THE CYCLE OF TRUST

I GOT THE ABOVE IMAGE RELATING TO BIOSIMILARS FROM HERE.

The key word in economic transactions is TRUST

CONSUMPTION depends on TRUST. When a person buys a strip of a pain reliever like Crocin or Dart, there is a factor of trust involved in the transaction. The customer trusts that the product will meet a certain level of performance – ie., will relieve his headache (also known as cephalgia). When a person purchases a financial product like say an insurance product, the customer trusts that the product will meet a certain performance level in terms of services and money-back. When the performance claims are not authentic – when untruths are promised, and/or the promises are reneged, the cycle of trust is broken, and consumption comes down.

There are many factors affecting consumption – purchasing capacity, credit availability and support, need for the product or service, price of product or service etc. However, the root of all the reasons for consumption is TRUST. The basic trust – HERE – is that the product or service will fulfill the consumer’s need or want or desire. The trusted product should deliver the expected value or make the customer FEEL GOOD. If a customer is going to feel conned and feel bad about a transaction –ie., he does not trust the transaction, the consumption will not take place. The core of marketing is increasing consumption of the marketed product or service. Thus, it is logical to conclude, that the root job of marketers is constantly building trust between target audience and the brand.

Recession

When the economy becomes sluggish, ie., when consumption comes down, demand stifles, and production stagnates… recession sets in. There are a lot of triggers for recessionary forces to gain speed; however, the major catalyst is MISTRUST, lack of faith. The cycle of trust gets broken down – consumption comes down, consumption growth retards and recession sets in. And every one runs for cover. Spending habits become conservative because you do not know what is waiting round the corner, and there is a negative cycle of mistrust.

Just like trust can be infectious, mistrust too has a butterfly effect. After all economic behavior of people is basically human behavior, and is guided by emotions and not logic alone. When the housing mortgage crisis started in US, it generated a lot of mistrust - about the actual demand - consumption patterns in society. And when people realized one cannot trust situations, financial figures and statements, and CXOs - stock markets started melting and economic recession gained speed.

The rofecoxib story & mistrust

When rofecoxib 'failed' (in terms of safety) causing a huge financial loss to Merck, the reverberations were felt in the entire pharma field. Managements and US FDA became conservative with respect to 'go-to-market' decisions on new drugs.

Mind you, introducing a new drug is not easy. It requires the new chemical entity (NCE) to go through a battery of preclinical and clinical tests before getting commercialized.

It is rare for a NCE in modern times to fail on the grounds of safety. The reason is the clinical trial process. Any promising NCE cannot enter the human clinical trials unless safety is established in the pre-clinical animal testing stage. In the US and EU, clinical testing in humans is given a high level of importance.

In Phase 1 clinical trial stage, of 1 to 3 years duration, the drug's safety profile is mainly vetted on about 100 patients.

In phase 2, which is of 2 years duration, the safety of the drug is established in a larger pool of patients (about 100 to 300) suffering the disease targeted by the drug. In phase 2 clinical trials, the efficacy of the drug is also checked if it is statistically significant.

In phase 3, which is of 3 to 4 years duration, not only is the effectiveness checked for the target indications, the safety profile is continuously built and the side effects monitored. Phase 3 studies involve several hundred to several thousands patients. Two pivotal trials are required to be positive in this phase, for the drug to get marketing approval.

When in phase 4, the marketing of the drug can be taken up, however, post marketing surveillance studies are continuously done to check for the safety and efficacy of the drug. It is at this stage that rofecoxib's cardiovascular side effects became public. And caused the burial of the drug.

IT IS AMAZING THAT DESPITE A ROBUST CLINICAL TESTING PROCEDURE, AS DESCRIBED ABOVE, ROFECOXIB BECAME A COMMERCIAL FAILURE. The root cause for such failures resulting in a massive loss of trust on pharma R & D, is that managements' are forever on the hunt for patented blockbusters. This means one can make a lot of money by ruling a LARGE market. Each blockbuster product launch should fetch at least 500 million USD with 70% net margin - that is the game plan.

Why is pharma said to be relatively recession proof?

The main reason is that one needs medicines come what may - recession or no recession. But it also indicates that there is a lot of trust on those medicines - physicians trust them, patients trust them and the society trusts the pharma products. If this trust was not there, during a period of recession, when money is scarce, people would think twice to spend on medicines too. If pharma in any country feels a big pinch during recession, it is indicative that people there do not believe the medicines are value for money and they are waiting for alternatives.

Trust: the reason for Baba Ramdev's success

Baba Ramdev's Yoga, healthcare, functional food and Ayurvedic pharmaceutical strategies are successful, because his programs and story telling are authentic - they are winning the trust and word-of-mouth of people. Trust is the foundation of his success.

Biosimilars and trust

Biosimilars is the buzzword of the pharma industry, today. This amazing field is seeing a lot of trust and hope. Pharma CXOs trust that a lot of growth in sales and profits is possible through launch of biosimilars. Merck and Pfizer are getting deeper in to the biosimilars and biopharma game. However, if any company has to succeed here, again it is TRUST that needs to be won. Biosimilars is a premium game in the pharma business today. Any biosimilar should prove itself as worthy as the innovator brand - and it requires a lot of robust clinical trials - or the brand will lose trust - even if a small side effect occurs that does not occur with the innovator brand. While the financial pot of gold is alluring to the biosimilar entrepreneur, there are a lot of risks that can cause the initiative to go bust. IN A RECESSIONARY WORLD, WHERE MISTRUST REIGNS SUPREME, WINNING TRUST IS THE KEY. In the case of biosimilar marketing, the mindset of the marketer needs to be different, as compared to marketing of chemical generics.

