Business Insights - S Seget - Pharmaceutical Branding Strategies

7/25/2019 Business Insights - S Seget - Pharmaceutical Branding Strategies

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H E A L T H C A R E

Pharmaceutical Branding StrategiesThought leader perspectives on brand building, effective

communication and future brand models

By Steven Seget


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Steven Seget

Steven Seget is Principal at Delphi Pharma, and provides independent strategic

consulting services to the pharmaceutical and biotechnology industries. Steven

previously managed the strategic healthcare consulting function at Datamonitor and has

an MBA from the London Business School. [email protected]

Delphi Pharma provides strategic, financial and marketbased solutions to clients,

focusing primarily on the portfolio management, business development and licensing

functions. Delphi Pharma combines an extensive research network, applied analyticalexpertise and an established track record to deliver high value results and measurable

impact to its clients. www.delphipharma.com

Copyright 2006 Business Insights LtdThis Management Report is published by Business Insights Ltd. All rights reserved.Reproduction or redistribution of this Management Report in any form for anypurpose is expressly prohibited without the prior consent of Business Insights Ltd.

The views expressed in this Management Report are those of the publisher, not ofBusiness Insights. Business Insights Ltd accepts no liability for the accuracy orcompleteness of the information, advice or comment contained in this ManagementReport nor for any actions taken in reliance thereon.

While information, advice or comment is believed to be correct at the time ofpublication, no responsibility can be accepted by Business Insights Ltd for itscompleteness or accuracy.


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Table of Contents

Pharmaceutical branding strategies

Executive Summary 10

Introducing pharmaceutical branding strategies 10

Building pharmaceutical brands 11

Communicating pharmaceutical brands 12

Alternative brand models 13

The future of pharmaceutical branding 14

Chapter 1 Introducing pharmaceuticalbranding strategies 16

Summary 16

Introduction 17

Report outline 18Introducing pharmaceutical branding strategies 18Building pharmaceutical brands 19Communicating pharmaceutical brands 19Alternative brand models 19The future of pharmaceutical branding 19

Profiles of contributors 20Joe Carofano, General Manager, CCA Advertising 20Jeff Daniels, Strategic Branding Consultant 21

Karen Friedman, Karen Friedman Enterprises 22David Griffith, President, Sparkiting Solutions LLC 23Max Jackson, President, Publicis Healthcare Group International Division 24E.M. Kolassa, Managing Partner, Medical Marketing Economics LLC 25Rebecca Robins, Global Marketing Director, Interbrand Wood Healthcare 26David L. Stern, Executive Vice President, Metabolic Endocrinology, SeronoInc 26David Wood, CEO, Interbrand Wood Healthcare 27Lydia Worthington, Vice President, Managing Director of Healthcare,BuzzMetrics 28

Pharmaceutical brands: state of the pharmaceutical brandscape 29The importance of pharmaceutical brands 29

Brand versus message 31


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Global versus local 31Current trends in pharmaceutical branding 32Direct-to-consumer advertising 33The future of pharmaceutical brands 33

Successful pharmaceutical branding 34

Chapter 2 Building pharmaceutical brands 36

Summary 36

Introduction 37

Understanding the nature of pharmaceutical markets: building brands

through evidence-based marketing 38Why pharmaceutical markets are different 38Response to medical need 39Learned intermediary 40Guidelines and protocols 42Experience goods 42

Negative goods 43Fixed product features 44Restricted pharmaceutical marketing 45Evidence-based marketing 46Conclusion 49

Building global brands: a new challenge for the pharmaceutical industry 50The importance of global branding 50

The value of global brands to key stakeholders 51Pharmaceutical global branding to date 51Key challenges of global branding 52Delivering global brands 54Corporate branding 55Launch phase coordination 56Communicating to different audiences 56Current best practices 57A cautionary tale 58The future of global brands 59

Brand matters: the lingua franca of pharmaceutical brand names 60Introduction 60The value of a good name 62An art and a science 64A global currency: namer beware! 70Summary 73


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Chapter 3 Communicating pharmaceuticalbrands 78

Summary 78

Introduction 79

Pharmaceutical public relations: the impact of corporate

communications on brands 80The importance of effective PR 80Impact of media communications on pharma brands 81Best practice communication 82Media messages 84

Maintaining credibility in a crisis 85Crisis management 85Improving PR efforts 90

Word of mouth: the new frontier for patient insights and communication 91Word of mouth: an influential force in patients lives 91The internet becomes a major catalyst of patient word of mouth 92Pharma companies tap into online word of mouth 92Word of mouth strategy: five guiding principles for pharma marketers 93Into the future: word of mouth an untapped opportunity 96Crisis buzz: tracking reactions to drug trials gone bad 97

Chapter 4 Alternative brand models 100

Summary 100

Introduction 101

Promise-centric versus product-centric branding: creating a meaningful

pharmaceutical brand 102The state of pharmaceutical branding 102A promise is central to successful brands 103Integrating communication around the promise 103

Identifying the product-centric approach 108A review of pharmaceutical products 109Promise-centric branding and relational buyer behavior 114Planning brand communication with the relational buyer behavior model 116Brand communication pitfalls 118Focusing the brand for success 118

Brand dynamics: coordinating brand efforts across different touch-

points, geographies and lifecycle stages 119Managing brand dynamics 119Defining Core Brand Dynamics 121Combining a brands core function and core user need to define its CoreUtility 122


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The Core Evaluative dynamic 123Determination of the Core Brand Value 124Facilitating common understanding across brand marketing teams 136A coordinated brand model 136

Final point: lifecycle branding 137Corporate branding: building franchises of product brands 140Destroying product brands 140Corporate branding 142Corporate brands 143Franchise brands 144Line extensions 145Corporate versus product branding 146The future of branding 147

Chapter 5 The future of pharmaceuticalbranding 150

Summary 150

Introduction 151

A shift in the branding model: building sustainable brand equity in a

commoditized market 152Brand evolution 152Brand revolution 152A new model of information sharing 154An image crisis 154Brand conversion 155Creating a sustainable halo effect 155Intellectual meets emotional 157Brand values 158The future of branding: the new healthcare model 159

Critical success factors: building and communicating winning brands 160Building pharmaceutical brands 160Communicating pharmaceutical brands 161Alternative brand models 162


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List of FiguresFigure 2.1: Examples of Viagras blue pill branding (left) and the use of the color purple by

Prilosec and Nexium (right) 58Figure 2.2: The AA encoding in the angiotension antagonist brands Hyzaar and Cozaar 67Figure 2.3: Zavesca combining brand name, supporting nomenclature, messaging and brand

graphics 69Figure 3.4: Examples of GSKs corporate campaign in UK, centered around science with a

conscience 83Figure 3.5: Zocor sentiment before and during test result announcement 98Figure 4.6: Promise-centric versus product-centric branding 107Figure 4.7: Promise-centric and relational buyer behavior 115Figure 4.8: Brand Utility (conjoined expression of Function and Need) is determined by the actual

Core Function of the brand and the Core User Need it satisfies 122Figure 4.9: Rational brand dynamic (Core Function), emotional brand dynamic (Core User Need)

and evaluative brand dynamic (Core Evaluator) combine to define the EvaluatedUtility (or Core Brand Value) 124

Figure 4.10: Brand Analysis model facilitates the audit of all rational and emotional dynamics ofa given brand, and distillation of these to extract a meaningful and enduring

promotional platform 126Figure 4.11: The highly complex, time consuming and costly stages between the initial idea for a

new product and it actually being available in the pharmacy 138Figure 4.12: Examples of brand switching strategies: Prilosec to Nexium (2000-05) and Prozac to

