By Elisabeth Pena Modern Marketing in the Making September 2004 VIEW on Marketing Marketing executives from pharmaceutical, biotechnology, device, and diagnostic companies, ranging in size from small specialty to midtier to large and global, share the common challenges of shorter product life cycles, increased pricing pressure, and regulatory controls. The challenges and demands presented by a changing and increasingly crowded pharmaceutical marketplace are fueling an evolution of marketing tactics, as well as of the marketing professional. An increased focus on the patient and a renewed commitment to the physician are hallmarks of today’s marketing strategies. To more effectively reach a customer, whether that customer is a physician, patient, or payer, marketers need a deeper understanding of the science behind a product, as well as of the disease it treats. Communicating this knowledge to stakeholders to give them a better understanding of a product’s benefits is the ultimate goal. According to Best Practices LLC, successful companies recognize the need to commit sufficient and consistent marketing resources for a product throughout all phases of the product-development process. These companies understand that rapid sales uptake is a consequence of cumulative marketing investments over several years rather than an extravagant spend in a single year. Companies with successful drug launches have established a highly effective commercialization process that aligns research/clinical development efforts with evolving market needs to create real value for the company, patients, and physicians. (See page 10 for more information.) Pharmaceutical companies continue to expend enormous resources to deliver their marketing and promotional messages through a variety of media, including consumer advertising, professional advertising, field forces, and the Internet. Best Practices’ data suggest that companies spend between $13 million and $36 million to prepare a high-potential product for launch. Company executives also believe that what matters most is not how much money companies spend on marketing, but how well they spend it. Spending on Direct-To-Consumer Advertising Top 10 Spending Brands in 2003 Brand ($ in Millions) Nexium $233 Allegra 129 Prevacid 128 Clarinex 111 Viagra 110 Lipitor 109 Zyrtec 104 Advair 100 Celebrex 95 Zocor 94 Top Spending Pharma Companies in 2003 Company ($ in Millions) Pfizer $643 GlaxoSmithKline 486 Merck 341 AstraZeneca 264 Novartis 185 Aventis 141 Sanofi 129 TAP 128 Schering-Plough 111 Ortho McNeil 86 Top Spending Therapeutic Categories in 2003 Category ($ in Millions) Allergy $525 GI (acid reflux/heartburn) 361 Depression/Anxiety 267 High Cholesterol 239 Asthma 164 Osteoarthritis 163 Erectile Dysfunction 156 ADHD 116 Source: NOP World Health, East Hanover, N.J. For more information, visit nopworld.com. Source: NOP World Health, East Hanover, N.J. For more information, visit nopworld.com. Notes: Total spending for magazine advertisements: $938 million (29% of total DTC spending). Total for television advertisements: $2.1 billion (66% of total DTC spending). Source: NOP World Health, East Hanover, N.J. For more information, visit nopworld.com. Marketing Masters Mark Alfonso. VP of Marketing, Purdue Pharma L.P., Stamford, Conn.; Purdue Pharma and its independent U.S. associated companies are known for their pioneering research on a principal cause of human suffering: persistent pain. For more information, visit purduepharma.com. Peter N. Cholakis. VP of Marketing, Avitar Inc., Canton, Mass.; Avitar develops, manufactures, and markets innovative and proprietary products in the oral fluid diagnostic market, disease and clinical testing market, and customized polyurethane applications used in the wound-dressing industry. For more information, visit avitarinc.com. Thomas Ebeling. CEO, Novartis Pharma AG, and head of Novartis’ Pharmaceuticals Division Worldwide, Basel, Switzerland; Novartis is a world leader in the research and development of products to protect and improve health and well-being, with core businesses in pharmaceuticals, consumer health, generics, eye care, and animal health. For more information, visit novartis.com. Richard G. Ganz. President and CEO, OmniSonics Medical Technologies Inc., Wilmington, Mass.; OmniSonics is developing breakthrough treatments for vascular occlusive disease based on its innovative OmniWave acoustic technology. For more information, visit omnisonics.com. William N. Garbarini. Director of Marketing, Ferring Pharmaceuticals Inc., Suffern, N.Y.; Ferring Pharmaceuticals, part of the Ferring Group, specializes in the research, development, and commercialization of compounds in general and pediatric endocrinology, urology, gastroenterology, obstetrics/gynecology, and infertility. For more information, visit ferringusa.com. Buddy King. CEO, Athlon Pharmaceuticals Inc., Birmingham, Ala.; Athlon is a specialty pharmaceutical company that develops, markets, and distributes a full range of products indicated for symptomatic relief of coughing, congestion, and rhinorrhea associated with respiratory infections such as the common cold, influenza, bronchitis, and sinusitis. For more information, visit athlonpharm.com. Martin Mattingly, Pharm.D. Executive VP of Marketing and Business Development, CancerVax Corp., Carlsbad, Calif.; CancerVax is a biotechnology company focused on the research, development, and commercialization of biological products for the treatment and control of cancer. For more information, visit cancervax.com. Kathleen Milligan. VP of Marketing, Biovail Pharmaceuticals Inc., Bridgewater, N.J.; Biovail Corp., with headquarters in Mississauga, Ontario, Canada, is an international full-service pharmaceutical company engaged in the formulation, clinical testing, registration, manufacture, sale, and promotion of pharmaceutical products using advanced drug-delivery technologies. For more information, visit biovail.com. Lorenz Muller. Executive Director, Marketing, CV Therapeutics Inc., Palo Alto, Calif.; CV Therapeutics is a biopharmaceutical company focused on the application of molecular cardiology to the discovery, development, and commercialization of novel, small-molecule drugs for the treatment of cardiovascular diseases. For more information, visit cvt.com. Max Noble. Managing Director, Britannia Pharmaceuticals Ltd., Redhill, United Kingdom; Britannia is a niche pharmaceutical company specializing in products for diseases with orphan indications. For more information, visit britannia-pharm.co.uk. Heather Ready. Director of Marketing, Global, VISX USA, Santa Clara, Calif.; VISX is a global leader in the design, manufacture, and marketing of proprietary laser vision correction technologies. For more information, visit visx.com. Mark R. Straley. Chief Operating Officer, AusAm Biotechnologies Inc., New York; AusAm is a biotechnology research and development company commercializing both diagnostic and therapeutic products to identify and treat major diseases. For more information, visit ausambiotech.com. The Forum A major change, and one that is still evolving, is the increasing focus on patients. What ultimately drives all of our branding and DTC efforts — and helps make them so effective — is a consumer-oriented approach we call C4 Insights: customers, consumers, competitors, and compounds. Thomas Ebeling Thomas Ebeling CEO Novartis Pharma AG Challenges: Then and Now EBELING. Two of the major challenges we face are pricing pressures and shorter life cycles for medicines. As the population ages and the bill for healthcare rises, government pressures on pricing will continue. It is important to note, however, that medicine accounts for only 10% of healthcare