One doesn’t need a thermometer
to take the temperature of contemporary rhetoric against the pharmaceutical
industry. The white-hot title of author and physician Ben Goldacre’s 2012 book Bad
Pharma: How Medicine Is Broken, and How We Can Fix It says it all.
Bristling with outrageous examples of slanted or suppressed research and
corrupt marketing and sales tactics, Goldacre’s book paints a picture of a hopelessly
wayward medical industry awash in dirty money.
“He shines a light on the more
negative aspects of the industry, which do exist,” says Marcel Corstjens, The
Unilever Chaired Professor of Marketing at INSEAD. “Some marketing and sales
practices are unethical; some research is misused.” But the animus expressed
toward Big Pharma these days is at an unfair level, Corstjens suggests. “No
industry is snow-white. There are issues in the food industry, around obesity,
in the tobacco industry, and in the financial services industry with the global
economic crisis…The world would have been a worse place without big pharma.”
It is out of that more
constructive spirit that Corstjens and his co-author Edouard Demeire titled
their new book Good Pharma: How
Marketing Creates Value in Pharma. He warns,
“If you keep emphasising problems in the industry and push for more controls,
companies will be more risk-averse, which will result in less innovation.”
Rather than tightening the reins, Corstjens and Demeire write, companies should
intensify their marketing efforts while adhering to industry best practices.
But they should do so with awareness of the fundamental changes currently
underway within the industry, which are rendering the old rulebook obsolete.
Meet the New Stakeholders
Bringing a new product of any
kind to market has never been easy, but the shifting centre of gravity within
the pharmaceutical industry poses unique challenges. Broadly speaking, the
industry has moved from being mainly driven by individual prescribers (i.e.
doctors) to having to weigh input from a diverse set of stakeholders, including
regulators, insurance companies, hospital administrators, managed care
organisations, nurses, social media, and, of course, patients.
“Because pharma reps have many
years of experience dealing with prescribers, they have built a personal
relationship and many of them have deep insights about the perceptions,
preferences and behaviour of these prescribers,” Corstjens says. “The reps know
a lot less about these other stakeholders.” Therefore, Corstjens and Demeire
write, “Getting ‘under the skin’ of the relevant stakeholders is a marketing
and sales task whose importance is second to none.” (Good Pharma contains plenty of concrete tips and strategies for achieving this).
Further complicating matters
is the fact that these newly empowered decision-makers have differing, often
conflicting needs and wants. “How does a company then consistently position a
product if it wants to satisfy all its stakeholders? That is a delicate and new
job for marketing and sales in pharma,” says Corstjens.
But the potential rewards for
getting insights right outweigh the difficulties. Corstjens cites the example
of Eli Lilly’s erectile dysfunction drug Cialis, which initially faced long
odds in its bid to take on market pioneer Viagra. Dose for dose, Cialis
far outlasted Viagra, with a 36-hour window of effectiveness compared to Viagra’s
four-hour one, but physicians considered this a meagre advantage. However, the
Cialis team, by getting “under the skin” of its target audience, hit upon a
compelling sales point: Having 36 hours to play with allowed couples to have a
less pressured, more romantic experience. Contrasting Viagra’s positioning as a
male performance enhancer, Lilly marketed Cialis as the “couple’s weekend pill”
helping them to restore intimacy and reduce stress within their relationships.
The creative positioning paid off handsomely: In 2011, sales of Cialis overtook
Viagra.
Global Challenges
Insights are much harder to
tease out when the cultural context is unfamiliar, which is why the rise of
developing markets threatens to compound the challenges facing pharma
companies. “Emerging markets should not be seen as low-hanging fruit,”
Corstjens says. “The prevalence of diseases may not be the same, the
stakeholders may be very different. In addition, the healthcare infrastructure
is often not very sophisticated, and these markets can be rather volatile and
difficult to predict. It’s not a sure bet; you have to invest.”
To win a foothold in a new
market nowadays, companies need to commit seriously to building a heavily
localised approach that is substantiated by a global reputation. Otherwise,
they risk going the way of Procter & Gamble, which sold off its
pharmaceuticals business in 2009 after failing to become a major global player
in the industry. “P&G wanted to go into pharma, but it didn’t last long.
One of the issues was that people weren’t sure they could trust a soap and
diaper producer with their health. You have to build reputations, and that’s
going to cost,” says Corstjens.
Finding Your Niche
As the era of the “blockbuster
drug” draws to a close, industry focus is shifting away from primary care and
toward specialty and niche markets. In 2011, 15 of the industry’s 20 top
sellers were specialty care products, a more than sevenfold increase since
1997. Rather than being marketed to a huge patient population from the
beginning, the new pharma blockbusters will likely follow in the footsteps of
Novartis’ Afinitor, which began as a treatment for kidney cancer but gradually
has become adopted as a treatment for certain kinds of lung, breast, and brain
tumours as well.
By far the most game-changing
drilling-down trend in the industry is personalised healthcare (PHC), an
approach that aims to match medicines to specific patient groups, for example,
cancer drugs that target a subgroup of patients with elevated levels of a
particular biomarker. “When you go to complex diseases, you tend to go in the
direction of personalised healthcare,” Corstjens says.
The shift toward PHC is also
necessitated by the increased importance of payers (for example, insurance
companies and government health regulators) as industry stakeholders. Because
specialty drugs brought to market by pharma companies are expensive and often
work only for small segments of the patient population, regulators and payers are
setting the threshold for reimbursement higher and higher. PHC is being put
forward as the industry’s best bet for satisfying stricter effectiveness
criteria not only by developing new drugs but also by investing in the magical
trio of the future: “drug-biomarker-diagnostic”.
Companies are already adapting
their marketing strategies in an attempt to claim their niche, but this can
backfire if brand recognition is lacking. Good Pharma includes an
in-depth case study of AstraZeneca’s Brazilian misadventure with Iressa, a
niche lung cancer drug, which lost out to Tarceva, a similar product from
oncology giant Roche/Genentech, despite AstraZeneca financing expensive
eligibility tests. When the time came for the actual prescription, providing
free biopsies to test for the biomarker didn’t generate enough goodwill to
persuade Brazil’s stakeholders to choose AstraZeneca over the better-known
brand.
“Category Captains”
For Corstjens, Iressa is an
example of the importance of “category captainship” within the pharma industry.
“The most financially successful company in the past 20 years has been
Novo-Nordisk. They have specialised in diabetes, they’re extremely good at
that. Roche specialises in oncology. The larger the company, the more ‘captive’
areas they can have,” he says. But the success of Novo-Nordisk, a relatively
small company, proves firms of all sizes have a chance to compete, as long as
they stick closely to their strengths.
Spotlighting strengths could
also be a way for the industry to shake the opprobrium of critics such as Ben
Goldacre. “The lion’s share of the marketing and sales investments of
pharmaceutical companies has indeed produced outstanding contributions to many
critical fields,” Corstjens and Demeire write in the preface to Good Pharma.
New markets and new stakeholders may hold opportunities for companies to put
their best foot forward in a rapidly changing world.