Cymbalta (2003-05) 141

Figure 4.13: Example of franchise branding: Novartis BP Success Zone website 145Figure 5.14: Examples of BMS campaign with Lance Armstrong (left) and GSKs commitment tocorporate responsibility and access to essential medicines (right) 156

Figure 5.15: Examples of Amgens commitment to human science (left) and J&Js legacy as atrusted consumer brand (right) 158

List of TablesTable 2.1: Pharmaceutical brand names beginning with Z, October 2005 65Table 3.2: Percentage of messages mentioning statin brands 98Table 4.3: Review of pharmaceutical brand promises (1) 110Table 4.4: Review of pharmaceutical brand promises (2) 111Table 4.5: Review of pharmaceutical brand promises (3) 112Table 4.6: Review of pharmaceutical brand promises (4) 113


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Executive Summary


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Executive Summary

Introducing pharmaceutical branding strategies

Pharmaceutical branding describes the process whereby companies attempt to

transform an active chemical compound into a recognizable package of associated

brand values. These values, such as effectiveness, safety, trust and other more

emotional associations, have become increasingly important levers through which

pharmaceutical marketers can look to achieve greater market share and loyalty in

an evermore competitive market space. Pharmaceutical branding efforts impact on

a range of related strategies, including brand name development, Rx-to-OTC

switching, DTC marketing, PR and corporate communications.

Rather than present a generalized summary of current perspectives in

pharmaceutical branding strategies, this report brings together the different views

found from across the industry, presented directly from the experiences of leading

experts in the field. The report contains the views of ten experts drawn from across

different sectors of the branding arena, including industry product and marketing

managers, advertising agency executives and management consultants. In an

attempt to shed light on the future direction of this dynamic topic, Pharmaceutical

Branding Strategies provides a unique window into the perspectives and

experiences of those leaders at the forefront of shaping that future.

There are a number of reasons why pharmaceutical brands have become more

important. First of all you have got to create more value from your molecule above

and beyond the obvious benefit. Secondly you want to create an entity that is

differentiable from your competitors. In addition to that, you have the potential to

create a sustainable entity through which to leverage the value of your brand.

Pharmaceutical companies need to clearly define the value that their brands have in

the marketplace above-and-beyond that of the competition. Only by clearly

defining and managing that value can they begin to build and leverage brand equity

moving forward.


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Building pharmaceutical brands

Pharmaceutical markets are different than more typical consumer markets, and as a

result the marketing of pharmaceutical brands cannot follow the established rules of

consumer brands. However, by examining what has actually occurred in

pharmaceutical markets and evaluating the relevant forces and relationships,

pharmaceutical product managers can become more effective, efficient marketers.

In the future, as this marketplace becomes tougher, evidence-based marketing will

become a requirement for success.

The key challenges of global branding go in line with the key critical success

factors. The critical success factors in terms of global branding really come down to

one thing you have to have a position that is single minded, that resonates well in

the key markets, and that is applied consistently at local level.

Effective global brand teams will have to balance an inclusive branding process

creating buy-in across the organization with strong corporate leadership

limiting the rework of the global brand at the local level. The resulting brands,

which have been developed from an early stage of the product lifecycle, willdeliver a clear and consistent brand promise to their target audiences and a

premium price and sustained market position for their marketers.

In an industry where patent life is limited and the domain of market exclusivity is

being toppled harder and faster by the onslaught of generics, a brand name needs to

work that much harder throughout its on-patent life, while having the potential to

live long beyond it. As companies are increasingly looking to lengthen the

productive and profitable life of their brands, established equity in a brand name

can provide a powerful platform for future wealth creation. Its about a name that

will resonate with prescribers and consumers alike, and, ultimately, that will be

relevant for the lifetime earnings potential of a brand.


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Communicating pharmaceutical brands

The public does not care about pharmaceutical brands. They do not care whether

you make money, or whether you stay in business or fold tomorrow. They care

about the benefits and what your brand means to them. How would it help me?

How would it ease the horrific pain that my grandmother suffers from rheumatoid

arthritis? How would it make my cancer treatments more bearable?You have to

think about what the brand really means for someone.

When dealing with the media in a crisis every situation is different and there is no

such thing as a one size fits all solution. If the public believes you did the right

thing, you can work with them. However, if the media even hints that you might be

hiding something, that you are not approaching it in the right way, that you did not

do something that could have benefited the public, you are dead. That is how the

media works.

The pharmaceutical industry has always been subject to heavy government

regulation, especially when it comes to collecting information on patient

consumers. Consequently, pharma marketers face complex challenges in theirattempts to responsibly promote products, solicit patient feedback, manage

relationships and ultimately close that entire marketing and information loop.

However, these challenges have prompted pharma to become one of the most

advanced industries in leveraging an ancient phenomenon we call word of mouth.

Numerous pharma brand managers and researchers should be commended for their

leadership in applying word-of-mouth research and insights to strategic decisions

surrounding drug launches, black-box warnings, patient feedback and product

development and positioning. Looking to the future, the word-of-mouth channel

will be evermore important amidst our fragmenting media landscape. Before long,

all healthcare companies may have no choice but to more actively engage in

conversational marketing. Therefore, its probably a wise decision to start

incorporating these strategies now.


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Alternative brand models

The brand promise is the basis for integrated communication across all audiences:

physicians, patients, payers, and others in the pharmaceutical industry. The purpose

of specific communication often varies to address the specific audience, yet a brand

promise should remain consistent across all audiences. A consistent brand promise,

at its very essence, should match across audiences in order to more effectively

establish brand expectations that will be fulfilled in the brand experience.

Clarity in brand communication must be achieved and maintained for brands to be

successful. Promise-centric branding is a simple concept, yet often difficult to

execute. The brand promise decision must be well conceived with a comprehensive

marketing analysis that selects an appropriate expectation that will be fulfilled in

the brand experience. Once a compelling brand promise is defined, all brand

communication must embrace the essence of the brand promise in a campaign that

is consistent over time.

A correctly observed brand analysis process involves a lot of hard work and can be

heavy going. However, the entire process is normally redeemed by the satisfactionexperienced as each phase is completed and the functional and emotional territory

truly occupied by the brand is revealed. The need to generate the deepest possible

understanding of, and attitudes towards, the brand is overriding. All existing results

of quantitative and qualitative research will need to be taken into account and

become part of any new promotional campaign. This campaign must express a

clear, motivating, selling idea in a form that customers will notice, talk about and

act upon.

The pharmaceutical industry must begin to look at channeling their promotional

investments in particular therapeutic areas. However, a move to franchise brands

will require a deliberate corporate strategy within different therapeutic areas, with

companies establishing a beachhead in an area, and developing follow-up products

into those therapy areas.


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The future of pharmaceutical branding

There is currently little to no corporate brand equity in the pharmaceutical industry.

This is unlike most other industries that have communicated their value and

educated the world about their contributions. While the commercial objectives of

an organization cannot be compromised, they must be synergistic with corporate

visibility goals. There needs to be an evolution to brand conversion looking to

build corporate image, therapeutic and disease awareness, and the product brand

simultaneously. Fusion will become the new brand model.

Rather than starting with the solution the lone marketed product of the old model

marketers need to focus on a therapeutic/corporate model and build relationships

with patients and caregivers at this deeper level. This must be the new priority.

Reallocating resources across different mediums will help educate todays curious

and thoughtful consumers, and invite patients, caregivers, and physicians in to

direct the dialogue.

Building successful pharmaceutical brands requires an understanding that

pharmaceutical markets are different to other consumer markets, that brandingefforts should be global, that brand teams must be inclusive and that brand names

are important for building brand equity.

