships, develop prototypes and create pilots to determine how best to use emerging technologies to solve age-old problems.

Technology will also play a more fundamental role in defining how HCPs get drug and disease management information, how they manage patients in their practice, how patients manage their own health (and that of their families), and how both sides work to improve the doctor-patient relationship. As technology allows for less intrusive patient management and more effective treatment, there will be cost benefits to the patient, practice, plans, and society in general – all driven by the data that allows for a more seamless, informed, beneficial and productive experience for all stakeholders.

Arno Sosna, general manager of CRM, Veeva: In 2018, the phrase of the year was “digital transformation.” Historically, the industry has not been able to deliver true digital engagement and meet healthcare professionals’ need for real-time information across devices. In the last year, digital transformation empowered life sciences companies to become more efficient, effective, and agile in how they bring new products to market and reach HCPs through the channels they prefer – from email to video to events.

Moving into 2019, “intelligent engagement” will continue to be a focus across the industry. Companies store and process a significant volume of data. This year, they will start to leverage data to make smarter decisions and allocate sales and marketing resources more effectively. As the industry generates more data from digital channels, companies will incorporate richer insights into reps’ daily workflows for better decision-making. All of this data will be foundational to running advanced statistics and analytics.

Tim Wohlgemut, senior VP, TGaS Insights, TGaS Advisors, a division of Trinity Partners: For 2019, the word of the year for pharma commercial models will be “Partner.” TGaS has assessed hundreds of commercial and organizational structures for companies of all sizes for the past 15 years. Despite shifts, discernible trends tell us what could, and should, hold in tomorrow’s commercial models.

Descent of the sales team won’t mean disappearance of sales. Reach and frequency models have been relegated to minor parts in the commercial model. Make no mistake, fewer traditional sales people are in pharma’s future. Yet those that remain will have new roles in both sharing information with key audiences and collecting data and customer insights on the ground, feeding the commercial model in real-time. Sales will be the partner to both the customer and the company.

Rise of patient services. At a recent TGaS executive conference, a business unit head at a Top 10 pharma company predicted that patient services will be the core of the commercial model within five years. A few gasps, but mostly nodding heads. Patient services will not be a single function or department in the future but a capability that partners with all other commercial functions. Most companies already refer to a “hub” model, stitching together many functions, including patient-related services, into a coherent model.

Orchestrating the capabilities of the future? Or convening the Commercial Council? Stitching together many functional silos requires coordination. Will that look more like an orchestra with a conductor or a council of stakeholders with clear governance models to direct decision-making? The council as a partnership of equals may win in the end.

Vendors as partners. Pharma already views its most critical vendors as partners (eight of 10 dollars spent on commercialization goes through a vendor of some type, per TGaS data). Creating true vendor partnerships is one of the most important capabilities a pharma company can create. Our data shows those with the most advanced commercial capabilities also have the highest vendor satisfaction. Getting vendor partner management right will be vital for pharma.

Med Ad News: Will price disclosure in ads happen? If it does, what will it look like, and what will the impact be on marketing plans and strategies?

Wendy Blackburn, executive VP, Intouch Group: Yes – sooner or later – one way or another – some level of pricing transparency in TV advertising will happen. To start, there are 39 companies that are members of PhRMA and a number of others that have agreed to follow the organization’s Guiding Principles. Beginning April 15, these companies have already agreed to point to where patients can find more information and context about the cost of the medication. Then of course there is the proposed CMS mandate, which was much more specific to include the list price on the ad itself, and which could technically take effect any day. (Though many predict a substantial legal battle here.)

Will the situation create a new world where pharmaceutical companies turn away from television advertising altogether, as some people predict? Will advertising budgets tank overnight and major product launch strategies stall due to new regulation? Will creative directors abandon the pharma industry in droves to avoid having to include yet one more mandated, regulated chunk of information into a thirty second spot?

It doesn’t have to be that way. If you look past the hype, doom, and gloom to see the positive opportunity, all sides can win here. For years, research has pointed to a desire from both consumers and professionals for clearer pricing information. To note: the proposed CMS rule does not prevent manufacturers from, once disclosing the basic price information, providing additional context around product pricing. This additional context could be accomplished in a number of ways, from offering online co-pay lookups to a comprehensive, real-time benefits checkers where consumers enter the product name and personal insurance coverage information to receive pricing specific to them. In fact, the data and technology to offer this already exists.

So whether it’s a single-minded mandate for a list price, a voluntary industry approach that provides wider context, or various interpretations of that at the industry and company level, in 2019 we will see some level of pricing transparency happen. My hope is that parties can agree on a sensible, consumer-centric solution.

Harrison Boulay: I’m not convinced it will, despite the current administration’s push for pricing transparency. If it were to happen, there would be a push to develop partnerships with payer groups coupled with big data in order to accurately showcase pricing based on coverage.

Susan Dorfman: As we noted in a communication to our clients, it’s not certain that this will happen, but it’s important to still be prepared. Our recommendation is that companies not part of PhRMA should discuss implications with their government and regulatory affairs teams and make decisions jointly based on what they believe is most appropriate. One major implication of this ruling, if passed, is the potential of increasing the cost of air time, as longer TV ads may be needed to ensure enough time to read list price information and surrounding contextual cost messaging. Our clients should begin discussions now to prepare for such broadcast media implications as well as those that are likely to impact their search and social strategies. While there’s no way at this point in time to know the specific implications, there’s much we can do to prepare. Aligning search and social strategies is a good first move. Social listening can allow a gauge of consumer reaction and enable smart response. We want to be there when the conversations are happening and be a resource to them. We can also review search queries to see how queries around cost change or increase, and then modify the brand’s bidding strategy. In addition, we partner with a number of interesting companies that enable reaching consumers based on TV schedule and other relevant factors that would be beneficial in further supporting and educating patients around pricing, direct out of pocket costs and other financial support that is provided.

Matt Nespoli: There are too many variables to know if or when price disclosure could happen, but if it does this is where we can start to see digital ad spend slowly overtake that of TV. Price disclosure can turn patients away from certain treatments or even considering treatment at all, which is not the outcome this proposal is hoping for. Digital marketing provides the outlet for patients to seek information prior to making any treatment options. The marketing goal is to ensure that brands are prepared to be in places like WebMD, but also delivering a multitouch point experience across platforms like paid search and social. Content development and syndication will also play a key role in providing a valuable educational resource for those seeing treatment.

Sharon Suchotliff, Strategy Insights and Planning, Patient and Consumer Health, ZS: The interpretation of list price and what it means for someone will differ based on health literacy, condition, and circumstance. It is important for pharma to be aware of and sensitive to these nuances and the potential impact. The intention behind price transparency is positive, but the result may not be. Patients may become concerned about costs which could impact their willingness to seek treatment or their adherence to treatment plans. Giving patients information in a way that is relevant and customized to their situation is the best plan.

Steve Trokenheim, partner, Beghou Consulting: To encourage marketplace competition that keeps a lid on drug prices, the government may force drugmakers to include in TV ads the price of any brand-name drugs covered by Medicare or Medicaid costing more than $35 per month.

