Williams S. Ettouati, Pharm.D.

Director, Industrial Relations & Development

Health Sciences Associate Clinical Professor, N.S.
Objectives
•  Pharmaceutical Traditional Marketing: The 4 Ps
•  FDA: Regulatory Rules
•  Pharma New Business Models
•  Novel Approach: The 4Cs
•  Conclusion
Marketing Pharmaceutical
•  What makes a drug a success?
-  Is it a great ad campaign, or promotions from doctors?
-  Does the drug address a much-needed area of medicine?
-  Does the drug treat a disease in an exceptional way with few side
effects?
-  The way to measure its success is sales

Marketing’s role is to increase SALES

•  Marketing & brand development start early at Phase I

•  New Product Planning and Product Management: Group charged with

commercializing developing brands

•  Payers require Pharmacoeconomic data before reimbursing products

Marketing The 4 Ps

•  Product

•  Place or Market

•  Price

•  Promotion
PRODUCT
 Elements of the “Ideal Drug Profile”

•  First in class + best in class

•  Expanded patient populations
•  Simple dosage regimens; a pill once a day
•  Multiple delivery systems
–  Oral, injectable, topical…
•  Superior efficacy data
•  Enlarged safety data
•  Compelling pharmacoeconomic data
•  Shows increase survival data
•  Sustainable competitive advantages vs. competitors
 Commercial Models in Pharma
•  DIFFERENTIATED
–  Significant product innovation
–  Often no generics available
–  Payers exert little influence on treatment decisions

•  COMMODITY
–  Generics minimally differentiated, other than by price
–  Payers have a great stake in the prescribing decisions

•  TRANSITIONAL:
–  Fall between the above two extremes and are likely to undergo
significant change

Understanding New Commercial Models – IMS Health

Design Marketing Plan
•  Develop differentiated brand positioning
–  Product label approved by FDA, EMEA…

•  Build brand plan and articulate strategic imperatives to

deliver brand including
–  Key brand messages
–  Communication strategy for each stakeholder
–  Pricing and promotions strategy
–  Linked to clinical strategy

•  Develop physician/patient programs to build

compliance and persistency

•  Define brand portfolio and architecture

 Product Positioning
•  Brand positioning specifies
–  Clear target
–  Defines what the product is and does
–  Provides distinctive reason to believe benefit are true and bring value

•  In addition it must address all these questions:

–  Is it relevant to target customers?
–  Will customers care?
–  Does it address a unmet medical need?
–  Is it credible for the brand?
–  Is it distinctive from competitors?
–  Does it leverage brand strengths and address weaknesses?
–  Will it enable the brand to achieve its growth objectives?
–  Is it consistent with the organization’s core competencies?
–  Can it be effectively executed and measured?
PLACE - MARKET
 Place: Define the Market
•  Segment key customers & target key stakeholders
–  Who are we marketing to?
–  Physician, hospital formulary, patients, advocacy group?

•  Identify unmet needs & size volume opportunity

–  Are we going after mass market?
–  Specialty market, orphan diseases?

•  Understand current brand & competitor equity

–  Who is the competition? Benchmarking
–  Are we first in class, best in class?
–  A “Me Too” drug?

•  Define product opportunity & economic value proposition

–  Do we have better efficacy, safety, dosing, pharmacoeconomics?

•  Develop S.W.O.T. Analysis

–  Strengths, Weaknesses, Opportunities and Threats
 2011 Generics & Specialty Outperformed
the Market %Growth US $

Source: IMS Health, National Sales Perspectives, Dec 2011

A Historic First: Traditional Prescription Drug Spending

Since 1993 when Express Scripts began recording annual drug trends
2012 First year where total spending on traditional drugs declined
Market Shift: Pharma Changes Strategy
•  Move from General Practitioner and Family Practice
market to specialty market
•  Going after orphan indications
•  Portfolio moving from small molecules to biologics and
macromolecules
•  Why?
–  Protection from generic erosion
–  High price per treatment
–  Cheaper & different promotion mix
–  Smaller sales force
–  Lower cost of entry, cheaper clinical trials
–  Faster to market
–  Fast track approvals
–  True unmet medical needs
 Major Changes in Market Forces
Certain impacts are negative in the short term but more positive or
uncertain longer term

http://fmi.org/docs/2012-health-wellness-conference-presentations/doug-long---the-us-pharmaceutical-market.pdf?sfvrsn=2
PRICE
Generics Reached All-Time High
Market Share

Source: IMS Health, National Sales Perspectives, Dec 2011, National Prescription Audit, Dec 2011, Branded generics disaggregated
Pricing Strategy
How is the brand perceived vs. competition on
relevant parameters?