The effective communication of pharmaceutical brands requires an understanding

that patients require a personal touch, that the media reflects the public perception

and that word of mouth communications must be tracked and managed.

Winning brand models must include an understanding that the brand promise needs

to be clear and consistent, that brand analysis must consider both functional and

emotional aspects and that franchise brands help to deliver long-lasting

relationships.


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CHAPTER 1

Introducing pharmaceuticalbranding strategies


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Chapter 1 Introducing pharmaceuticalbranding strategies

Summary


transform an active chemical compound into a recognisable package of associated



pharmaceutical marketers can look to achieve greater market share and loyalty in

an evermore competitive market space. Pharmaceutical branding efforts impact

on a range of related strategies, including brand name development, Rx-to-OTC

switching, DTC marketing, PR and corporate communications.

Rather than present a generalised summary of current perspectives in

pharmaceutical branding strategies, this report brings together the different views

found from across the industry, presented directly from the experiences of leading

experts in the field. The report contains the views of ten experts drawn from

across different sectors of the branding arena, including industry product and

marketing managers, advertising agency executives and management consultants.

In an attempt to shed light on the future direction of this dynamic topic,

Pharmaceutical Branding Strategies provides a unique window into the

perspectives and experiences of those leaders at the forefront of shaping that

future.

There are a number of reasons why pharmaceutical brands have become more

important. First of all you have got to create more value from your molecule

above and beyond the obvious benefit. Secondly you want to create an entity that

is differentiable from your competitors. In addition to that, you have the potential

to create a sustainable entity through which to leverage the value of your brand.

Pharmaceutical companies need to clearly define the value that their brands have

in the marketplace above-and-beyond that of the competition. Only by clearly

defining and managing that value can they begin to build and leverage brand

equity moving forward.


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Introduction

The Introducing pharmaceutical branding strategies chapter sets out the important

issues impacting on pharmaceutical branding, as well as introducing the reports

structure and approach. The reports outline has been divided into three core elements,

namely the building of brands, the communicating of brands and the alternative brand

models employed in the pharmaceutical industry. The report is concluded with a look

at the future of pharmaceutical branding and the critical factors associated with

success.

Pharmaceutical Branding Strategiescompiles the independent views of ten different

pharmaceutical branding experts. Along with the summary and conclusion sections

written by the reports editor, the ten articles written by industry experts reflect their

personal perspectives on the leading issues surrounding pharmaceutical branding

strategies, both now and in the future. Full profiles of the writers contributing to this

report have been detailed, along with contact details where available.

The first perspective included in the report introduces the topic of pharmaceutical

branding and gives a review of the current state of the industrys efforts in this area.

David Wood, CEO at Interbrand Wood Healthcare, presents his thoughts and

experiences in Pharmaceutical brands: state of the pharmaceutical brandscape. This

article sets out the importance of pharmaceutical brands, current industry trends and

where the industry is heading in the future.


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Report outline


transform an active chemical compound into a recognizable package of associated



pharmaceutical marketers can look to achieve greater market share and loyalty in an

evermore competitive market space. Pharmaceutical branding efforts impact on a range

of related strategies, including brand name development, Rx-to-OTC (prescription toover the counter) switching, DTC (direct to consumer) marketing, PR (public relations)

and corporate communications.

Branding is a central issue in the pharmaceutical industry. However, while the

packaged consumer goods industry has highly sophisticated branding models, the

pharmaceutical industry has been slower to develop and leverage its brands. Product

managers are evolving into brand managers and are beginning to understand thedynamics of brand equity that lie at the heart of product development and marketing.

Introducing pharmaceutical branding strategies

In the reports first chapter, the structure and approach will be outlined. It will explain

how the report will tackle the key issues associated with pharmaceutical branding and

how these will be compiled into coherent sections. It will include an introductory

article reviewing the importance of pharmaceutical branding and setting out theindustrys experiences to date.


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In the reports second chapter, the importance of building effective pharmaceutical

brands will be explained. It will present why pharmaceutical brand markets are

different, how difficult it is to develop global brands and the importance of a strong

brand name.

Communicating pharmaceutical brands

In the reports third chapter, the value of communicating brands effectively will be

outlined. It will look specifically at two hot topics: the use of effective PR and the

word of mouth communication between patients.

Alternative brand models

In the reports fourth chapter, alternative brand models will be presented and discussed

in detail. It will include reviews of the promise-centric approach, a combination of

rational and emotional dynamics and the development of franchise brands.

The future of pharmaceutical branding

In the reports final chapter, the future of branding in the pharmaceutical industry will

be presented. It will include recommendations as to the critical success factors in

building and communicating winning brands.


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Profiles of contributors

Rather than present a generalized summary of current perspectives in pharmaceutical

branding strategies, this report brings together the different views found from across

the industry, presented directly from the experiences of leading experts in the field. The

report contains the views of ten experts drawn from across different sectors of the

branding arena, including industry product and marketing managers, advertising

agency executives and management consultants. In an attempt to shed light on the

future direction of this dynamic topic, Pharmaceutical Branding Strategiesprovides aunique window into the perspectives and experiences of those leaders at the forefront

of shaping that future.

The reports editor would like to take this opportunity to thank those listed below for

the high quality of their contributions. A short biography of the contributing writers

and their companies follows:

Joe Carofano, General Manager, CCA Advertising

Joe Carofano has spent the last 21 years in the pharmaceutical and healthcare arena. He

spent 18 years on the client side working for Bayer Healthcare, Pharmaceutical

Division. Joe held numerous positions of responsibility at Bayer including Senior

Product Manager, Cardiovasculars; Director of Business Operations; Vice President of

Sales; and Vice President of Global Strategic Marketing, Cipro. Joe joined the

Chandler Chicco Companies in 2002 as the Head of Advertising. He has helped leadCCA Advertising into a growing and reputable agency partner. He has also helped

launch `nition, a multi-media and design studio. His clients include a diverse mix of

healthcare companies.

Joe has a rich history in marketing communications, product launch and lifecycle

management. While his therapeutic expertise is diverse, his area of strength is in the

field of anti-infectives and cardiovasculars.


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Joe has been involved with the launch of Cipro (PO and IV), Adalat CC, Avelox,

Baycol and Cipro XR.

Joe can be contacted at:

Joe Carofano

General Manager

CCA Advertising

450 W 15th St

6th floor

New York, NY 10011

212-845-5651

Jeff Daniels, Strategic Branding Consultant

Jeff Daniels is Executive Vice President and Chief Creative Officer for Europe at Grey

Healthcare Group, the healthcare division of Grey Global Group. After graduating as a

designer in 1981 Jeff worked for a number of leading London-based design

consultancies and communications agencies. He now specializes in the strategic

branding of healthcare products and services, and most of the worlds largest

corporations are long-term clients of his. Widely published and winner of over 40

creative/design awards, he is regularly invited to give talks and hold strategic branding

workshops with major international corporations, and also to judge at international

design/creative awards festivals. In addition to his professional obligations, he is

currently involved in postgraduate doctoral research into strategic brand positioning.

Jeff can be reached at [email protected]


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Karen Friedman, Karen Friedman Enterprises

Karen Friedman is known as one of the leading communication coaches in todays

business world. An award-winning television news anchor and reporter who has

interviewed thousands of people, she now teaches others how to make the most out of

every interview, appearance and presentation.