Broadly speaking, publicizing a drug’s price is a good idea. It can help physicians and patients make more informed decisions. But the effort will be misleading if the government requires manufacturers display only the drug’s list price. There are far too many exceptions related to payer negotiations, consumer co-pay deals, and coupons.

Instead, pharma companies could provide pricing-context related to the drug’s typical out-of-pocket costs (e.g., “85 percent of patients pay $100 for a one-month supply.”). Being required to cite that information would encourage drug companies to price their drugs more competitively based on several factors, including efficacy, safety and dosing convenience. And it would provide meaningful information to both physicians and patients.

Of course, the physician should always make the call on prescribing. As patients take a more active role in researching symptoms and treatment options, however, they may request physicians prescribe a competing drug offered at a lower price. If that less expensive drug works well for the patient, price transparency could help keep drug prices in check.

When drug companies start advertising prices to consumers, patients start asking doctors about cost. And that’s something few physicians may be prepared (or care) to discuss. Pharma manufacturers will need to change messages and marketing tactics aimed at physicians. Among the first steps: collecting data and equipping sales reps to explain why their drug also is the best value to that specific physician’s patient population.

Med Ad News: What’s up next for marketing technologies in 2019? What new tech tools in the brand manager’s toolbox will make the biggest impression? And what tech tools are wearing thin? Why so?

Harrison Boulay: Chatbots and messenger marketing will continue to make a big impact on retention campaigns. Tools that help marketers centralize their brand voice to be consistent across the many platforms available will be highly sought after.

Gene Fitzpatrick, senior VP, engagement strategy, Ogilvy Health: Chatbots are the technology tool brand managers should be utilizing – immediately in 2019. Consumers expect instant access to nearly anything and everything, and brands are no exception. In most cases, the questions consumers often ask about a product or a brand are common questions with standard responses. “Can I use product X with this?” “Where can I find product X?” These types of questions can be easily programmed for a chatbot to deliver an instant answer, fostering better relationships and user experiences with consumers. The technology to create this automation in chatbots has greatly advanced and has become increasingly cost effective. Additionally, many automated platforms used to create chatbots have built-in templates for business rules, user flows, and other documentation, making it easier for medical/legal teams to review conceptual ideas.

The brand experience no longer lies within one, single tactic or channel. Consumers don’t only experience the brand on its website; they are interacting with the brand on different channels, such as Facebook or other social media outlets. Chatbots can often be platform agnostic and adaptable, as well as available for use on several different brand destinations (eg, websites, Facebook pages).

Customer relationship management (CRM) isn’t just about email anymore; chatbots are now one of the crucial technology tools in this arena. The chatbot offers several touchpoints with the consumers via chat, text, and more. Providing chatbots on digital brand’s various destinations like websites, social media pages, and other platforms should be an essential piece of any marketing plan in 2019.

Paul Kallukaran, executive VP, Performance Analytics and Data Science, CMI/Compas: Triggered marketing is the most impactful way that technology is changing marketing. We get instant feedback on how people have engaged with the brand, allowing us to modify the cadence on the next touchpoint to a customer based on how they have engaged in other channels.

We can decide the sequence of media based on how the audience has reacted to what we’ve already shown them. In a recent client project, we wanted to see if we could reach our conversion goals faster. We aimed for a sequence of activity that could get them to the asset we wanted them to see in less time, and we were successful. This is a big deal. Triggered marketing enables us to remove a lot of waste from the system plus complete campaigns much faster. In addition, triggered marketing has the added bonus of avoiding one annoying aspect of targeted marketing: think of all the times you’ve seen an ad for a product that you’ve already purchased. With triggered marketing we can eliminate that, because once we see that the customer has taken action, we can move on to the next message.

Arno Sosna: Digital publishing will make the biggest impression in 2019. For the first time, a life sciences-specific application will enable brand marketing teams to publish content and approved assets to any digital channel. Life sciences companies create a large amount of digital assets stored in multiple repositories, making it difficult for global teams to identify approved content and have visibility into where content is published.

In 2019, organizations will be able to publish and withdraw digital content faster from one central location to ensure compliance. Companies can distribute and update content to any channel, including multichannel CRM, web, and email, while having full visibility into performance and use of digital assets.

Classic campaign management and customer segmentation are two approaches that are wearing thin, as they do not allow for true personalization of the customer journey. The rise of artificial intelligence will allow for more granular decision-making and, for the first time, give companies greater scalability in how they organize and use customer data.

Med Ad News: Everyone is talking about artificial intelligence, but most haven’t scratched the surface of its potential yet. Is pharma really ready? In what surprising ways might AI change the conversation in pharma marketing this year?

Harrison Boulay: Pharma marketers are ready, and the industry is hungry for a targeting solution that does the heavy lifting. 2018 saw some interesting applications, like BioSymetrics “Augusta” that analyzes and integrates disparate types of healthcare data with business processes. I think a nice surprise would be a move from probabilistic to predictive targeting and messaging.

Justin Chase, executive VP/head, innovation and media, Intouch Group: Last year, FDA approved the first medical device to diagnose disease without a doctor. Other FDA-approved apps help doctors diagnose heart problems and identify signs of a stroke. On the pharma side, AI already is helping make better decisions faster, from drug discovery to physician segmentation, from M&A to corporate strategy.

For pharma, the message should be clear: you can no longer relegate AI to the COE and innovation groups.

Many – pharma marketers included – still think of customer service chatbots when they imagine AI. What we don’t think of is complex orchestration that marries analytics with actions, or engagement with affinities. Presenting a connected ecosystem that effectively manages patient record data, social, influencer, wearable, network, first-party, third-party, attitudinal and behavioral data, should ultimately be the vision. However, starting with a simple chat interface that can live in an Echo, or through SMS, email and chat, is a great first step. But that’s really just the tip of the iceberg. Like in many other areas, social included, it’s not at all surprising to see pharma approach AI cautiously. Especially as some companies have overpromised and underdelivered. The important thing now however, is that we refuse to be deterred by these stops and starts. It is absolutely essential for pharmas to build an AI foundation now, otherwise risk being left in the dust in the very near future.

With this in mind, AI use cases in healthcare are almost endless: Sales rep training/engagement; medical, legal, and regulatory process efficiencies; predicting patient retention and adherence; patient assistance via chat support; resource management for pharma medical information teams; testing treatments from R&D in virtual environments before human trials; providing emotional support through patient support programs; and more. Applications for AI in marketing are just as broad.

To get regulatory teams on board, we must present AI as a practical solution to systematic problems that all brands face. We also need to focus on specific solutions for things like adherence issues: daily reminders, filling prescriptions and providing engaging daily content to remain top of mind among our target audiences.

The market for healthcare AI tools is expected to grow to more than $34 billion by the mid-2020s. This market will consist of software, hardware and services powered by AI.

AI will soon power amazing consumer-facing products and behind-the-scenes infrastructure. The potential for the technology to improve our lives for the better is incredible.

