Thinking about Life Sciences: A Pharmaceutical Addiction Print Version http://blog.aesisgroup.com//2007/09/11/pharmaceutical-addiction/print.

aspx

Thinking about Life Sciences

http://blog.aesisgroup.com

Tuesday, September 11, 2007

A Pharmaceutical Addiction

The New York Times reported earlier this week on an interesting phenomenon in the medical and
pharmaceutical world – namely online advertising by pharmaceutical companies. Milt Freudenheim’s article
“A Medical Publisher’s Unusual Prescription: Online Ads” describes how the “medical publishing world [is
meeting] the Internet.” There are yet even more interesting implications to this trend.
Deconstruction of Big Pharma
There are two problems underlying the current “deconstruction” of Big Pharma. (Mind you, I am not
writing “big pharma” in a pejorative sense as I certainly recognize the huge importance that the industry
plays in the health of patients worldwide as well for the strength of our economy). Like Cordelia in King
Lear, I write, if critically, in hopes that pharmaceutical firms can overcome some of the adverse effects
(pun intended) plaguing the industry.
The first problem relates to the growing obsolescence of the blockbuster model which I’ve written
about before a number of times and summarized in the article: FDA Reform Redux: On Business Models,
Regulatory Reform and Safety. This topic has certainly been covered in the mainstream business literature
as well. See, for example, the June 28th Economist article “Beyond the blockbuster” and its accompanying
leader “From bench to bedside.” In summary, there are several factors- a triple storm of sorts - leading to
the demise of the pharmaceutical blockbuster business model. These include:
· A paucity of products in the drug development pipeline. This has, as outlined in the FDA
Reform Redux: On Business Models, Regulatory Reform and Safety article several root causes
of which the most important relates to a fundamental lack of understanding – at the scientific
level – of how drugs interact with their targets in the body. This view may be somewhat
heretical since many have learned even in basic high school chemistry about the Fischer “Lock-
and-Key” hypothesis and the later Koshland induced fit model so it may seem on these terms
that the problem has long been resolved. Alas, that is not quite the feeling among many leading
scientists – such as Harvard professor George Whitesides – who work intimately in the drug
development and molecular biophysics field. New paradigms are needed. A topic which I will
address in a later blog entry.
· Safety problems with mass-market, blockbuster drugs. As commented on earlier, one of
the most important reasons for the demise of the blockbuster is safety. Blockbuster drugs are,
by definition, those that are given to either relatively large and indiscriminate target populations
and/or given in a long-term, chronic setting. This makes these drugs quite susceptible to safety
issues. It amounts to simple statistics: if you give a drug to enough people for a long-enough
time, safety problems are bound to arise.
· The rise of personalized medicine. Counter these safety issues, some pharmaceutical firms
have embraced personalized medicine. With personalized medicine, drugs are designed for (and
given to) much more focused groups of patients. Patient subsets may be identified, for
example, by various genetic tests and so forth in order to either maximize the positive effect
and/or eliminate the adverse effects. In this sense, personalized medicine basically represents
the opposite trend from that of mega blockbuster drugs. Embracing personalized medicine is a
tacit acceptance – with perhaps a few exceptions - of the demise of the blockbuster model.

1 of 4 11/17/2008 12:36 AM
Thinking about Life Sciences: A Pharmaceutical Addiction Print Version http://blog.aesisgroup.com//2007/09/11/pharmaceutical-addiction/print.aspx