costs, and medicines can actually lower costs for the system. Innovative drug therapies have made major achievements in the drop in death rates for diseases such as hypertension, emphysema, early infancy diseases, and atherosclerosis that are treated with pharmaceuticals. The pharmaceutical industry needs to continue to develop truly innovative drugs to continue to deliver value for patients. And because of a shortened time frame for entry of competitive drugs and at the same time the rapid introduction of generics when patents expire, the life cycles for medicines are shrinking. This decrease makes our marketing strategies even more important in order to maximize our ability to reach physicians and patients quickly and effectively. GARBARINI. Extending the product life cycle by finding ways to keep the product and/or treatment new in the mind of customers is a big challenge, and it is one that gets more difficult as a product enters its latter years of marketing. This has become very important, maybe more so today than it was five years ago, because more major-revenue products are coming off patent and generic companies are being more aggressive than ever in introducing their products. GANZ. The biggest challenge that we face today in marketing is clearing away the fog. Our customers are now inundated with tremendous amounts of information, but the classic elements of a marketing plan have not changed. We still need to know how to segment, target, position, and price, but now our competitors have improved and the expectations have increased. To get through the fog requires a much higher level of skill. STRALEY. One aspect of marketing that I have tried to change in the organization and with the marketing teams that report to me is challenging all of the traditional tactics that have been done in the past. The first thing a marketing person wants to do is produce a brochure and advertisements. I try to get everyone to take a step back before they begin producing collateral materials. This is even more important today than it was five or 10 years ago because there are so many more options out there, and the money available for marketing efforts has decreased. We have to be more focused. CHOLAKIS. The challenge is to do more with less. Compression has become a common theme. Resources, product life cycles, and prospect and client “air time” are becoming increasingly compressed each year because of financial and technology market pressures. Five years ago, the Internet was just evolving as a B-to-B marketing tool; now a Web presence is a mandatory and growing component of most strategic marketing programs. Real-time contact with clients, prospects, and suppliers on both a one-to-one and one-to-many basis is a very powerful tool, but is equally difficult to manage effectively. ALFONSO. The biggest challenge we face in marketing pharmaceuticals today is that product life cycles are so much shorter than they used to be. We used to be able to count on a 12-year to 15-year life cycle for a new medication. Five years ago, this time frame dropped to about 10 years, and today we often have only five or six years on average. There are a number of reasons for this. For one thing, it takes much longer today to develop a new drug, obtain regulatory approval, and bring the medication to market. Furthermore, generics arrive on the market much more quickly than they once did, and e-commerce helps these generics acquire retail distribution more rapidly as well. In addition, market share is often eroded by the introduction of branded competition from drugs with similar molecules even before generics enter the market. With less time available to recoup the enormous investment in research and development, marketing today must focus more on a product’s profit contribution than just increasing market share at any cost. READY. Competing within markets that are impacted by ever-changing economic, political, and global conditions is our biggest challenge. This broad array of factors challenges our ability to anticipate, proactively respond, and meet our marketing goals. Marketing plans are formulated with certain market assumptions in mind. When these assumptions are impacted by volatility in the marketplace, it challenges the heart of the planning process. As the level of volatility has increased during the last five years, planning horizons have narrowed, which forces us to work within a more predictable time frame. KING. The challenges today are a little different from five years ago. There has been an evolution within marketing. The marketplace is much more crowded from a sales representative standpoint. It’s more difficult for traditional sales representatives from smaller, midtier pharmaceutical companies to get the time to talk to the doctor about products, differentiate products, and raise the voice of products. We don’t have the budget for direct-to-consumer advertising, and some physicians have become accustomed to hearing messages in this way. EBELING. The increase in the number of sales representatives has created a saturation effect, so it is more difficult for sales representatives to obtain access to doctors or spend quality time talking with the physician. Better quality of calls, targeting, and other means of reaching doctors have, therefore, become even more important. GARBARINI. On the one hand, direct selling has become harder as it has become more difficult to keep physicians’ attention. For instance, there are a greater number of sales representatives calling on each physician, there are more professional journals than ever with physician advertising, and fewer physicians want to participate in activities such as dinner meetings and speaker events. On the other hand, there are more indirect selling methods that can provide adequate return on investment, and more and more specialty vendors can help pharmaceutical marketers in this area. The Internet has opened an effective way to educate consumers about diseases and their treatments. The Web also has provided a forum for pharmaceutical marketers to speak to physicians through mechanisms such as e-detailing. The market will evolve in such a way that consumer empowerment will likely continue to grow, and the physician audience will continue to be difficult to penetrate. Pharmaceutical marketers who can find creative ways to reach their customers and stay ahead of the ever-increasing competition will be the ones who come out on top. STRALEY. As we develop tactics around a marketing plan I try to get the teams to fully develop fewer tactics and fully fund fewer tactics. We try to develop deeper plans as opposed broad-based tactics. At the same time, I try to drive metrics to challenge and make sure that we can track and measure the investments we are making. Tracking and measuring marketing efforts and promotional efforts are two of the biggest changes in the last five or six years. MATTINGLY. I have worked in the specialty fields of oncology and HIV/AIDS for the past 10 years, and a major challenge for these areas is how crowded they have become. The growing number of traditional pharmaceutical companies and sophisticated biotechnology companies developing highly targeted therapies means marketers have to be disciplined in communicating key value drivers. They need to be clear and focused in their messaging. Increasingly, this targeting can result in increased resource requirements to accomplish marketing goals. NOBLE. The biggest difference during the last five years is the regulatory control of advertising and the various legislations with regard to what we can and can’t say. Now we have to be so careful. The Makeup of a Marketer ALFONSO. The marketing function has changed