Striking the right chord

Obama is proving to be a leader of high mettle, he has directed the US govt to find out about the monies lying in Swiss banks. His intention is to get the idle cash in to the system in USA - this will certain build confidence and TRUST. IMAGINE IF THE INDIAN GOVT. DOES THIS - IT IS ESTIMATED THAT INDIANS HAVE STASHED RS. 50 LAKH CRORES OF RUPEES IN SWISS BANKS. THE CENTRAL ANNUAL BUDGET IS RS. 20 LAKH CRORE RUPEES ONLY! IF ALL THIS MONEY FROM THE SWISS BANKS GETS IN TO INDIA, IT WILL CREATE AN ECONOMIC AND HEALTHCARE MIRACLE OVERNIGHT BECAUSE THE TRUST ON THE ECONOMIC SITUATION WILL INCREASE, THE PURCHASING CAPACITY AND DEVELOPMENT WILL ALSO RADICALLY INCREASE!

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THE MELTING POT PRODUCT PORTFOLIO STRATEGY

The above image is that of Indian sweets. Variety is not only the spice of life, Indian sweets are also available in a rich variety! (I got this image from here). If a customer visits an Indian sweet stall, he will be so impressed by the variety, a sort of melting pot of sweets, he or she is bound to purchase something - a prospect will get converted in to a customer because of the variety, and a customer will purchase at least one item. The wide variety is responsible for the success of the sweet shop. The ability to cater to a wide variety of tastes and different customers is important. We pharma marketers can learn from this concept!

When we were kids we used to read a lot of Asterix and Obelix comics. There was this interesting character, Getafix – the druid in these comics. This wise old man used to create potions in his cauldron – a melting pot – with diverse herbs. One of his unique products was the magic potion that gave the drinker immeasurable strength. Today pharma giants are in search of such a potion that can give immeasurable strength to their product portfolio!

John Mack, the pharma consultant and blogger from America, has written about this product portfolio dilemma in a humorous way where he brings to focus the drying product pipeline of big pharma companies.

Product portfolio challenges

Products are the bread and butter of companies. Products are the identities of a company in the market. It is through the product range that a prospect or customer gets to know the company – the products are a point of contact between the target audience and the company. So product portfolio management is a most critical task of any company as all revenues are hinged on it.

With respect to new products, traditional pharma has been single minded: Identify a molecular target, synthesize/extract and screen a new drug candidate to modify the molecular target for patient benefits; establish the safety and efficacy of the new molecule through clinical trials. That is, see if the new molecule can be established as more effective and safer than contemporary medicines, patent the product, and market it. Basically, the new product should have projected annual sales (from the first year) of at least 500 million US dollars and fetch at least 70% net margin. This was the well trodden R & D path, which cost the pharma company for new product R & D (including clinical testing costs) at least 880 million dollars and the time- to- market being about 14.7 years. Traditionally pharma companies either invent the new molecule, or license it from innovator pharma companies or buy up the innovator company or outright purchase the technology. This traditional approach has been based on molecular biology and understanding the biochemistry of the disease process. True, this approach provides fodder for the new product cannon.

However – rofecoxib changed this product pipeline strategy forever. Rofecoxib was touted by Merck as the revolutionary highly selective Cox 2 inhibitor, which was very effective for pain relief; it was promoted as a drug that did not have any side effects on the tummy (ie. creating hyperacidity) or on the respiratory tract (ie. causing broncho spasm). But the celebrations were short lived. Phase 4 clinical trials established that rofecoxib caused deaths due to adverse effects on the cardiovascular system. Rofecoxib was withdrawn. Perhaps after the thalidomide tragedy no other pharma event has shaken the pharma industry to its very roots.

The rofecoxib product market tragedy was followed by the 800 million USD torcetrapib failure AND Exubera – the world’s first inhalable insulin was also withdrawn from the market. No new blockbusters were visible on the new product horizon. (The benchmark for any new product introduction is that it should have a minimum annual sales projection of 500 million USD from the first year. And there were no products fitting this criterion. ) Risks were too too high. The product pipeline strategy of many a company was at peril.

The biopharmaceutical product pipeline

However, biopharma companies like Amgen and Genentech are in a better shape. These companies have new introduction products that generate annual sales of at least 300 million USD. So a glimmer of hope has come from the biopharma segment. Hence, Merck is betting big on its vaccines range and Pfizer is reinventing itself as a biopharmaceutical company. In fact, the acquisition of Wyeth has been on these grounds.

Remember, Pfizer is a symbol of America. If it had not purchased Wyeth, one more icon of America would have weakened. So the purchase of Wyeth gives Pfizer a new hope.

The latest fad of product pipeline strategy is to have a set of biopharma products

Biopharma has gained traction due to an interdisciplinary approach to new drug R & D. New biopharma products have a connection to the field of genomics (identifying, understanding, and functional characterization of genes), proteomics (study of proteins in the body) and in turn computational biology (applying IT in biology - the leader company here is IBM).

The biopharma game started with the Human Genome Project (2001). This project and Celera (a private company) characterized the 30000 genes in the human body. Thus, it was now possible to identify defective genes and create new therapies that correct the genetic problem. Genes also contain coded information for protein synthesis. Proteins are ubiquitous and are made up of amino acids. Enzymes, antibodies, and most hormones are proteins. Proteins are involved in the structure of cell, inter-cell communication and functioning of cells. Proteins also undergo a process called protein folding which is important and is considered while creating therapeutic proteins. Biotech companies reseach and manfacture therapeutic proteins that correct disease processes. For instance, lack of erythropoietin (which is synthesized by the kidneys) is responsible for anemia in kidney failure patients. Amgen launched a biotech product - alpha erythropoietin. This is now a blockbuster pharma brand.

This goes to show biopharma products are important for a robust product pipeline and product portfolio.

Ranbaxy is acquired by Daiichi Sankyo

The Ranbaxy purchase by Daiichi Sankyo is a marriage of convenience to both parties. The challenge of having a robust product portfolio can be met by having a strong generic portfolio. This is the bet by Daichii Sankyo. Many companies buy competitors to strip off their resources and weaken them. However, this Ranbaxy purchase appears to be an important synergistic acquisition for Daichii Sankyo. On the other hand, Ranbaxy's promoters were having some debt and the company did not have any promising blockbuster molecule(s) that would take it to greater heights. Hence, the marriage took place. And mind you this integration is a very strategic one. There are no sobs of job cuts - pure harmonius synergy - like a Japanese poem - HAIKU!

Having a generic drug portfolio is important to have a melting pot product portfolio that can withstand technological stresses.