2012 Top-selling drugs reflect the strategy of the $310 billion annual drug
industry:

No. 1 NexiumTM, (heartburn) + 7.8% price increase to a $262 average

prescription

No. 2 AbilifyTM, (bipolar disorder) + 10.4% to $642 per prescription

No. 3 CrestorTM, (cholesterol-lowering) + 9.7% to $193 per prescription

IMS Health reports.

 Global Pricing Strategy

•  First wave markets US, Germany, UK, &

Canada

•  If the price of a drug in Japan is

- Either > 150% or < 75% of average
pricing in US, Germany, France & UK
- Japan adjusts its pricing

Source: Cutting Edge March 2013

•  International price referencing can either make or break

a company’s market access strategy.
 Price Elasticity: Is it Sustainable?

•  Biologic and orphan drugs pricing reaches stratosphere!

•  Example; GattexTM (short bowel syndrome), fourth drug

approved in 2012 priced > $200,000 per patient/year

•  Market for orphan drugs growing at a faster rate than the

overall drug market

•  Brand-name pharmaceutical prices have

–  Risen faster than inflation
–  Increased more than 13% from Sept. 2011 to Sept. 2012

Source: Fierce Biotech

PROMOTION
Launching The Drug: Promotion
•  Align organization
–  Sales force, global/local, commercial/clinical
–  Optimize communication delivery vehicles

•  Customize interaction mix for key customers

–  Physicians, patients, managed markets

•  Partner with payers

–  Maximize preferred access while minimizing discounts

•  Set clear sales targets for brands

•  Measure both volume and brand equity performance

•  Understand impact of programs on revenue, return on investments

•  Monitor customer satisfaction

Promotion
Market Share & Sales Driven By
•  Broadest indications into large patient populations

•  Sustainable competitive claims against marketed and

products in development

•  First in class and best in class

•  Timing of line extension

•  Promotion intensity, marketing budget

•  Reimbursement
What Do Customers Think & Feel
About Our Drug?
 PROMOTION
•  Sales Force
•  Other means of promotions
–  Direct to Consumer Advertising (DTCA)
•  TV, print magazines
•  Internet, Facebook, social media, advocacy groups
•  DTCA Promotional spending
–  Peaked at $5.9B in 2006 followed by 25% decline to $4.4B by
2010
–  In 2010; $370 million top 15 small molecule (8.8% of sales)
–  $33 million for the top 15 biologics (1.4% of sales) *
–  Medical Science Liaison
–  Publications
–  Promotion is one-way communication

Promotion is regulated & limited by FDA and other regulatory agencies

Promotion of Prescription Drugs to Consumers and Providers, 2001–2010; Rachel Kornfield, Julie Donohue, Ernst R. Berndt G. Caleb Alexander;
PLOS ONE | www.plosone.org 1 March 2013 | Volume 8 | Issue | e55504
 Changing Stakeholder Influence
In 2009, + 90,000 Pharma sales reps traversed nation’s hospitals
and doctors’ offices, wooing doctors and dishing out free
samples!

-  Fundamental change
in decision-makers

-  Payer eclipsing
physician in many
markets

-  Different markets are

in different states

-  Tailoring solution to
local environment is
essential to success
Pharma Sales Rep Challenges
•  Many primary-care doctors get paid by the office visit
•  Physicians responses to pharmaceutical sales reps:
–  “I’m too busy to talk right now”
–  “Respect my time, please just drop off the literature and samples
at the desk”
No
Pharma
Sales
Reps
Allowed!

•  Cornering docs and spewing a quick pitch of products features and

benefits rarely will work

•  Physicians really don’t listen – they are thinking:

–  How long will this take & how can I cut this conversation short?
Regulatory Rules
 FDA: Office of Prescription Drug Promotion
•  Mission: "To protect the public health by assuring prescription drug
information is truthful, balanced and accurately communicated.”

•  Accomplished through:
–  Comprehensive surveillance
–  Enforcement
–  Education program
–  Fostering better communication of labeling and promotional
information to both healthcare professionals and consumers.

•  OPDP regulates:
–  Sales representative presentations
–  Speaker program presentations
–  TV and radio advertisements
–  All written or printed drug promotional materials

FDA.gov; http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/UCM330855.pdf
 FDA: Prescription Drug Advertising Must
Prescription Drug Advertising must
•  Be accurate
•  Balance the risk and benefit information
•  Be consistent with prescribing information approved by FDA
•  Only include information that is supported by strong evidence

Common Violations
•  Omitting or downplaying of risk
•  Overstating the effectiveness
•  Promoting off-label, or unapproved, uses
•  Misleading drug comparisons

http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Surveillance/
PrescriptionDrugAdvertisingandPromotionalLabeling/UCM209847.pdf
PHARMA NEW BUSINESS MODELS
 The New Marketing Model
The Four Cs: The customer’s perspective
•  Customer
–  Profiling, patient stratification, payers, physician, government
–  What does each customer want

•  Cost
–  Maximize customer value: Pharmacoeconomics
–  Reimbursement: Outcomes trials early before, during & after launch

