THE INNOVATION TREND: A WAKE UP CALL FOR PHARMA COMPANIES

One swallow does not make a summer. But what starts as a buzzword, later a fad and that which gains momentum and does not whittle down, then you know a major shift is happening – yes a TREND IS ON!! And now here is the trendiest of market trends to hit the world of business and society in general; this is the trend of doing something NEW. The business of NEWNESS (ie innovation), which is giving HOPE to the society at large and the business community in specific.

So what does innovation mean? Essentially it refers to a positive change, a change that impacts the topline, bottomline and wealth generating capacity of organizations positively. In fact change management is a major capacity at the individual and organizational level in a world of dynamic marketplaces. So innovation is a strength giving mantra. In fact the Japanese with their continuous improvement strategy (Kaizen) are the past masters of this innovation game. They have interesting offshoots of this main theme. They have a technique where in an idea is passed on person to person and he or she has to add value to it and the end result of this passing the idea - ball game is examined and vetted for its economic potential.

As such, the IT/Consulting/ITES/BPO segment is fast becoming the brains trust of the world. This segment is not only the repository of knowledge and intelligence it is pleomorphic and as Charles Darwin says it is not the intelligent of the species that survives, but it is the one that is most responsive to change that survives. The very talk of innovation is about creating changes and change management. So this IT/Consulting/ITES/BPO segment, as we can surmise from Charles Darwin’s observations, is very adept at change management and hence is gaining more and more power in the scheme of things globally.

Furthermore Swami Vivekananda has said life is a game of might and mercy and that life is expansion and death is contraction. In this light, if one observes the action and goings on in the field of IT/Consulting/ITES/BPO segment, with INNOVATION as its buzzword these guys are expanding vertical by vertical across societal functioning. So it not long before each vertical like healthcare and pharmaceutical vertical(s) will have a major component of the IT/Consulting/ITES/BPO segment in it.

Yet there is one field that will have an edge over the IT/Consulting/ITES/BPO segment. That is the bankers-financial consultants-agencies-venture capitalists combine. Yet they will also fall for the innovation buzzword. You see humanity survives on HOPE. The greatest marketers sell HOPE. Innovation is touching on that HOPE factor. As such, organizations (and individuals) have an insatiable appetite for topline and bottomline growth; and growth in assets (because wealth is like the game of monopoly – those who have more assets, including brand assets, are wealthier). Innovation is now the HOPE to whet some of this appetite. So with innovation being actually about creating positive changes (read: a vista to become wealthier) it is one trend that will engage business and societal leaders for a long long time, till someone from the finance field blows the whistle and calls for consolidation, ie going slow on innovation and diffusion of innovation, so that the innovated entities and processes can bring in monies (the ROI thing will take over).

For innovation and positive changes (and hence more wealth for the organization) three things are essential:
a) a learning climate (in the organization); learning at both the individual and organizational level
b) a flat organization to generate ideas and diffuse ideas 360 degrees so that they get strengthened; you see, in non flat organizations, idea generation and innovation gets stifled mainly by prejudices, perception of threat to ones authority and power by the ones in power and an absence of meritocracy (flat organizations tend to cultivate meritocracy)
c) an organizational excellence group in the organization that drives quality management initiatives (in fact this is a very important aspect; today ICICI is a great organization much of it thanks to its organizational excellence group, that launches and monitors several quality initiatives. In TATAs there is business model driving change management, organizational excellence & quality initiatives through its TATA BUSINESS EXCELLENCE MODEL. There is a very senior group in the TATAs dedicated to see the agenda through).

Now what does all this have to do with the Indian and global pharmaceutical industry? Well, lots of it.