Wellness product portfolio is an evergreen one

A product portfolio that is evergreen - is one that can seemingly sell forever without the fear of technological obsolescence. There are such lucky products. For eg., Ayurvedic brands belong to this class. Liv 52 (#5 in the Indian pharma market ) a decade back was about Rs. 18 crores sales per annum, and now it is about Rs. 100 crores sales per annum. Revital - a nutritional supplement from Ranbaxy with its OTX (prescription plus over-the-counter) product promotion is such an evergreen product. Becosules Z a vitamin brand from Pfizer is also an evergreen wellness brand - and is a constant topper brand of Indian pharma market.

The moral: a strong wellness product portfolio is a must to strengthen pharma companies. This is one reason that pharma biggies in India like Merck, Piramal Healthcare, and Mankind are having electrolyte energy drinks with patient value in their product portfolio.

P & G has an interesting product portfolio

Procter and Gamble is one interesting company that does not believe in gambling in the product marketing game! They have put their eggs in many baskets!! This interesting company has detergents, personal care, fast moving health goods like Vicks, fast moving consumer goods - soaps etc, and even PRESCRIPTION PRODUCTS in its product portfolio. Yes - they address the exciting chronic orthopaedic prescription markets like osteoporosis and osteopenia through its brand Actonel (risedronate). Actonel is positioned to increase BMD in postmenopausal women (even with a once-a-month therapy - that is something that no woman would grumble about and surely one can convince a woman to buy it!). There are lots of lots of things to learn from P & G's product portfolio game. It has products from FMCG point to FMHG point and even a prescription range. Talk of bulletproofing! Johnson and Johnson is a similar company. Some companies that come close to P & G in their business approach is the Ayurvedic major of India, Himalaya; Zydus Cadila - of course has some products in its FMHG segment and many in the prescription segment. Mankind is trying to grow and gain market share in the Ayurvedic and FMHG segment - it is already strong in the prescription segment.

By the way, the herbal and Ayurvedic pharma market is now catching the attention of pharma marketers. One reason is Patanjali Chikitsalaya and its success. This institution created by Swami Ramdev has about 800 doctors all over India, and they see some 50000 patients every day (all over India). Their sales turnover even though the products are very economical is near abouts Rs. 20 crores plus per annum and growing steadily (not bad for a new company).

Pharma marketing is tricky

Let us say you have Rs. 100 to spend on pharma marketing. Now, how will you divide and where will you focus these monies? On which product and which strategy? This is the question that constantly grapples pharma marketers. On which product will you bet on - so you get the best ROI? That question haunts many a pharma marketer. One guide is to have a MELTING POT PRODUCT PORTFOLIO STRATEGY for best bulletproofing from unfavorable market conditions.

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HOT BUTTONS OF A CONVERSATION: the e-imbroglio

TRY CONVERSING WITH A GROUP OF DOCTORS! IT IS TOUGH CUTTING THROUGH THE CONVERSATIONAL CLUTTER!! THE ABOVE IMAGE COMES FROM HERE. The fact is, we are in the age of conversations - enhanced by social media and the internet. Both the - loud and whispered conversations - are defining our attitude, emotions, and activities.

I was waiting to meet a dermatologist, some time back with a MR colleague, at a hospital. We overheard a conversation between two doctors:

Doc 1: So how is patient Ankita doing?

Doc 2: She is better, no doubt it was mainly a exacerbated hypersensitivity of the skin...

Doc 1: OK, but don't forget to put her on Augmentin ... there is always a possibility of secondary infection!

This is a conversation - and it reflects the word-of-mouth popularity of Augmentin. There are thousands of such conversations going on in target prospect or customer segments. The point is how can pharma and healthcare marketers benefit from conversations?

One to one conversations

Pharma marketing is characterized by highly personalized relationships between pharma company medical representatives and physicians. This is one reason pharma has not been fast in embracing digital marketing concepts (as fast as other industries).

During one-to-one conversations between a doctor and a MR, knowing the profile of the doctor with all the fine details helps in discovering the hot buttons to engage in a fruitful conversation:

Dr. Manohar MD, a bearded Malyali gentleman, practicing in Marathhally, Bangalore was one of my favorite calls during my independent field work days. While talking to him I realized he had a fond hobby - he loved aeroplanes. In fact, his knowledge was so vast, he knew the wing span and horse power of various military and commercial airplanes.

With this background knowledge, I happened to meet him at his clinic for a call one day. I wanted to launch a new product - SUPERGESIC CREAM - to him.

As an ice breaker, I started talking about aeroplanes and the Aero show (for which Bangalore has now become famous - in fact, this year's aero show is to start in a week's time). After some talk about planes, I took out the launch visual aid, and started, "Dr., planes are known for their swiftness, and here I am pleased to launch a new SWIFT ACTING, topical approach to pain management, introducing, (pause) Supergesic cream... "

The call went on well. During my next visit after 15 days, a pleasant surprise awaited me from the chemist - he said, Dr. Manohar was prescribing good quantities of Supergesic cream, at least 3 to 6 tubes a day!!

So the hot button here was the aeroplane talk, this was effective in having a productive conversation and good storytelling on Supergesic cream to Dr. Manohar MD. This incident is still fresh and vivid in my memory, thanks to the success.

Thus, the point is that one has to discover the hot buttons of a person and strike a conversation based on the likes and dislikes.

In fact, I had learnt this point from my dad - Late Suresh G Chiplunkar, a PSR with Wyeth. He would share with me (when I was still going to college), how based on the tastes of a doctor, like say, films, one has to start the doctor call with that point.

Mr. Vivek Balse, a good family friend and an exceptionally gifted PSO with Pfizer, would share with me his experiences too. I believe Pfizer called this approach of effective conversations with doctors as SOCIAL STYLE SELLING TECHNIQUE. The technique was to basically align the in - clinic activity with the personal interests of the doctor and finally put across the product message.

Digital marketing and pharma

Digital marketing and pharma have a sort of love-hate relationship. On one hand, all pharma marketers agree to the immense potential of the internet and digital media for marketing activities. However, all wonder why the adoption of these digital technologies is not as swift as it could be.

