Pharmaceutical Marketing

Syllabus

Core Concepts1. Healthcare environment2. The Pharmaceutical Industry Environment3. The Pharmaceutical Marketing

Environement4. Marketing Strategy5. Marketing Research6. Market Segmentation7. Situational Analysis

Core Concepts8. Positioning Targeting and Profiling9. New Product Development10 Product Life Cycle and Portfolio Management11.Distribution Strategy12. Pricing Strategy13. Communication strategy14. Personal Selling15. Advertising16. Public Relations and Sales Promotion

Healthcare Environment

• Define Health

• Define Illness

• Define Disease

Healthcare Structure

Hospital care

Subacute care

Long Term Care

Ambulatory Care

In Home care

Personnel intertwined with structure

Primary Providers

Secondary Providers

Regulatory

Personnel intertwined with structure

Healthcare Professionals

Patients

Regulatory

Media and General Public

Interelationships

Patient

Pharma Industry EnvironmentNational Laws

Pressure Groups

Self Regulations /Ethics

International directives

Marketeers

Pharma Industry Components

Pharma Industry

APIsOTC

Biotech

GenericsPackaging

Supply Chain

CRO

Research

Understand the role of stakeholders

Patients

Prescribers

Hospitals

Influencers

Financers

Regulators

Pyramid of Influences in RxKOL

Specialists, Pharmacist in charge

General Practitioners

Lets understand us - Patient

• Usual consumers – Needs and Wants (Classical marketing based on Kotler’s book)

• Patients: Needs, Wants and Rights are different. • Buying decisions are more complicated• Compliance – Huge impact from pharmaceutical

marketing perspective– Examples,

• Starting of Disease Management Concept

Patients

• 20% of Rx are never filled• 50% of the patients don’t follow the dosage• 50% of patients never change lifestyle• Reasons for non compliance:– Complex dosage regiment – Perception of disease– Family Input– Age– Poor communication

Assignment

• Identify any disease either you or your family member is suffering and answer:– Disease symptoms– Treatment regimen– Compliance – Reasons for non compliance– Calculate the loss to you if you if you were the brand

manager– Steps you will take to convert this problem into

opportunity

Phase I

•Lowest Cost•Safety tested on healthy

Phase II•Moderate Cost•Safety and efficacy tested on disease individuals

Phase III

•Highest cost•Large clinical trials

Phase IV

•Post Marketing•Market expansion•Heaven for marketing!

Besides Patient, let us understand nature of the industry

Kotler Marketing –Pure vanilla

Analysis of Market

Market Segmens

Strategies for each

segment

Planning

of marketing

Program

s, Activitie

s

Evaluation

and

Control

Pharma Marketing Different

Brand Manager

Market Research

Clinical MedicalHealth Outcomes

Forecasting

What are the other differencesPharmaceutical Consumer

Consumer is decision maker Mostly not true True

Consumer pays directly Not True True

Brand Loyalty Not True True

Government Regulations Very High Low

R&D Complex Less complex

Price sensitivity Low high

Clinical/Medical

• Pros and Cons of current treatment available• Technical ability to understand the drug• Knowledge of standard practice• It helps how patients are viewed and treated

by physicians• Helps brand manager to develop SWOT

analysis

Health Outcomes

• Epidemiology• Economic benefit of various treatment• Pricing and reimbursements• Effect of product on QALY (Quality adjusted

life years)

Market Research

• Quantitative and Qualitative– IMS– Focus Groups– Treatment pattern– Drug of first choice– Issues to highlight in promotional message

• Show and learn how to use IMS data –Real Life scenarios

Forecasting

• Assess the commercial potential• Develop revenue models based on

prescription• Arrive at numerical forecast and not to have

strategic implications

Role of Pharm marketeer

• Comprehnsive review of disease marketplace• Competitive landscape• Pros and Cons of currently available and

pipeline treatment• Assessment of unmet medical need where

new compound can fit it• Ultimately developing a brand positioning

Developing Product Strategy

• Comprehensive marketing strategy to meet key objectives of the brand including– Product Positioning– Market Segmentation• Patient• Physicians