dramatically in the pharmaceutical industry in recent years. Where once marketing was primarily tactical, focusing on the creation of promotional materials and visual aids, it is now a highly strategic function that coincides with the company’s commercial goals and direction. In addition to working closely with sales, the marketing function now partners with research and development to help evaluate the commercial viability of new chemical entities at a very early stage and with licensing and business development to ensure that potential alliances fit a company’s core competencies. GANZ. Most companies have a much more scientific approach to the marketing discipline today. They have moved from an intuitive approach to an approach that is validated by years of experience. One of the risks of the validated approach is that creativity diminishes. Therefore the challenge for the future is to discover additional ways to clear the fog and engage the customer in a meaningful way that changes behavior. NOBLE. When I started in marketing 30 years ago, many executives came from different backgrounds, such as pharmacy, consumer goods, etc., and they applied conventional marketing techniques to pharmaceuticals. That has changed; today to be in marketing one has to have a much greater technical understanding of the subject matter and of the disease area. STRALEY. The new rank of senior marketing professionals will have a broader base of experience from other parts of the organization. If marketers don’t understand the impact of customer service or the supply chain on the customers then they are missing a degree of granularity that helps with making decisions. Marketers will need to spend time in a number of different functional groups to be successful and efficient as they go forward. CHOLAKIS. The days of marketing based upon product features and pricing are gone. Today, life-sciences marketing needs to become less product oriented. The competitive landscape’s increasing demands have companies competing on overall value, products, and services, which will result in the highest possible return for resources invested in the target market. Our industry’s marketing strategies need to evolve just as they have in the technology and financial industries. MULLER. In the past, very successful blockbuster products were launched by one or two people. The breadth of what could be done in marketing was relatively narrow so someone at a fairly junior point in his or her career could be launching a product and have almost complete brand responsibility. Today, with more elements in the marketing mix, companies need a much bigger team to effectively launch a brand and to efficiently spend the money that is allocated toward promotion of a product to customers. Within large pharmaceutical companies, marketing departments are more compartmentalized. Someone is responsible for promotion, another person is in charge of science, and so on. It’s harder for people to get a broad marketing experience quickly. One of the advantages of working in a smaller company is that marketing people have an opportunity to wear many hats and get a broader experience than they could at a larger company where there is a more established way of marketing a drug. EBELING. I believe that the importance of the marketing role in pharmaceutical companies has been elevated in recent years, as the importance of patient education has increased. Success in marketing and educational initiatives is crucial to whether a product becomes a blockbuster or not. Since competitive exposure comes faster today, better marketing skills are imperative. KING. The marketing profession has changed and evolved, but the principles are still the same: trying to achieve recognition of the product in the physicians’ office and getting time to discuss the advantages of one product over another with physicians. Today, however, the rep has become a commodity. Specialty reps are the next evolution. These reps are taking on new roles, which means they need more specialized degrees and experience in nursing or pharmacy work, for example. Physicians, in some cases, are becoming sales representatives. The types of people who are coming into marketing have changed. NOBLE. Conventional marketing, such as advertising, sales representatives, gifts for physicians, is in the past. Marketing materials for doctors need to focus on what is good for the doctor, in other words, addressing the cost benefit. Going forward, I believe there will be less above-the-line advertising and more symposia and other activities that provide services to doctors. There also will be documentation that supports a cost-benefit analysis with technical backup. I see marketing becoming an automatic source of information about the product for the doctor. MATTINGLY. A major change in marketing as a profession has been the evolution of specialty markets and their importance. Ten years ago the industry tended to refer to these markets as “niche,” which translated into small market and limited opportunity. An oncology franchise, for example, was comprised of many small products. Today, there are numerous oncology products that are achieving worldwide sales of more than $1 billion. Products such as Gemzar, Taxol, Rituxan, Gleevec, and so on, have fundamentally altered the way the industry views markets with small patient populations. I believe this is a trend that will continue as new and more effective oncology products are brought to market. Fast Track to the Top GANZ. There is a longstanding debate about whether the career path for marketers should begin in sales or with traditional marketing education or experience. Clearly, to be a successful marketer one has to understand the sales process. Some people have the capability of understanding that process without having practical experience. Other people require significant experience and still might not fully understand the process. One of the reasons marketing has been viewed as a stepping stone is that often marketers touch many parts of the commercial organization. As a result of the breadth of that experience, many marketers are viewed as qualified candidates for roles of increasing responsibility. GARBARINI. In our organization, our president was a former product manager who later became a senior marketing executive, so building a career through marketing is certainly not out of the question. Today, I think more and more companies are trying to integrate other functions into marketing, but keeping marketing the focal point. By its nature, marketing compels individuals who work in the discipline to be hands-on and have detailed knowledge of a broad range of issues that affect the business. This knowledge includes sales, finance, medical affairs, and product development. To be involved in the business on this level naturally trains the marketer for higher responsibility. ALFONSO. As a result of its evolution from a tactical to a strategic function, the role of marketing has been elevated considerably in today’s pharmaceutical company. In effect, marketing sits at the center of the wheel of corporate disciplines. Market research, for example, is required to validate the need for a new medication as a way to identify the key point of difference that will set the medication apart from the competition. For many years, the path to the presidency of a pharmaceutical company was generally through research and development, but today this path can easily be through marketing. STRALEY. Senior managers in most companies have done a stint in marketing, but I don’t know of any senior managers who have functionally grown up through sales or marketing. Marketing is an important competency to have and