Friedman made award winning stops at television stations in Philadelphia, Milwaukee

and Huntsville, Alabama, where her breaking coverage of local and national events

aired on ABC, CBS, NBC, CNN, the Today Show, Good Morning America and

Nightline. Her expertise was recognized when a U.S. delegation led by former First

Lady Hillary Rodham Clinton tapped Karen to provide media and political training for

women in South and Central America. She continues to counsel people across the

globe, recently returned from Asia where she helped a worldwide health organization

roll out a crisis communication training program.

For the past decade, spokespeople have been relying on Karens know-how to

communicate during nationwide educational campaigns, manufacturing shutdowns,

Justice Department inquiries; product launches and recalls, employee issues, chemical

spills, and during presentations to seek approval for new drugs being presented before

the FDA Advisory Committee. She taught journalism at the University of Wisconsin

conducts seminars at the University of Pennsylvania and once ran for a hotly contested

seat in the Pennsylvania State House.

A dynamic keynote speaker, Karen is a proud member of the National Speakers

Association, who is often quoted by national publications such as Selling Power, PR

Tactics, Presentations, and the Wall Street Journal On Line. She has published a series

of Communication Survival Guides, recently released a multi-media Communication

Survival kit and has authored hundreds of articles.

Karen can be reached at [email protected]


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David Griffith, President, Sparkiting Solutions LLC

David Griffith provides consulting and training for sales and marketing in his role as

the President of Sparkiting Solutions, LLC. David has worked with entry-level

management through to senior executives from over twenty-five countries on a variety

of subjects that often cover important concepts involving leadership, communication,

branding, marketing, and sales. David developed the Sparkiting model that is

designed to energize entire organizations with a customer-focused approach. His

specific area of focus involves healthcare related industries for either products or

services.

David uses his extensive experience in healthcare related industries to generate insight

that is used to create interaction during training forums involving managers to senior

executives. David has provided consulting and training throughout the Americas, along

with international countries such as Germany, Japan, Spain, Australia, and China,

giving him a truly international flavor to his training. In the pharmaceutical industry,

David communicates elements of the sales and marketing process needed for growth at

any point along the molecule to medicine cabinet spectrum. David has both created

course content and been utilized to facilitate senior executive learning / discussion on

the internal processes for large organizations.

David also teaches a Masters level marketing course at the University of Texas. The

course is offered through the College of Pharmacy, one of the nations leading centers

of pharmacy education that often ranks in the top two by US News and World Report.

David also serves on the Editorial Advisory Board ofProduct Management TodayandNutraceuticals World.

David earned a BS in Pharmacy from the University of Texas and an MBA from St.

Marys University. David lives with his wife and four children in San Antonio, Texas.

David can be contacted via email: [email protected]


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Max Jackson, President, Publicis Healthcare Group International Division

Originally from New Zealand, Max studied Marine Biology at university where he

gained a Master of Science at the University of Auckland, and initially followed a

career as a Navigating Officer in the Royal New Zealand Navy, before joining the

pharmaceutical industry. Within the pharmaceutical industry he gained extensive

strategic and operational sales and marketing experience, and joined the Medicus

Group in 1992, moving to FSP International in 1996 initially as Client Service Team

Leader, then Director, Strategic and Client Services, before becoming Managing

Director of FSP in January 1999.

In November 2001, Max was appointed Regional President, The Medicus Group, with

responsibilities for all European and international operations within the group.

Following the merger of BCOM3 and the Publicis Groupe in September 2002, Max

took over responsibility for the European and International operations of Publicis

Healthcare group. Publicis Healthcare Group, the largest healthcare communications

group in the world, is composed of the Publicis Vital, Publicis Wellcare agencies, the

Medicus Network and the Saatchi & Saatchi Healthcare network. With offices in all

major European and ROW countries, Publicis Healthcare Group has the strongest

Global presence of any healthcare agency group.

Max has combined his skills from industry together with involvement in over 40

product launches to contribute to the development of unique strategic processes for the

Publicis Healthcare Group. Max continues to provide strategic input and direction for

major client accounts, including facilitation of both internal and external meetings, and

has published a number of articles on the strategic marketing of early development

products.


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E.M. Kolassa, Managing Partner, Medical Marketing Economics LLC

Dr. Kolassa is the Managing Partner of Medical Marketing Economics LLC (MME), a

consulting firm specializing on marketing and pricing strategies for firms in the field of

health care. He is also Adjunct Professor of Pharmacy Administration at the University

of the Sciences in Philadelphia and Adjunct Associate Professor of Pharmacy

Administration at the School of Pharmacy of the University of Mississippi.

Prior to forming MME, Dr. Kolassa was Associate Professor of Pharmacy

Administration and Associate Professor of Marketing, and Coordinator of the

Pharmaceutical Marketing and Management Research Program at the University of

Mississippi. He has held several positions in the fields of marketing, pricing, and

economic policy, serving as Vice President with the Strategic Pricing Group, Director

of Pricing and Economic Policy with Sandoz Pharmaceuticals, Pricing Specialist with

the Upjohn Company, as well as holding positions in the banking industry. His

academic research has focused on the value of pharmaceuticals in health care systems,

the application of marketing activities in pharmaceutical markets, the effect of cost

control mechanisms on patients and systems, and the process of treatment selection by

clinicians. He received his doctorate from the University of Mississippi and MBA from

Eastern Washington University.

Dr. Kolassa has written and lectured extensively on the topics of health care policy and

pharmaceutical markets and marketing activities. He is the author of several papers

published in both business and pharmacy journals and is the Editor of the Journal of

Pharmaceutical Marketing and Management and former Co-Editor of the Journal ofPharmacoepidemiology and Associate Editor of the Journal of Research in

Pharmaceutical Economics. His first book, Elements of Pharmaceutical Pricing, was

published by Haworth Press in 1997. His latest book, co-authored with Mickey Smith,

Greg Perkins, and Bruce Siecker, is Pharmaceutical Marketing: Principles,

Environment, and Practice. It was published in 2002, also by Haworth Press.


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Rebecca Robins, Global Marketing Director, Interbrand Wood Healthcare

Rebecca Robins is Global Marketing Director of Interbrand Wood Healthcare. She is

based in London, having previously been based in the New York office of Interbrand

Wood. She is responsible for global marketing, client services and heads up the London

office. Among a diverse range of clients across a number of industries, Rebecca has

extensive experience within the pharmaceutical and biotech industries, working with

companies such as AstraZeneca, GSK, Merck, Novartis, Roche and Schering AG. She

also brings to the pharmaceutical industry an understanding of branding at product,

service and corporate levels, having worked with such clients as British Airways, Lego

and Reuters.

Rebecca is co-author of Brand Medicine: The role of branding in the pharmaceutical

industry, a practical examination of the changing dynamics in the industry and of the

increasing importance of strong branding. She is a regular conference speaker, keen

writer and contributor of articles to pharmaceutical and marketing publications.

Having graduated from Cambridge University with a First Class degree in French and

German and an M Phil in European Literature, Rebecca has a passion for languages.

Rebecca can be contacted at [email protected]

Interbrand Wood Healthcare is the worlds leading branding consultancy in the

pharmaceutical industry, providing services in brand strategy, brand name

development, visual identity, package design and market research.

David L. Stern, Executive Vice President, Metabolic Endocrinology,Serono Inc

David L. Stern is the Executive Vice President for Metabolic Endocrinology at Serono

Inc. He is responsible for commercial operations of this therapeutic area in the US.

Serono, Inc., located in Rockland, MA, and is the US affiliate of Serono, a global

biotechnology leader. David can be reached at [email protected]


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David Wood, CEO, Interbrand Wood Healthcare

David Wood, CEO of Interbrand Wood Healthcare, is the renowned developer of many

of the world's leading healthcare brands.