One reason is that pharma marketers still swear by the conversations (including story telling & messaging) between the field force and the doctors - as the foundation of pharma sales. Pharma marketing does not envision any other form of effective conversations with the target doctor community. There is an important reason for this belief. The reason is: EFFECTIVE PHARMA SELLING IS A HI-TOUCH EXPERIENCE. There is an intimacy between the MR and the doctor, which is in fact responsible for prescription generation. Digital marketing on the other hand, is not personalized. It is standoffish and there is a thinking that digital marketing may not result in better sales. Hence, pharma marketers feel it is better to play with the time- tested & trusted winning business model - and that is invest on MRs (more and more of them), and more on in-clinic activities between doctors and MRs - to ensure prescription generation.

Is there a way out of this e-imbroglio?

E-imbroglio is a pharma marketing phenomenon characterized by inertia to adopting digital marketing concepts and techniques.

The main reason for the e-imbroglio in pharma marketing is that digital marketing avenues are not positioned as effective for conversations that can result in doctor conversions and enhanced prescription generation. Digital marketing is visualized as a costly add-on to traditional sales and marketing through MRs. The ROI from digital marketing campaigns is anybody's guess - hence, pharma marketers continue to invest in the MR based pharma product promotional formats.

The best way out to increase adoption of digital media for effective sales and marketing is to use a HI TOUCH-HI TECH approach.

THE HI TOUCH - HI TECH APPROACH

Hi-touch refers to the human touch of marketing, represented by MRs. Hi-tech refers to use of high tech gadgets and techniques to enhance sales and marketing activities. In the Hi-touch and Hi-tech approach the MRs, field personnel and Head Office personnel use digital media in a co-ordinated way to have enhanced conversations with doctors.

Example 1: Background: India has one of the world's highest mobile phone penetrations. In fact, every doctor has a mobile phone. Every MR has a mobile phone.

Let us say we want to create a campaign for electrolyte energy drinks in prescribing practice.

Step 1: Provide a mobile phone to each MR with which one can record a doctor's medical opinion with some clinical patient photos on how electrolyte energy drinks have delivered patient value.

Step 2: MR sends the same to Head Office, through email, and this is posted on the product portal.

Step 3: MR informs his doctors about the posts, and the doctor community visits the product portal to view and understand the medical opinions of other doctors.

Step 4: A poll is conducted to find out which are the most interesting clinical videos and the most voted one is given a good gift. The doctors can also discuss issues relating to the videos on message boards available in the portal. They can also be enticed to listen to e-detailing.

Example 2: Background: The pneumococcal vaccine is sometimes in a bind - some pediatricians feel it is not a very valuable vaccine as it provides protection from invasive pneumococcal disease only - and not from the common types of clinical pneumonia.

The pharma marketer's problem here is to enhance consumption of this vaccine. This can be done by reiterating that this is a necessary protection to some susceptible groups (to begin with).

The marketer launches a mobile phone based case study photographing campaign of invasive pneumococcal disease in diabetics. The case studies are collected by MRs in collaboration with the doctors on whom they call.

These medical opinion case study videos are uploaded on the product portal and doctors are informed of the same. These doctors will not only see their video but will engage in conversations on the website message boards and they can view the videos of their colleagues too.

Such doctors can also be encouraged to listen to e-detailing podcasts on the importance of pneumococcal vaccine in diabetics. They can also order for samples or purchase vaccines at discounted prices or print out a discount voucher for gifting to patients who opt to get vaccinated.

The above approaches can be used for any campaign - like liver disease case study campaign, antibiotic resistance clinical study campaign, etc.

THROUGH THE ABOVE E-CAMPAIGN BASED DIGITAL APPROACHES, THE PHARMA MARKETER GETS THE DOCTORS HOOKED ON TO THE NET, CREATES AN EXCITEMENT AMONG MEDICAL LIAISON FIELD PERSONNEL, AND MEDICAL REPRESENTATIVES. The end result is that there is an INTEGRATED MARKETING COMMUNICATION APPROACH, with out dismantling or altering the traditional MR based approach to doctors in clinical settings.

When such e-CRM (customer relationship management) approaches are adopted not only will pharma marketers get out of the e-imbroglio, they will also see enhanced product adoption. Besides, patients and doctors too will get to enjoy the benefits of the digital revolution leading to better patient care and healing.

The digital medium is a great enabler for pharma marketers to create a selling environment, to the patients it is an empowering medium, and for doctors the digital medium facilitates instant and real-time communication. The digital medium helps overcome geographical barriers.

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GOODBYE HUBRIS! Hello jugaad!!

I GOT THE ABOVE INTERESTING IMAGE FROM HERE.

The human quest to overcome adverse circumstances is eternal. Every person wants favorable circumstances in his or her life. The quest to avoid and overcome unfavorable circumstances is very challenging. No amount of knowledge, skill and native intelligence seems to be enough to avoid unfavorable circumstances. Einstein, a genius in our living memory, faced unfavorable circumstances in his domestic life.

Today, even the most intelligent business person perhaps did not anticipate the knotty economic mess that plagues nations. Today, the world is united by the global recession! THE ONE INTERESTING THING ABOUT FACING ADVERSE CIRCUMSTANCES - it teaches humility, and one says goodbye to HUBRIS!!

Pharmaceutical and healthcare businesses in India are yet to face the heat of an economic slowdown in the domestic market. Perhaps pharma companies may never face recession since the domestic pharma business never saw a sudden boom. However, it is justifiable to expect that the double digit growth of the pharma industry may now turn to single digit growth.

Patients are certainly going to ask the chemist or doctor for economical alternatives and will invest only on the very necessary drugs. However, the cost of drugs in India is not prohibitively high, so people may not cut down on drug and healthcare expenditure significantly. They may postpone it, but not indefinitely. Patients will also invest more time on yoga and other non drug therapies to try and control the course of disease and maintain wellness. This would definitely be economical to the patient.

