Marketing a new drug is a lot like marketing a blockbuster movie. Both products require an incredible amount of time and money to produce, and both have only a finite sales window to recoup that enormous cost. So it’s not surprising that in both cases the key to success is marketing on speed.
In the case of prescription drugs, the company may have only six months to a year to maximize sales before a competitor comes along.
The COX-2 Inhibitor category of anti-inflammatories is a perfect example of speed to market. Celebrex (Pfizer-Searle) and Vioxx (Merck) were launched in 1999, and late last year Boehringer Ingelheim introduced a third brand, Mobicox.
Like any other brand category, there is a distinct advantage of being first to market. The unique selling proposition around the marketing of Mobicox is its price, which is more than 50% less per day than the number one and two drugs on the market. Even so, Celebrex leapt out of the starting block, Vioxx is close behind and Mobicox is in third place with a fight on its hands.
Why pre-marketing?
Drug companies have already made a major investment in the new product before they even submit it to Health Canada for approval. An average of $6-million U.S. is spent on research and development, clinical trials, and pre-marketing efforts before a drug even reaches that point. Pfizer Canada, for example, spent $110-million on research between 1994 and 1998.
To help quickly recover costs, pharmaceutical companies are starting to launch pre-marketing efforts up to four years before a drug is introduced. Such activities include the new global trend of hooking up with another company to co-promote a drug and get twice as many sales feet on the street for the launch.
The passing of Bill C-91 in 1993 – which killed a special provision that gave pharmaceutical companies seven years of exclusivity in the marketplace regardless of when a patent was granted – made speedy marketing even more crucial. Now drug companies get the same 20-year patent term as everybody else, and this term begins a good seven to 10 years before the drug is available to the public. So while more often than not a new drug will still enjoy at least seven protected years, there’s no longer any guarantee. This time of exclusivity has been further shortened by computer-assisted drug design technologies that allow competitors to analyze a new entry and rush similar alternative therapies to market within months.
Twenty years ago pharmaceutical marketers expected to have a clear playing field for several years before generic manufacturers came out with cheaper versions of their drugs. Today, who can worry about generic competitors when a new drug for the same disease or condition can hit the market as soon as six months later?
‘We’re in the world of high-compression marketing where you have to do a lot of pre-marketing and, when you launch, you have to put a lot of effort behind it to recoup your return on this drug in a very short time,’ says Mehbs Remtulla, CEO of Remtulla Euro RSCG of Toronto.
That’s why Remtulla says it’s very important that a communications agency get involved with its client prior to submitting the new drug to Health Canada. An agency can help craft the message that goes into the product monograph, because if claims of efficacy are not supported in this submission document, they cannot be used to promote the drug after approval. Receiving notice of compliance or approval generally takes about two years from date of submission.
‘The rules are very tough,’ says Remtulla. ‘The government and the Pharmaceutical Advertising Advisory Board [PAAB] are not allowing companies to promote anything that is outside the product monograph restrictions. It’s in the company’s best interest that the product monograph be done accurately.
‘By the time it goes to Health Canada you’ve got a comfort factor that the drug works in real life and you’ve got a good argument in terms of its potential in the marketplace. You also have a feel for the way you want to market this drug and what hot buttons you want to press.’
The marketing stakes are also higher since the pharmaceutical companies can no longer afford to wait 10 to 12 years to recover their investment – now they’re looking to do it in two to five years from launch. For example, Prozac, which launched 10 to 12 years ago, took 11 years to reach the same sales target (in the U.S.) that Parke-Davis’ cholesterol drug Lipitor achieved in two years.
‘Whether it is the first, second, or third entry in the category – it has to have blockbuster potential. In the U.S., the definition of a blockbuster is anything that can bring in a billion dollars during its life span. Anything less than a billion is frowned upon,’ says Remtulla.
But while pre-marketing can help drugs hit the ground running, there is one big drawback that’s kept many pharmaceutical companies from embracing the strategy: occasionally a drug is pulled by its company, it isn’t approved, or an approval is delayed for years.
This is bad news for the drug company any way you look at it, but it’s even worse if millions have already been spent building up expectations among doctors and the general public.
One such notable incident involved the heart drug Posicor, from Roche Laboratories. It launched in the U.S. in 1997 and was about to receive Health Canada approval in 1998, when Roche pulled it off the market due to its potential for harmful interactions with at least 25 other drugs.
Putting pre-marketing
into practice
Pre-marketing has many phases. One is working on the key opinion leaders and making sure the medical profession is keen on the new drug or therapy. Another is making sure payors – both government and private insurance companies – will add it to their list of covered drugs.
Remtulla says, ‘We’re involved with a drug called Meridia [from Abbott Laboratories] for obesity management. Payers are saying the person is fat because they chose to be fat. How do you convince an employer they should pay for this drug for an obese employee? We have to prove that obesity can have an effect on cardiovascular risk and other conditions and by actually paying for this drug, they would actually benefit in the mid- to long-term.’
Pre-marketing also involves establishing a market for the drug in the minds of consumers. This is one of the more difficult tasks, since pharmaceutical companies are not allowed to advertise drugs directly to consumers.