one has to do time in marketing to understand it, but I don’t see too many people coming up through the marketing silo to run a company. MATTINGLY. Frankly, I think marketing always has been viewed as one of the places to be in the industry. When I started my career at Eli Lilly in 1983, marketing was where people wanted to be and that has been true at all of the companies at which I have worked. Having said that, I feel strongly that a diverse background that includes sales, marketing, new products, market research, and team leadership is ideal for someone who aspires to the most senior levels of a pharmaceutical company. CHOLAKIS. The track records of successful companies with staying power indicate that marketing provides and supports the corporate road map. Companies that do not take advantage of the resources provided by marketing individuals usually rocket to the top and fail. Marketing plays a strategic role in a company that is equal in stature and importance to all other roles. MILLIGAN. No single discipline provides a straight shot to the top of a company, but marketing experience is clearly very highly valued among the leaders within our industry today. The value derives from the fact that marketing, as a discipline, is customer-oriented in a proactive and strategic manner, rather than a reactive one. The best-run marketing departments help provide a compass for the company in terms of which direction it should go and how it should invest time and money. This role requires strong business acumen and leadership skills, among other traits. Many of the skills important for success in marketing are also transferable to other positions, be they lateral or higher. These attributes, in turn, help equip individuals to achieve broader positions within a company. Individuals working within marketing departments also gain an excellent perspective of how the various functions within the company need to align to meet company and brand goals, which is invaluable as their careers advance. NOBLE. I quickly discovered in my career that the people in the marketing department were making the major decisions for the company. Generally, the people who run pharmaceutical companies have had some marketing experience. Companies are, and should be, run by marketing people. Pharmaceutical companies certainly shouldn’t be run by production or financial people. Other disciplines are needed as well, but the days of a research and development director, the human resources person, or the accountant becoming the president of the company are diminishing. Creating an Integrated Team MATTINGLY. Talent, experience, and diversity are the key components to an integrated marketing team. A marketing team should have a mix of fresh thinking that may come from a new MBA graduate or an experienced marketer who knows how to get things done. I always like to have people on the team who have actually had to sell something. They keep us all honest in terms of what matters to the customer. Pharmaceutical companies that are on the cutting edge of integrated marketing are aligning messages and strategies with other corporate disciplines, especially corporate communications and investor relations. Key message delivery can be driven by either of these communications strategists, and marketing must line up its product messages with the broader corporate messaging. EBELING. The first main component of an integrated marketing team is a shared focus on the patient need by leveraging physician and patient insights to effectively reach target audiences and convey the product’s benefits in a way that is most impactful for them. At Novartis, we continue to concentrate first on efficacy and safety, and then we take the next step by addressing the emotional benefits for the consumer, the caregiver, and for the physician. READY. The key components to developing an integrated marketing team include thinking outside the norm as to the background and experience needed to complete the team. The team members should possess a broad array of skills and experiences that they can bring to bear on the challenges they face. Including team members from outside our industry is one way to enrich the team and provide a different point of view for defining marketing directives. Another method is to develop a group of outside sources to augment the skills companies have internally. It also is important to have effective vehicles in place to ensure good communication within the team, so people know the focus of their colleagues and can provide direct input. I also believe that an integrated marketing team should be unified under clearly defined marketing goals. This helps to ensure that everyone is pulling in the same direction. MULLER. It is important to get the right people in place. I like to hire curious people. An integrated marketing team needs to have people who have functional expertise and who also understand the other disciplines that are required. Brand managers need to understand what their counterparts in other functions are thinking and the contributions those people make. Someone who is responsible for promoting a drug to doctors needs to be curious about how the medical-affairs perspective, the regulatory perspective, and so on, impacts the marketing strategy. That curiosity inherently pulls the team closer together because people realize that the individual is interested in not just driving his or her own agenda but in developing a plan that incorporates or embraces all different perspectives. That makes a much stronger marketing plan. STRALEY. To get a marketing team to develop as an integrated group it is important that everyone is involved in very early discussions around strategy. Everyone has to understand the decision-making process all the way back to the marketing assessment and the market research. The team needs to understand the basis from which decisions were derived. There is a lot of communication that is involved, as well as a lot of checking and rechecking. There needs to be basic communication. GARBARINI. Recruitment is the first piece to developing an integrated marketing team. Recruiting people with knowledge and experience is important, but they also have to have the ability to fit in with the team and the team’s dynamic. After recruitment, training is essential. Training the person for the role that the new hire will assume, as well as training on other roles within the department, ensures that team members will complement and supplement each other’s work when required. For the team to be effective, regular group updates and idea sharing are critical. This helps the team self-evaluate and allows all members to contribute to team performance. It is critical for the marketing manager to foster interdependency among the team outside staff meetings to maximize idea generation and flawless implementation. NOBLE. First, team members have to believe in the product and, clearly, team members need to be motivated. But, as part of an integrated marketing team or campaign, the doctor is the most important member, although one shouldn’t underestimate the patient perspective. MULLER. We include people on our marketing teams who are a little more junior. Therefore, as our environment changes we have a commercial team that can adapt quickly. We can move team members around as the market and the dynamics of the business environment change. And the benefit from their perspective is that they get a much broader set of experiences more quickly. One minute they are working on a brand-marketing strategy, the next they are working on business-development activities, and then they might be working on project management. EBELING. At Novartis we look to fast-moving consumer