Marketing Management Prof.

Eyal Biyalogorsky Case Study 4 Dec 12, 2010

Group 4 Lavi Gili Alexandra Hayman Matan Tessler Jacob Thompson

Eli Lilly Case Study

Question #1: In order to decide which direction Eli Lilly should pursue, we first need to access the possible market share of Cymbalta under both of the options. Then, assuming relatively the same price will be charged in both options; the decision will be made according to the possible market share, associated advantages/risks, and finally future opportunities. According to segment profiles presented in exhibit 10, we can conduct the following estimation of the market share: % with Pain Sympto m(s) Non-responding Nancy Addicted Denise Complex Carl Functioning Fran Anxious Anne Hurting Helen Classic Carol 42% 35% 68% 24% 34% 100% 42% % of total Mark et 11% 4% 10% 28% 19% 8% 20% % of Market Share w/ Pain 4.62% 1.40% 6.80% 6.72% 6.46% 8% 8.40% 42.2% of total Market Pain w/No Complianc e Problems X X X 6.72% 6.46% 8% 8.40% 29.58% of total Market

Twice Daily(BID) with Pain Indicator Possible Market Share: The amount of patients listing pain as a symptom is almost half of the total market. Even if all patient profiles with major compliance issues are removed (due to the massive increase in compliance problems tied to BID as compared to QD), and the remaining number(~42.2%) is halved, it still would provide a market share large enough to sustain Prozacs previous market share of 15%. Advantages: The most important advantage of the pain indication would be product differentiation. As the market is about to be flooded with cheap versions of Prozac, some sort of distinct differentiation could play a very important role in establishing Cymbalta as a new brand. If Cymbalta is the first antidepressant shown to have important pain relief attributes, this would be a big advantage compared to other antidepressants. Additionally, while it is true that many psychiatrists who deal with depression do not believe that there is a relation between depression and pain, a large part of antidepressants prescribed are done so by Primary Care Physicians (PCPs) and not by psychiatrists. This is an important point to emphasize because the PCPs tend to know their patients better and see them on a more regular basis. As a result, they are more attentive to other symptoms depressive patients can present, such as pain symptoms. Having a pain indicator on an antidepressant could be an easy all-in-one option for PCPs with patients depressed and describing any pain symptoms. 1

Risks: The concern in taking this option is that physicians might not find the gain of pain reduction worth risking their patients compliance by subscribing a BID medicine. The tests might also show that Cymbalta does not have a measurable effect on patient pain which would lead to the drug being denied its application for a pain indicator. In addition, many patients have problems remembering to take a pill more than once a day or taking the multiple pills around the same times. This problem with compliance could lead to not only bad psychiatrist and physician response to the prescription, but also negative patient reviews of the effectiveness of Cymbalta. Lastly, not having a QD dosage of Cymbalta would put it behind on a crucial comparison point with the other major competitors in the SSRI anti-depressant market. Future Opportunities: Emphasizing Cymbalta's abilities to aid in pain relief could also be a tremendous opportunity to open Eli Lilly to totally new markets. Diseases such as fibromyalgia and diabetes (which many often involves neuropathic pain) have no FDA approved drug with an indication of pain relief. In addition, the drug's relatively complicationfree safety profile can make it an attractive alternative to more common analgesics such as non-steroidal anti-inflammatory drugs (NSAID's) which have the potential of causing severe bleeding. As seen on page 14, the combined sales of NSAIDs and COX-2s exceeded $6 billion in 1999. For comparison, the annual sales of Prozac were roughly 2$ billion a year. Additionally, once Cymbalta establishes itself as an effective antidepressant with strong abilities to treat pain as well, it would be relatively simple to introduce a new QD version later into the product life. Single pill regimen Possible Market Share: While Cymbalta was shown to be more effective than Prozac in one clinical trial, this difference was not that significant (49% response rate compared to 45%). If patients will have an option of switching to a generic version of Prozac to which they are accustomed and aware of its effects- why should they try a newer drug that isn't necessarily that much more potent and may even be more expensive? The likelihood of Cymbalta maintain Prozacs 15% market share seems unlikely with these factors in mind, but the company reputation and brand recognition of Prozac could be a very effective launching point for Cymbalta to establish itself as Prozacs successor early on. Advantages: This is the better option with regards to patient compliance. More patients will prefer taking a pill once a day rather than multiple times. This option places Cymbalta on an even field competitively with the leading products in the SSRI anti-depressant market. Risks: The QD dosage of 60mg dosage could have problematic reactions and the side effect profile shown in the preliminary clinical trial will not necessarily be similar to that shown with BID dosing. An even bigger potential problem involves the bioavailability of the drug. A higher dosage given once daily does not necessarily mean that the drug will be effective for 24 hours as expected. Since the tolerability and adverse effects of a drug weigh more heavily than its efficacy in physicians' decisions when prescribing a drug (for example, the issues of potential weight gain and sexual dysfunction were chosen as the most important thing taken into account by

physicians when prescribing an antidepressant drug), any addition symptoms that might appear with the 60mg QD dose testing could greatly damage Cymbaltas competitive edge. Future Opportunities: While it would be more difficult to make any major changes to Cymbaltas positioning without an initial differentiation, if Cymbalta did see a large amount of independent verification of its effectiveness against pain (such as review articles, medical journals, and word of mouth), it would be possible to release a later version with the pain indicator approved. This would allow for possible expansion into new markets with an already established brand name. Conclusion Taking into account all of the above advantages and disadvantages, our recommendation is the Eli Lilly choose Option 1 and apply for the indicator for pain. There is a massive market opportunity, not only in capturing a larger share of their current antidepressant market by addressing a previously ignored symptom, but also expanding into additional larger markets where competitors are plagued by problems with dangerous side effects, addiction, and more. It is also strong differentiator in a market that is already full of QD SSRI medication and is soon going to have even more and a cut rate when the Prozac patent expires. Question #2: The process that leads patients to use a specific medicine is as follows: A patient meets with a physician/psychiatrist who then evaluates the patient using the HAMD17 (or variation), the physician than evaluates the type of depression and recommends or prescribes a medication. Patients also contact their physicians regarding medication theyve had recommended to them or seen in advertisements. As Cymbalta is a new brand that needs to establish itself with a strong differentiation, Eli Lilly should not only market directly to the primary care physicians, general practice physicians, and psychiatrists, but also to the customers themselves. This is an opportunity for Eli Lilly to utilize their strong connections built while marketing, selling, and distributing Prozac. One way to accomplish that is to publish the scientific results of relevant researches and certification test results to the physicians. Additionally, we should advertise Cymbalta to the end user as the successor of Prozac by Eli Lilly, making the patient consider Cymbalta as the go-to anti-depression medicine just as Prozac was, just better. It is important to advertise not only the low side effects, but the new and improved focus on pain management. With very simple television, magazine, and web campaigns, Cymbalta could quickly become known as the anti-depressant/pain medication. Offering free sample doses to Doctors offices to provide their patients with a free trial of the benefits could be another affective marketing technique for this new product. It is very important that during this campaign, none of the target markets consider Cymbalta as a divided product. It should be made very clear that Cymbalta is The anti-depressant of choice that also comes with an important pain management feature in its arsenal. The message should be simple and clear to all parties, for depression, use Cymbalta and you too can be happy and pain-free.