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

Launching Pharmaceutical
Megabrands: Best Practices in
Marketing Blockbusters
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Launching Pharmaceutical Megabrands: Best Practices in Marketing
Blockbusters (SM-124) profiles an elite group of high performing Number of Companies
pharmaceutical companies that have demonstrated effective operating practices
• 13 Companies Profiled
and winning strategies in the area of Marketing Pharmaceutical
Blockbusters. By studying other organizations’ successful approaches to Information Types
marketing blockbusters, your company can improve its multi-phased pre-launch
• 34 Information Graphics
marketing support to drive rapid uptake of new products. • 31 Data Graphs
• 401 Quantifiable Metrics
After reading this report, you will know how world-class pharmaceutical • 20 Manager Narratives
companies drive commercially focused drug development to create blockbuster • 96 Best Practices

megabrands. Benefits of commercially focused drug development include


Report Length
increased sales, increased speed to market penetration, improved product
positioning and market acceptance, and greater marketing impact through • 169 pages

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

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

METRICS INCLUDED IN THE STUDY


Performance metrics enable executives to perform gap analyses and identify areas needing improvement. Metrics
are an important complement to the qualitative best practices included in this study report. Best Practices, LLC
analysts collected and analyzed the following key metrics for blockbuster product launches from the companies
benchmarked in the study:

• Marketing activities and frequencies at each product phase


• Pre-launch marketing investments
• Total marketing spend for global and U.S. operations
• Pre-launch vs. launch marketing spend
• Marketing spend by activity
• New drug marketing investment by company, phase and activity
• Composition and size of product teams
• Marketing compensation levels
• Product/Brand manager qualifications
• Marketing publications staff responsibilities

KEY FINDINGS
Shape product development strategies and programs through early and continuous
commercial input.

Companies with successful new drug launches have established a highly effective commercialization process that
facilitates clinical and commercial collaboration at every product development stage. Visibly and consistently
supported by senior leadership at these companies, the commercialization process aligns research clinical
development efforts with evolving market needs to create real value for both the company and patients. This
growing imperative requires pharmaceutical companies to break down the walls that have traditionally separated
R&D from marketing, and instead form a partnership that leverages the strengths of both talented medical
researchers and skillful marketers. According to this study, companies that consistently launch blockbuster drugs
foster a culture that actively supports productive medical and marketing collaborations. Marketing staff and
research scientists at these companies coordinate their efforts as early as the Pre-Clinical Phase. By developing
and sharing clear goals and accountability, they create a transparent decision-making process. They communicate
frequently to identify new market opportunities, evaluate competitive positioning and address product
development issues. This ongoing collaboration bridges the gap between breakthrough scientific discoveries and

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

commercial potential, enabling top-performing companies to target and develop compounds with a high market
demand and clear competitive edge, leading to rapid sales uptake.

Manage cross-functional teams to drive launch strategy development and implementation.

Top-performing companies extend the partnership between R&D and marketing throughout the entire
organization. Increasingly, they employ cross-functional teams to enhance both the efficiency and effectiveness of
the development and launch process for new drugs. Cross-functional teamwork allows benchmark partners to
compress development cycle-time, increasing a product’s speed to market through close coordination of efforts
and earlier resolution of downstream problems (e.g. regulatory approval, manufacturing capacity, sales force
support). It is also valuable to develop a well-rounded product launch strategy by leveraging the knowledge and
capabilities of diverse teams (market research, competitive intelligence, medical affairs, disease management,
finance, strategic planning, public relations, etc.). Despite these benefits, making cross-functional teams work
often presents a major challenge. Best-in-class companies take a multi-pronged approach to managing and
coordinating cross-functional teams. They carefully select the right mix of experience, skills and personalities to
promote a dynamic exchange of varied perspectives. They recruit team leaders who demonstrate strong project
management and interpersonal skills as well as technical expertise. While managing phase-to-phase transition
seamlessly through early planning and retention of core team members, they also time the involvement of different
functional areas based on the specific needs of each development phase. Additionally, best-in-class companies
deploy robust technologies that enable rapid information sharing. They increase the ease and frequency of face-to-
face communication through co-location and regular meetings. Critical to the success of a cross-functional
approach is senior management’s commitment and support. Executives at the highest level play an important role
by transcending organizational boundaries and rallying around shared corporate objectives and strategies. They
also create an incentive system that rewards and recognizes collaborative innovation.

Employ broad-based market research to develop insights on complex and evolving customer
needs and competitive dynamics.

Market research has always been a cornerstone of marketing planning support. Increasingly, market research is
becoming a strategic function that drives key decisions in new product development and launch. According to
benchmark data analysis, top-performing benchmark partners conduct a wide spectrum of market research from
pre-clinical to post-launch. At each development phase, market research provides critical market data and insights
that drive informed decisions ranging from the target product profile to clinical trial design, competitive
positioning to branding and Phase IV studies. Most notably, best-in-class companies are increasingly employing
market segmentation research tools to help them understand attitudes behaviors of patients and consumers as well
as physician prescribers and pharmacists. Additionally, the amount time and effort to understand the needs of
payors, professional and patient advocacy groups and other key customer audiences is also growing as an essential
part of new product launch planning.

