Promotion, that means launching the drug aligning the organization, so everyone needs to be aligned clearly. you need to have customized the interaction for key customers. Partner with the payers, very early on I told you about this as well. you need to, one of the things we didn't talk about in this class at all is manufacturing, but think about it, you know? So you are developing your forecast, you have the marketing guru in your organization. And you have developed the forecast. What if you are wrong either up or down or hundredfold? In terms of what the demand is going to be. You can either have major product shortage, and if that's the case. You lose the sale, okay? And you lose, I mean you have a huge problem, and that has happened. And that's, you know I mean I'm not saying that's a good thing. But it's better to be in that direction. Or you overshot your forecast, and you doubled upped three manufacturing plants. And you invested hundreds of millions of dollars, because for that, it's really expensive. And guess what? The drug is a flop. And you don't even sell 10% of your forecast. So that's another thing you have to think about when you are looking at your promotion. And you have to think about what kind of impact. And more and more today, marketing is being put under the microscope as to, okay, you're going to do that program, you're going to do that tactical plan. What's the return on investment on this? What do I get out of my, five minutes, $50 million Super Bowl commercial? Okay? What's the return on investment? And then finally, you want to know if the customer well, that commercial on that, that you had, really was horrible. And that's another issue when you think about global positioning. Because these drugs are positioned globally on the global market. So you have a strategy. You usually have a central strategy on a worldwide basis. But one other thing that's very interesting is that you have to adapt, to adapt the strategy at the local level. You do not market a drug, and I know because I did this for a number of years, the same in Korea as you do it in Spain. Okay? The cultures are very different, the approach are very different. The wording of what you use, I mean I've seen some stuff, you know, total crack up, where people would have slogans translated in other language, was almost like an insult. and so that's one of the things where you have to be very careful about. And at the same time, you have to plan your budgets. And each units have to really understand that. And I think pharma has become better in that area, which is, has to be with customer satisfaction. Again promotions, it's going to address, you know, payers, patients, providers, manufacturer. Different tactics based on where you are, which countries, and costs. Market share is going to be in sales, are going to be driven obviously by you know, the broadest indications. The more patients, the more you're going to sell. but to be honest, if you have a targeted patient population and you are the only drug. You're probably going to be much more successful as well. Sustainable competitive claim. and again we have to look, we have looked at all that. The other thing that's important that we didn't talk as much is the timing of line extensions, and that's very important. That's part of life cycles strategic plan. Let's say I have a great drug, and it, let's take you know, one that just came off patent. Lipitor came off patent, $12 billion in sales. Well, they didn't have it for long. You know, they didn't have, maybe they could have had a sustained release formulation or a Lipitor Plus. Or, you know, do another type formulation where they actually had even better control. So, that's where you see vanishing your brand equity that you have, that $12 billion that you had in sales. Almost overnight become 1.2 billion or 120 million. I mean, look at the amount of investment if you think about, you know, in the consumer market, you know, I gave you Nike, Apple, Coke. You look at these brands, they are still selling very strong. But they are always working on their brand, they are always launching new products. Some of them are flops, but they are always trying to capitalize on that brand. But the same goes true for a pharmaceutical. If you have a series of line extensions and you are able to do that, you know, smartly enough. you are going to capitalize on that. And that's going to be a lot cheaper than trying to rediscover when you drive, where you start from ground zero. The other thing is reimbursement is going to be critical. and that's going to be really critical as well. So, when you look at customers, what do they think and feel about the drug, well, these are all the interesting pieces. So at the top you have the intangibles and at the bottom you have what I call really tangible. Again, I'm not going to go through all of this, but you know, the perceived value's important, what does it say about my company. you know, what you have in terms of how does it make me feel? You know, do I, do I really like to work here as a company? and then you look at all the other things on the outside. So again, all of these pieces are important and questions to ask yourself when you are going to go and launch your drug. So, in terms of promotion, so promotion is really the application of your marketing strategy, okay? You have your sales force, which is the typical, you