Interbrand Wood Healthcare was born of David's desire to find better ways to address

the branding process, and is a direct expression of his commitment to excellence in

business and in life. His innovative approaches have been setting new global branding

standards for the past twenty years for some of the best-known healthcare companies in

the world.

Born in England, David received his B.A. in Marketing from Strathclyde University in

1966. He opened the first North American office for Grand Metropolitan (now

Diageo), then an emerging British hotel and consumer products company. He served as

President of Grand Metropolitan in North America, and as President of Air France's

Meridien Group for North and South America. His global experience and

understanding of complex international markets continues to keep Interbrand Wood a

step ahead.

David can be contacted at: [email protected]

Interbrand Wood Healthcare is the worlds leading branding consultancy in the

pharmaceutical industry, providing services in brand strategy, brand name

development, visual identity, package design and market research.


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Lydia Worthington, Vice President, Managing Director of Healthcare,BuzzMetrics

Lydia Worthington leads the BuzzMetrics word of mouth research team with

responsibility for maintaining research modes and methodologies as well as overall

quality assurance. Since joining BuzzMetrics, Lydia has spearheaded research projects

for over twenty Fortune 500 clients, including analysis of more than two dozen

healthcare therapeutic markets.

Prior to coming to BuzzMetrics, Lydia served in the Financial Services and

Telecommunications divisions of Booz Allen Hamilton, a leading management

consulting company. While there, through a program of nationwide in-person

interviews she helped streamline the operations and processes for a major health

diagnostics facilities provider. Previously, Lydia worked as an Analyst at the Royal

Bank of Canada, focusing on the implementation of new software technology for the

retail brokerage group.

Lydia received an MBA from the Columbia University School of Business in New

York City, where she focused on Management, Entrepreneurship and Marketing. She

earned a BS in Microbiology & Immunology from the University of Western Ontario.

Lydia can be reached at [email protected]

BuzzMetrics, the global standard in online word-of-mouth measurement and analysis,

helps more than 75 Fortune 1000 companies strategically leverage the buzz

surrounding their brands. BuzzMetrics client list includes global leaders in virtuallyevery industry companies like Comcast, Hewlett-Packard, General Motors and

Mazda. Its partners include the worlds largest marketing-services firms, and

distinguished think tanks such as the Pew Research Center. The company is

headquartered in the U.S. and operates an advanced technology research-and-

development lab in Israel. BuzzMetrics receives strategic backing from VNU, owner of

such renowned research brands as ACNielsen and Nielsen Media Research. For more

information, visit www.buzzmetrics.com.


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Pharmaceutical brands: state of the pharmaceuticalbrandscape

By David Wood, CEO, Interbrand Wood Healthcare

The importance of pharmaceutical brands

If you look at why people create brands, there are a number of reasons. Fundamentally,

they include being able to sell a product at a higher price and being able to create a

sustainable entity through which to differentiate it from the competition and to leverage

the brand going forward. If you look at the traditional pharmaceutical model, the modelwas to invest a lot of money to develop an innovative product for which you get a

patent life and when that patent is over you launch a new product. Once a molecule was

approved you could more-or-less charge anything you like, and so pricing was never

really an issue. The life of the brand was seen to last only as long as the life of the

patent, and so it was not really possible to create a sustainable entity. Therefore,

traditionally, pharmaceutical brands were created to build awareness. When

pharmaceutical marketers talked about branding what they really meant was brand

awareness and whether or not a physician recognizes your product.

If you look at what has happened in pharmaceutical marketing over more recent years,

a number of key factors can be extrapolated that have impacted on the way in which

brands are now viewed and developed. First there are considerable price pressures

going on. The differences in prices between Europe and the US are huge, with

European markets much more restricted in what they are willing to pay for

pharmaceutical products. Pharmaceutical pricing has become increasingly important,

where if I am going to pay that much money for something it had better be worth it.

This trend is now evident in the US with the recent Medicare/Medicaid reforms

meaning that individual states will have a significant drug bill, beginning to put the

same sort of pressure on US prices that European governments currently exert on

European prices.


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Secondly, typically what used to happen in the pharmaceutical industry was that

companies would develop and launch a new molecule that was many times better than

the last one. It was probably more effective, it was probably much safer and worked

faster, lasted longer and had all sorts of tangible benefits. If you go back to the 1980s

and 1990s, you would also have the market to yourself for maybe 4 or 5 years after

launch. However, now the whole model has changed. Innovations are smaller and

smaller it is getting harder and harder to produce significant improvements. New

drugs may work in different ways, but they rarely work much better than the previous

drugs on the market. As a result, distinguishing your drug has become very important

and the chance of you having the market to yourself for any significant period of time

has become pretty slim.

Finally, there is such pressure now, particularly with the big pharma companies, to be

able to deliver a double digit growth every year that they are required to bill several

billion dollars in drug sales each year. As a result the time to launching new drugs and

marketing them into blockbusters has been squeezed into a much shorter timeframe.

Thus, the traditional models that were set up to monitor adverse side effects by the

Food and Drug Administration (FDA) and others, setting limits to the total number of

adverse effects within a short period after launch, are no longer appropriate. For

example, setting a limit of 100 adverse effects in the first three months on the market,

but then having an accelerated launch, means you are likely to see many more adverse

effects than expected. The problem is are there really more adverse side effects than

expected or is it just a function of an accelerated launch?

So there are a number of reasons why pharmaceutical brands have become more

important. First of all you have got to create more value from your molecule above and

beyond the obvious benefit. Secondly you want to create an entity that is differentiable

from your competitors. In addition to that, you have the potential to create a sustainable

entity through which to leverage the value of your brand. For example, if you take

Prilosec and Nexium, they have been able to try and leverage the values they had in

their brand using the color purple and the vehicle of the purple pill. The brand

elements that were associated with Prilosec, that were built well in advance of its


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decline following patent expiry, were leveraged into the Nexium brand. Another

example of brand leverage is Claritin and Clarinex. Claritin never really had any

discernable value other than it was a non-drowsy antihistamine, but Schering-Plough

has leveraged that nicely into Clarinex.

So pharmaceutical branding initially was just about brand awareness and being able to

make sure that you maximize awareness. Now it is much more about the value that my

brand has over-and-above competitors in the marketplace. Pharmaceutical branding

today is about expressing brand value about expressing something else about the

product that is valuable to either the patient, physician, or any relevant audience.

Brand versus message

The same brand can be expressed in different ways to different audiences. If, for

example, your brand is all about being trusted, then that may be expressed in one way

to a physician, another way to a payer and another way to the patient. However, the

brand is still about being trusted what it stands for is consistent but its messages can

change.

Global versus local

When you build a global brand you build a positioning and a brand essence. While you

might be able to position your product slightly differently in different markets the

brand essence needs to be consistent. For example, if we look at Volvo cars, the

original brand essence is all about safety. However, in the UK you might have the S60

positioned as the young persons car, whereas in the US the same car might bepositioned as a reliable car for the older person, but the brand essence of safety remains

constant.


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Current trends in pharmaceutical branding

The traditional pharmaceutical branding model was developed around product features

and related directly to the products positioning rather than any consistent brand

essence. You might position a new product because it has a fast mode of action. You

would build your whole identity around being fast, and would probably have the

market to yourself for quite a while, and you would own that space for being fast. If we

looked at your logo, the typeface, everything would be about being fast. However, the

problem is that markets are now becoming so competitive that you may have to change

your positioning. The traditional model worked very well and was very functional and

focused on what the drug did. However, things have now changed, and if you just load

your whole brand on a single positioning that is not based on a consistent brand

essence, then you risk severing your relationship with your audience.