Susan Dorfman: AI has a very broad meaning; it encompasses predictive analytics, machine learning, robotics, and human intelligence. We are using some of these in pharma and healthcare already. For example, at our agency we’re using predictive analytics and machine learning to better engage our clients’ audiences. There is of course opportunity to expand into more advanced areas of AI; such as using bots in decision support and other conversation-based processes. We’ll likely see a lot more in the next five years of the utilization of that tech for more advanced practices that are stable enough to be used to bring ease to patients and physicians without risk of harm.

Gene Fitzpatrick: A few years ago many debated the role of AI in healthcare, especially with advances IBM Watson had shown enhancing clinical decisions and treatment regimens. There certainly are benefits in how much AI expediates researching compounds and other potential new treatment developments. However, I believe AI will influence pharma more this year within marketing as opposed to the clinical environment. The ability AI has to enhance marketing automation is game-changing. The AI engines built into Salesforce Marketing Cloud, IBM Watson’s Marketing and Marketos marketing automation platforms have been helping other industries deliver precision-targeted all-encompassing marketing program for years. While Pharma is usually more cautious in adapting to new marketing trends and technologies, I expect AI in marketing automation to be more fully embraced this year. Marketing automation platforms have enhanced the additional supporting tools to provide clear visibility into formulas, business rules and customer journeys. Brands will quickly engage in automated, tailored, multichannel relationship programs in a very competitive environment with clear, measurable points along that journey.

Dennis Fournogerakis, manager, Beghou Consulting: AI is an exciting new technology, and pharma companies are beginning to use it to extract commercial insights from an ever-increasing amount of data. Companies can deploy AI to automate targeting, analyze click-through rates for digital marketing campaigns, determine who a sales rep should visit next, uncover why a physician won’t prescribe a drug, and more.

Still, commercial teams should do more with AI. Most fail to appreciate the true value of AI and only use it to marginally increase operational efficiencies. Pharma companies that mix AI and human intelligence to gain actionable insights earn a better return on investment and outperform their competitors.

To effectively deploy AI, pharma companies must first purchase the right data and adopt a solid data infrastructure. This requires a shift toward a data-driven mindset and investment in the appropriate data and tools. Commercial teams must also help foster trust in AI across leadership and their companies’ sales and marketing functions. It’s also important to be transparent about the complexities associated with using AI to maintain realistic expectations.

As AI becomes more accessible, pharma companies should consider making it a critical component of their operations. It’s easier than ever to access cleaner, ready-to-use data and advanced tools that support AI. We also may see an emergence of citizen data scientists in the pharma industry – data analysts who work with predictive models, but outside statistics and analytics. These business analysts can use their better understanding of the market, brand and business to help pharma companies produce more actionable results. Companies that embrace AI will be able to analyze data, uncover commercial insights more efficiently and set themselves up to successfully overcome the evolving challenges in the industry

Paul Kallukaran: Right now the biggest impact AI can have in pharma is how we analyze and use data. We have an explosion of data and AI allows us to leverage it. There’s more of an appetite to do things proactively or in real time that you previously couldn’t do. We collect data, use AI to analyze the data, then use that analysis to apply to a CXM solution, so it’s a continuous loop. In one exercise for a client we uncovered that a particular channel was working well with one specialty and not others, so our recommendation was to stop using the channel with other specialties and reallocate that investment to go deeper with the first specialty. Previously we wouldn’t have seen that pattern early enough to have made a significant difference.

Jerry Luciano, VP, omnichannel marketing, TGaS Advisors: Artificial intelligence is poised to become a multibillion-dollar industry. With the amount of available data, the potential influence AI is primed to make on the industry is undeniable. The accuracy, speed and consistency AI effects on large data sets leads to faster, more informed, personalized decisions. In a recent TGaS study, 82 percent of respondents stated AI will play an increasing role in marketing. So why hasn’t AI been widely adopted by brand teams?

The industry was slow to adopt social media due to the perceived loss of control over the conversation. AI is viewed as even more risky. In talking with brand leads, we found two primary factors that influence the slow adoption of AI: mistrust and data accuracy. The skepticism stems from the black-box AI process and how systems arrive at an output. Further erosion of trust arises from AI vendors, who need to keep methods and algorithms confidential to protect their intellectual property. In order to overcome the impasse, companies are requiring arduous testing of results against known outcomes to validate the process. Brand managers worry about an algorithm being wrong, even once, and the potential liability. Validation requires extensive effort and investment with undefined ROI, which can be seen as an impediment to adoption.

In addition to internal skepticism, FDA has begun to influence the development and use of software in this space. They have just launched a new Software Precertification (Pre-Cert) Pilot Program to help provide a regulatory framework for approval on new technologies that will undoubtedly bleed into AI. The agency states: “While the FDA’s goal with the Pre-Cert program is to regulate digital health technologies in a way that fosters innovation, the model is based in protecting patient safety.”

The other significant barrier we identified in benchmarking the industry is data hygiene. The industry is viewed to be in the data aggregation and hygiene phase, a precursor for enabling AI. As companies move to aggregate data sources, the growing breadth of data types is not the hindrance; it is the quality of data that influences how a system calculates a result.

So how should marketers leverage AI? In order to allow AI to influence the standard of care, companies need to focus on iterative wins to build momentum. AI is currently being used with success in the low-risk space of ad buys. However, brand leaders must acknowledge the trends in consumer behavior to understand how to effectively apply AI. For example, some estimate that between 30-50 percent of all searches will be done without a screen by 2020, opting for voice searches. Users structure their searches differently using voice compared to text. Searches are more verbose and tend to be in the form of questions. Understanding the differences in how users are searching and optimizing content onsite to improve indexing is an easy way to leverage existing AI platforms.

A second application is in automating a conversation with a patient or healthcare provider, i.e., chatbots. A chatbot can change the way information is disseminated to various audiences. For example, a patient may have a question on how to take a new medication or symptoms, or a user has difficulty typing. There are some clear benefits to leveraging chatbots on digital properties to address the changing landscape of interactions: availability to service customers at a time of their choosing, personalized delivery, cost savings over call centers and as a form of market research to inform future decisions.

A common question we hear from our clients is around how companies outside of pharma leverage AI. One way to overcome internal inertia around AI is to identify proven successes outside the industry and understand how they can be adapted. Internally, AI has proven successful in areas like clinical trials and drug discovery, but if it is going to succeed within marketing, the paradigm must change from brand-driven communications to data-driven.

Saby Mitra, principal, ZS: We’re seeing many pharma companies create innovation groups to experiment, pilot, and launch early experience programs for this type of capability [artificial intelligence and machine learning] in the commercial space. For example, pharma companies have been building out capabilities to personalize customer engagements for some time now, but more recently we’ve seen focus and intensity pick up in using advanced analytics to learn and mine good performing patterns of engagement across channels and recommend next best actions for customers.