know, thing that pharma has been using. Thousands of reps going after thousands of GP's. Well that's dangling and we will talk about it. Other means of promotions is direct to consumer advertising. That's very different. In the, the US is the only country in the world where you can do Direct to Consumer Advertising, and I mean direct to patient. That's the end consumer, not the physician. that is also changing very rapidly. You know, TV, print magazine, internet, a lot of social media. that's right now not extremely well regimented, that's also going to be a lot more regimented. But what's interesting to me if you look at the promotional spending and that comes out of a study that was published. Actually a paper that was published in March 2013 actually. I just got that paper yesterday, I thought that it was very interesting. Is if you looked at it and you have the reference right here. If you looked at it you know, it peaked at $5.9 billion in 2006, declined by 25% to 4.4 billion by 2010. I think the numbers are probably even lower today. So people obviously are not seeing the return on investment. what's also interesting is that 370 million top for the 15 smalls 15 top small molecules. and then on, only 33 million for the top 15 biologics. It's not completely surprising if you look at the percentage or so of sales. In the sense that for biologics, the sales force are a lot smaller and you don't as big as a target audience that you can reach, you, you have to reach. Medical science liaison, publications. And one of the things to remember is promotion, very often, at least the way it has been done up until now was a one way street. You know, you are passive, you are receiving the stuff, you don't really interact with it. Of course, FDA and other regulatory agencies are regulating all this. You're asking about the change of power, this is kind of an interesting slide. That shows that basically, the decision makers have dropped substantially, and if you look at the physician, this was done between 2008 to 2013. That was project to 2013, you look at the physicians, most of the country is. The physicians have very little decision making power compared to the national payers, the local payers. The patient groups have gone up substantially. And some opinion leaders are still important in some countries, but in others they have really gone down. Here's what's happening to the pharma sales reps, a lot of primary care physicians. get paid by the office visit, especially if you nice care situation, it's the number of patient you see a day. So a lot of physicians say, you know what, I don't have time to talk right now just drop off the samples, which is really primarily a US custom. And then the other thing is in a lot of offices now, you see this. You know this stop sign. No Pharma Sales Reps allowed. Okay? So with that and, and also besides the fact that it's not very efficient, you know? I think Pharma is changing their, their motto. Which is why you see a lot of companies basically getting rid of their or actually shrinking their pharma sales force. I talked about the FDA. The FDA has what is called an office of prescription drug and promotion. Their mission is to protect the public health by assuring prescription drug information is truthful, balanced, and accurately communicated. I'm not going to go through all of this. We had a lecture on the importance of the FDA, and why the FDA was, was created. But they regulate all the promotional pieces that are being put on the market. And if you have, if you are crossing the boundaries, they will send you warning letters. They'll fine you for it substantially. so that's again, you know, quite important to understand. the prescription drug advertising must be accurate, balancing the risk and benefits. Which is why where sometimes you hear advertising on the radio, they go on and speed at you know, 200 miles per hour about the side effects. Or like on the TV when you have the, the ad coming up. After that, you have the package insert in invisible fonts. Flora, that's you. Yes, question? >> I have a question about the off label. >> Yes. >> You can see up on that slide. >> Yes. >> Do you see the FDA starting to developing regulations around that? >> So I don't work for the agency so I can't really answer that directly. All I can say is that a physician can prescribe a drug off label, that's his prerogative. Okay, that's one of the things which is basically, if the physician, they don't want to second guess what the physician is doing. Now, where they are going to crack dawn on, let's say you are a sales rep and you come to me. And you know that Doc X over here, Doc Smith over here, is prescribing off-label, and he's seeing some good results. And you come to Doctor Jones over here. And you tell him, hey you know your colleague is really working and prescribing that drug for that indication. That by the way I know is not approved, but you should really use it there. The FDA's going to be down your neck, okay? because you are basically promoting off-label usage. That's a huge issue. So they are definitely enforcing that. What they cannot enforce is against telling physicians, you will not prescribe this drug unless it's for that indication. Now, in a hospital setting, they have protocols, and they have to follow protocols. So again, you know,there is other measures being put in place from that prospective.