– Develops Pricing Model– Roll out plan –operational and more tactical

approach

Marketing Mix in Pharma

Product

Therapeutic Class

Generic or Branded

Dosage Form

Price

Competition

Margins

Treatment Cost

Promotion

Detail Aid

Clinical Papers

CME Programs

Symposias

Personal Selling

International events

Place

Hospital

Pharmacies

Distributon strategy

Supply chain and Storage

Regulatory requirements

Controlled versus non controlled

Defining a Product, Critical component in Pharma Marketing

• Classical way– Efficacy– Safety– Tolerability– Speed of Action– Quality– Cost– Side Effects

Product Defination

• New Paradigm– Life Style– Quality of Life– DTP Branding– Redefining the patient population– Redefining disease yardsticks

Price

• Brand versus Generic• Duration of patent protection• Competitive landscape• Dosage form• Cost of API

Place

• Hospital or Retail Product - Oncology• Controlled or non controlled -Psychiatric• Cold Chain - Vaccines• Dosage Forms – Suppository• Select market or Global launch

Promotion

• Advertising• Personal Selling• Public Relations• Sales Promotion• Target Audience• ATL/BTL• Gimmicks• Global Branding

Strategic Framework

• Which therapeutic area and geographical area?• Portfolio selection and resource allocation• Target physicians, target indications• Marketing Mix• Implementation

• Discuss the examples of generic and branded company

Marketing Planning Stages

Evaluation of

opportunties

Analysis of market

segment

Positioning and

strategy

Execution of

marketing plan

Control and review

Pharma Market Research

• Prescribers– Prescription Audit– Patient Compliance– Indications, both approved and off label

• Patients– Therapy awarenss– Compliance

Pharma Market ResearchAttributes Quantitative Quality

Question Nature How many What if, “Why

Research Nature Quantity defining Exploratory

Focus Historic and Statistical

Behavioral

Results Measurble Opinionated

Sample Size Large Small

Hoe w to create and analyse IMS Data

• Live demonstration using real life IMS Rx Audit• Calculations of Market Share, Growth,

Volumes, Values, Performance Index

Concept of Market Segmentation, Targeting and Positioning

Reasons for Segmentation:• All Doctors and Patients are not identicle• Their response to same drug could be

different based on perceived side effects, cost, dosage regiment, off label indications (discuss with examples)

Benefits of Segmentation

• Optimal Product/Market Match• Optimal, cost effective promotional strategy• Media allocation

Segmentation in real life• By Indications

– Maintenance– Acute

• By Patient Profile– Ethnic background– Demographic– Severity of illness

• By Physicians type– Specialist versus GPs– Hospital versus Private– Patient’s economic status

• By Dosage Forms– Injectables– Oral– Suppository

Segment criteria

• Differentiable• Measurable• Accessible• Actionable• Defendable

Segmentation AnalysisMarket Potential Therapeutic

class/Indication AB C

Potential Market SizeAvailable Market SizeServed Market Size

Avegrage Rx Value

Value Potential

Volume Potential

Market Growth

Competitors

Complexity/Legal

Product Attribute AnalysisAttribute Your Product Competitor A B C

Efficacy

Safety

Tolerability

Adverse Events

Onset of Action

Other

Desgin attribute analysis and provide importance/score for physicians and patients both. Example Escitalopram versus Venlafaxin (Tolerability versus efficacy)

Targeting

After arriving at segments, company has to target certain segment based on

• SWOT Analysis• Sustainable Competitive Advantage• Evaluation of current and future resources• Product Life Cycle• Sales force capability• In house talent pool

Positioning

• Most important job of marketer as this is the first message that goes outside!

• Based on product attributes, real and perceptual

• Wrong positioning leads to wrong message and cascading effect all the way down to a flop!