In the pharmaceutical industry overall, there are departments that are sitting on pockets of data, and unfortunately in some cases, data is getting politicized. It’s critical that pharma companies – and some have already started – create separate data organizations and appoint chief data officers, if you will, to mandate the use and access of data. For better adoption of AI, there has to be an AI-friendly culture that’s championed from the top down. Senior management has to believe in the value of AI and build the next layer of management to be those change advocates and change agents.

If you ask someone about AI, particularly in the commercial organization, it’s hard to tell what the machine is going to come up with or why it comes up with what it does. Is it giving the right recommendation, or is it an accident of data? In coming months, I could see more focus on providing more transparency to the end users who are administering and managing those types of AI programs.

Arno Sosna: This year, the industry will move toward an AI-driven workforce as AI becomes a standard, pervasive capability that is embedded into commercial applications and business processes. For example, AI will automate claims-reference linking in content management for marketing operations, or automatically recognize and suggest optimal inventory layouts on shelves for retail sales. Embedded AI can also provide suggestions on next best action, improving overall effectiveness for reps.

At this year’s J.P. Morgan Healthcare Conference, Novartis’ pharma CEO Paul Hudson shared an example of how AI supports his company’s sales reps’ effectiveness. Reps have access to an AI service that listens to their interactions and conversations with HCPs, then suggests other customers to visit and subjects to discuss in subsequent meetings. This “virtual assistant” helps reps “plan better, move better, and make sure when they show up to see a healthcare professional, they are talking about things that the healthcare professional is absolutely interested in,” Hudson said.

Transforming the commercial data warehouse space will be key to providing the missing link to pharmaceutical and biotech companies fully implementing AI and enabling a new era of intelligent engagement. AI needs data to build intelligence, and for that data to be useful, it has to be organized in a standard way. For decades, the industry has relied on building and maintaining its own custom-built data warehouses because of a lack of high-quality, packaged commercial data warehouse solutions.

Data originates in many different places – medical records, personal devices, claims, biomonitoring – and remains unorganized. A next-generation commercial data warehouse will better organize and prepare data, removing the largest impediment to gaining value from data through machine learning and AI. An AI-driven workforce can become a reality as more organizations put the right data foundation in place.

We are just at the beginning of how AI will affect established sales and marketing processes. Specifically, the effects of next best action suggestions will be enormous. Processes like incentive compensation, territory structures, targeting, and forecasting will be disrupted as the cadence of decision-making increases from monthly to weekly, daily, or even hourly. AI will infiltrate every business level, from “big AI” helping with decisions at headquarters to “local AI” embedded in field reps’ devices to replace manual data entry with voice, text, and image recognition.

Med Ad News: Sometimes folks forget about them with all the focus on technology, but pharma sales teams are still the ones on the ground. What do brands have to do to optimize and maximize the effectiveness of their sales teams in the new year and going forward?

Michael Deichmiller, group account director, Butler/Till Health Group: We’ve had a lot of interesting discussions with our clients this year about leveraging media to support the efforts of their sales teams – in essence, creating a more educated, more aware audience prior to the sales team having the opportunity to communicate with the physicians/staff in-person. Refining media efforts to specific healthcare professionals that are of the greatest importance to the sales team is critical as is aligning the messaging that the healthcare professional may be exposed to via paid media with the messages that are being delivered by the sales team members.

Nicole Fischer, data analyst, Butler/Till Health Group: Sales force and marketing efforts should work in tandem. Brands need to recognize the areas of strength that their sales teams possess while supplementing the areas of weakness with additional marketing efforts. With increasing frequency physicians are restricting sales representative access in physical offices, how can brands make a connection? Cue marketing. If access is allowed, will the HCP recall the conversation with the rep in a week? A month? Cue marketing.

Greg Flynn, president, Ashfield US, a part of UDG Healthcare: There has been so much said and written about face time with healthcare practitioners and the constraints that puts on the traditional sales dynamic. While this is true, we all recognize that selling still requires a personal touch to be truly effective – it just might be that the personal touch we deploy need to become even more personal. What does this mean exactly?

We need to step back and take a look at our brands and the company culture that drives on those brands and devise a holistic approach to present those values and messaging. Ultimately, we are looking to change behavior, or at a minimum, maintain existing brand support and use. Our mission should be to deliver an enhanced customer experience which should come from a better understanding of who we are, what our customers need, and how we deliver messaging to our customers so that it resonates and engages them in the process of delivering impactful healthcare.

An optimized sales model needs to proceed from this basis. We should always structure an approach that engages the HCP and patients served – one based on meeting their needs with messaging that resonates on a personal level. Traditional boots on the ground may not always deliver the desired or best results.

To deliver the most effective approach can be a lot easier said than done. For one, it takes a certain agility or flexibility to meet the various sales profiles needed to be the most effective in today’s marketplace. For another, it requires demystifying the warehouses of accumulated market data and subsequently analyzing it to underpin the most effective model approach. Doing the assessment upfront on the most appropriate mix of personal and non-personal channels will best inform us on how to create and implement the right mix for each engagement. Then, once these things are accomplished, one can build a transformative sales model rationalizing resource allocation by assessing all relevant data and isolating the cost and impact of each channel to establish the optimal mix.

For instance, we may learn that more productive engagements result from a diverse sales approach configuration that we optimize with other channels such as social media and our website. A traditional 80-person field team could be replaced with one with only 50 traditional field staff, augmented by 30 inside sales staff calling on “hard to see” HCPs with video detailing at times more convenient to them, and 20 field service representatives supplying the office with samples, insurance updates and collateral support.

Gone are the days of driving the need. Today and into the future, we must look to engage with HCPs with value-based messaging that resonates because it addresses the needs they see in serving their patient populations.

Patrick Lezark, partner, Beghou Consulting: Incentive compensation is one of the most complex aspects of the pharmaceutical industry. You must mix behavioral economics and human psychology with in-depth data analysis. A fair incentive compensation plan is necessary to attract, reward and retain reps. If headquarters fails to reward the sales force, it risks reps underperforming or moving to a competitor. Sales reps that follow effective compensation plans generate more prescriptions and increase their company’s bottom line.

To ensure an effective incentive compensation plan, pharma companies need to get back to the basics of organizing, analyzing, and managing data. Data informs everything from sales force size and structure to territory design and alignment to goal setting, all of which comprise its incentive compensation plan. Every quarter, headquarters should reflect on its payout and compare progress and results against goals. Questions to ask include:

• Are we paying the right number of reps the right amount?

• Are sales reps close to their quotas?

• Is quota attainment biased toward territories with certain underlying characteristics?

• Do we have low or high turnover?

• Do we need to revisit our territory alignment?

• What should we be doing differently?

• Is the plan working as we hoped?

Commercial teams can incorporate insights from new technology into territory management, but must not lose focus on its IC plans. Machine learning and artificial intelligence can help sales reps better target customers, determine their “next best action” and improve the plan’s overall effectiveness. Pharma companies must be sure to embrace tools that accommodate these insights and consider new, adaptable alignment tools to manage their territories. As technology in the pharma industry continues to evolve, it’s important to build on the fundamentals of incentive compensation while incorporating more advanced techniques to maximize sales force effectiveness.

