Transcript Marketing Objectives - Specialist Pharmacy Service

Marketing Techniques Used By
The Pharmaceutical Industry
by
Allan Karr, FPharmS, DipM, MBA
Pharmacy Business Services Manager,
UCL Hospitals Trust
The Association’s Mission
The ABPI’s mission is to represent the
pharmaceutical industry operating in the United
Kingdom in a way that:
• Assures patients access to the best available
medicine
• Creates a favourable political and economic
environment
• Encourages innovative research and
development
• Affords fair commercial returns
Messages : In short . . .
•
Better medicines for patients
•
Better value for money for the NHS
and taxpayer
•
Better economic success for the
industry and the country
Value of Medicines
• Reduce or eliminate the need for other more
•
•
•
•
costly treatments
Speed up health treatment, thereby freeing
up state resources
Improve the quality of life for patients
Reduce the cost of ill health to other areas of
public expenditure
Improve the health of the nation
The Drug Development Process
Phase II
Preclinical
Testing
100–300 Patient Volunteers Efficacy
and Side Effects
IIa
Laboratory and Animal
Testing
0
2
4
6
8
IIb
10
FDA Review
Approval
12
14
16
Years
Discovery
Phase I
Phase III
(2-10 Years)
20–80 Healthy
Volunteers
Safety and Dosage
1,000–5,000 Patient
Volunteers
Monitor Adverse
Reactions to
Long-term Use
Additional
Post-marketing
Testing
Exploratory Development
Full development
Close collaboration with academia;
Novel approaches; new endpoints;
biomarkers
Confirmatory studies;
Access to large pt numbers;
Attrition in the
R&D Process
~100 Discovery Approaches
7,000,000
Compounds Screened
1,000
Screening Hits
30 Candidates
1 Medicine
12 Candidates
Discovery
Exploratory Development
Phase I
0
Idea
Full Development
Phase II
Phase III
10
5
12 -24 Years
15
Medicine
Innovation: the lifeblood of an
economy
In 2005 the pharmaceutical industry spent
nearly £9million every day of the year in
the UK on R&D
(£6000/minute!)
Trends in R&D expenditure, sales and
number of NMEs
R&D expenditure
Sales
Number of NMEs
Indexed growth (1991 = 100)
200
175
150
125
100
75
50
1991
1992
1993
1994
1995
1996
Year
Source: CMR International Ltd.
1997
1998
1999
2000
2001
Global Growth to 2006
Driven by the US
2001
2006
ROW
14%
ROW
17%
Japan
15%
USA
59%
Japan
USA
49%
Top 5
Europe
19%
US$ 390 billion
10%
Top 5
Europe
17%
US$ 628 billion
IMS Audited Markets + Estimates for Other Regions
Source: IMS Global Consulting
Financial Pressure on
Industry
Results in…..
Mergers and Acquisitions
World market share for leading
companies 2006
8.1%
6.1%
5.2%
5.4%
4.7%
4.2%
4.2%
3.6%
2.9%
2.3%
Amgen
Abbott
Roche
MSD
AZ
J&J
S-A
Novartis
GSK
Pfizer
* primary and hospital Source IMS World Review
Origin of IMS world top 75 products in
2006, share by value
Germany
1%
USA
60%
Japan
5%
France
7%
Switzerland
8%
UK 19%
Share of world market for
pharmaceuticals – UK 2006
World ex- UK
$581bn, 96.8%
Sources: IMS World Review
UK $19bn,
3.2%
£m
Annual NHS expenditure
90,000
86,610
80,000
70,000
Total NHS expenditure
60,000
50,000
40,000
30,000
20,000
Total NHS pharma
expenditure
10,543
10,000
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
Source OHE
Average daily expenditure per
person 2005/2006
housing
8.31
transport
3.67
education
3.12
Food and non-alcoholic drink
2.70
defence
1.48
clothing and footwear
1.35
alcoholic drinks
0.88
holidays
0.80
restaurant meals
0.73
Medicines
0.49
TVs
0.45
tobacco
0.27
0
1
2
3
4
5
6
7
Expenditure per head per day £
8
9
Prescribed medication is the most
common form of medical treatment
in the UK and affects the majority of
the population
• At any one time 70% of the UK population is taking
medicines to treat or prevent ill-health or to
enhance well-being
• 36% of older people take 4 or more different
medications on a regular basis
• Many long term illnesses are tackled by means of
prescribed medicines
Economic
Positive trade balance of £4.3 billion pa
UK Pharmaceutical Trade Balance
13,797
14,000
Exports
£m per annum
12,000
9,457
10,000
8,000
6,000
4,341
Imports
4,000
2,000
Balance
0
1980
1985
1990
1995
1996
Source HM Customs & Excise
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Employment
• 68,000 jobs
• 250,000 related jobs
Affordability?