Let us do some stocktaking now. Outsourcing (or becoming ‘Bangalored’) has become the in-thing in the pharma industry. So what is the pharma and healthcare industry outsourcing? Here is a list: Clinical trials, clinical trial results statistical processing, R & D project(s) outsourcing, development of marketing communications, organizing events and other sales & marketing activities, training, drug development activities, sales field force reporting and doctor database maintenance, CRM activities, some administrative and finance activities and other IT and IT enabled activities. Now with this list getting longer day by day, the IT/Consulting/ITES/BPO segment are getting to know the pharma and healthcare industry better. Domain expertise in pharma and healthcare is becoming their might. In fact IT companies including Indian biggies like Infosys, TCS, MindTree, Convergys, Satyam & Wipro are getting in to the consulting space softly, confidently and steadily. And before long these companies would get in to corporate strategy and major strategic decision making in pharma and healthcare industries (or verticals as they call it). Now it is not a question whether it is right or wrong. It is a trend that is happening. The shift is taking place. Merck’s rofecoxib fiasco and Pfizer’s torcetrapib failure in recent times is making people sit up and ask the question WHAT IS WRONG WITH THESE PHARMA ORGANISATIONS?

And any vacuum will inevitably be filled up by the stronger and the ones better responsive to change. There is something static about the current organizational status in the pharma and healthcare industry. It is a fact that pharma companies though being knowledge intensive do not have a strong learning culture (at the employee and organizational level), pharma organizations are notoriously hierarchical – top heavy and perhaps there is not a single pharma or healthcare organization that has an organizational excellence group like the one at ICICI or the TATAs.

So it is time for the pharma and healthcare companies to don the thinking caps and rework some strategy and gain might or be led slowly but surely by the IT/Consulting/ITES/BPO segment. In fact the toast of the 58th IPC at Mumbai in Dec 2006 was the Infosys healthcare vertical! That sends a strong message to us - right?!!

- Sunil S Chiplunkar M Pharm PGDMM
Manager – Marketing and Training, Juggat Pharma, Bangalore
www.pharmaceuticalshealthcare.blogspot.com

INTERNAL MARKETING, for the cutting edge

The following article is published in CHRONICLE PHARMABIZ IPC SPECIAL DATED 30 November 2006 on page no. 217.

As per ORG MAT Aug 2006, the vibrant retail pharma industry is valued at Rs. 26,014 crores with a value growth of 16.22%. Today, four companies show an ORG MAT value above Rs. 1000 crores. They are GSK, Cipla, Ranbaxy and Nicholas Piramal. Till recently only GSK was a Rs. 1000 plus crores company (as per ORG chemist retail audit.). Three brands are over Rs. 100 crores ORG MAT value (Aug 2006): Phensedyl, Corex and Voveran. Of course, it is ironic that the #1 and #2 brands are anti cough formulations. The Indian retail pharma market is a very happening place.

Market complexities

The pharma market complexities are mirrored by some interesting statistics. There are an estimated 23000 manufacturing units. The guesstimate is that some 70,000 brands are battling for mindshare, prescription share and retail space. For example, ciprofloxacin has over 100 brands!

In the pharma industry the Medical Representative teams continue to be the main medium for demand creation, availability and stock liquidation. The 2003 estimate was 1,20,000 MRs wooing a pool of estimated 5 lakh doctors (of various qualifications) and around 3 lakh retailers.

There is a geometrical growth in number of local companies who serve a pool of doctors and retailers in a few districts. For example TPRL (Tumkur Pharmaceuticals & Research Laboratories) serves doctors from Tumkur, Kolar and a few other districts of Karnataka. There are many such companies. Many C & Fs and stockists have their own companies with divisions to serve small markets as per their feasibility. A glance through trade oriented tabloids, like MEDICAL DARPAN, shows the mosaic of companies marketing products with different business models – propaganda cum distribution, franchisee marketing and so on.

So we see the Indian pharma market is a highly fragmented complex market situation. Some 250 companies are said to control 60 to 70% of the market. Competition is rife at the retail level, dispensing doctor level, institutional level, specialist level, in prescription markets and in rural areas.