Pfizer strategizes boldly to avoid an adverse circumstance in 2011 - but sweeps people and cultural issues under the carpet

The top management is always keyed on to defining the future of the organization. It is said the future belongs to those who can invent it. And in this vein, Pfizer has made a bold strategic move to acquire Wyeth, for 68 billion dollars. Wyeth has a promising biopharmaceutical portfolio and pipeline. So this acquisition makes financial sense as Pfizer is bulletproofing its position #1 - 2011 onwards - when the Lipitor patent expires.

However, a mere financial purchase does not make an acquisition successful. There are numerous cultural and people integration issues. A merger or acquisition poses a lot of systemic challenges. Although Pfizer has not addressed this issue publicly - they need to do so. THERE ARE TALKS THAT THERE WILL BE MASSIVE JOB CUTS ALMOST 19500 (EQUIVALENT TO 40% OF WYETH'S WORKFORCE) IN THE USA. This may not happen in India, at least at the MR level, as the market dynamics are different, market coverage will suffer if MRs are asked to quit and that will further affect revenues.

When Tatas took over Corus it was not the financial matters alone that mattered, the people and cultural issues were equally vital. What was important to the Tatas was that there was a cultural fit in the takeover of Corus. Do pharma companies ever think of such issues? Pharmaceutical acquisitions seem to be singularly insensitive to these matters. To pharmaceutical companies, mergers and acquisitions are mere business therapies, and side effects like job cuts seem to be taken in the stride. However, the moot question is - is this insensitivity to people and cultural issues healthy for the pharma industry?

It reminds one of the Wild West stories of cowboys fighting to take control of green pastures and valuable cattle. Why is the pharma industry as compared to IT and engineering fields insensitive to people and cultural issues?

The business model is changing

Industry pundits (CLICK HERE) say that the largest drug market in the world ie., the US of A which is a 286 billion dollar market is maturing and gaining a competitive stage. This sets the stage for further consolidation in the industry. This is compounding the adverse situation. One can expect pressure on product margins. The stage will lead to commoditization of the industry in USA.

In India, this has already happened. We never had product patent protection, hence, very big margins to pharma companies was not possible. Product patent protection is only a recent introduction, post 2005. Indian Pharmaceutical market has always had a lot of commoditization.

So how to survive in a severely competitive market?

The Indian answer is jugaad (or native inventiveness). The answer lies in being novel or innovative with respect to BRAND NAME, DOCTOR RELATIONSHIP MANAGEMENT, DISTRIBUTOR RELATIONSHIP MANAGEMENT, AND OFFERING VALUE-FOR-MONEY PRODUCTS/MARKETING PREPOSITIONS.

The above language is very odd for pharma marketers who are used to marketing PATENTED PRODUCTS. Pharma marketers of patented products are used to monopoly markets, virgin markets, high margins, tight control over doctors and distribution, and commanding huge premiums on the price of the product (justification - I invented the drug with lots of toil, sweat, blood and tears). There are no competitors to bite at the innovator brand. Hence, there is a lot of hubris (a kind of technological hubris) in the pharma marketer of patented products. In a competitive and commoditized market one can say goodbye to all such attitudes.

Not just commoditization of drugs - but also of drug classes and therapies

The unique global pharma market feature is not just commoditization of drugs but also of drug classes and therapies. The market is very crowded with so many new and latest drug types that the doctor too in a way is bewildered with the pros and cons of so many options.

When such is the situation, there is a lot to learn from Indian pharma marketers. And one thing Indian pharma marketers do not have and cannot afford to have - ie., HUBRIS. When you drop hubris, jugaad begins. This word means 'working around' it comes from the name of a vehicle. The quintessential feature of jugaad is making best of the circumstance. Perhaps one of the best example of jugaad in Pharma is the FPO (fruit process order) based aseptic product - electrolyte energy drinks in natural fruit juice base with Tetra Pak technology for prescriptions. (www.jagdale.com info@jagdale.com)So let us drop the hubris, and solutions will open up through JUGAAD!!

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THE THIRD WAVE

I GOT THE ABOVE IMAGE FROM HERE.

The market is a pot pourii of various dynamic forces. Different needs, wants and desires and various product prepositions drive the Indian pharmaceutical market. Accurately understanding these market requirements and servicing them has created mega fortunes for pharma companies.

During the 1960s, 1970s and up to early 1980s the major growth driver of pharma companies was the antibiotic wave. There was a huge need for such products. Wyeth was a leader of the penicillin wave; Sarabhai, Alembic, Ranbaxy and other 'old' pharma companies of India rode on this wave to become pharma biggies of India. Free India at that time was in its early growth phase. The socio-economic conditions demanded that a huge volume of antibiotics be produced and marketed. Diseases like diabetes and even cancer were still niche market areas. The antibiotic wave was the first wave in pharma India.

The second wave was the lifestyle drug wave. It was all along a niche market but sometime during mid 1980s and the decade thereafter (ie., 1990s) the lifestyle disease wave trend gathered steam. Companies like Sun Pharma, and Torrent rode well on this wave to become pharma heavy weights.

2000AD onwards India will be known for not only the antibiotic (and associated anti-inflammatory drugs market), and the lifestyle drugs market - India will be famous for its new wave - THE WELLNESS WAVE - a huge and growing market for wellness products and services. This in fact, is the THIRD WAVE IN PHARMA INDIA, which has come of age and is at the cusp of exciting growth.

Success through wellness

Increasing health consciousness, improving purchasing power, increased average life span, and the higher literacy rates have all combined to create a new wellness wave. People are investing on preventive and proactive healthcare products and services. This has contributed to the growth of direct selling products like Herbalife, and Amway too.

Wellness products come in different marketing formats. The oldest of wellness products belong to the Ayurvedic market stream. This was a niche market all along, however, due to various social forces like Swami Ramdev, Sri Sri Ravishankar, and other individuals, the healthcare attitude is leaning towards wellness Ayurvedic products.

Wellness products are not only marketed under drug licence - the fomulations may be presented similar to drugs (eg, in capsules), however, they are not necessarily marketed under the provisions of the Drug and Cosmetic Act. Such wellness products are marketed under food licence. A PFA (Prevention of Food Adulteration Act) no. is given to such products and a local state health authority provides the licence for manufacturing the product.

