Large pharmaceutical companies like Pfizer and Merck MRK are often celebrated for their marketing acumen. But, when compared
with really successful marketing companies like the Internet giant Google their performance is less than stellar. True marketing leaders
must innovate continuously to stay ahead of the market, by creating needs,
rather than only responding to them. To them, marketing begins with
choosing which products to develop and ends with the sales process. That
is what Google has accomplished with Google Glass.
With the advent of the Information Age, marketing has been transformed from
mass distribution to targeted, individualized communications aimed at smaller
and smaller demographic groups. Recipients of marketing messages are
chosen based on criteria such as age, income level and the last item for which
they searched on the Internet. Eventually, marketing efforts could become
unique to the individual for whom it is intended.
Large pharmaceutical companies have yet to catch up to the trend. For
decades they have thrived on a one-pill-for-all model and an old-fashioned,
door-to-door marketing approach, where so-called “detail people” hand out
starter-dose samples of new drugs they want doctors to prescribe. In the
past several years, big pharma companies have also begun advertising directly
to consumers on television and in print, telling potential patients, “ask your
doctor” to prescribe a variety of powerful medicines that can often have
multiple and potentially dangerous side-effects.
Big pharma needs to learn to stay ahead of the marketing curve — to
innovate targeted products for specific populations and to focus its marketing
on those populations. Yet big pharma seems locked into the quest for
billion dollar blockbuster drugs that can support large bureaucratic
organizations.
One way big pharma can learn from companies like Google is to give old
products new life by improving the products themselves or by improving the
delivery systems of existing products. New delivery systems provide an
opportunity for drug companies to repackage tried-and-true drugs and regain
market exclusivity based on the innovative delivery process. That is what
Google is doing with Google Glass. Glass delivers existing products, like
mobile telephony, the Internet, global positioning systems and more, through a
new, wearable system. In this case, Google is applying new technology to
enhance the effectiveness of existing technology, something big pharma rarely
does.
What big pharma shuns, little pharma sees as an opportunity. We have
followed two companies with new delivery systems for previously approved
drugs. These delivery systems make administration of the drug easier,
increase the speed the drugs become effective, reduce side-effects and promise
to deliver healthy revenues to their developers.
One such company is Alexza Pharmaceuticals. It has developed an aerosol delivery system for already-approved
drugs, called the Staccato system. The company’s first product, ADASUVE was approved in January 2013. It combines a 1974-vintage anti-psychotic
drug, loxapine, with the company’s new delivery device.
The $33 billion Israeli pharmaceutical company Teva Pharmaceutical
Industries Limited must have seen
significant potential for the Staccato system when it signed a deal with Alexza in early May worth up to $235 million, including $40 million up front.
Under the deal, Teva will be responsible for all U.S.development and commercialization of
ADASUVE, including the U.S.post-approval clinical studies and any additional
clinical trials for new indications. Alexza will manufacture ADASUVE and supply
it to Teva for clinical trials and commercial sales.
The broad implications of this technology reflect a logical paradigm shift
in critical emergency room and acute-care medical settings. Teva’s
foresight is that it is not acquiring just an individual drug, but a platform
for many new drug combinations.
Thomas King, President and CEO of Alexza says, “The Staccato system is
potentially a disruptive new technology because it increases speed of
availability and action of known drugs. Staccato exemplifies the benefits
of changing the method of drug delivery to address critical unmet medical
needs, where speed of action and ease of administration are key to the meeting
the patient’s need.”
NuPathe is another company with a unique and new delivery system for already
approved drugs. NuPathe created a system called SmartRelief. It delivers medication using
iontophoresis, which transports molecules through the skin using mild
electrical stimulation. It is sometimes called an injection without a
needle. The company’s lead product, ZECUITY, delivers
sumatriptan, which became a generic drug in 2009, to treat acute cases of migraine with or without aura in adults.
ZECUITY was approved by the FDA in January 2013.
Armando Anido, CEO of Nupathe said “Zecuity is the first and only
FDA-approved migraine patch and is a game-changing treatment option for
millions of patients who suffer from migraine headache pain and
migraine-related nausea. We look forward to securing commercial
partners and preparing for the launch of Zecuity, which is expected in the
fourth quarter of this year.” The fact that NuPathe continues to
negotiate for partners reflects a major lack of understanding in the greater
pharmaceutical industry.
The point is that corporations like animal species, must adapt or
die. The business world is replete with examples of corporations that
failed to adapt and are no longer in existence. Western Union telegrams,
Woolworth’s five and ten-cent stores, Sharper Image stores and Commodore
computers are just a few examples of once successful dominant businesses that
failed because they became stagnant and were overtaken by competitors.
Companies using new technology and evolving marketing techniques to capture
markets and displace predecessors, like Wal-Mart in retailing, Zappos in
footwear, Volkswagen in cars, and others, were late entrants into existing
markets but eventually surpassed their competitors. Big pharma, beware, the same could
happen to you.