So as the market is changing, we are in that flux period where some people are starting

to look at what brands are really about and build brands from a different perspective

than from the traditional, simple perspective. They are looking more into how super-

brands are built, with a big idea as well as a positioning. However, progress tends to be

limited to where you have big global launches with big global teams that spend a lot of

time developing a significant opportunity. Smaller, more local, launches continue to

develop brands in the more traditional way.

As part of this change we are beginning to see new people enter the pharmaceutical

industry people with different backgrounds, people with MBAs, people who have

spent a lot of time in marketing and come from consumer brand backgrounds. So wenow have a different type of marketing person in the industry much more savvy,

much more aware and those people are starting to build the pharma brands of

tomorrow.


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Direct-to-consumer advertising

Direct-to-consumer (DTC) advertising can be a very effective medium. However, it

often fails to get across what the brand is about. The problem with DTC, in terms of the

information we must give legally, is that the information is usually conditional

information and is given in such a context that people do not really understand it fully.

It therefore becomes very difficult to get a balanced communication, and this limitation

impacts on brand.

One of the main issues for DTC is the use of television. Television by definition is a

single-minded media, it is all about putting one view across. However, in a 30/60

second commercial it is very difficult to get across a number of different concepts.

While really what you want to say is this works faster, a whole host of additional

qualifying information is included to maintain fair balance and the key message that

you are trying to put across gets lost. It is important to have a very simple message in

DTC campaigns, otherwise they are confusing and not a cost-effective means of

communication.

The future of pharmaceutical brands

As the pharmaceutical industry moves towards bigger and bigger brands, companies

will have to look more closely at the equity they have created in those brands and how

they can leverage it. For example, Lipitor is a $10 billion brand, and out of that there

must be some significant brand equity. So even if a blockbuster drug goes off patent

and loses 90% of its sales, it is still a $1 billion brand. This is enough money to force

companies to ask themselves the serious questions: what is the brand equity and how

can you leverage it?

On a smaller scale, pharmaceutical companies can leverage franchise brands. Key

product brands can be leveraged into a therapeutic franchise area and other brands from

the same therapy area. By building a portfolio of products, companies can invest in the


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franchise, spreading costs across a number of different products, rather than having to

invest in each individual brand.

In the future, pharmaceutical companies will develop corporate brands, but not

necessarily to support their products but rather to support their business. Traditionally,

the industry has not focused on their corporate branding, but companies are more

interested in it now because of the negative perception of the pharmaceutical industry

right now.

The extent of lifecycle branding opportunities, with more and more drugs coming off

patent in the future, is really down to how much brand equity a product has and how

easy it is to leverage that brand equity. Obviously, the bigger a drug is when it is

coming off patent, the more interesting the brand leveraging opportunities. However,

the size of the brand equity will depend somewhat on whether companies have

effectively built a brand in the first place. The big problem is that many of the

pharmaceutical products on the market today are not real brands of additional value,

they are simply brands that have a lot of awareness.

Successful pharmaceutical branding

Pharmaceutical companies need to clearly define the value that their brands have in the

marketplace above-and-beyond that of the competition. Only by clearly defining and

managing that value can they begin to build and leverage brand equity moving forward.


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CHAPTER 2



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Chapter 2 Building pharmaceuticalbrands

Summary

Pharmaceutical markets are different than more typical consumer markets, and as

a result the marketing of pharmaceutical brands cannot follow the established

rules of consumer brands. However, by examining what has actually occurred in

pharmaceutical markets and evaluating the relevant forces and relationships,

pharmaceutical product managers can become more effective, efficient marketers.

In the future, as this marketplace becomes tougher, evidence-based marketing

will become a requirement for success.

The key challenges of global branding go in line with the key critical success

factors. The critical success factors in terms of global branding really come down

to one thing you have to have a position that is single minded, that resonates

well in the key markets, and that is applied consistently at local level.

Effective global brand teams will have to balance an inclusive branding process creating buy-in across the organisation with strong corporate leadership

limiting the rework of the global brand at the local level. The resulting brands,

which have been developed from an early stage of the product lifecycle, will

deliver a clear and consistent brand promise to their target audiences and a

premium price and sustained market position for their marketers.

In an industry where patent life is limited and the domain of market exclusivity is

being toppled harder and faster by the onslaught of generics, a brand name needs

to work that much harder throughout its on-patent life, while having the potentialto live long beyond it. As companies are increasingly looking to lengthen the

productive and profitable life of their brands, established equity in a brand name

can provide a powerful platform for future wealth creation. Its about a name that

will resonate with prescribers and consumers alike, and, ultimately, that will be

relevant for the lifetime earnings potential of a brand.


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Introduction

The Building pharmaceutical brands chapter introduces answers to the important

questions of why and how pharmaceutical companies build brands. E.M. Kolassa,

Managing Partner at Medical Marketing Economics, sets out his experiences and

insights in Understanding the nature of pharmaceutical markets: building brands

through evidence-based marketing. This article outlines the key ways in which

pharmaceutical markets differ from other consumer markets, and how this makes

traditional brand marketing more difficult. It also presents several rules of thumbcurrently employed in pharmaceutical branding that should be replaced by evidence-

based marketing.

Max Jackson, President of Publicis Healthcare Groups International Division, outlines

the challenge of global branding in Building global brands: a new challenge for the

pharmaceutical industry. The article outlines the importance and value of global

branding in the pharmaceutical industry before setting out the key challenges andsuccess factors. It finally presents current best practices in global branding and

forecasts future changes in global branding.

Rebecca Robins, Global Marketing Director at Interbrand Wood Healthcare, sheds

light on the important topic of brand names in Brand matters: the lingua franca of

pharmaceutical brand names. The article presents the value of a pharmaceutical brand

name and the difficulty in securing global names. It also outlines the steps that need to

be taken in building an effective brand name.


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Understanding the nature of pharmaceutical markets:

building brands through evidence-based marketing

By E.M. Kolassa, Managing Partner, Medical Marketing Economics LLC

Why pharmaceutical markets are different

The market for prescription pharmaceutical products differs substantially from other

markets in a number of important ways. Typically, most markets operate in response to

consumer demand, which often can be affected by marketing activities undertaken by

manufacturers and others. Customers, either businesses or consumers, often desire

products for a number of different reasons, not always reasons that might be considered

rational. In such industries, marketing activities can make products appear more

desirable or important and actually create demand by convincing a number of

consumers that a product is desirable. Pharmaceutical markets, on the other hand, exist

only in response to the initial medical need for the actions provided by the product. The

availability or promotion of a new pharmaceutical product cannot directly create

demand for it; the underlying medical condition must be there first. Although few

people actually need a Coke or a new shade of lip gloss, the patient with high blood

pressure requires a medicine to control the disease. Medicines are prescribed by an

individual not involved in the financial transaction of its actual sale, and consumed by

another individual who, all things considered, would rather not need the product in the

first place and may have no idea why they have been instructed to take it. The patient

may or may not have a direct role in the actual purchase of the product. This dynamic

is in stark contrast to most markets, and the components of the dynamic are described

in more detail below.

The market for prescription pharmaceutical products differs from the market for most

normal goods in several key ways:


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Prescription drugs are subject to derived demand products are demanded, and

sold, in response to medical need;

The key decision maker for prescription drugs is a learned intermediary, the

physician;

Prescription drug use is affected greatly by treatment protocols, guidelines, and

recognized standards of care;

Prescription drugs are experience goods, which means that their actual utility

cannot be determined until they have been used, and their continued use depends on

satisfactory experience;

Prescription drugs are negative goods, in that those who purchase or consume

them would prefer not to;

The product features for prescription drugs are fixed, and cannot be changed to

meet consumer needs or preferences without significant investment in clinical

development and achieving regulatory approval for the changes;

Prescription drug markets are highly regulated, and all communications must be

within a narrow set of parameters established by the FDA and other agencies.