goods companies to recruit top talent. Novartis has attracted marketing experts at all levels from companies such as Pepsi, P&G, and other marketers to learn from other industries and to better reach patients. CHOLAKIS. Marketing must be integrated with all aspects of an organization. A close relationship with sales, R&D, finance, manufacturing, clients, business partners, industry experts, and associated constituencies produces the best results. The Comarketing relationship STRALEY. When a relationship involves a comarketing partner, there needs to be a fairly significant level of clarity and trust between the two parties extending back to when the agreement was being negotiated. There has to be a clear direction of understanding of what the “marriage” is setting out to accomplish. Both parties have to come out feeling as if their best interests are going to be served. MULLER. My experience consistently has been that it is critical to invest the time up front when entering into a comarketing relationship to ensure that the contractual agreement is established and set up for mutual benefit. Success long term requires that both parties receive a tangible benefit from the partnership. As companies develop term sheets and negotiate how to work together, each company has to evaluate what the other needs from the relationship. This not only makes for a better contract, but this perspective also makes the relationship more sustainable going forward. The types of relationships that go on for years and years are based on the premise of mutual benefit, and those that tend to fall apart started out with an imbalance in terms of the benefits for each party. EBELING. It is important to be aligned in vision, strategy, actions, and execution. It’s also essential to form a superb team spirit among the partners. MATTINGLY. Both sides need to have people who are jointly accountable to the success of the marketing endeavor. There needs to be senior-level interaction from both companies as well. To ensure trust and collaboration, each company needs to be transparent in how the collaboration fits within its priorities and strategies. It is critical that each company’s marketing team has an understanding of how its goals align with the goals of its comarketing partner. NOBLE. At the start of the relationship it must be made clear that comarketing means comarketing and not competitive marketing. Each partner has to have a complete understanding as to what is to be achieved. If the objective, for example, is to create more noise for a product, each party has to discuss at the start how much noise to create. And, as with all partnerships, one partner should not have more at stake than the other. Comarketing partnerships should be evaulated carefully, account for size and compatibility, and the two parties should get to know each other before they decide to collaborate. GARBARINI. Effective communication is probably the most important practice when coordinating activities with a comarketing partner. Communication ensures the integration of team members across various disciplines, which is critical for success. Also critical for success is the establishment of clearly written objectives along with milestones and timelines for activities. This guarantees that both partners understand the goals of the partnership, despite cultural and/or operational differences that may exist between the partners. ALFONSO. It is absolutely essential to have a clear, common vision and shared objectives. To comarket successfully, there needs to be a merging of two cultures, and the chemistry must be right. Mutual trust also is essential. Additionally, each company needs a champion in senior management to drive success. Finally, the joint venture should have measurable goals. And everybody involved needs to understand how to coordinate resources to achieve these common objectives. Communicating with the Communicators READY. A marketing agency partner should behave as though it is a part of the company. Having a strong commitment to meeting the goals defined by the relationship also is very important. All of the efforts should appear seamless to the external customers who receive the product, service, etc. The agency’s or marketing company’s output should be viewed as if it were produced and developed in house by the company. Marketing partners should measure their success in the relationship not by completion of predetermined deliverables but upon the impact their activities have on supporting the goals of the company. GARBARINI. Whether working to develop a strategy, a new program, or a new creative execution, the product-management team can optimize results by ensuring the agency has a deep understanding of what goals and objectives should be accomplished. I think we often assume that the agency sees our challenges as clearly as the marketing team does, and I don’t think that is always the case. The more clearly we give direction and define our objectives, our partners are more likely to come back with a unique solution. To facilitate this, we hold weekly meetings, provide an office to our agency team, and integrate our public relations and advertising agencies into the strategic development and tactical implementation for our brands. MATTINGLY. Marketing partners should be treated as a true partner. They need to hire people who have demonstrated expertise within a specific area. All companies tend to say they can do everything for the client, and how true this is depends on the talent and experience of their teams. It is important to work with people you respect and with companies that have the most talent and depth of experience, not those that can just give a great pitch. CHOLAKIS. Establishing continuous communication of a shared vision, including complete and detailed definitions of responsibilities and deliverables, always provides the best foundation for a partnership. Mutually established benchmarks and metrics can then be developed and monitored to shape future needs. NOBLE. I have met people who have no idea about their marketing campaign because they gave it all to an agency to do. I think this is not a very good idea, because as marketers it is our product and we should know what we want to say. We may not be sure about the schedule or other technical aspects, but to give it over to an agency and say “do it for me” without providing a lot of input is a mistake. Marketers need to work very closely with their agency partners. ALFONSO. Purdue always has been extremely loyal to its vendors. We treat them as true partners. We have been working with some of our key advertising agencies for 10 years or more, and I believe that this has been an important ingredient of our success. Once a partner has developed a core competence in our specific field and has worked with us to achieve our brand objectives, it makes sense to continue the relationship. We want to be our vendor’s favorite client, and we generally are. STRALEY. The best relationships I have had with marketing communications firms have been when they are involved fairly early in the process. They should be with the team when the strategy is developed. The strategy is going to point the advertising and marketing communications groups in the right direction. And people from the marketing and communications groups can act as a sounding board. EBELING. The agencies we work with need to understand the way we think, but at the same time be able to challenge us to develop the best and most creative ideas for our brands. If I use an agency, I want to be able to count on it to give me the best talent. And I want to feel that the agency is thinking about our challenges and problems consistently on a daily