Marketing products manufactured under the food licence: Products manufactured as foods or food supplements or nutritional supplements can be promoted to patients directly. However, in the Indian context it makes more marketing sense to market them for prescriptions. This is because doctors are very trusted for recommending health care products. It is also more economical compared to costly media advertising for which measurable increases in sales are difficult to achieve. Furthermore, it is easier to establish the product in the market, make it available to the patient or consumer at medical stores, and ensure ever increasing market penetration through marketing in the prescription route. Doctors are great facilitators of marketing of such healthcare products.

Certain other wellness products including those that are manufactured under the food licence, are marketed by the OTX route (mix of prescription and direct to consumer) . While medical or sales representatives promote the product to doctors, who are important opinion builders, there are also media advertisements directly addressing the patients. This method is particularly followed by Ayurvedic marketers.

The Patanjali Chikitsalaya model of marketing: This organization is founded by the Yoga evangelist Swami Ramdev. During his television shows, and other demos on Yoga the Baba directly informs about the benefits of his Ayurvedic products. There are media advertisements too. Furthermore, there are dedicated doctors in his clinics who recommend and sell his wellness products. There are no sales reps of his organization that fan out to other doctors asking them to recommend products of Patanjali Chikitsalaya. Maharishi Mahesh Yogi had started an Ayurvedic firm Maharishi Ayurvedics and they had a sales force that would promote products to doctors.

Marketing products under FPO licence: This format is used by the pioneer of electrolyte energy drinks in Tetra Pak in India viz., Juggat Pharma, Bangalore (http://www.jagdale.com/). They also contract manufacture these products for other pharma marketers like Merck (Electrobion Apple Sip and Lemon Sip), Mankind (Electrokind L) and Piramal Healthcare (Elect-RTD). For more details: info@jagdale.com This range of products are marketed for prescriptions - although legally they can be sold without any doctor prescriptions. The main reason for this route of marketing is the fact that doctors see patient value for these products, and hence prescribe these products. Eventually, they may gain OTX status in years to come.

Wellness through vaccines: The recent edition of Pedicon (Annual meet of Paediatricians of India) ie., Pedicon 2009, Bangalore was an eye opener. There is a lot of action in the vaccine space in India. GSK has brought out Cervarix, & MSD has its celebrated Gardasil. Wyeth is heavily promoting its pneumococcal vaccine Prevenar.

The magic no. is 609: There are 609 districts in India, with a population of 1.1 billion, and this includes some 300 million of the middle class. Every marketer is excited by these nos. People want to go to each and every district of this set of 609 districts. In fact, IAP (Indian Academy of Paediatrics) a body with 17100 members too wants to go to each and every district of India. And that is the reason, the big MNCs GSK, MSD, and Wyeth are closely linking their marketing programs particularly their CME funding in co-ordination with IAP.

The clear distinction between marketing spends of Indian pharma companies and MNCs is the emphasis on brand communication. While Indian pharma companies excel on CRM aspects particularly in events like PEDICON 2009, MNCs are powerful builders of their brands in these venues.

Wyeth's close association with IAP seems to be paying off: Today, due to the fact, that regular (clinical) pneumonia is not (and Prevenar may increase risk of asthma too) protected by Prevenar, the brand is being positioned cleverly for protection from SERIOUS PNEUMONIA (invasive pneumonia). This refers to the rare radiological pneumonia. As per the IAP annual report, 2008 the pneumococcal vaccine will be a part of the IAP National Immunization Schedule after 2010. In the meantime, Wyeth is heavily investing on Pneumococal Disease Conventions and other formats of CMEs in league with IAP.

There was a time when MNC pharmas would not participate in such conventions, as they were supposed to be 'ethical' and in contrast, Indian pharma companies were alleged to be 'unethical' - since Indian pharma companies were heavily in to such sponsorships of events and stall activities. However, today, the rules of the game seem to have changed and thereby philosophies too - as the need of the hour is different!! Even conservative Wyeth had a huge stall at Pedicon 2009, Bangalore!! GSK and MSD had a very dominant presence too. THE STANDOUT FEATURE OF THESE MNCs IS THAT THEY WERE DOMINEERING IN THIER BRAND COMMUNICATION ACTIVITY TOO ALONG WITH MARKET SPEND ON DOCTORS. This is not seen with Indian pharma companies even though their market spend was as much.

All this participation is due to a new wellness trend in the Indian healthcare market. Vaccines are a part of this wellness trend. Besides vaccines, various drug and non-drug formulations for wellness are marketed for prescription support (eg., electrolyte energy drinks, info@jagdale.com). Now, by the way, if we were a poor country with low purchasing power, would these global pharma majors have launched Gardasil, Prevenar (Rs. 3300 per vial), and Cervarix?!! WELCOME - THE THIRD WAVE IN PHARMA INDIA (ie., the wellness wave) HAS COME OF AGE IN INDIA!!

Whither, sense of ownership?

Shocking! The Indian society is shocked with the SATYAM EPISODE of 'true lies'. Imagine funneling out Rs. 7000 crores towards real estate investments from cash cow company Satyam!! That is what the highest authority or 'owner' of Satyam computers, Mr. Ramalinga Raju has done. Mr. Ramalinga Raju's heist raises an important question not relating to corporate governance alone, but of something even more fundamental:

Imagine you start a IT company, take it to great heights, and all the time you pilfer monies from the corporate treasury and buy land with it. Now what does this indicate? Basically you are a crook?! Well, something even more basic - all the time you never had a sense of ownership of the company even though you were the 'owner' of the firm. That is what Raju did - he never had a sense of ownership towards his company!!

If Mr. Raju had a sense of ownership, he would never have stolen money from his own company!! Will any family member forgive if the father or master of the house stole money from the house!! And remember, Raju was the founder of Satyam and his family were the promoters of the company.

It is truly an oddball behavior!! Contrast this with Mr. Narayanmurthy, Mentor of Infosys, who was invited to join the board of Satyam after the heist was discovered. Mr. Narayanmurthy declined fundamentally because he had a sense of ownership with Infosys and taking up a role with Satyam would cause conflict of interest - this is what is meant by a sense of ownership.

