Meeting the Challenges Confronting the
Pharmaceutical Industry
By Jim Brigaitis, Associate Managing Director

The pharmaceutical industry is facing unprecedented challenges and transformation. A number of the largest drug classes are going generic. Sales of multi-billion dollar blockbuster agents such as statins, anti-depressants, anti-hypertensives and other widely prescribed drugs are evaporating. Many of these drugs were so effective that the prospect of replacing them simply by introducing a new generation of branded agents is unlikely.

Coupled with the onslaught of generic drugs, the industry is facing continued increases in cost and pricing pressures. Payers are demanding greater value for their money. Products that fail to deliver are being relegated to severe restrictions or no reimbursement at all.

To meet the market's demand for increased value, new products on the horizon will focus on addressing unmet needs for more targeted segments. These include specialty areas and smaller targets within the primary care market. In particular, these products will entail a much greaterdegree of complexity for both drug developers and marketers. Using of many of these new products will significantly redefine treatment paradigms – diagnosing and treating new diseases, targeting new patients, and introducing new efficacy measures, to name a few.

Understanding Behavioral Drivers – A Key to Success

To succeed in today's complex environment, organizations must excel at developing a clear and focused understanding of the critical behaviors that will drive usage. This is easy to say, but often difficult to do. Why? Because today's new products can involve a seemingly overwhelming mix of variables that impact marketing:

• Physicians The potential spectrum could include different physician specialties, varying levels of awareness and technical expertise as well as diverse attitudes, perceptions, and usage preferences
• Patients Targeted patient populations may seem to encompass a broad range of profiles – different levels of disease progression, severity of illness, co-morbidities, and other potentially relevant patient variables
• Products Relevant attribute trade-offs often include a mix of efficacy, safety, tolerability, dosing, and formulation issues

This broad array of potential variables can cause an organization to lose focus. Varying individuals may latch on to separate pieces of data and infer different needs or priorities. All too often, this results in conflicting investments and plans. Important initiatives may be under-funded or ignored, while less valuable activities receive attention. Moreover, in increasingly complex and cost sensitive markets, this lack of clarity results in a less compelling value proposition.

Top Priority

Marketers must be able to blend all of these variables and data into a clear, integrated, and focused strategy. Given the overwhelming complexity of treatment decisions, it is unrealistic to assume that stated preferences or behaviors can serve as the proper foundation for strategic assessment. Marketers can develop a focused strategy only by thoroughly analyzing customer behavior over the range of possible usages and purchases. What's more, this analysis of behavior must include both physicians and patients.

Today's unprecedented challenges in the pharmaceutical industry create a new urgency for marketers. For either launching a new drug or revitalizing the growth of an existing agent, marketers must start with a thorough, behavior-based understanding of physicians and patients to determine the true competitive frame for their drug. Once that is understood, companies are in a much better position to create a growth strategy that takes advantage of the market's potential for transformation

After marketers identify the driving behaviors, they can use them to organize and focus what would otherwise be an unmanageable set of descriptive data and variables into a holistic theory of how the market works. A thorough understanding of the market from a behavioral standpoint leads to consistency across the organization. This enables marketers to develop a well-aligned, coordinated product marketing strategy.

Today's unprecedented challenges in the pharmaceutical industry create a new urgency for marketers. For either launching a new drug or revitalizing the growth of an existing agent, marketers must start with a thorough, behavior-based understanding of physicians and patients to determine the true competitive frame for their drug. Once that is understood, companies are in a much better position to create a growth strategy that takes advantage of the market's potential for transformation.