basis. In addition, our agencies need to help us to present our brands consistently around the world, so that we don’t have marketing efforts from various countries that have a different look and feel. MULLER. We are a small company with limited resources and have worked very diligently to develop strong strategic relationships with our public-relations companies, advertising agencies, medical-education agencies, e-communications companies, and so on. I have found that the most successful relationships are ones where we don’t treat the partner as a vendor. We are most successful when we can take our partners’ more senior people and integrate them into the development of our marketing strategies and tactics. This way we get an objective, external assessment of the marketing strategies, and they get to understand our business strategies in a much more meaningful way. Our partners also get to understand our company’s mission, goals, and ethics. This makes for a more sustainable relationship, one that is based on mutual benefit. MILLIGAN. When working with marketing partners, three things are critical. The first is to make sure that the agencies and vendors are integrated into the brand team so that they are well aware of the brand’s objectives and performance, the brand strategies, and core tactics. This instills a sense of ownership in the success of the brand. Second, it is equally important that the company not look at its agency partners as staff extensions. It’s simply too expensive to take that approach. Instead, it’s important to keep an outcome-versus-activity orientation with agency personnel. By that, I mean one must think very clearly about the specific deliverables expected, confirm that the cost matches the value that will be provided, and then proceed accordingly. An easy trap that busy brand managers can fall into is to give their marketing partners vague direction without remembering that every hour of time costs money. The third essential element is feedback and recognition. When marketing partners do a great job, tell them. When something is not quite right, let them know that too. But this needs to be done in a way that is respectful of them as professionals and with the knowledge that during the course of the discussion, you may discover ways your own team contributed to the underperformance. KING. Communication with marketing partners is important. They need to listen to us and what message we want to project for a product. They have to understand us and we also have to understand them. Our relationships with our marketing partners have helped us a lot. From our perspective, as a midtier company, our agency partners help set up-to-date, focused new ways of presenting messages. This has been very important. NOBLE. There are so many agencies and so few clients. Companies that use agencies can be selective and can actually be fairly demanding. Plan for Success MILLIGAN. The most critical element for a marketing plan’s success is matching the strategy and tactics to a company’s capabilities. For example, some companies are capable of implementing very sophisticated physician segmentation and messaging strategies. Others, which may lack alignment between marketing and sales or the appropriate data systems, need to stick to a very uniform approach to the marketplace. The best strategy needs to be one that can be implemented extremely well. GARBARINI. A successful marketing plan is based on the contribution of a multidisciplinary team within the organization to ensure the plan is focused, relevant, and can be carried out. Any plan that is not agreed upon throughout the different areas of the organization, or that cannot be executed throughout the organization, will not optimize the performance of the brand. Also, buy in throughout the organization will ensure that the plan doesn’t sit on a shelf somewhere gathering dust. The marketing plan is meant to be a road map for brand success in the coming year and beyond, and it should be referred to in order to gauge the team’s performance against stated goals. EBELING. Focus is key: patient focus — what ultimately drives all of our branding and direct-to-consumer efforts and helps make them be so effective is a consumer-oriented approach, which proposes a much broader and deeper definition of insights than pharmaceutical companies have traditionally held; resource focus — resources should be focused on key brands to maximize potential and not spread our efforts too thinly across the portfolio, superior share of voice is also critical; talent focus — we are looking beyond pharma to recruit top talent, and focusing on the talents of the team is critical; global focus — a global strategy and execution need to be shared by everyone; if there are local amendments and changes there must be good reasons and these are really the exceptions. MULLER. A fundamental foundation for a successful marketing plan is to invest the resources up front to understand the marketing dynamics that exist in a therapeutic area through thoughtful and rigorous analysis. A company should not under invest in market research. No matter how limited resources are, up-front investment is necessary to understand the marketplace and the market dynamics, as well as customers’ needs. Also critical to a marketing plan is that it is shaped by perspectives from multiple functional disciplines inside and outside of the company. If a team does not solicit input early on, not just for the tactical plan, but for the strategies as well, decisions about target audiences and positioning will be inherently biased. MATTINGLY. Simplicity and focus are key. Most marketing plans are way too complicated. They look beautiful in the binder, and their intricate nature is impressive. In the end, however, for those responsible for the successful implementation of the plan it must be clear and understandable. A first-rate plan also must be based on solid market research conducted with the customer in mind. If marketers ask the proper questions of the customer, based on solid research going in, then listen to the answers, they are likely to get the ultimate positioning correct. If they rely on their gut or past experience, they may or may not be right. Finally, marketers can’t be afraid to course correct, if needed. All marketing plans must have an element of flexibility to react to changing market conditions and to continually optimize the resource mix. KING. The implementation of the marketing plan is a big factor in its success. Experience shows that some people change the marketing plan too often and too quickly. It takes time to evaluate whether a plan is going to be successful or not. Once a company has an integrated marketing team and the team has come up with a plan, senior management has to express confidence and patience and let the plan take its course before deciding if the plan will be successful or not. ALFONSO. As Thomas Bonama of Harvard Business School said years ago, “When the best-laid plans do not produce expected sales, implementation is usually the problem.” If a marketing plan is to be successful, everybody must buy into the plan. It’s important to constantly remind people of the plan’s goals through regular communication. There also needs to be follow up to make sure each component is being implemented. And there needs to be enough flexibility to adjust the plan’s individual components if needed. STRALEY. A marketing plan has to be simple and grounded on the things that can be done as opposed to things on a wish list. I have seen too many 300-page marketing plans sit for 12 months until it is time to create the next one. A marketing plan has to be clear and simple throughout. Anyone in the organization