The second problem – one which I have not yet commented on– is what is sometimes termed the
“cracking the [pharmaceutical rep] code.” See, for example, an earlier article that sums up many of the
ethical and practical aspects relating to what one commentator described as the “monster [created by] the
pharma industry.” More on this below.
Addicted Pharmaceuticals
The 1990’s were pivotal years for the pharmaceutical industry. Back then Merck – which advertised itself
as being a research-driven enterprise - was the predominant pharmaceutical company. Indeed nearly all
drug companies conduct some research (and these efforts can be quite significant), yet, during this era,
drug marketing became increasingly important.
In particular, this decade saw the rise of pharmaceutical sales reps (who directly reach physicians) as well
as the rise of direct-to-consumer (DTC) advertising which really took off with final approval by the FDA
in 1999. Concurrently, Pfizer made a bold move to become the #1 drug company which it accomplished
by touting its overwhelming sales force advantage and consequently acquiring other companies who could
not compete on such grounds. Of course, Pfizer has its own R+D teams but the company was not at all
shy about advertising their marketing muscle. Indeed, it was this advantage that did the most to catapult
them to top dog status in the pharmaceutical industry by the turn of this century.
For the time being at least.
Let me digress for a moment. Thomas Murphy (Remember him? Likely not … but he is important) was
the CEO of GM during the 1970s. He has been credited with the phrase: “General Motors is not in the
business of making cars. It is in the business of making money." No doubt a “brilliant” turn of phrase
back then but one which was to spell the doom for GM’s ascendancy during subsequent decades. When it
comes to marketing, indeed all of the 4P’s (product, place, promotion, price) are important but in the case
of GM, product (namely vehicles) may not have been (and may still not be) top of mind for their senior
management. Mr. Murphy’s brilliance shines now on the GM tragedy unfolding now.
Now, back to pharma. Led by Pfizer in the 1990s and rapidly accelerated during this decade, marketing
(and, in particular the promotion piece of marketing) substantially drove industry growth. When you
combine that with the well known sparseness of the pipeline (e.g. lack of product) you can fully understand
why big pharma has become addicted to big marketing (both in its DTC and sales rep aspects). Of course,
as many are aware, such an addiction – just like with GM - was bound to be self-defeating and indeed,
Pfizer (among other companies) has announced massive layoffs in its sales force. Growth through
marketing is a dangerous drug indeed.
Back in 1993, while at Columbia, I learned about a secret project commissioned by the then CEO of one
of the top pharma companies to investigate how to replace the pharma sales rep model. This CEO (I
won’t say who but some of you may be able to guess) was, indeed, very wise and prescient. What was the
conclusion of this project? Interestingly, the conclusion back then was that there was – apart from minor
measures and apart from DTC advertising – no way to replace the pharma sales rep model in terms of
reaching physicians. The rapidly growing legions of pharma reps were here to stay and the addiction,
indeed that would be the right way to term it, was fully established.
Since that time, the pharmaceutical drug model has come under increasing attack with some of its
identified faults being:
· Unsustainable high cost. Ergo the layoffs that Pfizer announced.
· Related to this are concerns that marketing costs add to the cost of drugs passed on to patients.
· Ethical concerns about inappropriate pressures being made on physicians with respect to gifts
and other benefits being distributed by drug reps
· The banning of pharmaceutical drug reps from some medical campuses including Stanford,
Henry Ford and Rush University medical centers.

2 of 4 11/17/2008 12:36 AM
Thinking about Life Sciences: A Pharmaceutical Addiction Print Version http://blog.aesisgroup.com//2007/09/11/pharmaceutical-addiction/print.aspx