Market skepticism

New product launches in the 1980s and early 1990s, were easier to handle. Doctors would adopt innovations more readily, to deliver better healthcare strategies to their patients. Making the product available was easier. Key retailers would absorb the initial stocks; spreadstocks would account for initial secondary sales from stockists. Bills too would get retired in time by the stockists. Late 1990s and 2000 onwards many companies have had to resort to consignment basis for new products (payments would be obtained after collection of dues from retailers). More importantly, the glitz of a new product launch at the clinical level has faded away. A new product is not exactly greeted by excitement at the doctor level, but with a sense of skepticism, more so thanks to the controversy of Cox 2 inhibitors (the rofecoxib marketing fiasco). To make a new product successful, today, one has to work on the concept for a longer time.

Furthermore, the public and doctor community’s skepticism is increasing the world over on pharmaceutical marketers, even as the market spend on doctors is increasing. The way social marketing programmes and awareness communication programmes on diseases are evolving; the net for product users is being cast wider. Awareness building programmes on conditions like menopause, erectile dysfunction, restless legs syndrome, sleeplessness, tiredness in children, ADD (Attention Deficit Disorder), IBS (Irritable Bowel Syndrome), SAD (Social Anxiety Disorder), loss of BMD (Bone Mineral Density) are expanding business potentials for products. Marketing departments in co-ordination with clinical research departments see emerging markets for conditions like Diabesity (central abdominal obesity in diabetics), Hidden Hunger (subclinical micronutriuent malnutrition), prediabetes and prehypertension. Over zealous marketing in a way has made doctors and the public wary of product promotions, clinical trial results and new product launches.

The above scenario of newly evolving robust challenges calls for something beyond regular training programs – the need is for INTERNAL MARKETING, to gain customers through trust and help balance commercial and social goals.

The changing face of marketing

Change is the way of life. Earlier marketing was about planning and execution of pricing, promotion, and distribution of goods, services and ideas. Marketing was meant to facilitate a ‘sale’ and satisfy individual and organizational goals.

The face of marketing has changed. Today, marketing is not a departmental function; marketing is an organizational function. Marketing is seen as an organizational function involving a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. In fact, this is the new definition of marketing as released by the American Marketing Association. There is thus a greater accent on customer relationship management, with the marketing department being a facilitative agency.

Internal marketing

Internal marketing is an emerging area that refers to training of employees (particularly front line personnel) on how to manage and deliver a brand, so as to positively impact the acquisition and retention of customers. This concept springs from the fact that marketing is about delivering value and managing customer relationships.

Internal marketing recognizes the fact that people do business with people. Internal marketing helps build differentiation in service. It is all too common for doctors to perceive pharma companies as similar. Quality of pharma products is a qualifier and not a differentiator. Product portfolios of various companies look similar; in innovator companies pipelines are not exciting; so the accent is obviously on managing customer relationships – a key ingredient of it being internal marketing.

In regular training programmes for a new product, one starts with the anatomy, physiology, pharmacology, product profile, detailing, USPs, target markets and other promotional inputs. In internal marketing the starting point is the product positioning, understanding target market profile and learning associated medical and product profile aspects and spending a lot of time on practice of use of communication and other inputs – to get the best bang for the buck. One spends more energy and time on planning the call, extempore detailing, dialogue detailing (with objection handling, role play and proceeding with ‘Yes Momentum’ in the discussion) and visual aid/communication input detailing. This way the MR learns to give a memorable brand experience to the target market and strengthen the doctor’s and chemist’s connect with the brand. The bottom line is to acquire & retain customers, while also expanding customer base.

The pharma business revolves around in-clinic effectiveness and communication to customers. This is enhanced through internal marketing as the company empowers, motivates and guides field personnel to be in close association with real demand creating customers and deliver relevant brand experiences. Thus field personnel spend more time with the real customers’ in-clinic rather than just chasing predetermined sales figures with the stockists and other intermediaries.