not involved in its creation should be able to pick it up and understand it and know what to do on Monday morning if he or she reads it. READY. The most critical element to the success of a marketing plan is having clearly defined and measurable goals that are well communicated to the team. This plan should take into account internal and external market drivers and include several what-if scenarios that could impact a company’s strategies. This enables a company to be responsive to market factors while driving toward its goals. NOBLE. Market research before launch is the most critical factor of a marketing plan’s success. A team can’t ask enough doctors, patients, government officials, or pharmacists too often: “what would you do if you were offered … ?” Market research will give the team the right price, the right message, the right distribution, and so on. muller. Marketing teams need to spend the time to simplify the business plan and identify the key market drivers. Teams need to identify the three or four things that are driving the marketplace and develop the strategies that will shape those drivers to their advantage. Many plans miss this point. Pharmaceutical companies often don’t invest in this activity because they are under time pressure to get things done. As a result, companies have complex plans that are diffused. Teams are not able to rally enough resources to target the specific drivers to change physician and customer behavior in ways that benefit their product or the company. CHOLAKIS. Efforts must be taken to assure that all constituencies are committed to the core strategy. Additionally, communication channels, both internal and external, need to remain open. GANZ. Companies are experimenting with marketing products that span the boundaries of commercial approaches. For example, physicians rarely differentiate between a pharmaceutical approach and a device approach. Rather, they identify a patient problem and seek the most appropriate solution. Companies have had a hard time finding the intersection between drugs and devices. In the future, however, that intersection will allow companies to make a lot of money. Ultimately, the solutions that parallel our customers’ thought processes will lead to rapid adoption. PharmaLinx LLC, publisher of the VIEW, welcomes comments about this article. E-mail us at [email protected]. Where once marketing was primarily tactical, focusing on the creation of promotional materials and visual aids, it is now a highly strategic function that coincides with the company’s commercial goals and direction. Mark Alfonso VP of Marketing Purdue Pharma L.P. Marketers who can find creative ways to reach their customers and stay ahead of the ever-increasing competition will be the ones who come out on top. William Garbarini Director of Marketing Ferring Pharmaceuticals Inc. The biggest challenges we face today are competing within markets that are impacted by ever-changing economic, political, and global conditions. The level of volatility has increased in the last five years, so planning horizons are more narrow to fit within a more predictable window of time. Heather Ready Director of Marketing, Global VISX USA The marketing profession has evolved but the principles are still the same: achieve recognition of a product in the physicians’ office and get time to discuss the advantages of one product over another with physicians. Buddy King CEO Athlon Pharmaceuticals Inc. Most companies have a much more scientific approach to the marketing discipline today. They have moved from an intuitive approach to an approach that is validated by data and years of experience. Richard G. Ganz President and CEO OmniSonics Medical Technologies Inc. The days of marketing based upon product features and pricing are gone. Today, life-sciences marketing needs to become less product oriented. Peter N. Cholakis VP of Marketing Avitar Inc. Marketers need to have a much greater technical understanding of the disease area than before. Someone with just a marketing background probably is at a disadvantage in pharmaceutical marketing these days. Max Noble Managing Director Britannia Pharmaceuticals Ltd. The marketing department needs to become the face of the company to the customer. To achieve this, marketing organizations and companies really need to understand the relationship between a customer and the company. Mark R. Straley Chief Operating Officer AusAm Biotechnologies Inc. Today, with more elements in the marketing mix, companies need a much bigger team to effectively launch a brand and to efficiently spend the money that is allocated toward promotion of a product to customers. Lorenz Muller Executive Director, Marketing CV Therapeutics Inc. Promotional Material Review Process Applicant Surveillance Complaints Submit Launch Submit Other Campaign Requests for Comment (Non-Launch) DDMAC Review Consult Yes Consultation Needed? No Historical Review (Launch or Non-Launch) No More Info Yes Request Info Needed? from Applicant “Non-Launch “Launch Letter” No (Surveillance) Letter” to to Applicant* Applicant** **End of *End of Launch No Enforcement Action Comment Campaign Review Needed?* Process Process Yes Enforcement Yes Enforcement Rounds? Rounds No No Action No Enforcement No More Info Yes Required Action Needed? Needed? Yes Untitled Letter Warning Letter Other Enforcement Actions Source: Food and Drug Administration, Rockville, Md. For more information, visit fda.gov/cder/handbook/ddmacrev.htm. A diverse background, which includes sales, marketing, new products, market research, and team leadership, is ideal for someone who aspires to the most senior levels of a pharmaceutical company. Dr. Martin Mattingly Executive VP of Marketing and Business Development CancerVax Corp. Launching Pharmaceutical Megabrands Best Practices LLC profiled a group of high-performing pharmaceutical companies that have demonstrated effective operating practices and winning strategies in the area of marketing pharmaceutical blockbusters. The benchmarking company identified several best practices being employed by these pharmaceutical companies in their pursuit to drive commercially focused drug development to create blockbuster megabrands. KEY FINDINGS Shape product-development strategies and programs through early and continuous commercial input. Companies with successful new drug launches have established a highly effective commercialization process that facilitates clinical and commercial collaboration at every product development stage. Visibly and consistently supported by senior leadership at these companies, the commercialization process aligns clinical-development efforts with evolving marketing needs to create real value for both the company and patients. This growing imperative requires pharmaceutical companies to break down the walls that have traditionally separated R&D from marketing and instead form a partnership that leverages the strengths of both talented medical researchers and skillful marketers. According to Best Practices’ report, companies that consistently launch blockbuster drugs foster a culture that actively supports productive medical and marketing collaborations. Marketing staff and research scientists at these companies coordinate their efforts as early as the preclinical phase. By developing and sharing clear goals and accountability, they create a transparent decision-making process. They communicate frequently to identify new market opportunities, evaluate competitive positioning, and address product development issues. This ongoing collaboration bridges the gap between breakthrough scientific discoveries and commercial potential, enabling top-performing companies to target and develop compounds