•  Convenience
–  On the customer’s term
–  Online detailing, ordering, mobile aps

•  Communication
–  Two way communication, Internet ie: www.Sermo.com
–  Building meaningful interaction and relationships
 Achieving Launch Performance
•  Payers’ control over the use of new medications
•  Many generic alternatives in almost all primary care therapy
•  Abandoning tone-way messaging model to patients
•  Moving to a consumer-centric model; views physicians as consumers
•  Increasing number of specialist classes

For launch to achieve

excellence, companies
must address different:
-  Environment
-  Customers
-  Approaches to market
-  Timescales

New commercial models and launch excellence

 New Pharma Business Model
Forget blockbuster, one size fits all, let’s go after
•  Orphan drug business
-  1,795 projects were in development, Oct 2011
-  Individually affect fewer than 200,000 people in the U.S.
-  Together estimated to affect over 25 million people
-  Broad range of diseases & conditions from enzyme storage disorders to
rare cancers
-  Orphan drug approvals accounted for 30 % of approvals in most recent
five-year period

•  Therapeutic cancer vaccines

•  Antisense therapies
•  In vivo diagnostic
•  Bioengineered vaccine
•  Cell therapy, gene therapy
•  Monoclonal antibody,
•  Recombinant and transgenic products

http://www.phrma.org/pipeline; http://phrma.org/sites/default/files/2435/2013innovationinthebiopharmaceuticalpipeline-analysisgroupfinal.pdf
Mastering Stakeholder Complexity
New markets:
•  Specialty market, dominant growth driver of global pharma industry
•  Oncology forecast to be world’s leading pharmaceutical sector

Changed environment requires new commercial model

•  Greater attention to payers & to gaining market access
•  Greater investment in outcomes trials before, during and after launch
Address Payers Effectively: 7 Steps
1.  Identify & understand the funding flows for the disease area
2.  Identify the decision makers controlling these funds

3.  Understand what motivates decision makers and criteria

4.  Adapt product development based on insights into decision making

criteria

5.  Develop value dossiers tailored to each type of payer, segmented

both by group and motivation type
6.  Before & during launch, target the segmented payers with appropriate
communication; Using digitally-based commercialization approaches

7.  Monitor the impact of all activities

Increasing Challenge of Specialty
Prescription Medication Spending
•  Require specialized handling or administration, frequent dosing
adjustments, and intensive clinical monitoring & patient assistance

•  Affecting less than 2 percent of the US population, in 2012

accounted for 24.5% of the country's total drug spend

•  Four of the US 15 costliest diseases in drug spend are treated with

specialty medications
–  Inflammatory conditions
–  Multiple sclerosis
–  Cancer
–  HIV

Firece Pharma
“Owning the Patient”
Demand Side
•  Develop medical management or wellness programs

•  Assess other non-traditional service offerings which

could serve as logical bundling opportunities

•  Serve as a patient advocate, supporting the patient with

education and assistance in making informed health care
decisions
New Sales Rep = Customer Relationship Manager
Obsolete: Monolithic sales force; every rep is charged with same tasks

•  New Sales Forces = Customer Relationship Manager (CRM)

–  Build adoption at individual customer level
–  Build acceptance & approval with payers

•  New CRM = New set of skills

–  Account management
–  Ability to manage strategic relationships with all levels in an organization
–  B to B selling skills
–  Ability to deal with broad range of stakeholders:
•  Physicians, payers, nurses, key opinion leaders and patients
–  Coordination with team of individuals in overlapping roles
–  Develop payer insights, create payer value, & drive demand
–  Provide information in nearly real-time with mobile technology
 What Would Happen if All Traditional
Pharma Reps Went Away?
Decline in U.S. Pharmaceutical Reps

•  Many people say: Everyone

would be better off!
•  Reps cost pharma $B

•  Drain scarce physician time

•  Provide little of the results-

based information
increasingly demanded by
providers, patients, payers,
and regulators
Source: Fierce Pharma

Pharma’s New U.S. Commercial Model Deloitte Development

 The “New Independent Rep”
-  Specialize in specific therapeutic area
-  Background and skill set with greater clinical expertise
-  M.D., PharmD, Nurse Practitioner, Physician Assistant, or Nurses
-  Representing all relevant treatments in the range of pharma
companies
-  Relying on outcomes-based research and comparative data
-  Maintain unbiased stance
-  Pharma would not be able to differentially compensate for different
branded treatments, avoid bribery

Example of a Independent Rep:

Pharma 1

Pharma 2
Independent Rep Prescriber
Pharma 3
Pharma 4
 In Conclusion
Sustainable Competitive Marketing Strategy

KOL: Key Opinion Leader management and medical marketing

Thank You
 Novel Therapies Address Unmet Needs
Selected Product Launches 2009-2013

Source: IMS Health