Market-driven pharma. Should pharmaceutical companies really be …. market-driven? – Michael Herschel


Should pharmaceutical companies really be ….
… market-driven?

In a big pharmaceutical company the majority of top executives are either marketing experts or other specialists that have spent some of their career in marketing. Indeed, medical advisors who wish to advance within a pharmaceutical company are usually advised not to stay in medicine for too long but rather to move into marketing and sales, or, corporate affairs or licensing and acquisitions – at the very least.

This implies that marketing is the key to commercial success. While this may be true in some cases, where some of the marketed products show little or no superiority over existing ones, for example, it is clearly easier to make a commercial success of a product that can be differentiated from others in the market place and that has a clear advantage over “me-too” products that need a lot of marketing support.

In some companies marketing dominates product research and development early on. In these companies, early developments are scrutinised for further commercial exploitation. As a consequence of traditional accounting techniques, such as net present value, they are often dismissed too early – before they have had an opportunity to demonstrate potential. Furthermore, the strategic frameworks that govern marketing plans have often originated for use in large therapeutic areas, in which there are many patients and many prescribing physicians, and so are not always appropriate for use in other areas of true therapeutic need. Looking back in history, the estimation of markets has often been incorrect and sometimes appears to be formed on a basis of wishful thinking. I can recall a recent marketing scenario that assumed that 20% of all American women suffer from a disease called “sexual hypofunction” – without any medical evidence or data in support of this assumption. I sometimes wonder whether the determination of incidence and prevalence of diseases should not be left to medical experts rather than their marketing colleagues.

This clearly leads on to the question regarding at what point customer need should be determined, and by whom. In the end, patients are our customers and not prescribing physicians. It is evident that patients are emancipating themselves from physicians more and more – using publicly accessible sources to learn about their diseases and diagnoses. This trend is further supported by the increasing number of health systems that rely on patient contributions to pay for medicines, which also buys them into the decision-making process. So drugs are increasing purchased on perceived value rather than physician authority – at least in areas where taking the medication is not a question of life or death. Our determination of customer need also entails making a conscientious decision about which customers to listen to most. There are some customers that are always content with status quo and there are others who are always dissatisfied. The truth may lie somewhere in the middle but there is no clear way to estimate market forecast effectiveness. Or rather, there could be one but so far nobody has been motivated to collate all the data and to analyse them – to compare historic data with regards to market forecasts, with market fullfilment within predetermined therapeutic areas.

If we look at marketing-driven companies, the key to their success is good market research. Often market research looks back using the data from IMS in their various presentations. It also looks into opinions and there are different ways in which we can look into different data distortions. Focus interviews of individuals may develop a perspective into the future market if very creative individuals are cross-examined. However, focus groups are more frequently assembled and interviewed to explore a company’s concept. The group dynamic usually determines the outcome. I question whether this actually leads to a good forecast or whether it better reflects the relative strengths of the participants in the group discussion. Lastly many companies assemble advisory boards with what they like to call “key opinion leaders”. Some of these key opinion leaders may have been invited because they are very vocal, others because they could not be omitted for political reasons. I’m still looking forwards to prospective analysis of advisory board forecast outcomes versus reality. Other, less frequently used, methods include Delphi methods of forecasting and concept testing with patients or physicians.

If we looked for product development techniques that could make life easier for marketing, we should expect that the development cycles become shorter. Still, it takes many years for the development of a new chemical entity, some years for line extensions, and sometimes many more in indication broadening. I know of one pharmaceutical company executive who does not allow the marketing people to make mathematical predictions of sales until phase II has been completed. Even by that time, many of the product features have not been determined. I frequently see target product profiles for which it was clear that the truth would not be available before its time of launch – if not later. I think we should be more determined by customer need than by the big wide-eyes of marketing. The big wide-eyes of marketing may just reveal some sort of marketing myopia by looking at the big markets and over-looking markets in which significant improvements can still be made. Further, marketing often focuses on conventional opinion leaders that may not like changes to paradigms. Some companies have experienced big changes such as when histamine blockers took over from antacids or calcium antagonists from some of the older antihypertensive compounds, for example. It is not usually marketing that prevents this lack of foresight, but medicine. Medicine should, thus, be awarded its rightful place in product development and may perhaps dominate some aspects of marketing one day.

(C) 2008 – Alle Rechte vorbehalten


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