with a high-market demand and clear competitive edge, leading to rapid sales uptake. Manage cross-functional teams to drive launch strategy development and implementation. Top-performing companies extend the partnership between R&D and marketing throughout the entire organization. Increasingly, they employ cross-functional teams to enhance both the efficiency and effectiveness of the development and launch process for new drugs. Cross-functional teamwork allows benchmark partners to compress development cycle time, increasing a product’s speed to market through close coordination of efforts and earlier resolution of downstream problems, i.e., regulatory approval, manufacturing capacity, and salesforce support. Despite these benefits, making cross-functional teams work often presents a major challenge. Best-in-class companies take a multipronged approach to managing and coordinating cross-functional teams. They carefully select the right mix of experience, skills, and personalities to promote a dynamic exchange of varied perspectives. They recruit team leaders who demonstrate strong project management and interpersonal skills as well as technical expertise. While managing phase-to-phase transition seamlessly through early planning and retention of core team members, they also time the involvement of different functional areas based on the specific needs of each development phase. Additionally, best-in-class companies deploy robust technologies that enable rapid information sharing. They increase the ease and frequency of face-to-face communications through co-location and regular meetings. Critical to the success of a cross-functional approach is senior management’s commitment and support. Executives at the highest level play an important role by transcending organizational boundaries and rallying around shared corporate objectives and strategies. They also create an incentive system that rewards and recognizes collaborative innovation. Employ broad-based market research to develop insights on complex and evolving customer needs and competitive dynamics. Market research always has been a cornerstone of marketing planning support. Increasingly, market research is becoming a strategic function that drives key decisions in new product development and launch. According to benchmark data analysis, top-performing benchmark partners conduct a wide spectrum of market research from preclinical to postlaunch. At each development phase, market research provides critical market data and insights that drive informed decisions ranging from the target product profile to clinical-trial design, competitive positioning to branding and Phase IV studies. Most notably, best-in-class pharmaceutical companies are increasingly employing market segmentation research tools to help them understand attitudes and behaviors of patients and consumers as well as physician prescribers and pharmacists. Additionally, the amount of time and effort to understand the needs of payers, professional and patient advocacy groups, and other key customer audiences is growing as an essential part of new product launch planning. Manage all thought-leader segments to shape commercially focused products and ensure optimal market impact. Benchmark partners stress the importance of managing thought-leader development as an integrated, multiphase process. They describe a new era in which the most sophisticated thought-leader management systems segment key influencers and involve each group in different activities during the evolving stages of drug development. Most companies prioritize thought leaders by hierarchy of impact (global vs. continent or country unit). Some companies now distinguish research-focused thought leaders from patient-focused thought leaders, involving both in the development process to ensure diverse perspectives. A few benchmark companies already engage nonphysician thought leaders, such as representatives from payers and patient advocacy groups, in the new product development and launch process. Companies seek to tailor their efforts, activities, and relationship investments to match the value of each thought-leader segment and to reflect the roles of each segment at different points in time. Such an integrated approach ensures that companies optimize their resources and effectively build relationships with the most influential thought leaders who can help shape clinical development, market positioning, brand development, and market acceptance. Companies are aligning marketing resources to provide early, ongoing, and consistent support throughout the entire product development and launch cycle. Align marketing resources to support market-development activities with key customer segments prelaunch and promotional activities postlaunch. All benchmark partners recognize the need to commit sufficient and consistent marketing resources for a new product throughout all phases of the product-development process. According to benchmark data, companies that launched top-performing brands share a set of common characteristics in their marketing investment patterns. First, they begin to allocate marketing resources for a new compound as early as the preclinical phase. Marketing personnel conduct crucial market research that helps identify unmet medical needs, market opportunities, and competitive issues, which are key components that drive early market assessment and product profile development. Second, top performers spend gradually and selectively on high-impact premarketing activities to create awareness, demand, and preferences for their new products. These companies understand that rapid sales uptake is a consequence of cumulative marketing investment over several years rather than extravagant spend in a single year. Executives also believe that what matters most is not how much money companies spend on marketing, but how well they spend it. Carefully targeting those activities with the highest impact on a new drug’s success in the market, best-in-class marketers invest heavily in such prelaunch activities as: thought-leader and advocacy group development; scientific meetings and symposia; medical publications; continuing medical education (CME) programs; public relations; and disease-awareness programs. At launch and postlaunch, top-performing brands build on their prelaunch market development activities and invest substantial marketing and sales dollars in: field force detailing and sampling, direct-to-consumer marketing, CME programs, and professional journal advertising. Source: Best Practices LLC, Chapel Hill, N.C. Prelaunch Marketing Spend by Phase Pharmaceutical companies increasingly recognize the importance of providing early and ongoing marketing support for a new drug throughout the development process. Data from the benchmark class suggest companies spend between $13 million and $38 million to prepare high-potential retail products for launch. Although the investment is about 15% of marketing spend for the launch phase, small sums of money can work like large amounts, compounding over time with surprising strength. Source: Best Practices LLC, Chapel Hill, N.C. For more information, visit best-in-class.com. $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Phase I Phase II Phase III Submission Pharmaceutical companies that launch top-performing brands share a set of common characteristics in their marketing investment patterns. Marketing experience is clearly very highly valued among the leaders within our industry today. The value derives from the fact that marketing, as a discipline, is customer-oriented in a proactive and strategic manner, rather than a reactive one. Kathleen Milligan VP of Marketing Biovail Pharmaceuticals Inc.