Govts can afford ALL medicines for
ALL people :
they choose NOT to
• The UK is very slow at introducing the fruits of
advances in medical research
• Britain’s doctors are ‘probably the most
conservative in the Western world’ and the
slowest to use new drugs.
Prof Sir Michael Rawlins
Evidence to Health Select Committee on NICE
Access to Medicines
Reduced access to new drugs in Europe may
be reflected in higher morbidity and mortality
from diseases that are responsive to
innovative drugs
World Economic Forum
Wall St Journal (19 April 2004)
Pharmaceutical Industry
Donations for Tsunami Relief
Effort
Abbott - Donating $2 million in cash and
supplied $2 million worth of prescription drugs
and nutritional aids.
Akzo Nobel - Akzo Nobel has pledged
$400,000.
Amgen - Providing a $1 million contribution to
the International Federation of Red Cross and
Red Crescent Societies.
Astra Zeneca -Providing more than $600,000
primarily directed through the Red Cross
organisations. Also donating a range of
anaesthetics and an important antibiotics
through its own local marketing companies.
Baxter - Nearly 200,000 units of Baxter products
delivered to the affected areas
Bayer - Contributing approximately $1.4 million
worth of medicines, products and money to
disaster organisations
Top US Rx Products in 1999
Rank
Product
US Sales
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
millions $
PRILOSEC (Astra Pharm L.P.) 4,186
LIPITOR (Parke-Davis)
3,002
PROZAC (Lilly)
2,570
PREVACID (TAP Pharm)
2,356
ZOCOR (Merck & Co)
2,304
EPOGEN (Amgen Inc)
1,841
ZOLOFT (Pfizer)
1,737
CLARITIN (Schering)
1,533
PAXIL (SB Pharm)
1,516
ZYPREXA (Lilly)
1,494
NORVASC (Pfizer)
1,482
CELEBREX (Searle)
1,409
GLUCOPHAGE (BMS US Ph) 1,310
PROCRIT (Ortho Biotech Div) 1,203
PRAVACHOL (BMS US Ph)
1,178
AUGMENTIN (SB Pharm)
1,164
Medicines Contracting Strategies
Generic
Drugs
Oligopoly
Potential for Purchase/Contracting
Supplier Strategy
Monopoly
Impact of size of
Purchasing Organisation
Single
Hospital
Consortium
Regional
Purchasing Power
Size of Organisation
Ease of Co-ordination
National
Marketing
Definitions of Marketing
1.“The object of selling is to make the
customer want what the company has. The
object of marketing is to make sure the
company has what the customer wants”
Theodore Levitt
2 “Marketing is looking at the business through
the customer’s eyes” Peter Drucker
3 “Marketing is the identification and
satisfaction of customer needs at a profit”
Institute of Marketing
Pharma
Marketing Objectives
1
1
2.
3.
Enlarge the Market by innovation or product
development
Increase market share by emphasising:
product development for competitive
advantage.
persuasion effort for competitive advantage.
customer service activities for competitive advantage
Increase profitability by;
Increasing sales volume for profit leverage
eliminating unprofitable activities
price improvements
cost reduction
Key Players in the
Pharmaceutical Chess Game
Pharmaceutical
Finance/CEO
PPRS
Manufacturers
Patient Support
Government
GPs/Community Pharmacy
Groups
PCT’s
Procuremen
t
Consortia
Wholesalers
Doctors
DOH
Commissioning
Agencies
NPS
A
Clinical
Pharmacy
EMEA
Industrial marketing versus
Consumer marketing
Internal marketing or
External Marketing
Principles of Customer/Market
Segmentation
Benefits sought e.g. economy,convenience,
prestige.
Conditions of purchase e.g stringent, light
Geographic e.g urban rural
Usage e.g. light, heavy
Organisations personality e.g. risk taking,
loyal, power seeking.
Organisations demographics e.g. size,
specialities
Segmentation
Measurable
Accessible
Substantial
Unique in it response
Model of a Buying Centre
Buyers
Deciders
e.g. Trust Boards,
e.g. Government
PCTs
Influencers
e.g. Practice
Managers
Pharmaceutical
Advisers
The Buying
Centre
Gatekeepers
Users
e.g. Patients
e.g. Receptionists
GPs
The Marketing Mix (4P’s)
A. PRODUCT
Does the company have the right products now? - What are
the right products going to be in the future?
