Re-launching Pharmaceutical Mega Brands

Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

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EXECUTIVE SUMMARY

Abbott Laboratories Amgen AstraZeneca Aventis Bayer Boehringer-Ingelheim Bristol-Myers Squibb Eli Lilly GlaxoSmithKline Novartis Pfizer Merck Wyeth

Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters (SM-124) profiles an elite group of high performing

Number of Companies

pharmaceutical companies that have demonstrated effective operating practices

• 13 Companies Profiled

and winning strategies in the area of Marketing Pharmaceutical Blockbusters.

By studying other organizations’ successful approaches to

marketing blockbusters, your company can improve its multi-phased pre-launch marketing support to drive rapid uptake of new products. After reading this report, you will know how world-class pharmaceutical companies drive commercially focused drug development to create blockbuster megabrands.

Benefits of commercially focused drug development include

increased sales, increased speed to market penetration, improved product positioning and market acceptance, and greater marketing impact through

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Information Types • • • • •

34 Information Graphics 31 Data Graphs 401 Quantifiable Metrics 20 Manager Narratives 96 Best Practices

Report Length • 169 pages

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

market assessment and preparation activities. This online report summary includes key findings, report structure, sample best practices, a table of contents, project maps that illustrate the study's focus, and an order form to facilitate purchase.

METRICS INCLUDED IN THE STUDY Performance metrics enable executives to perform gap analyses and identify areas needing improvement. Metrics are an important complement to the qualitative best practices included in this study report. Best Practices, LLC analysts collected and analyzed the following key metrics for blockbuster product launches from the companies benchmarked in the study: • Marketing activities and frequencies at each product phase • Pre-launch marketing investments • Total marketing spend for global and U.S. operations • Pre-launch vs. launch marketing spend • Marketing spend by activity • New drug marketing investment by company, phase and activity • Composition and size of product teams • Marketing compensation levels • Product/Brand manager qualifications • Marketing publications staff responsibilities

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 research clinical development efforts with evolving market 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 this study, 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 Pre-Clinical 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

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

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 (e.g. regulatory approval, manufacturing capacity, sales force support). It is also valuable to develop a well-rounded product launch strategy by leveraging the knowledge and capabilities of diverse teams (market research, competitive intelligence, medical affairs, disease management, finance, strategic planning, public relations, etc.). Despite these benefits, making cross-functional teams work often presents a major challenge. Best-in-class companies take a multi-pronged 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-toface communication 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 has always 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 pre-clinical to post-launch. 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 companies are increasingly employing market segmentation research tools to help them understand attitudes behaviors of patients and consumers as well as physician prescribers and pharmacists. Additionally, the amount time and effort to understand the needs of payors, professional and patient advocacy groups and other key customer audiences is also growing as an essential part of new product launch planning.

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

Manage all thought leader segments to shape commercially focused products and ensure optimal market impact. Benchmark partners stressed the importance of managing thought leader development as an integrated, multiphased process. They described 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 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.Align 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 pre-launch and promotional activities post-launch. 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 Pre-Clinical Phase. Marketing personnel conducts crucial market research that helps identify unmet medical needs, market opportunities and competitive issues – key components that drive early market assessment and product profile development. Secondly, top performers spend gradually and selectively on high impact pre-marketing 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. They also believe 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 pre-launch activities: •

Thought leader and advocacy group development

•

Scientific meetings and symposia

•

Medical publications

•

CME programs

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

•

Public relations

•

Disease awareness programs

At launch and post-launch, top performing brands build upon their pre-launch market development activities and invest substantial marketing and sales dollars in •

Field force detailing and sampling

•

DTC marketing

•

CME programs

•

Professional journal advertising

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

REPORT STRUCTURE Our research uncovered winning strategies, team structures and investment patterns used by top pharmaceutical marketers to improve product development, positioning and acceptance, optimizing market impact and driving new product sales. Report findings are divided into five chapters: •

The first chapter, Developing and Deploying Integrated Marketing Support, includes a topic overview, benchmark data describing marketing activities at each phase of development, and extensive best practices about timing of marketing activities. For example, one benchmark company found that marketing support truly must start at the discovery stage. Group members work closely with research scientists and provide therapeutic area managers with market research data including: epidemiology of disease, unmet medical market needs, and market opportunities and size.

•

The second chapter, Investing for Maximum Impact, provides detailed data depicting benchmark partner spending habits at each phase of development. Chapter practices include key insights and lessons learned from marketing executives. A sample practice from this chapter follows on the next page.

•

Chapter three, Managing Team Structure, Communication and Transition, analyzes management team structure and responsibilities throughout the development process to prepare the market for product launch. The chapter also includes information on structuring marketing career paths and the responsibilities associated with each position. For example, one benchmark partner has established a Global Franchise Team for each of its therapeutic focus areas. This 15-person team provides commercial input for new drug development. This cross-functional team includes members from strong commercial backgrounds, including marketing, strategic planning and business development.