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

Manage all thought leader segments to shape commercially focused products and ensure
optimal market impact.

Benchmark partners stressed the importance of managing thought leader development as an integrated, multi-
phased process. They described a new era in which the most sophisticated thought leader management systems
segment key influencers and involve each group in different activities during the evolving stages of drug
development. Most companies prioritize thought leaders by hierarchy of impact (global vs. continent or country
unit). Some now distinguish research-focused thought leaders from patient-focused thought leaders, involving
both in the development process to ensure diverse perspectives. A few benchmark companies already engage non-
physician thought leaders (such as representatives from payers and patient advocacy groups) in the new product
development and launch process. Companies seek to tailor their efforts, activities and relationship investments to
match the value of each thought leader segment and to reflect the roles of each segment at different points in time.
Such an integrated approach ensures that companies optimize their resources and effectively build relationships
with the most influential thought leaders who can help shape clinical development, market positioning, brand
development and market acceptance.Align marketing resources to provide early, ongoing and consistent support
throughout the entire product development and launch cycle.

Align marketing resources to support market development activities with key customer
segments pre-launch and promotional activities post-launch.

All benchmark partners recognize the need to commit sufficient and consistent marketing resources for a new
product throughout all phases of the product development process. According to benchmark data, companies that
launched top performing brands share a set of common characteristics in their marketing investment patterns.
First, they begin to allocate marketing resources for a new compound as early as the Pre-Clinical Phase.
Marketing personnel conducts crucial market research that helps identify unmet medical needs, market
opportunities and competitive issues – key components that drive early market assessment and product profile
development. Secondly, top performers spend gradually and selectively on high impact pre-marketing activities to
create awareness, demand and preferences for their new products. These companies understand that rapid sales
uptake is a consequence of cumulative marketing investment over several years rather than extravagant spend in a
single year. They also believe what matters most is not how much money companies spend on marketing, but how
well they spend it. Carefully targeting those activities with the highest impact on a new drug’s success in the
market, best-in-class marketers invest heavily in pre-launch activities:

• Thought leader and advocacy group development

• Scientific meetings and symposia

• Medical publications

• CME programs

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

• Public relations

• Disease awareness programs

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

• Field force detailing and sampling

• DTC marketing

• CME programs

• Professional journal advertising

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

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

• The first chapter, Developing and Deploying Integrated Marketing Support, includes a topic overview,
benchmark data describing marketing activities at each phase of development, and extensive best practices
about timing of marketing activities.

For example, one benchmark company found that marketing support truly must start at the discovery stage.
Group members work closely with research scientists and provide therapeutic area managers with market
research data including: epidemiology of disease, unmet medical market needs, and market opportunities and
size.

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

• Chapter three, Managing Team Structure, Communication and Transition, analyzes management team
structure and responsibilities throughout the development process to prepare the market for product launch. The
chapter also includes information on structuring marketing career paths and the responsibilities associated with
each position.

For example, one benchmark partner has established a Global Franchise Team for each of its therapeutic
focus areas. This 15-person team provides commercial input for new drug development. This cross-functional
team includes members from strong commercial backgrounds, including marketing, strategic planning and
business development.

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

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

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

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

performance. Appendix C, Marketing Publications Staffing, details optimal staffing levels, staff workload
and staff optimization resources.

SAMPLE PRACTICES

How much do benchmark companies spend for a new product’s marketing support in the
years prior to launch?

Pharmaceutical companies increasingly recognize the importance of providing early and ongoing marketing
support for a new drug throughout the development process. Data from the benchmark class suggests companies
spend between $13 million and $38 million to prepare a high-potential retail product for launch. Although the
investment is about 15% of marketing spend for the launch phase, small sums of money can work like large
amounts, compounding over time with surprising strength.

Pre-Launch Marketing Spend by Phase

$18 $17
$16 $15
$14
Marketing Spend
(in millions)

$12
$10
$8
$6 $5 $5
Low
$4 $3
$2 High
$2 $1 $1
$0
Phase III
Phase II
Pre-Clinical

Phase I

Submission

Phase

Incorporate input from national thought leader physicians to help shape the product during Phase III and
submission, thereby building market acceptance.

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

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

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

Toward the end of Phase III, key country units conduct market research to validate the theories of the thought
leaders. According to a U.S. marketing manager at one partner company, this is an important step since
differences often surface among physicians. For example, a researcher at Emory University may view a
hypertension treatment quite differently from a primary care physician. In an iterative process, marketing
personnel take market research back to thought leaders, attempting to understand the rationale behind their views.
“We say, ‘Here’s what your peers are telling us. What do you think about that view?’” This may result in changes
to the medical research plan or product positioning, and often sparks additional research for new indications. A
key question the company seeks to answer in Phase III trials is: What kind of qualitative and quantitative market
research should be done around positioning and pricing? With the valuable input from thought leaders, a detailed
plan is developed and then implemented from late-phase clinical trials to the submission stage.