In the case of Meridia, the strategy includes educating the public about obesity and management of obesity through newspaper articles and other media coverage that talks about the condition without naming the drug. That is also the time when the drugco wants to plant certain terms in the minds of physicians and consumers. In the case of Meridia, the term is body mass index (BMI), based on height and weight. Over a certain level a person is considered obese and at risk for cardiovascular disease and other conditions.
Pharmaceutical companies are also aligning themselves with disease groups such as the Heart and Stroke Foundation or the Canadian Lung Association as another way to deliver information about new drugs to consumers without violating the advertising veto.
Priming the professional community includes papers in medical journals authored by the physicians involved in clinical trials of the new drug. The researchers also speak at association meetings and symposia via satellite.
Walking a fine line
As with any field of heightened competition, the result is that some are walking a very fine line with their pre-marketing efforts, which are getting perilously close to promoting directly to consumers, says Ray Chepesiuk, director general of PAAB.
‘There are legitimate things they can do. I’m a bit leery of some activities when they get closer to market, when they think they’re getting a product monograph [approval] and start doing press releases or putting out notices on the newswire to hit the public.
‘That’s the kind of stuff that could be deemed to be promotional as opposed to an exchange of scientific information.’
For example, Schering Canada has a drug called Remicade that’s on the market for Crohn’s disease. Schering is now looking to have its use approved for arthritis, as well, and the company has already teamed with the Arthritis Society to put on meetings with invitations extended to both physicians and the general public. In addition, the Arthritis Society has information about Remicade on its Web site.
About 10 minutes of a 35-minute presentation given during the meetings pushes Remicade, something that Chepesiuk says is a high proportion of time for a drug that hasn’t yet been approved for arthritis in Canada.
‘Without the drug company, would they have gone ahead with extensive meetings? I think not,’ he says. ‘Normally that’s not bad if there are new treatments they want to talk about in a balanced fashion, but to me, pre-NOC [notice of compliance] is taboo. We don’t know what’s going to happen with this drug. They could be building up false hopes and expectations.’
CRM on speed
Since the pharmaceutical industry is evermore reliant on data for its marketing and sales initiatives, the days of keeping track of GPs and specialists on little file cards are long gone, and customer relationship management (CRM) is king.
John McCaig, director of business development for Synavant in Toronto, says in the past, clinical research people would have one database of doctors to work from, marketing another, the sales staff another. And, like most industries, communication between all these groups was virtually non-existent.
Today software from companies such as Synavant, which specializes in providing technology solutions, direct mail and market research to the pharmaceutical industry, is integrating CRM and information sharing throughout a company.
McCaig says, ‘There is a single database repository in a company from which everybody can access data about a customer or potential customers.’
Synavant is allied with e-business software provider Siebel Systems and customizes it for the pharmaceutical industry. They take the data on physicians in Canada and slice and dice it for finely tailored direct mail campaigns.
Double your sales force
Once a drug receives approval, it is becoming more and more common in the industry to have sales forces from two separate drug companies coming together to sell it.
Co-promoting a product with another company is happening on both local and global levels. The tactic is ideal for pharmaceutical companies, since they often have periods of a year or two between each product launch.
Mark Nolan, VP, managing director of MC Healthcare in Toronto, says this phenomenon again is a result of trying to get the product out in the market as fast as possible.
He says the sales force, while the most effective sales tool, is also by far the most expensive.
‘In order to get the sales curve as steep as possible, they have to get as many feet on the street as possible, storm the market and start generating revenue as soon as they can. Some of the alliances may seem like strange bedfellows, but there are a lot of factors that affect that. Like, who has a sales force that maybe for the next 18 months to three years is waiting for their next blockbuster product?’
A recent example includes the Lipitor launch, which was a joint venture between Parke-Davis and Pfizer (which now owns Parke-Davis and Warner-Lambert).
Boehringer Ingelheim and Pfizer also recently announced a global alliance to market Spiriva, a once-a-day-inhalant for chronic obstructive pulmonary diseases such as chronic bronchitis and emphysema. Spiriva is still a number of years away from being launched and has just been submitted for approval to regulatory authorities in Europe.
Larry Kich, manager of emerging therapies for Boehringer Ingelheim (Canada), says co-promoting provides critical mass with two sales forces as well as the efficiencies of sharing the costs.
‘You put more resources behind it. The partners share some of the marketing costs and they certainly share the sales force costs.
‘If you’re just looking for a hired gun, then the approach might be to hire a contract sales force, a rep-for-hire. If you wanted a true partner, like an alliance you would form with another pharmaceutical company, you would approach some and indicate your interest,’ Kich says.
‘Largely it would depend on the market you’re going into. If we have a product in the pipeline that is mass market, a large market, then clearly you have to be well-resourced to go there.’
The downside to co-promoting is that it takes more time to optimize profit because you’re sharing it with a partner for a fixed number of years. ‘What you hope to get is the long-term return,’ Kich adds. ‘Short-term pain for long-term gain is the fundamental approach that’s taken.’