•

The fourth chapter, Driving Commercially Focused Drug Development, is divided into five subsections: Balancing Clinical and Commercial Concerns; Trial Strategy and Execution; Health Economics Concerns; Thought Leader Development; and Advocacy Group, Payer and Employer Influences on Drug Development.

•

The fifth chapter, Preparing Market for Rapid Product Uptake, reveals how top marketers and product managers employ thought leaders, public relations, and competitive intelligence to prepare the market for rapid product uptake. A sample practice from this chapter follows on the next page.

•

The appendices highlight more specific examples of marketing successes with product launches. Appendix A, Optimizing Commercial Resources for Launch Success, provides information on the resources invested in the marketing activities of blockbuster launches and marketing team structure and organization. Appendix B, Marketing Metrics at a Glance, highlights marketing metrics responsibilities, timeline and competencies, which evaluate marketing effectiveness. Appendix B includes the leading and lagging indicators for brand

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

performance.

Appendix C, Marketing Publications Staffing, details optimal staffing levels, staff workload

and staff optimization resources.

SAMPLE PRACTICES How much do benchmark companies spend for a new product’s marketing support in the years prior to launch? 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 suggests companies spend between $13 million and $38 million to prepare a high-potential retail product 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.

$17 $15

$5

Low High

Submission

$1

Phase III

$1

$5 $3

Phase II

$2

Phase I

$18 $16 $14 $12 $10 $8 $6 $4 $2 $0

Pre-Clinical

Marketing Spend (in millions)

Pre-Launch Marketing Spend by Phase

Phase

Incorporate input from national thought leader physicians to help shape the product during Phase III and submission, thereby building market acceptance. Leading pharmaceutical companies design clinical trials according to input they receive from thought leader physicians. However, as one benchmark partner said, “Clinical trial design is just the tip of the iceberg in terms of the overall medical research plan.” Successful product managers achieve rapid uptake by utilizing thought leaders to address a variety of market issues. One benchmark partner effectively manages a cascade of thought leaders from the global level down to region or key country units. At each level, the marketing team first makes sure

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

thought leaders understand the product and shares the results from clinical trials, actively seeking feedback. Thought leaders offer an important perspective on competitor products (both current and on the horizon), leading to a decision about what types of market research should be conducted. Toward the end of Phase III, key country units conduct market research to validate the theories of the thought leaders.

According to a U.S. marketing manager at one partner company, this is an important step since

differences often surface among physicians.

For example, a researcher at Emory University may view a

hypertension treatment quite differently from a primary care physician.

In an iterative process, marketing

personnel take market research back to thought leaders, attempting to understand the rationale behind their views. “We say, ‘Here’s what your peers are telling us. What do you think about that view?’” This may result in changes to the medical research plan or product positioning, and often sparks additional research for new indications. A key question the company seeks to answer in Phase III trials is: What kind of qualitative and quantitative market research should be done around positioning and pricing? With the valuable input from thought leaders, a detailed plan is developed and then implemented from late-phase clinical trials to the submission stage. Two and a half years before launch, this partner company’s U.S. marketing group formally establishes its own thought leader panel consisting of about 12 physicians, perhaps half of whom will have served on the global advisory board. The consistency of thought leaders throughout all of the clinical trials offers clear advantages such as a higher level of familiarity with the product, and adding new thought leaders adds the benefit of some fresh perspectives. The U.S. advisory panel has an expanded role: examining and giving input on market research plans and any final research to be done before submission. The company asks thought leaders to look beyond approval to consider questions such as: •

What studies are needed for promotional use?

•

What new indications should be pursued? What clinical research might need to be conducted for additional indications in Phase IV?

•

What competitive products are on the horizon, and what advantages are they expected to claim?

•

What is the predicted response of other practicing physicians to the current labeling, dosage and indications?

Input from national thought leaders in key countries is vital to understanding the market into which a product is launched.

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

PROCESS MAP Our Best Practice Process Maps are graphical representations of key business processes. Study findings are synthesized using the diagram below:

Employ broad-based market research to drive product development & market positioning. Pre-Clinical • Market Needs Analysis • Market Size Research • Competitive Analysis • Commercial Potential Analysis

Phase I • Concept Testing • Initial Profile Testing • Therapeutic Area Competitor Research • Thought Leader Identification • Market Needs Analysis • Market Size Research

Phase II • Positioning Studies • Focus Groups on Market Analysis • Concept Testing • Initial Profile Testing • Therapeutic Area Competitor Research • Thought Leader Identification • Market Needs Analysis • Market Size Research