Raffi Siyahian, principal, Scout: Sales reps continue to be one of the most significant commercial line items on the ledgers of most pharma companies. Why? Because marketers would be hard-pressed to point to more than a couple of brands that have achieved success without the support of feet on the street.

Even in this day of content-managed, pushed digital communication, sales reps, where allowed, continue to be a primary source of brand-specific information for physicians. But marketers know that reps continue to get less and less time with HCPs. So, what’s the secret to optimizing success for the field force?

Well, the formula hasn’t changed — reps who establish good relationships with their customers are the most successful. Only after the doctor trusts the rep will she or he accept a brand message. Brand teams that help reps establish strong relationships, through efficient meetings and meaningful, succinct brand messages, will be best positioned to maximize impact. How can this be done?

First, bring value. HCPs crave information that helps them better treat patients. This often means helping identify undiagnosed or misdiagnosed patients or delivering clinically relevant disease state information. Marketing teams that arm their reps with disease state information that HCPs deem valuable will be off to a great start.

Second, provide reps with a brand message that is clearly differentiating and motivating but can be delivered succinctly. Sounds simple, but many brands miss this in favor of the “kitchen sink” message.

Finally, give reps a way of quickly explaining the trigger point for when the brand should be used. “Doctor, when you see X, that’s when our brand can be a benefit to your patient and your practice.” This goes far beyond patient profiles and, if not well-executed, often relegates the brand to use far down the treatment continuum.

Brand teams that help their reps build strong, trusting relationships with HCPs, provide valuable information, and deliver a succinct brand message in a hyper-efficient manner will always have a leg up on their competitors.

Ryan Sowers, director of commercial strategy, DRG: Health payment reform, consolidation, and other market forces have completely upended prescribing influences in the U.S., and it’s become increasingly complicated for brands to prioritize their resources.

One of the keys to maximizing sales force effectiveness will be the ability of brands to leverage the right data sets to inform their strategies.

Brands will need to map and assess the complex relationships, influences and treatment dynamics among payers, providers and patients at the regional level for their indication or focus area.

Which regions have the strongest payer influences, and who are the key players? Are there areas where patients play a bigger role in decision-making, or is cost a significant barrier to compliance? Are there geographies where providers have more autonomy, and how does that vary by health system affiliations? How many physician types are interacting with a patient and how is that impacting care? And so on.

Luckily, emerging data sets and advances in data science to connect these pieces are enabling us to answer these questions better and faster for our clients.

And then when it comes to identifying the best-fit physicians for different use cases, including sales force targeting, we work with clients to assess and score physicians by a variety of factors:

• Clinical influence. How is prescribing behavior influenced by the actions of peers they work with and trust?

• Provider influence. How is prescribing behavior influenced in organizations such as IDNs, where cost and quality protocols are standardized?

• Payer influence. How are formularies influencing prescribing and treatment of patients?

• Online influence. How are online influencers, discussions and information shaping health decisions?

• Affiliations influence. How does a physicians’ affiliation impact treatment choice decisions?

• Key Opinion Leader (KOL) influence. How are experts and KOL speakers influencing networks at national, regional and local levels? Who are the future market shapers?

The right data – and the ability to act on it – will be a key differentiator in sales force effectiveness going forward.

Curt Staab, senior VP, Emerging Life Sciences Network, TGaS Advisors: It is easy for marketers to become enamored with the latest technology, like Artificial Intelligence, and develop a multi-channel marketing (MCM) plan around it, but this may lead to neglecting the one channel that has the face-to-face interactions with customers – the sales force. In order to optimize and maximize the effectiveness of their sales teams, marketers should ensure that the sales force is fully integrated with an overall MCM strategy. A recent TGaS study showed that pharma companies can improve in this area; 40 percent of companies self-reported that they are not integrating field calls with their multi-channel marketing data. Many pharma companies are trying to leverage their CRM systems to enable multi-channel marketing integration, but here again there seems to be room for improvement. Only 50 percent of surveyed companies said their CRM system is a “fully integrated” MCM tool. Another way integration can occur within the CRM system is to leverage predictive analytics capabilities to provide the rep with “next best message” or “next best call” intelligence. This information flow should go both ways. It should provide recommendations for the field rep, but reps should also be able to enable other non-personal promotion channels and go well beyond rep-triggered e-mails. The combination of analytics that can only come from headquarters with on-the-ground rep intelligence can prove a winning combination.

Along with a fully integrated MCM strategy with the field, marketers can also maximize effectiveness by identifying different roles and responsibilities for field personnel. As pharma companies become focused on more specialty products, marketers have realized they may not need to feed the “arms race” in personal promotion. TGaS has observed that the average size of a sales force has decreased 64 percent since 2009 from 525 reps to 188. The number of field forces in a company, however, has increased 143 percent during that time, from 4.4 to 10.7. This is due to marketers realizing the need for different field-based roles to fill an array of different customers and customer needs. These new roles include reimbursement specialists, nurse educators, clinical specialists, IDN-focused reps and many more. Marketers are realizing that a field force is a vital part of an MCM strategy, but the field-facing roles need to evolve from the standard reach and frequency model of deploying reps to HCPs.

Along with changing the standard reach and frequency approach, marketers are continuing to strive for a holistic approach to their MCM strategy. While building promotion plans, marketers should look at the interaction between all channels, which includes not only field sales but also web ads, print ads, websites, email, speaker programs, etc. Promotion plans should not start with looking at promotional response for the field force and then layering in other channels on top. A holistic approach understands the interaction between all channels and ensures that the right message through the appropriate channel with the optimal frequency will have the greatest impact. Thus, marketers will always have a personal promotion field channel, but this will evolve to ensure it is fully integrated in an impactful multichannel marketing strategy.

Malcolm Sturgis, principal, ZS: The sales force is still pharma’s No. 1 tactic for HCP promotion, despite the industry’s embrace of digital heavy, multichannel approaches. The sales force’s personal relationships and depth of interaction allows more touches, with more content, than any other channel. Sales representatives are also a high investment channel. While about half the HCP interactions the industry tries for are non-personal (e.g., emails), sales force still represents the vast majority of the industry’s professional spend. Making the most of that investment matters.

Sophisticated pharma companies are taking advantage of technology to make their sales forces more effective, not just to shift spend to lower cost channels. Today’s representative is at the heart of the omnichannel ecosystem, bringing dynamic digital sales aids to a call, communicating with customers online, and coordinating with or deploying other marketing channels to make each interaction as impactful as possible. HQ can help with this by enabling seamless cross channel coordination and sending the field timely, customer level insights and suggestions that help reps tailor the strategy for each doctor.

Ben Swan, digital media strategist, Butler/Till Health Group: I feel that there is a huge opportunity for agencies and advertisers to take their collaboration to the next level in 2019 and I believe that a large part of that opportunity will come in the form of sales and marketing cooperation. Too often there is a drop or gap in communication from agencies to marketing/advertising to the CRM programs/teams to the sales team.