Well, this can rarely happen in Pharma India

An episode of the type of Satyam can rarely happen in Pharma India. The main reason is that most of Indian Pharma top management leadership is with people who have marketing experience. When a person goes to the field to sell his products, he has to have a deep sense of ownership. In the marketplace battlefield, every marketer is the owner of the brands he is trying to sell. That is the sentiment of every salesman and marketer. The sense of ownership develops in to a habit. In fact, a sense of ownership is also reinforced by stockists, doctors and others with whom the MR interacts.

Raju of Satyam was a non-marketing kind of a guy. Not a person with field sales experience. So probably that is why he never developed a sense of ownership with his own company!! And that is the strange thing - this absolute lack of sense of ownership. Imagine Henry Ford stealing money from Ford Motors and buying ranches and properties in USA with that money!!

Pharma India is full of heroes at the top

It takes a lot of warrior-like attitude to be at the top in Pharma India. You have to have a deep sense of ownership or you can't steer a company at the top. That is the stuff of the INDIA'S BEST CEOs. As per Businessworld special issue dated 29, Dec. 2008, India's most 'value'able CEO is MR. DILIP SHANGVI 'owner' of Sun Pharmaceuticals. The second most 'value'able CEO of corporate India is again - not somebody from IT or ITES, it is MR. GLENN SALDANHA of Glenmark Pharmaceuticals. KUDOS TO INDIAN PHARMA FOR THIS GREAT PERFORMANCE. We should remember Businessworld is a very respected business journal of India. And this rating gives a thumbs up to Indian Pharma.

Mr. Dilip Shangvi - the ultimate authority of Sun Pharma - he leads the company with an iron fist. His sense of ownership with Sun Pharma is intense. He is the face of Sun Pharma. Mr. Dilip, son of a pharmaceutical distributor of Kolkatta, started Sun Pharma. He founded Sun Pharma. He has field experience too.

Mr. Glenn Saldanha is a toast of the pharma profession because he has a great corporate record and is a graduate pharmacist (alumnus of Bombay College of Pharmacy). This gentleman along with Mr. Mark his brother, handles the business started essentially by his father Mr. Gracias - this elderly gentleman too started as a pharmaceutical wholeseller of Mumbai. Mr. Glenn's sense of ownership is understandably high for Glenmark, as it is a sort of family based concern (95% of Indian businesses are family businesses, Sun Pharma too is a 'family based company'.). Mr. Glenn is involved closely with the marketing operations of Glenmark.

So the point is, the first funda for a company to become great is that its promoters' should have a sense of ownership - unlike Raju of Satyam. Even though Mr. Raju started Satyam he lacked a sense of ownership. He seemed to have a greater sense of ownership towards Maytas and other companies that lived off monies sucked out of Satyam. This lack of a sense of ownership is the real reason for the Satyam tragedy. I HOPE SATYAM BOUNCES BACK BECAUSE IT HAS GREAT PEOPLE - some 50000 odd highly qualified employees. And I also hope it shifts out of Hyderabad, because AP is a state where politics is too intertwined with business. Satyam - welcome to Bangalore!!

I got the above images from here, here, and here.

Regarding integrity and marketing wisdom HERE IS A GREAT LINK please do read it.

The fall in integrity often starts with small things. Like bribing!! Today the dept. of pharmaceuticals of Govt. of India is focusing on the gifting practices of pharma companies to doctors. In fact, this marketing practice is making front-page headlines in India!! The dept. believes that this excessive gifting practice is leading to a situation where doctors are prescribing excessively to meet the targets given to them by the pharma marketer.

Well, to be frank, this situation is not so easy to deal with.

I remember when I started my field work career way back in the 1990s, I made an excellent call to Dr. Arun Vadavi, MD, Bangalore. This doctor is a great guy. A dynamic doctor with a fairly good practice. He was impressed with my presentation, and while committing to prescribe Hepatogard, at the end of the call, he asked a question: 'Hey, why should I prescribe your product?' May be he was testing me and my nerves. I ignored his question and went on with my call, he never asked that question again. But his voice still rings in my ears. HEY, WHY SHOULD I PRESCRIBE YOUR PRODUCT?

Most doctors give a fundamental support because of quality, safety, efficacy, and availability of the brand. Of course, quality of representation is a key factor also. For a doctor, ultimately, the patient value of a product is the most important factor. However, after some time, the doctor also expects something for all the business he gives to a pharma company. This is where gifting, and sponsoring practices of the pharma marketer comes in to play.

This concept of gifting and sponsoring to doctors is a universal phenomenon. It is done in different ways. MNCs call them clinical services, medical grants and scientific services. It is like organizing a conference in Washington DC and sponsoring leading oncologists of India to this event, they will also throw in complimentary sight seeing tours and gifts etc to doctors. In fact, the gifting and sponsoring practices in India is kidstuff compared to what happens in USA. I have a relative who is a cardiologist in USA, and man the kind of sponsorships and gift offers he gets from pharma companies out there!! In fact, in USA it is a big big practice of gifting or sponsoring to CMEs etc to doctors. However, it is well camouflaged under scientific grants, CMEs etc. Indian companies are not so sophisticated - that is all.

So how to tackle this problem if it has damaging consequences to patients and healthcare?

The answer is patient empowerment. Legalize and encourage direct-to-patient advertising. Of course, products should be sold only on prescriptions. However, advertising to patients should be allowed. This will ensure that you have informed patients. It is not easy for the doctor to take such patients for a ride!

However, for pharma marketers, gifting works only up to a point. Ultimately there is the ROI (or return on investment thing, which controls gifting). Personally I feel gifting and sponsoring is a legitimate expense akin to advertising. Gifting to doctors is not a bribery. It is a marketing necessity. Because, Dr. Vadavi's straightforward question still rings in my ears: 'Hey, why should I prescribe your product?' And mind you, this doctor is a thorough gentleman, and a great guy, who has prescribed a lot during my field days, and helped my career. But his question is very pertinent, isn't it? I recollect another doctor who had commented: 'Sunil, remember there are no free lunches!! '

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NEW MARKETING DEFINITION AND PHARMACOLOGY

I GOT THE ABOVE IMAGE FROM HERE.