• Once you are positioned, it is not easy to shift

Positioning

Questions to ask internally:• What is the licensed indication by FDA/EMEA• Different therapeutic segments to cover• How many physicians• SWOT/Competition/Patent Protection• USP versus other products• Can Clinical Trials support the message• Amount of resources• Can we prove/convince authority/doctors (for eg

undefined MOA is very difficult to sell!

Positioning

Fit with Corporate Objectice

Creat USP

Two Dimensional Positioning

Safety

Efficacy

Examples of Product Positioning

• Dosage• Formulations• Drug Delivery/Technology – Pk and Pd• MOA• Drug Drug Interactions• Safety in Children and Pregnant women• Product Class• Packaging• Reiumbursement• Onset of Action

Indian Generic Positioning

• Unsubstantiated claims by Sales Force• Difficult to supervise• Difficult to control by regulation• Self regulation is limited• Erroneous claims• Too many claims

Pharmaceutical Branding

Strategy Segmentation Targeting Positioning Branding

Is Pharma Branding different than others?

• Discuss attributes of brand and differentiate versus other industries

• Front End branding: Name, Sign, Symbol, colors, location of placement, distribution outlets. Location of advertisement, price, celebrity endorsement, commercials, PR, Packaging, Consistency, Longevity, Design

Branding

• Back end Factors:– Research and Development– Core Philosophy of Management– Investment and re investment– Quality throughout the value chain– Customer engagement– Talent Pool

Does Branding Work in Pharma Industry?

Brands as the totality of perceptions and feeling that consumers have about any item identified a brand name including its identity(e.g. its packaging and logos),

Quality and performance, familiarity, trust, perceptions about the emotions and values that Brand symbolizes and

user imagery

Global and regional brands

How to stand out in crowded place?

Personal Branding plays significant role in Pharma Branding

• Especially in Rx category• Role of KOL– Personality– Ability to speak well and influence– Technology– PR

• Higher management is close to prescribers

Branding in Pharma

• Limitations compared to consumer product– Patents Expiration– FDA /Regulatory requirements– Duality – Doctors versus Patients

• Deductive versus Inductive– Deductive – Asking the target audience to choose

from predefined concepts– Inductive – Asking the target audience what do they

think about the treatment, how they see a brand and then creating concepts

Branding In Pharma

• Rx versus OTC– Rx brand survives short period of time, approx 7 to

10 years.– OTC brand can continue for ever like Coke hence

marketer can invest in brand building– Rx brand lacks organoleptics –appeal to senses

such as touch, taste, smell – Sensory appeals are essential in brand building

– All Rx brand looks more or less same

Question

• How many of you think it is not possible to build an Rx Brand?

How to build an Rx Brand

• Create with patients• Create tools for patient complinace• Direct marketing• Discuss the disease or conditions to be treated

and alternatives patient should know about• Blend of doctor and patient communication• Committing resources to making it a character.

Difference between Branding and Positioning

• Not inter changeable words• Positioning is all about perception –how you want

doctors or patients to think about your product• Its an unemotional exercise• Branding: Its all about relationship with target

doctors and patients. • Difficult to describe but it is a bond between

product and doctors• Corporate branding supplements product branding

Assignment

• Google search Claritin and Tylenol– Include message– Include images

• Describe in your words difference between branding and positioning using two examples

• Evaluate Indian brands and understand if any successful brands that appeals to you

Marketing Cases

• New pain killer belonging to new therapeutic category having patent expiry of three years is being launched

• Product is unique, once daily dosage compared to older drugs

• Product has some side effects but manageable as long as patient follows the treatment

• Suboptimal dose also works for mild to moderate cases

Objective

• Develop communication plan for doctors• Evolve a strategy post patent• Highlight your recommendations with reasons• Make as many assumptions as you think

appropriate• Think out of the box• Give a name to the product

Product Life Cycle and Portfolio Management

• Diffusion of innovation• Competitive strucuture• Internal product portfolio• Research and Development• Patents and IP• Technological advances• Sustained Profitability