Whether it’s marketing driving unqualified leads, CRM systems failing to adequately meet customers needs, and/or sales teams having difficulty following up with leads in a timely manner, it seems that no matter what the issue is, it typically boils down to a lack of collaboration and understanding. In the recent past, automation of marketing tech and API integrations with sales tech have been great tools to help mitigate any time lag and other issues but I contend that these tools fall short of a solution to maximize effectiveness of sales teams. In my opinion, when it comes to marketing to HCP’s, marketing objectives should be tied to sales team objectives which in turn should be tied to brand objectives in a more intimate and concise way. The only way to do this is to collaborate from start to finish, from the day 1 brief to the final report the three teams should be communicating constantly, sharing data, giving feedback, discovering insights, and optimizing marcomm budgets to deliver the optimal ROAS for a brand.

Aaron Uydess, executive VP, customer experience and analytics, Intouch Group: As access to HCPs declines, the challenges facing sales reps – less time with HCPs, Sunshine Act restrictions, and integration of practices into larger health systems – continue to increase. To reinforce their value, sales reps must be in tune with the market and the unique needs of the customer, so they can anticipate and tailor their interactions and support. Fortunately, today’s digital world enables connections and predictions that yesterday’s rep never even dreamed of.

By combining the best in industry expertise, data, CRM technology, and AI and machine learning, reps can have the tools to make anticipated relevance possible. And by anticipating relevance, the rep can provide an HCP with information that’s useful to them, in the format, time, and place that helps them most.

Intouch’s AI-powered embedded virtual assistant, which we call EVA, is a great example of what’s possible. EVA connects with Veeva to access a rep’s calendar of appointments to get information about where they need to go and who they need to see. Combined with marketing segmentation, EVA prepares the sales rep with the breakdown of the physicians lined up for the day’s calls. Data further informs the conversation with helpful facts like script-writing history, promotional objectives, prior messages presented, and online activity, giving the rep a prediction of what their next best actions should be. These suggestions can be offered via the voice assistant, or sent by text or email for later reference, and can power the flow of the in-office detail. After the call, EVA can help a rep record a call quickly and easily in the CRM system.

With modern marketing tools at their fingertips, sales reps not only can become more strategic and valuable partners to HCPs, but they can also be more efficient, spending less time on administrative tasks. They can focus on selling, and more importantly achieving improved patient outcomes.

Med Ad News
How do you foresee pharma’s marketing mix changing, or not changing, in 2019? How will the various channels develop and change this year?

Susan Dorfman: The way we serve our customers, whether patients or HCPs, needs to reflect the way that they actually consume information and should be channel neutral. The small percentage of clients already doing that should keep doing it. For those who aren’t, the biggest change we see for you is embrace the people-first mentality, and ensure that your channel mix is reflecting your audience in a one-to-one manner based on continuous insight. It’s also important to remember that it’s not just the channel, it’s also the messages served in that channel that needs to be considered in the mix. Personalization of message and content mix by channel is as important as the channel mix itself.

Danielle Fox, digital media planner/buyer, Butler/Till Health Group: In 2019, we can expect more customized media to become a larger part of pharma’s marketing media mix driven by the expansion of social, influencer and experiential media channels. In the past couple years, pharma has become more comfortable using social channels, having navigated the legal considerations and establishing precedence for how to manage social channels with compliance to FDA guidelines. With this, I’d expect social to become a bigger role with brands tapping into sources outside of Facebook & engaging with channels like Pinterest to take advantage of the keyword level targeting and Snapchat to reach the younger demographics. With the expansion of social, I’d also expect brands to continue & expand upon leveraging influencers to connect with patients in a meaningful way and would expect to see more branded influencer content come into play. In trying to stand out from the clutter, I’d expect experiential media to become the next testing ground with brands and agencies beginning to look at how leverage artificial intelligence or build custom partnerships that align with consumer trends, i.e. partnership with UberEats.

Justin Freid, executive VP, managing director, CMI/Compas: While ultimately depending on the patient population’s consumption behaviors, continued shift to advertising on streaming services like Hulu will become a core part of the media mix. With so many people cutting the cord, some never even having the cord attached, reaching key audiences through the devices and channels they are actively using as their primary source of content consumption. This will be accompanied by cable companies continue to improve their technology, allowing addressable TV to continue to take on more and more of the traditional TV budget. The benefit of layering on additional targeting being met by scale will only push more and more dollars to addressable TV.

Eugene Lee, executive VP, managing director, CMI/Compas: A 2019 media mix will look more diverse in channels and tactics than ever, which will be the trend continuing. The media landscape’s expansion has resulted in media dollars being spread to so many more channels than in the past. Clients are always pushing to not be “cookie-cutter” and with solid measurement plans and analytics in place, the exploration or piloting of new channels or tactics is common. This expansion will also not be limited to paid media channels but inclusive of web presence management, community management, owned media assets, etc. This too will result in a mix of communication types in these media where it will not be just promotional messaging. The media mix in healthcare also includes combining the patient/caregiver audience with the healthcare professional audience media efforts in both a unique and synergistic way. Ultimately, what will matter is success from the total mix and the media that makes up that mix.

Liz O’Neil, senior VP, channel strategy and research, Ogilvy Health: As we consider the future of pharma’s marketing media mix and its likelihood to change, our Magic 8-Ball says, “My sources say no.” This response feels right for the following reasons. First, pharma marketing is one of the most complex markets with many stakeholders such as patients, caregivers, prescribers, allied health professionals, and payers. Finding the right mix has been the quest of pharma marketers and their partners, with advanced analytics shaping the understanding of cross-channel attribution. Strategic shifts in priority across stakeholders may shift the mix, but the channels leveraged are tried and true. Second, as an industry, pharma is evidence-based in their approach to marketing, so any changes to the media mix will be slow, due to the natural pace of testing and learning. Brand managers know that securing a media budget for year two is not easy if it does not show success in year one. Setting up learning plans and testing new channels is part of the approach, but they take time to scale.

Siloed structures of companies can compound the complexity of the optimal marketing mix, and thankfully there has been evolution in this area with teams on the agency and client side designed to be more agile and cross-functional. This development should help with optimization across channel and not having teams protecting budgets for the wrong reasons. This mindset shift will not likely change the mix significantly, but allow teams to be ready to react to shifting market conditions.

Pharma is a data-driven and results-driven category but does have a slower-paced learning curve due to the nature of the products sold. The selling cycle is longer, and the purchase decisions are multifaceted. Pharma is excited by the evolving channel landscape and moving to a more digital-first and data-driven approach, but these shifts are not big shifts in mix, but rather nuanced evolutions of the channels and testing the strategy rather than the channel. As brands embrace the promise of data-driven marketing and partnership of sales and marketing, we will see communications aligned to the customer journey and an increase in segments and more targeted messages. The investment in analytics and data should increase to power communication plans. 2019 will continue to build on personalization, especially in the HCP side of the business. Thinking about customer engagement and customer journey is to have the right message at the right time. Electronic health records, hypersegmentation, more data to understand physicians’ behavior is all exciting – you may alter the execution, but the channel mix is fairly tried and true.