Pharmacology and marketing are very interesting subjects. In pharma marketing, pharmacology is the bedrock. Pharmacology is the science of drug action. Pharmacology studies drug behavior in the body. Marketing is the science of 'product action' - marketing is the study of product behavior in the market.

BOTH ARE VERY INTERESTING TOPICS OF STUDY, BECAUSE NEW KNOWLEDGE IS CONSTANTLY CREATED. THE BASICS NEVER CHANGE, HOWEVER, KNOWLEDGE FLUXES ARE VERY DYNAMIC. For example in 2008, the American Marketing Association revisited the definition of marketing and has redefined it:

Marketing is the activities, set of institutions, and processes (science) of creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. Now this is a new dimension - marketing is not seen merely as an organizational process and CRM process, as in the earlier definition. It goes beyond and emphasizes the exchange process (hence, consumption), which is the core of marketing.

Medical pharmacology is the science of using drugs or medicinal substances to deliver health value to the patient and the marketing dimension in pharmacology is managing drug pharmacology to meet the commercial needs along with patient value.

It is important that the pharmacology of a drug matches the needs of the marketer: for commercial success

For instance, aspirin is a NSAID (pain killer), however, the pharma marketer finds the pharmacology of aspirin as a blood thinning agent (ie., helps prevent clots inside blood vessels) very interesting to market. The activities of the marketer reflects the market needs, wants and desires. Thus, pharmacology is a beautiful science, however, the marketing dimension of pharmacology is the application of pharmacoprofile for commercial benefits and patient value.

Particularly in Ayurvedic pharmacology, marketing faces a unique challenge. The pharmacological profile of Ayurvedic drugs is that they are very versatile. For eg., Shuddhaguggulu has benefits on the skeletal system, however, it also helps lower blood cholesterol levels. While a pure pharmacologist will find every dimension of shuddhaguggulu very fascinating, the marketer who uses pharmacology, is most likely to position shuddaguggulu as a blood lipid lowering agent - since the market for such drugs is large and there could be other better pharmacological Ayurvedic interventions to manage diseases of the skeletal system.
Pharmacology has two main branches:

PHARMACODYNAMICS - study of what the drug does to the body. Pharmacodynamics deals with mechanism of action of the drug and dose - response relationship. In pharmacodynamics, the scientist studies the exact mode of action like the receptors or target sites for drug action. The scientist also studies the dose administered and the response obtained.

The most common pharmacodynamic aspect is the drug-receptor model. Pharmacologically it is proven that most drugs combines with unique receptors (specific three dimensional sites normally on the exterior surface of the cell membrane) to elicit drug activity. It is like a lock and key, the key is the drug and the lock is the receptor. Only the right key can open the lock!

Some drugs are agonists - they bind with the receptor to produce stimulation. For instance, beta receptors in the airways are stimulated by drugs like salbutamol to produce airway dilation, and this helps provide relief in case of asthmatics and other cough with airway constriction.

Some drugs are antagonists - they bind with the receptors to block them. They prevent other stimulant chemicals from binding with the receptor. Ranitidine is a H2 receptor blocker. It prevents histamine from binding with the H2 receptor. Thus, ranitidine helps reduce acid production in the stomach.

Some drugs are partial agonists - they block the receptor, but also mildly stimulate the receptor.

In marketing too with some doctors, MRs will find themselves - agonists! The doctors can be stimulated to produce prescriptions in their favor. With some doctors, MRs will be partial agonists - the doctors are mildly stimulated to produce prescriptions in favor of their brands!! Some MRs are antagonists to certain doctors, prescription flow is not there, but they block physician time!!

PHARMACOKINETICS - study of what the body does to the drug. In pharmacokinetic studies, the ADME of drugs is studied (ADME stands for absorption, distribution, metabolism and excretion).

The pharmacodynamic and pharmacokinetic factors are very vital to the pharma marketer. For instance, the thumb-rule is that hydrophilic drugs (the drugs that are water soluble) stay in the body for a longer time, they are metabolized slowly as compared to lipophilic drugs (fat soluble). Hence, the frequency of dosing is reduced for hydrophilic drugs. Propranolol is lipophilic and atenolol is hydrophilic - both these are antihypertensives. Since, atenolol is hydrophilic, it has a once-a-day dosing schedule, hence, patient compliance is better. Atenolol has greater marketability or patient-value features.

In case of drugs that have to act on the brain, they have to cross a band of cells called BLOOD BRAIN BARRIER. Such drugs have to be lipophilic or they cannot cross the blood brain barrier. May be that is why, propranolol is useful in the prophylaxis (or prevention) of migraine.

As a thumb-rule liphophilic drugs are metabolized significantly in the liver, and need to be given twice or thrice a day.

These pharmacological considerations matter for the product positioning aspects to a pharma marketer.

Disruptions in the market

Business plans and business models are always at the mercy of disruptive forces in the market. For eg., insulin market is dogged by the limitation that it has to be injected. Biocon has launched a project to develop oral insulin. They are using a peptide technology from a US company to help coat the insulin molecule so that it is not degraded by the enzymes in the stomach and intestines, the peptide coating protects the insulin molecule until it reaches the liver (after absorption from the small intestines). And then the insulin (a peptide hormone that helps lower blood sugar) is released in to the bloodstream. The marketing of such a product will revolutionize the insulin market.

Today, treatment of an important wide spread endocrinological disease - THYROID DISEASE - is not a 'difficult to treat disease' because thyroxine hormone can be administered as oral tablets. Diabetes mellitus is painful to manage mainly because insulin has to be injected. The day oral insulin is available, the misery associated with disease management will decrease dramatically. People will start popping insulin capsules as easily as thyroxine tablets.

Another force gaining steam in the Indian society, which is not recognized by mainstream media is the DEVELOPMENT OF YOGA-PRANAYAMA-AYURVEDA market. The fillip to this market has come through a science based promotion of Yoga by Yogrishi Ramdev Baba. It is not mapped or documented by the English mainstream media or market research agencies as it ought to be. And one day, it will sock the established business models like a bolt from the blue.

So pharmacological aspects and marketing are very intimately linked in the marketing of pharmaceuticals.

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