Standard Graph

Pharma PLC versus Consumer

• Extensive Pre Launch Phase• Dependent on Patent Expiry• Reimbursement Limitations• Limited bandwidth to play around• Regulatory hurdles

What happens to business when you ride the wave

Introduction Growth Turbulence Maturity Decline

Revenue

Sales GrowthCost

Profit

Physicians ProfileCompetitors

Premarketing

• At least two years prior to launch• Develop advisory board, diverse members• Clear Mechanism of Action• Create a dedicated task force internally• Initiate selective exposure to KOL• Develop Speakers Bureau• Internal planning, Mfg, Packaging, PI, PM• Evolve positioning

Introduction

• Launch Planning –WOW Effect– Regional Launch– Country Launch– Sampling– KOL seminars– PR– Promo material– Charged up sales force – Motivation, Incentives

• Spend Spend Spend Spend

Growth Phase

• Territories are further divided to increase the frequency and targets

• Sales force expansion• Continued support to KOL• Focus increased in heavy prescribers• Expansion of target doctors to increase the

share of prescription• Overall investment is high

Maturity

• First impact is freeze on sales force• Cut down on lavish expenses, foreign trips etc• Cutting down on some target doctors.• More scrutiny on expenses• Stiff targets/growth expectations without must

investment• Most difficult period from sales force point of

view• No excitement !

Decline

• Time to move on to new company!• Tail end products are interesting acquisition targets

for start ups!• Allow slow decline by selective presence in the

market• Product moves from elite sales force to contract sales

force• Strictly no new initiative• Difficult period for sales force to understand –

Confused state!

Product Portfolio and PLC

• In Line Products, its different dosage forms, strengths and packaging

• Pipeline Products (In Phase III and under)• PM and PLC are very critical from strategic

planning• Investors and Analyst focus most on this two

issues• Only way to judge the future cash flows, profits

and sustainability of organization - Examples

Assessment techniques in PharmaPM

Assessment Targets

SWOT•Efficacy•Pricing•Ease of Use•Patent•PLC Stage

Long term Performance

•NPV•ROI•Market Value -Discounting

Stratgic Fit

•Therapeutic Class•Regions•Competencies•Clinical Support•Regulatory capbility

Concept of Net Present Value, NAV

• Demonstrate it using an excel formula

Different Matrices for evaluation of Portfolio opportunity

• Probability of Tech success versus NPV• Opportunity Cost versus Development Cost• BCG Model – Market Growth Rate versus

Relative Market Share (Starts, Question Marks, Dogs and Cash Flows)

• Market Attractivenss – Industry Attractiveness versus Business Strength

Competitive Strategy

• Strategic Issues:– Research inhouse or outsource– Market yourself or outsource– International expansion or stay at home!– Acquisition of product portfolio– Brand versus Generic– How much backward integration one should do?

Discuss Classic Kotler example

Leader Challenger

Follower Specialist

Lets talk India, Lets focus on Generics

Bioequivalence

Bioavailability

Patent Regulatory/Mkt Access

Price Technology

Pricing

Brand•Highest price you can get•Stay there•Patent Protection•No threat, No Limit pricing, ex: Biotechnology

Generic•First mover advantage•Fast In, Fast Out•Based on Brand Price•Cost of APIs•Cost of Regulatory

Forecasting

1940/40

1955/55

2012/80

Forecasting

Education

Awarness

Consumption

Forecasting

• Prevalence• Incidence• Compliance• Access• Availability• Dosage Form – MS• Diagnostic Tools• Advertising and Promotion• Historical sales

Forecasting a pharma product

• Disease Patient• Converting healthy patients to disease patient• Life Style diseases and drugs• OTC component• Off label indications – Neurontin• Innovative dosage forms – Nicotine

Sales Force Management

• Cornerstone of successful marketing• Territorial planning• Developing Call Plan• Identification of sales force size (RTF Model)• Hiring and recruitment• Training• Supervision• Motivation and incentives• Monitoring and Mentoring