Morgan Olek, digital strategist, Butler/Till Health Group: I foresee pharma’s marketing media mix continuing to evolve in 2019. Media consumption is changing, and with that, so must the media mix. As the number of cord cutters continues to increase year-over-year, I expect to see an increase in connected TV/OTT ad spend in 2019. In addition to a surge in connected TV adoption, I’m also anticipating an increase in influencer marketing in 2019. I’ve seen a few pharma companies dip their toes in this “new frontier” in 2018, and I expect this tactic to really take off in the new year. Brands and media partners alike will use prior executions as learning experiences and benchmarks to pave the way for new opportunities in the future. As more and more patients (influencers) are willing to share their stories and become advocates, opportunities to leverage these personal experiences will be abundant. While many brands will see this strategy as too risky, the ones willing to take the plunge will reap the benefits.

Med Ad News: What skills or offerings are brand managers going to expect from marketing agency partners in 2019 that they might not have expected in 2018? Why so? What other changes might be brewing in the agency world?

Intouch CEO Faruk Capan

Faruk Capan, founder and CEO, Intouch Group: Brand managers will demand that their agencies provide more integrated customer experiences for patients and HCPs. Now more than ever, people expect brands to know what they want and need, and creating integrated experiences demonstrates that we are paying attention. Agencies need to be partnering with centers of excellence and IT to develop and provide access to unified customer data in order to implement integrated customer experiences. Clients will demand deeper knowledge from their agencies, not only in terms of modern marketing but also on privacy – GDPR and CCPA are only the beginning of the push toward greater privacy controls. Using data science to optimize campaigns at every stage, from predictive modeling to identifying top-performing messages to measuring engagement, will continue to be a key expectation, as will a thorough understanding of technology platforms and which one is right for a particular brand’s needs.

Michael Deichmiller: Agencies must be able to make sense of data and tell a clear story of results. We all know there’s a lot of data and throwing that data at our clients to prove our value or our time/effort is a thing of the past. The evolution of data and analytics is making the complex simple. Distilling very complicated, and intricate data sets down to answer the question “what does this mean for the brand”. Most brand manager have an array of responsibilities and are stretched thin – helping them to tell a story through the orchestration of campaign data will go a long way in making their lives easier.

Susan Dorfman: In an agile world where things are changing all the time, insights shape priorities. We’re entering a daring environment and looking at doing things differently. Brand managers need to be much more flexible and much more time-responsive in the way that we design, execute and measure everything we do. We need to be quicker and more agile. And we need to be able to adapt and adjust, while also knowing when to hold and stick. We are no longer in a world where we can create a plan and set it in stone; in our people-first always-on marketplace, we need to embrace and manage change.

Danielle Fox: I’d expect brand managers to expect an integrated marketing plan inclusive of outside of the box opportunities accompanied with a clear measurement plan to understand how the holistic campaigns are tracking towards the goals our brand managers are being held to internally. Now more than ever, we have seen the willingness from brand managers to test the boundaries and begin to push more custom programs through legal review which in turn allows for additional media avenues to build meaningful connections with patients and HCPs. With new programs, it becomes important to prove value and ROI which is where a holistic measurement plan comes into play to prove the validity of these new opportunities. Agencies will work to connect their analytics teams with brand managers & analytics team members at client organizations to align measurement methodologies and be able to partner more closely to understand areas for optimization.

Justin Freid: Specialization has been key for the growth of many marketers when it comes to social media, analytics, search engine marketing and other channels. But what is occurring in agencies today is the lack of someone to pull it all together: being well versed across the board and understanding how the channels work together to reach and influence the end consumer. While specialization is needed to truly make many of these channels effective, we are beginning to lose the overall connection to business strategy and how each channel works together to achieve business results. Being able to truly be a media strategist across all channels is a skill set that is greatly needed within our industry.

Amy Graham, client engagement officer, Ogilvy Health: As an agency partner, our team serves as a steward of the brand entrusted to our care. As such, we sit at the table with our clients as an extension of their teams, partnering in their brand processes and success. We should be expected to have intimate knowledge of the brand and competitive landscape, as well as the business challenges facing the brand and team, but also have the ability to understand and leverage the role that technologies and data have on our brands. Agency marketers need to work with their clients to build brand strategies based on a number of key market dynamics.

When building a brand strategy, to ensure success in 2019 and beyond, it’s an absolute must for today’s marketers to incorporate data, analytics, and technologies into their process. Those who are able to analyze data and quickly develop insights by making intelligent, meaningful connections with their customers will have a strong competitive advantage. Applying data strategies to make better-informed decisions allows marketers to optimize innovation, and affords us the ability to build new tools for physicians, consumers, and insurers. Patients, prescribers, and payers are all more informed and have a variety of information available to them. Therefore, our goal is to deliver a stronger connection to customers and optimize the brand experience.

Healthcare consumerism can be defined as transforming decision-making into the hands of individuals. In pharmaceuticals, success is linked to the pharmaceutical company’s ability to meet consumers’ needs and expectations, often placing them in the position of serving as a primary source for education, information, and for providing the tools that patients need to take ownership of their health.

Consumers have come to expect transparency and choice in their healthcare experience. They no longer want to be told a story, they want to participate in stories. Now more than ever, healthcare users look to their peers, families, friends and extended online networks for validation – which gives consumers significant weight as influencers within our target markets. For years, marketers have known about the power of building our networks and creating brand advocates, delivering experiences that make our customers want to give us personal referrals – but where so many brands fall short is integrating that user-generated content within their brand strategies.

Within the world of oncology, we can draw upon more than two decades of experience launching drugs approved under accelerated or subpart H/subpart E approvals. As such, we’ve learned the importance of aligning brand and regulatory strategy early on to maximize what is often a truncated launch calendar. With an increasing number of such approvals over the last five years alone and no shortage of these approvals still to come, it’s important for brand managers to partner with a marketing team that’s experienced at helping identify potential opportunities and challenges that might help or hinder launch planning and execution. Organizational planning and prioritization are critical to drive readiness and success.

Borgeas Weighs In On Newsom’s State of The State –

Should Facebook change the way it monitors users for suicide risk? – WRAL Tech Wire

A pair of public health experts has called for Facebook to be more transparent in the way it screens posts for suicide risk and to follow certain ethical guidelines, including informed consent among users.

The social media giant details its suicide prevention efforts online and says it has helped first responders conduct thousands of wellness checks globally, based on reports received through its efforts. The authors said Facebook’s trial to reduce death by suicide is “innovative” and that it deserves “commendation for its ambitious goal of using data science to advance public health.”

But the question remains: Should Facebook change the way it monitors users for suicide risk?

‘People need to be aware that … they may be experimented on’

Since 2006, Facebook has worked on suicide prevention efforts with experts in suicide prevention and safety, according to the company.