Response to medical need

Prescription drugs are used in response to a medical need. Unlike consumer goods,

where demand can be created through creative advertising and other promotional

methods, a pharmaceutical company cannot create a need that is not there. The demandfor antibiotics is determined by the spread of infectious disease, and the demand for

other categories is driven by similar epidemiology. The primary demand, which is the

demand for a specific product category, is determined solely by medical necessity. The

product specific demand is then determined by the prescriber, who evaluates the

options that are known to be available at the time.


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Pharmaceutical marketing activities simply cannot create medical demand for the

treatment of a disorder that health care professionals do not recognize and believe

needs treatment. However, when a pharmaceutical product helps to fill an unmet

medical need, marketing activities, particularly sales calls, will act to increase sales by

making more potential prescribers aware of the product, and to provide them with the

information needed to reach a treatment decision. Pharmaceutical marketing, in this

regard, is principally communication and education, informing potential prescribers

about a treatment option, not creating a need for it.

Learned intermediary

Although marketing activities undertaken in support of pharmaceutical products can

help to increase prescribers awareness of a new agent, or new uses for an older agent,

those marketing activities cannot affect the underlying epidemiological structure of the

market or the physicians ongoing opinion of and faith in a product. Because the initial

decision-maker for a prescription is the physician (or similarly authorized individual),

the task for the pharmaceutical marketer is far different from that of a consumer

marketer. The physician is a highly educated decision maker who is not only sceptical

by training but conservative by nature.1For a physician, especially those who practice

in a primary care setting, adopting a new product is not something that is generally

done on a whim.

When deciding to try a new medicine, the clinician weighs the risks and benefits of the

new product, and compares them with those currently used. If the new product has

greater potency or effectiveness, with no increase in side effects or other untoward

consequences, the product is likely to be used. Similarly, if the new product offers

improvements in side effects and other negative aspects of their current products,

1 Fennell ML, Warnecke RB, The Diffusion of Medical Innovation: An Applied Network Analysis,

Plenum Press, New York, 1988.


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without a substantial decrease in effectiveness, the new product is likely to be tried. A

basic tenet of medical practice is to first do no harm. Products that provide

improvements in safety, or improvements in efficacy without sacrificing safety, will be

readily adopted by many practitioners, who recognize the added value brought by the

new product. I have discussed this concept at length in my book, Elements of

Pharmaceutical Pricing.2 The presence of the learned intermediary who follows this

tenet in pharmaceutical markets places a constraint within the market that limits the

ability of pharmaceutical marketing to create artificial demand or to drive use that is

not medically warranted.

The nature of medical practice also constrains pharmaceutical marketing. The average

sales call lasts less than 5 minutes, during which a sales representative is expected to

discuss three or more products. Because physicians have only a limited amount of time

to spend with sales representatives, given their duties of patient care and practice

administration, those minutes made available to a sales representative are precious.

Physicians are unlikely to dedicate the time and attention to a sales message that does

not meet with an immediate need.

Because practitioners, in general, do not readily seek out new therapies, and no

mechanism exists to require them to accumulate new and developing information on

pharmaceuticals,3 the marketing activities of pharmaceutical firms is the most readily

available mechanism whereby the diffusion of new information concerning drug

therapies can be assured. The complexities of medical practice combined with the

inherent conservative nature of the practitioner and the lack of requirements to acquire

2 Kolassa EM, Elements of Pharmaceutical Pricing, (New York, Hayworth Press, 1997) pp 95-98

3 Avorn J, Harvey K, Soumerai SB, Herxheimer A, Plumridge R, Bardelay G, Information and

Education as Determinants of Antibiotic Use: Report of Task Force 5. Research in Infectious Disease,

1987;9(3): S286-96


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new knowledge without some other stimulus would lead most physicians and other

providers to focus on their immediate needs, seeking new information only when faced

with intractable problems and ignoring most products that provide lesser

improvements. Pharmaceutical marketing helps to provide healthcare professionals

with the most current information on new medicines, new uses for older medicines, and

newly discovered problems with or cautions concerning medicines. This is the basic

purpose, and effect, of pharmaceutical marketing: to communicate information on

medicines and advance that knowledge.

Guidelines and protocols

Medical care, although typically customized to meet the needs of an individual patient,

is influenced and guided by clinical guidelines, treatment protocols, and standards of

practice, which are developed and promoted by medical societies and governmental

agencies, not by pharmaceutical companies. Clinical practices that do not reflect

generally accepted standards of practice expose physicians to high risks of treatment

failure and medical/legal liability. Because of the typical physicians concerns about

these issues, it is uncommon for clinicians to stray too far from these standards except

in extreme cases.

Pharmaceutical marketing programmes and activities that are not consistent with

standard practices and currently accepted guidelines are very unlikely to be successful

because of the inherent risk-averse nature of physicians, and because such programmes

would, in all likelihood, be in violation of the products official labelling, which

establishes the parameters under which the product can be marketed.

Experience goods

An experience good is distinguished by the fact that its quality, and therefore its value

or usefulness to a customer, cannot be precisely determined at or before the time of

purchase. Examples of experience goods include used cars, food and wine, expert

advice, and prescription drugs. Unlike the case of known product quality, with

experience goods a customer cannot know until after its use whether he or she will


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have positive outcomes. This problem is due to the nature of the product; regardless of

the search for information undertaken before the purchase, the customer cannot know

whether the desired outcome will be achieved until he or she has had experience with

the product. They can solicit advice and opinions from colleagues or friends who have

experience with the product, but cannot know before hand if the product will work

for them. If the desired outcome is not achieved, customers will either seek refunds or

discontinue the use of the product.

The marketing in support of experience goods may move customers to try a product,

but their continued use of the product requires that it performs satisfactorily.

Prescription drugs, to gain a physicians or patients loyalty, must deliver the outcomes

promised or expected. Failure to deliver would result in a new search for a better

alternative. In healthcare, no amount of marketing efforts, whether they are advertising

or personal selling, will convince a physician or patient to continue to use a product

that does not perform as expected. Even in the case of satisfactory performance, should

a new pharmaceutical agent enter the market with enhanced features and outcomes,

prescribers will move to that agent upon learning of it.

Negative goods

Unlike many types of products with which we are familiar, pharmaceuticals are what

are termed negative goods, that is, a product that people would rather not buy. A

specific definition of negative goods is products or services seen by customers as an

unpleasant necessity bought to avoid some disutility. A simple way to consider

negative goods is that their primary benefit is the negative reinforcement the removal

of an unpleasant condition.4 Because of the negative nature of pharmaceuticals,

marketing appeals aimed at generating greater use of the product are generally doomed

4 Dawkins I, Best RJ, Coney KA, Consumer Behavior: Implications for marketing strategy, Richard

Irwin, 1995, pp 454


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to fail. The motives for a customer to purchase (or prescribe) a negative good is to

overcome or reduce the underlying problem, not to add pleasure or enhance their

personal image. The difference in the reasons for the continued purchase of positive

and negative goods can be summed up as follow: [p]ositive reinforcement occurs

when the subjects positive utility increases. For example, the purchase behaviour of

ice cream is reinforced by pleasant consumption. On the other hand, negative

reinforcement causes an increased probability of behaviour through disutility

reduction. The subject is under some pain or discomfort, and the action that reduces

that discomfort is reinforced.5

Besides pharmaceutical products, other negative goods include pest control services,

automobile insurance or repair, and airline tickets, all of which, like pharmaceuticals,

are products that customers would rather not need to purchase.