A key component of internal marketing is soft skills. This dimension plays a vital role in brand building. Soft skills are essentially people skills -- the non-technical, intangible, personality-specific skills that determine strengths as a leader, listener, negotiator, and conflict mediator. The general soft skills to be developed by an individual include: work conscientiousness, integrity, teamwork, self motivation, self analysis, social grace, etiquette at workplace, business and in society, negotiation skills, attitude, time management, counseling skills, effective presentations, interviewing skills, conflict management, effective meeting skills…. As such soft skills training through internal marketing improves effectiveness of personnel, which in turn strengthens brand building.

The avowed objective of marketing is to create a culture centered on a product(s) or service(s). McDonalds: they market their restaurant as a part of great family life. Coca Cola is also positioned as a festive drink, bringing it into the cultural mainstream. A ‘Madrasi’ wakes up to coffee and ‘THE HINDU’, this newspaper is a part of ‘TamilNadu culture’. Microsoft is trying to usher in a ‘digital home’ cultural revolution starting with the ‘Mediacenter PC’. In fact, giving out prescriptions is the practicing doctor’s culture; and pharma marketers are cashing in on this culture. Internal marketing training helps MRs identify these threads of culture in the market and also help create newer habits, attitudes and cultures; thus creating legendary products. Revital, Liv 52, Party Smart, Metronidazole infusion after surgery, Becosules, Chywanprash, baby massage oils and Dettol are examples of pharma and healthcare products that are cultural icons.

Internal marketing meets the emergent need of pharma companies to ensure mega successes of products by making them icons of ‘prescribing or OTC or OTX’ culture… Internal marketing works to train and motivate employees to serve customers well. Through internal marketing one can facilitate ‘customer centric thinking’ in every one in the organization. Internal marketing when based on ‘think flat’ and ‘lateral thinking’ has all the potential to lend a pharma company the cutting edge; reduce a company’s dependence on ‘commodity play’ and generate high quality revenues.

- Sunil S Chiplunkar M Pharm PGDMM
Manager – Marketing and Training
Juggat Pharma, Bangalore

TORCETRAPIB AND PHARMA INNOVATION MANAGEMENT

One of the most interesting and a pharma-world-shaking event has been the ‘withdrawal’ of torcetrapib. SO WHAT IS TORCETRAPIB?

Torcetrapib (CP-529414, Pfizer) was a drug being developed to treat hypercholesterolemia (elevated cholesterol levels) and prevent cardiovascular disease. It acts by inhibiting cholesterylester transfer protein (CETP), resulting in higher HDL cholesterol levels (the "good" cholesterol-containing particle) and reducing LDL cholesterol levels (the "bad" cholesterol). Development of the drug began around 1990; it was first administered in humans in 1999, and manufacturing at production scale began in Ireland in 2005.

Pfizer had previously announced that torcetrapib would be sold in combination with Pfizer's statin, atorvastatin (Lipitor); however, following media and physician criticism, Pfizer had subsequently planned for torcetraipib to be sold independently of Lipitor. A 2004 trial showed that torcetrapib could increase HDL and lower LDL with and without an added statin.

On December 2, 2006 Pfizer cut off torcetrapib's trial because of "an imbalance of mortality and cardiovascular events" associated with its use. This was a sudden and unexpected event and as recently as November 30 Jeff Kindler, Pfizer’s chief executive, was quoted as saying "This will be one of the most important compounds of our generation." In the terminated trial, a 60% increase in deaths was observed among patients taking torcetrapib and Lipitor versus taking Lipitor alone; there was not suggestion that the results called into question the safety of Lipitor. Pfizer recommends that all patients stop taking the drug immediately

http://en.wikipedia.org/wiki/Torcetrapib

This reminds one of Vioxx withdrawal.

Actually the two events ie torcetrapib withdrawal and Vioxx (rofecoxib) withdrawal ought to set off deep soul searching in the healthcare and pharma world. In fact, the blog world too is shaken up with this latest million dollar loss event. Please see the blog: http://www.pharmamkting.blogspot.com for interesting posts.