In 2011, Facebook partnered with the National Suicide Prevention Lifeline to launch suicide prevention efforts, including enabling users to report suicidal content they may see posted by a friend on Facebook. The person who posted the content would receive an email from Facebook encouraging them to call the National Suicide Prevention Lifeline or chat with a crisis worker.

In 2017, Facebook expanded those suicide prevention efforts to include artificial intelligence that can identify posts, videos and Facebook Live streams containing suicidal thoughts or content. That year, the National Suicide Prevention Lifeline said it was proud to partner with Facebook and that the social media company’s innovations allow people to reach out for and access support more easily.

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“It’s important that community members, whether they’re online or offline, don’t feel that they are helpless bystanders when dangerous behavior is occurring,” John Draper, director of the National Suicide Prevention Lifeline, said in a press release in 2017. “Facebook’s approach is unique. Their tools enable their community members to actively care, provide support, and report concerns when necessary.”

When AI tools flag potential self-harm, those posts go through the same human analysis as posts reported by Facebook users directly.

The move to use AI was part of an effort to further support at-risk users. The company had faced criticism for its Facebook Live feature, with which some users have live-streamed graphic events including suicide.

‘Are you OK?’

In a blog post, Facebook detailed how AI looks for patterns on posts or in comments that may contain references to suicide or self-harm. According to Facebook, comments like “Are you OK?” and “Can I help?” can be an indicator of suicidal thoughts.

If AI or another Facebook user flags a post, the company reviews it. If the post is determined as needing immediate intervention, Facebook may work with first responders, such as police departments to send help.

Yet an opinion paper published Monday in the journal Annals of Internal Medicine claims that Facebook lacks transparency and ethics in its efforts to screen users’ posts, identify those who appear at risk for suicide and alert emergency services of that risk.

The paper makes the argument that Facebook’s suicide prevention efforts should align with the same standards and ethics as would clinical research, such as requiring review by outside experts and informed consent from people included in the collected data.

Dr. John Torous, director of the digital psychiatry division in Beth Israel Deaconess Medical Center’s Department of Psychiatry in Boston, and Ian Barnett, assistant professor of biostatistics at the University of Pennsylvania’s Perelman School of Medicine, co-authored the new paper.

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“There’s a need for discussion and transparency about innovation in the mental health space in general. I think that there’s a lot of potential for technology to improve suicide prevention, to help with mental health overall, but people need to be aware that these things are happening and, in some ways, they may be experimented on,” Torous said.

“We all agree that we want innovation in suicide prevention. We want new ways to reach people and help people, but we want it done in a way that’s ethical, that’s transparent, that’s collaborative,” he said. “I would argue the average Facebook user may not even realize this is happening. So they’re not even informed about it.”

In 2014, Facebook researchers conducted a study on whether negative or positive content shown to users resulted in the users producing negative or positive posts. That study sparked outrage, as users claimed they were unaware that it was even being conducted.

The Facebook researcher who designed the experiment, Adam D.I. Kramer, said in a post that the research was part of an effort to improve the service — not to upset users. Since then, Facebook has made other efforts to improve its service.

Last week, the company announced that it has been partnering with experts to help protect users from self-harm and suicide. The announcement was made after news around the death by suicide of a girl in the United Kingdom; her Instagram account reportedly contained distressing content about suicide. Facebook is the owner of Instagram.

“Suicide prevention experts say that one of the best ways to prevent suicide is for people in distress to hear from friends and family who care about them. Facebook is in a unique position to help because of the friendships people have on our platform — we can connect those in distress with friends and organizations who can offer support,” Antigone Davis, Facebook’s global head of safety, wrote in an email Monday, in response to questions about the new opinion paper.

“Experts also agree that getting people help as fast as possible is crucial — that is why we are using technology to proactively detect content where someone might be expressing thoughts of suicide. We are committed to being more transparent about our suicide prevention efforts,” she said.

Facebook also has noted that using technology to proactively detect content in which someone might be expressing thoughts of suicide does not amount to collecting health data. The technology does not measure overall suicide risk for an individual or anything about a person’s mental health, it says.

What health experts want from tech companies

Arthur Caplan, a professor and founding head of the division of bioethics at NYU Langone Health in New York, applauded Facebook for wanting to help in suicide prevention but said the new opinion paper is correct that Facebook needs to take additional steps for better privacy and ethics.

“It’s another area where private commercial companies are launching programs intended to do good but we’re not sure how trustworthy they are or how private they can keep or are willing to keep the information that they collect, whether it’s Facebook or somebody else,” said Caplan, who was not involved in the paper.

“This leads us to the general question: Are we keeping enough of a regulatory eye on big social media? Even when they’re trying to do something good, it doesn’t mean that they get it right,” he said.

Several technology companies — including Amazon and Google — probably have access to big health data or most likely will in the future, said David Magnus, a professor of medicine and biomedical ethics at Stanford University who was not involved in the new opinion paper.

“All these private entities that are primarily not thought of as health care entities or institutions are in position to potentially have a lot of health care information, especially using machine learning techniques,” he said. “At the same time, they’re almost completely outside of the regulatory system that we currently have that exists for addressing those kinds of institutions.”

For instance, Magnus noted that most tech companies are outside of the scope of the “Common Rule,” or the Federal Policy for the Protection of Human Subjects, which governs research on humans.

“This information that they’re gathering — and especially once they’re able to use machine learning to make health care predictions and have health care insight into these people — those are all protected in the clinical realm by things like HIPAA for anybody who’s getting their health care through what’s called a covered entity,” Magnus said.

“But Facebook is not a covered entity, and Amazon is not a covered entity. Google is not a covered entity,” he said. “Hence, they do not have to meet the confidentiality requirements that are in place for the way we address health care information.”

HIPAA, or the Health Insurance Portability and Accountability Act, requires the safety and confidential handling of a person’s protected health information and addresses the disclosure of that information if or when needed.

The only protections of privacy that social media users often have are whatever agreements are outlined in the company’s policy paperwork that you sign or “click to agree” with when setting up your account, Magnus said.

“There’s something really weird about implementing, essentially, a public health screening program through these companies that are both outside of these regulatory structures that we talked about and, because they’re outside of that, their research and the algorithms themselves are completely opaque,” he said.

‘The problem is that all of this is so secretive’

It remains a concern that Facebook’s suicide prevention efforts are not being held to the same ethical standards as medical research, said Dr. Steven Schlozman, co-director of The Clay Center for Young Healthy Minds at Massachusetts General Hospital, who was not involved in the new opinion paper.

“In theory, I would love if we can take advantage of the kind of data that all of these systems are collecting and use it to better care for our patients. That would be awesome. I don’t want that to be a closed book process, though. I want that to be open with outside regulators. … I’d love for there to be some form of informed consent,” Schlozman said.

“The problem is that all of this is so secretive on Facebook’s side, and Facebook is a multimillion-dollar for-profit company. So the possibility of this data being collected and being used for things other than the apparent beneficence that it appears to be for — it’s just hard to ignore that,” he said. “It really feels like they’re kind of transgressing a lot of pre-established ethical boundaries.”