So, nearly 15 years later, we can ask the same question. How can we replace (or at least supplement) the
pharmaceutical sales rep paradigm? Can it be replaced with a model that still meets the educational needs
of physicians (which is, indeed, a strong benefit of such a system, albeit costly and fraught with difficult)
yet gets beyond the pharma rep addiction?
The Internet as a solution?
That is why this New York Times article A Medical Publisher’s Unusual Prescription: Online Ads is so
important. It points to a trend that may, in fact, help pharmaceutical firms more efficiently reach their
physician target populations, provide educational content (though not necessarily with full CME credit of
course), at orders-of-magnitude less cost than the armies of drug reps now used to accomplish the task.
The article couches this trend in the context of “saving” the medical publishing industry for which the
print sector (like many print media companies) has been seeing successive declines in readership and
relevance. Indeed, internet advertising may help to solve that problem but more importantly – and this is
the point of this blog – this trend may also help to crack the wider problem of the “drug rep code.”
Internet advertising may help to solve the problem that kept that pharma CEO “up at night” back in
1993.”
In this regard, some of you may be aware that I am the host of a regular internet TV talk show Insights in
Medicine which broadcasts on the peer-to-peer internet platform of InTimeTV (see: www.intimetv.com).
Internet TV offers a compelling venue (perhaps because of the TV format even more compelling than
with static media) for pharmaceutical advertising and brand development. In addition to Insights in
Medicine, several other InTimeTV shows such as Heart Health Update (for cardiac specialists), On The
Edge (for medical researchers), Primary Care Physician, Talking Dentistry Live, etc. are geared towards
physicians, dentists and other professionals.
Plus, of course, there’s lots of interesting content. For example, for past shows, see:
Unmet Needs in Primary Care: InTimeTV talk show interview with Dr. Vedat Obuz
The archived InTimeTV video for the Insights in Medicine interview with Dr. Vedat Obuz (Medical
Director of the Lotus Medical Clinic) is now available. We discussed quite a few topics on
unmet needs in primary care including asthma care, home health care, the patient-center primary
care collaborative (medical home) concept, international health and other topics. For the full
video clip click Unmet Needs in Primary Care.
Emerging Clinical Technologies: Opportunities & Challenges for Hospitals: InTimeTV
talk show interview
I was interviewed by Dr. Kristine Mighion on her Healthcare Executive internet talk show on
InTimeTV . We discussed emerging clinical technologies and their implications for hospitals, health systems and
healthcare executives. For the full video clip click on: Emerging Clinical Technologies: Opportunities & Challenges
for Hospitals.

The Present and Future of Primary Care: InTimeTV talk show interview with Dr. C.
Anderson Hedberg, former President of the American College of Physicians
The archived InTimeTV video for the Insights in Medicine interview with Dr. C. Anderson Hedberg (former
President of the American College of Physicians) is now available. We discussed quite a few topics on the present and
future of primary care including the new medical home for primary care model – the Patient-Centered Primary Care
Collaborative. For the full video clip click The Present & Future of Primary Care Medicine.

And future planned shows on Insights in Medicine include:

9/22 Peter J. Weiden, MD
Director, Psychosis Program, Center for Cognitive Medicine University of Illinois – Chicago
"Integrating Physical Health Care for Individuals with Serious Mental Illness"
9/29 Craig Niederberger MD
Chairman of Urology, University of Illinois – Chicago

3 of 4 11/17/2008 12:36 AM
Thinking about Life Sciences: A Pharmaceutical Addiction Print Version http://blog.aesisgroup.com//2007/09/11/pharmaceutical-addiction/print.aspx

"Issues in Male Reproductive Health for the General Practitioner"

10/6 Stewart Lipson, MD
Associate Professor of Urology - University of Illinois – Chicago
"Nephrolithiasis for the General Practitioner"
10/13 Arvydas D. Vanagunas, MD
Associate Chief for Clinical Gastroenterology - Northwestern University Feinberg School of
Medicine
"Insights in Gastroenterology for the Primary Care Physician"
So …
“Tune in” to www.intimetv.com on Saturday evenings at 5pm (Chicago time) for the live show; archived
shows are available shortly thereafter. And if you are a pharmaceutical (or medical device) CEO looking
for ways to crack the “rep code” drop me a line and let’s talk about how to solve the problem. You may
want to make a note that we had 81,000 hits last month alone on InTimeTv.

Ogan Gurel, MD MPhil

gurel@aesisgroup.com
http://blog.aesisgroup.com/

Blockbuster model pharmaceutical industry online advertising pharmaceutical drug representatives pharmaceutical sales reps pharmaceutical
marketing InTimeTv Insights in Medicine Aesis Research Group Ogan Gurel Pfizer Merck General Motors Jeffrey B. Kindler Arthur D. Collins Jr.
John Syner Robert L. Parkinson Jr. Miles White Mike Garone Chip Hance Joe M. Hogan Wilbur H. Gantz John W. Brown Igor Landau Peter R.
Dolan George Abercrombie William C. Weldon Raymond V. Gilmartin Paulo Costa Martin Soeters Fred Hassan Robert Essner John E. Abele Roy
Vagelos

4 of 4 11/17/2008 12:36 AM