One important question at this juncture is ARE OUR PHARMA COMPANIES HAVING THE RIGHT ORGANISATIONAL DESIGN TO SUPPORT INNOVATION?

Traditionally pharma companies have a top heavy hierarchical command and control structure, with very little lateral functioning. In fact, the world over, knowledge oriented companies that thrive on creativity and innovation are ‘flatter’. As such flat organizations encourage horizontal communication and lots of internal debate. GE & Infosys prefers the flat organizational concept. Furthermore, to respond successfully to the challenges of a competitive marketplace, Price Waterhouse (in 1992) has also suggested The Benchmarking Organisation (with Rank Xerox as examplar), The Innovative Organisation (3M), Business Process Redesign (Ford), The Networking Organisation (BP), The Learning Organisation (Rover) and The Hollow Organisation (Benetton) as successful models. These organisational structures will foster better innovation management and better R & D results. This means better use of scarce resources and will certainly insulate the company and society from disasters like the torcetrapib and rofecoxib marketing waterloos.

Another important role is of a COLLABORATIVE APPROACH to commercializing the R & D molecules. For eg. Glenmark in India has a specific collaborative R & D approach to commercialize its innovations. In return the company receives mile stone payments from its foreign partners. This way there is better vetting of one’s R & D efforts.

The basic idea is to reduce R & D risks & reduce loss of monies through commercialization failures.

A GLOBAL CHYWANPRASH MISSION

Marketing is said to be a war of perceptions, as per Al Ries and Jack Trout. Another marketing guru Philip Kotler reiterates that Marketing is very much about customer relationship management and that every company does three things to its market: provides goods, services and communication. Thus a foundation aspect of marketing is marketing communication to attract new customers and help retain current customers.

Marketing is a very noble activity. This is from the moralistic or ethical angle. It is marketing that ensures product availability in every nook and corner of a market and endeavours to enhance consumption thereby enhancing living standards. Marketing is a key element for commercial and social contributions.

In the healthcare market, one can broadly visualize the scenario in two divisions: SICKNESS market and WELLNESS market. While the former focuses in making sick people healthy, the wellness market is preventive in character. It strives to raise the health bar, so as to say, and ensures the wellsprings of wellbeing are flowing always.

Chywanprash

Chyawanprash, also spelled chyavanaprasha, chyavanaprash, and chyawanaprash, is an ancient Ayurvedic health tonic, widely used in India, as a rejuvenative, energizer and immunity booster. It is often called "the elixir of life" due to its numerous nutritional properties and benefit to the body.

It is said that Chyawan Rishi (Rishi is a Hindu saint) was the first to prepare this tonic. Hence the name Chyawanprash. The first historically documented formula for Chywanprash is found in Charaka Samhita, the ancient Ayurvedic treatise.

Chywanprash is a brown-colored, sticky paste with the consistency of jam and a sweet/sour/spicy taste. It can be eaten directly (one or two teaspoons per day) or mixed in warm milk or water.

Since many companies manufacture Chyawanprash, the recipe may differ a bit. The number of herbs used in preparation of the paste varies from 25 to 80, but the main ingredient of all Chyawanprash is amla (Indian gooseberry or Embellica Officinalis), which is one of the richest natural sources of Vitamin C. Other chief ingredients are dried catkins, Cinnamon, Asparagus, Ashwagandha, turmeric, ghee, dehydrated sugar cane and honey. Clarified butter is included to help the body's absorption of the vitamins.

Chyawanprash is a rejuvenative and helps balance the body’s working. Regular intake of Chyawanprash strengthens digestion, absorption and assimilation of food. It eases constipation. Chywanprash's basic ingredient amla is the richest natural source of Vitamin C and strengthens the immune system (body’s defence systems). Chywanprash is also beneficial to the heart and the brain cells. It is considered a memory booster. It also works as an antioxidant (quenches disease causing free radicals, ie reduces free radical load), thus slowing down the ageing process. It is believed that Chyawanprash purifies blood, eliminates toxins and is beneficial to liver. It is also said to fight bacterial skin infections and improve complexion. It also improves muscle tone by enhancing protein synthesis. It promotes absorption of calcium, leading to stronger bones and teeth. It is especially beneficial for cough and asthma patients. It enhances fertility and keeps menstruation regular.