B. PRICE
Is the selling price right? - How do prices compare with those
of competitors or PI’s?
C. PROMOTION
What methods will you use to ensure all potential customers
are aware of your product and want to purchase it?
D. PLACE
What markets are you going to spotlight? - How will you
ensure product get to where they are wanted?
Product Differentiation
This term is used to indicate which buyers
perceive differences between goods and
services offered by different suppliers and
includes the extent to which their buying
decisions are influenced by such differences.
Sales Technique called “Benefit Analysis”.
The Product Life Cycle
Products
Patient Acceptability e.g. Sandostatin LAR, Zoladex
LA, EPO
Bioequivalence e.g. anti-epileptics, morphine,
nifedipine, mesalazine.
Product Licences e.g. Captopril, Taxol
Patient Loyalty e.g. pen devices, home delivery
Isomers - (Chiroscience) e.g.
Esomeprazole, Fluoxetine, Ca Folinate, Bupivicaine
Formulation e.g.Triazolam, Losec MUPS
Market Share & Market
Growth
(a) Market Share
Where a company tries to increase its
proportion of sales
(b) Market Growth
Where a company tries to increase the
total quantity of product used
BCG MODEL
HIGH
STAR
MARKET
GROWTH
RATE
CASH
COW
LOW
HIGH
PROBLEM
CHILD
DOG
RELATIVE
MARKET
SHARE
LOW
Promotional Tools
AIDA Model
Awareness = recall product identity
Interest = Recall advertising content
Desire = Attitudes/Buying intentions
Action = Purchase/sales and
reinforcement.
Rate of adoption of a New
Service
Promotional Tools
Advertising
Advertising Objectives
Increase awareness
Trial use
Education and informing
Changing attitudes
Increasing loyalty
Reminding
Building brand/company image
Conveying a specific message
Advertising
Print & Broadcasting aids
Packaging-inserts e.g PILS
Catalogues
Professional Journals
Brochures and Booklets
Posters & leaflets
Reprint of ads.
Point of Purchase displays
Packaging-outer
Mailings
Films
Symbols & Logos
Clinical Trials
SPC’s
Audiovisual material
Display signs
Promotional Tools
Advertising
Sales Promotion
Sales Promotion
Awards e.g. Baxters, AAH, MSD
Free of charge stock
Fair & Trade shows
Conferences
Demonstrations
Lunch time presentations
Rebates & Low-interest financing
Focus groups
Tie-ins
Promotional Tools
Advertising
Sales Promotion
Publicity
Publicity
Press Kits
Opinion leaders - Speeches
Seminars
Annual reports
Donations
P. R.
Promotional Tools
Advertising
Sales Promotion
Publicity
Personal Selling
Good day, could I interest you my new
drug?
Personal Selling
Sales Reps.
Sales meetings
Telemarketing
Incentive programmes
Salesman sample
Fairs & Trade shows
PRICING
Psychology Pricing
Settlement Discounts
Quantity Discounts
Seasonal Discounts
Low-interest Financing
Loss-leader Pricing
Sliding-scale Discounts
Captive-product Pricing
Compete against Parallel
Imports
Creaming vs Penetration
– Customer price reaction
– Competitor price reaction
Pharmaceutical Distribution
Channels
Medicines Supply Chain
Homecare
delivery service
R&D
Manufacturer
MHRA
Original patent holder
Production unit EMEA
Specials
Manufacturer
Production
unit
Production
unit
EMEA
MHRA
Generic
Supplier
PI
Supplier
Ward
D
W
I
H
S
O
T
& L
R
E
I
S
B
A
U
L
T
E
O
R
R
Hospital
pharmacy
Patient
Community
pharmacy
Dispensing
doctor
Channels Of Distribution
SUBMIX PLANNING
Examples Of Relationship
Marketing
Patient Care Partnership
PPI/OPD nurse
Health Management Awards
Conferences
Disease management
Marketing Practices
Removing products from the market before
patent expiry
Introduction of isomer or active metabolite
Changing formula or excipients e.g. Losec
Contesting patents
Additional product license indications
Anti-PI actions
Large multi-centres studies
Direct to consumer advertising
Good, Bad or Ugly
Marketing Practices?
Additional product license indications
Anti-PI actions
Direct to consumer advertising
Charging high prices in the UK
Supporting home care initiatives.
Enhanced safety process e.g. thalidomide.
Modulation of PPRS
Contesting patents
Good, Bad or Ugly
Marketing Practices?
Developing me-toos
Removing products from the market
before patent expires
Patient friendly administration devices
e.g injectable pens
Introduction of isomer or active
metabolite
Changing formula or excipients.