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The future beckons

A new age of pharma commercialisation is approaching and the marketing mix must adapt

 A robotic handWhen trying to predict the changes occuring in the pharmaceutical environment, it helps to look back - not just at how things used to be, but also at what was predicted in the past and how we coped with it then.

There have been two major ages of pharmaceutical commercialisation and we are about to enter a third. The three ages (or eras) and the drivers and characteristics that underpin them, are summarised in table 1 below.

The first age (1970s and 1980s)
This was a time when there were unmet needs in medicine. Novel and innovative treatments such as new anti-hypertensive agents (eg Adalat), histamine 2 antagonists (eg Tagamet) or newer NSAIDs (eg Voltarol) enjoyed rapid market penetration. The marketing mix was dominated by direct sales and journal advertising; medical communications was in its infancy and managed as a spin-off of journal publishing.

Due to the combination of a pull from unmet patient needs and a push from traditional share of voice and sales-force power, there was little need for medical communications programmes.  However, as the range of drugs available grew and competitive pressure increased, this situation altered - and the second age was upon us.

The second age (1990s and 2000s)
We are in this age and of it. Some commentators predict, however, that we are already transitioning into the next era, where a new model of pharmaceutical marketing will prevail - the so-called nichebuster model or, in our parlance, the third age.

Prophesies about the death of the blockbuster are, in our view, premature. Look at the top ten selling brands in 2007. If you had told marketers in the first age that the tenth best selling drug in the world would be worth over $4bn one day, they might have gasped, but agreed it was feasible. However, no one at that time could have conceived a situation where a single brand would reach $13bn per annum. Were Lipitor a company, this single brand would be positioned at number 15 in the league table of sales of pharma companies.

The other interesting, albeit hidden, stat from table 2 is the total market share of this top 10. They account in absolute terms for almost $64bn, yet this is only 9.6 per cent of the global pharma market. There are, therefore, lots of other large brands driving significant revenue in the second age.

So how has one single brand reached $13bn, and a further three surpassed $7bn? A glance at the characteristics of the second age in table 1 tells much of the story. Here the prescribing power of the PCP comes to the fore. Pharma industry sales and marketing efforts are much more rounded and strategically deployed; life cycle management and disease area expansion help to drive drug use in chronic conditions (see drugs in table 2) and shareholders reap the rewards. The medical community and patients benefit enormously too, as primary and secondary prevention begins to impact long-term morbidity and mortality.

The strategic and creative use of medical education began to play a much bigger role in this era and contributed largely to the success of the period. The writing is on the wall, however.

Another glance at table 1, this time focusing on the characteristics of the third age, spells out the impending end of this 'golden age'. Interpretations of 'impending' do vary when it comes to predicting the actual transition point though. As noted above, many believe we are already at this point, however, we predict there is still significant mileage (and profit) in a slightly tweaked blockbuster approach.

In reality, there will be no obvious 'tipping point' - that moment when we suddenly enter the nichebuster era - but the third age is coming, most likely in the next three to five years, and we need to prepare for it now.

TABLE 1: CHARACTERISTICS OF THE 'THREE AGES'
Age First 70s and 80s Second 90s and 00s Third 10s and 20s

Descriptor

Product led, volume driven

Marketing led, blockbuster driven

Customer led, nichebuster driven

Industry structure

Chemical company off-shoots, fragmented

'Big Pharma' consolidation

Integrated pharma and biotech

Growth drivers

New drug revolution,Brand uptake in developed world

Healthcare expectation and spend in USA and Japan

E7/ BRIC

R&D model

What have you got for me today?   

I want one of those too!

What does this patient need... (and can we afford to pay for it)

Prime skills

Formulation and selling   

Market insight and branding

Agility and franchise building

Market development strategy

Sales driven   

Unmet need and expand disease areas

Reactive to customer needs and exploit the new biology

Prime customer

Specialist (hospital) physician   

Primary care physician

Consumer (patient), payors

Touchstone brands which epitomise the age

Voltarol, Adalat   

Lipitor Paxil/Seroxat


Herceptin, Novel vaccines



Implications of the third age

A key issue facing the third age is the fact that there will be many more drugs available for any given disease area or patient sub-group. In the past, newer drugs or new classes tended to displace older compounds (eg the antihypertensive market looks very different now compared with 15 years ago). With the advent of better screening, pharmacogenomics and a wide range of drugs affecting different receptors, however, such displacement is less likely. New drugs will compete for a smaller share within a total market sector, which is more fragmented. 

As a result of this, the total number of patients suited to a particular drug will be lower, as will the number of prescribers/target physicians influencing prescribing. 'Targeting' becomes the watchword; just as many of the new drugs appearing within the next five years (MABs, 'nibs' and novel vaccines) will require careful targeting, so too will the marketing mix, especially medical communications.

 

Table 2: Top selling pharmaceutical brands in 2007

Brand Billion $
Liptor 13.5
Plavix 7.3
Nexium 7.2
Seretide

7.1

Enbrel 5.3
Zyphrexa 5
Risperdal 4.9
Seroquel 4.6
Singulair 4.5
Aramesp 4.4

Shifts required
In order for pharma marketing in the third age to give a good return on investment, both the balance and the content of the marketing mix needs to adapt to the new reality. Medical communications will play an increasingly important role in this new era.

Changes across the main areas of medical communications will be necessary to maintain the positive relationship our industry has with the medical community and the influence it has on prescribing in favour of a particular brand. For instance, strategic publications planning will need to increase the transparency of writing and provenance of papers, improve utility of global investment across affiliates/regions, increase the importance of differentiation and patient targeting messages, clarify outputs instead of focusing on the volume of publications, integrate the value story at an earlier stage and ensure publications are more acutely customised to target audiences. Where advocacy development is concerned, improved depth and breadth of engagement, better selectivity in relation to the deployment and workload for KOLs and greater interaction and harmony between global and local programmes will be required.

Medical education programmes will need to increase multi-customer materials and tactical outputs, take local demographics and healthcare delivery systems into account (better adaptability and adoptability) and develop core kits that can easily be sliced in the multi-dimensions required (market, audience, patient).

More frequent stand-alone meetings with a lower number of attendees per meeting, a wider audience mix at these meetings and more inclusive and creative content, with an emphasis on general education and not product, and a more discrete and focused presence at congresses will become the order of the day.

As for 'new media'; greater integration of e-strategy across media and the marketing mix, as well as flexible deployment of assets across many media will be required.

Focused approach
It is fair to say that the very best medical communications programmes will already be embracing some of these shifts, but few are achieving all of them.

Change remains part of everyday existence in our industry. If we occasionally take time to predict and plan for such change, by looking backwards as well as forwards, we are better placed to respond to it.

The Author
Tim Mustill
is managing director of Fishawack Communications

17th July 2008

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