From the above it is apparent that Chyawanprash is apt for both the wellness market and sickeness market (as an adjuvant).

Globalising Chywanprash

One thing is having a ‘good product’ but it is another thing to make the product a commercial success. The commercial success of a product depends on the forces that enhance the demand for it. As such if we analyse the business continuum, we observe that it comprises of innovation, manufacturing, distributing, retailing, and activities to enhance consumption. To this continuum, there are issues of production management, quality management, distribution management, management information systems, IT and technology management, sales management, marketing management, Human Resources management etc. Hence, to make a product a marketing success the product is to become a part of the culture, just as say The Hindu newspaper is a part of Madrasi culture or as McDonald’s is projecting, a great family restaurant for the upworldly mobile families of India. And to make such exciting successful events happen, marketing communication plays a key role.

VISION OF A GLOBAL CHYWANPRASH MISSION

The vision of a GLOBAL CHYWANPRASH MISSION is that of a non profit organisation that has the avowed objective of globalising chywanprash; putting it on the breakfast table of every home across nations in the world, so as to say. It is like what Kellogs has achieved in USA and Europe putting corn flakes as the cultural item on breakfast tables. And it is like what NASSCOM is doing in India; NASSCOM markets the IT and ITES industry of India to the world. This softens the ground for purely commercial organisations to enter in to virgin markets and sell their services. Similarly a global chywanprash misson can catalyze the creation of a global chywanprash consumption culture through unbiased communication and sampling systems. This mission obviously has to be a public private and Govt initiative for it to produce tangible results. This mission can through proper management and aggressive communication (through mailers, events, advertisements, celebrity based advertorials, evangelical advertising etc) can create through the Indian diaspora as its primary initial market, a great global chywanprash consumption culture, from paediatric to geriatric age groups.

The potential for a global chywanprash based culture in both the WELLNESS AND SICKNESS markets is there. What is required is application of mind and resources to create the necessary systems. Any takers??!!

WHY DO DOCTORS MEET MRs?

SEASONS GREETINGS! It is a question that haunts many pharma marketers since no answer is absolutely complete. Even with decades of experience this question does not provide a complete and absolute answer to many pharma professionals. However, given below is a list of reasons – NOW, DO YOU HAVE ANY MORE ANSWERS TO ADD to the question: WHY DO DOCTORS MEET MRs?

• MRs provide information about the product profile, product benefits, any promotional offers, latest updates and results of various clinical reports including post marketing clinical study results.
• The product oriented or therapy oriented presentations from MRs play a major role in information recall & information updates of doctors; since doctors in actual life are busy balancing a professional, social and domestic life with little spare time for continuous revision and study.
• MRs are a great psychological break from the routine humdrum of sick patients. A MR is smart, a great communicator on social aspects & medico marketing aspects and this gives a fantastic experience to the doctor.
• MRs provide through their sales pitches, ego massage to doctors & lots of positive strokes (that the doctor is OK, ie in terms of transactional analysis). This creates happiness in the doctor.
• MRs can organize for business sponsorships to luncheon meets, clinical conferences, stall participation in conferences with interesting ‘in stall activities’ etc.
• MRs can organize for personalized sponsorships such as stays, sponsored rooms, air tickets, taxi services etc.
• The MR through interactive corporate mailers and newsletters helps create a community; and this informal or formal community membership satisfies the affiliation needs of the doctors.
• The smaller freebies provided to the doctor by the MR, like samples, paperweights, pens, stationary items, patient education literature, posters etc, and clinically oriented gifts like knee hammer are very useful in routine clinical or surgical practice.