Fixed product features

One of the main reasons new and improved pharmaceutical agents can quickly

overtake already established agents is that the newer agents often provide better value

by offering better performance, in terms of efficacy, safety, dosing convenience, or new

uses. The maker of the older product cannot make immediate changes to their product

to meet the new competitive challenge. The features of a specific pharmaceutical agent

are fixed not subject to immediate change by the manufacturer and the

communication of those features to customers is restricted, in that a marketer cannot

make claims of the product that are not consistent with official labelling. To make

changes to the features of a product requires significant investments of time and

money. Firstly in the laboratory, to bring about the physical changes to the molecule or

delivery system, which seldom result in the desired results. Secondly in the clinical

5Widrick S, Fram E, Identifying Negative Products: Do Customers Like to Purchase Your Products?

The Journal of Product and Brand Management, Volume 1, No 1, Winter, 1992


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setting, to test and demonstrate whether the changes bring about the desired effects.

Finally, investments are made in negotiating through the regulatory maze to gain

approval of the new form and obtain permission to communicate those changes to

customers. If a superior agent is launched into the market, the makers of the older

product cannot simply change it to compete, they must undertake the efforts just

mentioned, and those efforts must bear fruit.

Attempting to match or exceed new competitive offerings is far more difficult for

pharmaceutical manufacturers than for many other types of business. This investment

and risk stands in stark contrast to the makers of cars, soft drinks, beauty aids, or

computer software and hardware, where manufacturers wanting to match or beat a new

competitive feature can often make the changes and market them to customers quickly

and at a relatively lower cost.

Restricted pharmaceutical marketing

Within the context and limitations just discussed, pharmaceutical marketing

programmes and activities can do little more than inform a potential customer about the

benefits of the product, communicate those benefits of the product over other choices,

and take steps to make the prescribing and dispensing of the product easier, such as

assuring the availability of samples and, in some cases, reimbursement and

affordability. That is the extent of pharmaceutical marketings effect and ability. What

differentiates a good pharmaceutical marketing programme from a bad programme is

the efficiency and effectiveness in the way these tasks are carried out. By identifying

and targeting the customers that will be most likely to try the product, and delivering

the required information in an appropriate manner, a firm can make its marketing

programme more effective, in that more potential customers will evaluate the product.

The continued use of the product is based solely on the customers satisfaction with the

performance of the product. No amount or quality of marketing effort can sustain an

inferior pharmaceutical product.


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Evidence-based marketing

Much of the intellectual focus in pharmaceutical marketing today is on understanding

best practices in the industry companies want to understand what the leading firms

do. That is all well and good, but what successful firms do better is that they tend to be

associated with better medicines. However, that does not mean small firms cannot

come up with good products; it means that when small firms do come up with winners,

they become bigger, and they themselves then become successful. Size, as well as

success, tends to be the result of good products, not their cause. What does this have to

do with best practices in marketing? Absolutely nothing! It is easy to have an award-

winning marketing programme when the product is in some way clearly superior to the

competition. It is more difficult to differentiate the marketing programmes of the so-

so products that do not grab anyones attention.

Most in the industry tend to associate great marketing with successful products.

Therefore the industry has failed, in many ways, to look at the evidence that is

available about marketing and what marketing can and cannot do. Hundreds of

pharmaceutical marketing rules of thumb have been advocated over the years, most of

which, upon investigation, have been very wrong. These rules involve:

Order of entry;

First-year sales and marketing;

New product launches and key opinion leader support;

New competitors and market growth;

Brand equity.


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Order of entry

Most people working in pharmaceutical marketing believe in the power of order of

entry and first-mover advantage in their markets, but any rules here must be based on

two assumptions: (1) that every product is exactly the same as its predecessor (e.g.

absolutely no differences) and (2) that every product receives the same amount of

marketing support.

When one views product performance in the marketplace through the lens of order of

entry, it appears that better products always beat out the competition as long as

better is defined as improvements in efficacy or safety that are needed and

recognised by customers. A me-too product that offers no advantages over the

competition will not create much excitement, no matter how hard one tries to sell it.

That been said, physicians are still more likely to try a product that is marketed than

one that is not. Marketing efforts do generally result in increases in sales, and the best

general predictor of the initial sales for a product is the number of sales representatives

supporting it. The best predictor of ongoing sales is the value the product delivers.

First-year sales and marketing

I have often been asked if there are any rules for how much one should spend on the

launch of a new drug. Several studies have shown that the median first-year sales for a

new drug are usually equal to the median first-year spend. Exceptions appear to be very

high-priced drugs (with higher sales than spend) and low-priced drugs launched into

competitive markets, such as antibiotics (with lower sales than spends). I have not been

able to find any products that generated substantial early sales without marketing, and

that makes sense. How are doctors supposed to learn about a new drug if the company

does not tell them about it?


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New product launches and key opinion leader support

Many in the industry believe that securing the support of key opinion leaders (KOLs),

also known as thought leaders, is essential for new product success, but this support is

not always necessary when launching a new product. They are, without doubt, essential

when bringing a new therapeutic category to the market. However, if a product offers

no new advantages, product managers should not waste their time trying to recruit

KOLs, because those who respond are not leaders. By the time there are several

products within a therapeutic category, the market is sufficiently familiar with the

concept that primary care physicians have often come to trust and understand them.

When a market is truly mature, a product manager will often have trouble finding true

thought leaders in the category, because clinical pioneers have already moved on to

new areas.

New competitors and market growth

The rule that new competitors expand the market is true for developing markets. New

competitors in an immature market will raise overall awareness and interest in a

therapeutic category, prompting more prescribers to try the new products or to try them

on different patient types. However, by the time the category is mature the launch of a

new agent does not prompt new use. The appeal of a specific new product might cause

prescribers to try it on patients for whom they would have prescribed a different

product in the category but generally will not result in new prescribers trying the

category for the first time.

Brand equity

Brand equity is the Holy Grail of pharmaceutical marketing, the topic of several books

and conferences, and the factor everybody is trying to measure. The problem is that

pharmaceuticals are not like other brands. Most people will never identify with their

proton-pump inhibitor (PPI). These are not fashion items; they are medicines people

are told they must take to feel better. The greatest measure of brand equity for any

product is the amount of business it maintains once close competitors enter the market.


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It is well known in many markets that a pharmaceutical brand that receives generic

competition can be expected to lose half of its sales in the first month and 90% by the

end of six months. So much for brand equity!

Molecules and treatments can have equity in that physicians will come to prefer them

over others and continue to use them, but in the current healthcare system, the brand is

virtually irrelevant after patent loss, which is the time when brand equity would be

most useful. Various branding initiatives have served some products quite well, the

most notable example being AstraZenecas Purple Pill campaign for Nexium

(esomeprazole) in the US. People can identify the product, and even prefer it over other

PPIs, so there is some element of brand equity at work here, but the pedigree and

labelling support the product and the Purple Pill campaign very well. Without

esomeprazole, the brand Nexium would have no equity. When the time comes, generics

will do to Nexium what they have already done to Prilosec and other brands. The

current equity generated for the Purple Pill is really only valuable now if patients

would be willing to pay a third- or fourth-tier copay for it over a different PPI that

would cost them less, or if the brand will be switched to OTC status, where its identity

and the trust it engenders with consumers can carry over.

Conclusion

Pharmaceutical markets are different than more typical consumer markets, and as a

result the marketing of pharmaceutical brands c

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Business Insights - S Seget - Pharmaceutical Branding Strategies

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