Two and a half years before launch, this partner company’s U.S. marketing group formally establishes its own
thought leader panel consisting of about 12 physicians, perhaps half of whom will have served on the global
advisory board. The consistency of thought leaders throughout all of the clinical trials offers clear advantages
such as a higher level of familiarity with the product, and adding new thought leaders adds the benefit of some
fresh perspectives. The U.S. advisory panel has an expanded role: examining and giving input on market research
plans and any final research to be done before submission. The company asks thought leaders to look beyond
approval to consider questions such as:

• What studies are needed for promotional use?

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

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

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

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

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

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

Employ broad-based market research to drive


product development & market positioning.

Pre-Clinical Phase I Phase II Phase III Submission Launch

• Concept • Positioning • Branding and


• Market • Market Attitude • Market
Testing Studies Naming Study
Needs and Acceptance Tracking
• Initial Profile • Focus Groups • Conjoint Analysis
Analysis Study • Sales Uptake
Testing on Market • Positioning
• Market Size • Promotional Tracking
• Therapeutic Analysis Studies
Research Piece • Sales Force
Area • Concept Testing • Focus Groups on
• Competitive Development & Feedback
Competitor • Initial Profile Market Analysis
Analysis Testing • Position &
Research Testing • Concept Testing
• Commercial • Refine Message
• Thought • Therapeutic • Initial Profile
Potential Positioning & Refinement
Leader Area Testing
Analysis Message • Physician
Identification Competitor • Therapeutic Area
• Pricing Study Awareness
• Market Needs Research Competitor
• Payer/Advocate Research
Analysis • Thought Leader Research
Advisory
• Market Size Identification • Thought Leader
Boards
Research • Market Needs Identification
Analysis • Market Needs
• Market Size Analysis
Research • Market Size
Research

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

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

TABLE OF CONTENTS

Executive Summary • Project Background ...........................................................................Page 1


• Benchmark Class ..............................................................................Page 2
• Prioritized Findings ............................................................................Page 3
• Report Structure and Organization....................................................Page 5
• Lessons Learned ...............................................................................Page 6
• Next Steps .........................................................................................Page 8
Chapter 1 • Overview .........................................................................................Page 11
Developing and Deploying • Benchmark Data .............................................................................Page 14
Integrated Marketing Support • Process Map: Employing Market Research ....................................Page 21
• Timing of Marketing Activities .........................................................Page 22
• Marketing Activities Matrix ..............................................................Page 29

Chapter 2 • Overview ........................................................................................ Page 33


Investing For Maximum Impact • Benchmark Data ............................................................................. Page 35
• Marketing Investment Matrix ........................................................... Page 41
• Investments and Resources............................................................ Page 44

Chapter 3 • Overview ........................................................................................ Page 51


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

• Overview .........................................................................................Page 81
Chapter 4
Driving Commercially Focused • Balancing Clinical and Commercial Concerns ...............................Page 85
Drug Development • Trial Strategy and Execution ..........................................................Page 90
• Thought Leader Development ........................................................Page 95
• Non-Physician Influences ................................................................Page 99
Chapter 5 • Overview .......................................................................................Page 101
Preparing the Market for • Thought Leader Program Management .......................................Page 104
Rapid Product Uptake • Competitive Intelligence ...............................................................Page 110
• Publication Strategy ......................................................................Page 112

Chapter 6 • Case Studies .................................................................................Page 115


Blockbuster Case Studies

Appendices • Appendix A: Optimizing Commercial Resources...........................Page 153


• Appendix B: Marketing Metrics at a Glance ..................................Page 161
• Appendix C: Medical Publications Staffing....................................Page 167

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

EXHIBIT LIST

• Maximizing Blockbuster Potential


• Global Commercial Resources
• Pre-Clinical Activities by Company
• Global Product Team Size Criteria
• Phase I Activities by Company
• Global Product Team Size
• Activity Frequency at Phase I
• US Commercial Resources
• Phase II Activities by Company
• Commercial Lead - Who
• Activity Frequency at Phase II
• Commercial Lead - When
• Phase III Activities by Company
• Commercial Lead and Team Structure
• Activity Frequency at Phase III
• Product Manager Qualifications
• Submission Activities by Company
• Marketing Metrics At-A-Glance
• Activity Frequency at Submission
• Brand Performance - Leading Indicators
• Launch Activities by Company
• Brand Performance - Lagging Indicators
• Activity Frequency at Launch
• Marketing Activities Levels
• Key Publicity Drivers in Phase III
• Marketing Process Efficiency
• Marketing Activities Matrix
• Tracking Marketing Competencies
• Total Marketing Spend
• Marketing Resource Support
• Pre-Launch Marketing Spend By Phase
• Measurement Timeline
• Marketing Spend by Activity
• Metric Tracking Responsibilities
• Marketing Full-Time FTEs
• Phase III to Approval Staff Workload
• Product Team Model 1
• Launch Year Staff Workload
• Product Team Model 2
• 1-2 Years After Launch Staff Workload
• Product Team Model 3
• Staff Optimization Responses
• Defining Marketing Career Path
• Marketing Career Path
• Marketing Structure - Example A
• Marketing Structure - Example B
• Marketing Structure - Example C
• Integrating Marketing and Development

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

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