Phase III • Branding and Naming Study • Conjoint Analysis • Positioning Studies • Focus Groups on Market Analysis • Concept Testing • Initial Profile Testing • Therapeutic Area Competitor Research • Thought Leader Identification • Market Needs Analysis • Market Size Research

Submission • Market Attitude and Acceptance Study • Promotional Piece Development & Testing • Refine Positioning & Message • Pricing Study • Payer/Advocate Advisory Boards

Launch • Market Tracking • Sales Uptake Tracking • Sales Force Feedback • Position & Message Refinement • Physician Awareness Research

METHODOLOGY This best practice study was conducted using a wide range of resources, including Best Practices, LLC’s own proprietary databases, public and private databases, literature reviews, on-line data searches, conference proceedings, professional journals and books, academic research, and analysis of past Best Practices, LLC consulting assignments. Research included an in-depth assessment of pharmaceutical industry marketing practices employed by an elite class of companies. Recommended practices have been identified from interviews with marketing executives from twelve top pharmaceutical companies.

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

TABLE OF CONTENTS Executive Summary

• • • • • •

Project Background ...........................................................................Page 1 Benchmark Class ..............................................................................Page 2 Prioritized Findings ............................................................................Page 3 Report Structure and Organization....................................................Page 5 Lessons Learned ...............................................................................Page 6 Next Steps .........................................................................................Page 8

Chapter 1 Developing and Deploying Integrated Marketing Support

• • • • •

Overview .........................................................................................Page 11 Benchmark Data .............................................................................Page 14 Process Map: Employing Market Research ....................................Page 21 Timing of Marketing Activities .........................................................Page 22 Marketing Activities Matrix ..............................................................Page 29

• Chapter 2 Investing For Maximum Impact • • •

Overview ........................................................................................ Page 33 Benchmark Data ............................................................................. Page 35 Marketing Investment Matrix ........................................................... Page 41 Investments and Resources............................................................ Page 44

Chapter 3 • Managing Team Structure, • Communication and Transition • • • •

Overview ........................................................................................ Page 51 Benchmark Data ............................................................................. Page 53 Team Structure................................................................................ Page 59 Structuring Marketing Career Paths................................................ Page 64 Early Involvement of Cross-Functional Team ................................ Page 73 Transition and Long-Term Management......................................... Page 77

• Chapter 4 Driving Commercially Focused • Drug Development • • •

Overview .........................................................................................Page 81 Balancing Clinical and Commercial Concerns ...............................Page 85 Trial Strategy and Execution ..........................................................Page 90 Thought Leader Development ........................................................Page 95 Non-Physician Influences ................................................................Page 99

Chapter 5 Preparing the Market for Rapid Product Uptake

• • • •

Overview .......................................................................................Page 101 Thought Leader Program Management .......................................Page 104 Competitive Intelligence ...............................................................Page 110 Publication Strategy ......................................................................Page 112

Chapter 6 Blockbuster Case Studies

•

Case Studies .................................................................................Page 115

Appendices

• • •

Appendix A: Optimizing Commercial Resources...........................Page 153 Appendix B: Marketing Metrics at a Glance ..................................Page 161 Appendix C: Medical Publications Staffing....................................Page 167

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

EXHIBIT LIST • • • • • • • • • • • • • • • • • • • • • • • • • • •

Maximizing Blockbuster Potential Pre-Clinical Activities by Company Phase I Activities by Company Activity Frequency at Phase I Phase II Activities by Company Activity Frequency at Phase II Phase III Activities by Company Activity Frequency at Phase III Submission Activities by Company Activity Frequency at Submission Launch Activities by Company Activity Frequency at Launch Key Publicity Drivers in Phase III Marketing Activities Matrix Total Marketing Spend Pre-Launch Marketing Spend By Phase Marketing Spend by Activity Marketing Full-Time FTEs Product Team Model 1 Product Team Model 2 Product Team Model 3 Defining Marketing Career Path Marketing Career Path Marketing Structure - Example A Marketing Structure - Example B Marketing Structure - Example C Integrating Marketing and Development

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• • • • • • • • • • • • • • • • • • • • •

Global Commercial Resources Global Product Team Size Criteria Global Product Team Size US Commercial Resources Commercial Lead - Who Commercial Lead - When Commercial Lead and Team Structure Product Manager Qualifications Marketing Metrics At-A-Glance Brand Performance - Leading Indicators Brand Performance - Lagging Indicators Marketing Activities Levels Marketing Process Efficiency Tracking Marketing Competencies Marketing Resource Support Measurement Timeline Metric Tracking Responsibilities Phase III to Approval Staff Workload Launch Year Staff Workload 1-2 Years After Launch Staff Workload Staff Optimization Responses

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Report Summary – Launching Pharmaceutical Megabrands: Best Practices in Marketing Blockbusters 2004 Edition

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