Direct to Consumer: Moving House

The "House of Brands" model is a house of cards. Industry should change, or risk losing trust forever.
Jul 01, 2005
By Ken Dec

These are demanding times for pharmaceutical marketers. An already challenging regulatory environment has become downright hostile, as highlighted by some recent, dramatic actions:
» FDA's anti-DTC, conditional approval of Symlin (pramlintide) and Palladone (hydromorphone) has restricted the marketing of these life-changing drugs to consumers.
» In its heads up this spring, DDMAC indicated that it intends to advise not only on fair balance compliance, but on the subjective context of risk/side-effect presentation. (For example, DDMAC warned that a shot of a dog running in the park was "too distracting.")
» Comparative advertising has been effectively squashed as FDA came down on Crestor (rosuvastatin), for which AstraZeneca launched a campaign using comparisons to Pravachol (prevastatin), Zocor (simvastatin), and Lipitor (atorvastatin). Although DDMAC approved a chart that was used to support the claim, the superiority claim illustrated by the chart was ruled incorrect.

Ken Dec
The result? Consumers are increasingly left with the impression that pharma marketers can't be trusted. Unfortunately, as an industry, we haven't done a particularly good job of gaining consumers' confidence. The problem is that we have been telling an incomplete story.

Brands are the Currency of Trust Rebuilding our fading trust with consumers will require a change in approach. People connect to brands to simplify decision-making about increasingly similar choices—choices they often make based on trust. Trust is the currency brands trade in, and to keep that value, we need to work on the relationship between consumers and pharmaceutical companies.

Continuing to invest almost exclusively in product advertising is no longer enough. Building meaningful trust requires communicating about and investing in the company brands that create these life-changing products. It also demands that we connect corporate brands more directly with product brands.

To take advantage of this opportunity, marketers must change their brand architecture model. (See "Brand Architecture Models,")

Play Offense, Not Defense The "House of Brands" model—that is, a strong single-product brand identity without corporate branding—currently employed by industry is used primarily to manage two risks.

First, companies use it to manage drug performance risk. Marketers feel that if there are issues with a drug's market performance, safety, or efficacy, avoiding close corporate ties will minimize negative impact on the company's stock value.

Second, with a rapid rate of industry consolidation, firms are concerned that investments in corporate brands might disappear due to mergers.

Both of these defensive brand-management strategies are ineffective. As the COX-2 inhibitor cases and Biogen-Idec's withdrawal of the promising Tysabri (natalizumab) both demonstrate, Main Street and Wall Street know who is responsible for these drugs' performances and have punished them for their perceived shortcomings.

Merck and the controversy surrounding Vioxx (rofecoxib) shows the pitfalls of not investing in corporate brand building. We've heard the "collateral damage" argument that "it's a good thing Merck didn't connect its corporate brand to Vioxx more closely." The argument goes that Vioxx and other Merck product brands would be more seriously damaged if they were closely associated with the parent. That argument is seriously flawed from a brand-management and customer-experience perspective—in fact, the opposite is true.

The problem now is that, in the minds of many consumers and investors, Merck does equal Vioxx—and only Vioxx. If Merck had invested more in building their corporate brand—communicating its values and its mission—and connected it to its full line of products, including Fosamax (alendronate) and Vytorin (ezetimibe/simvastatin), the concerns would be limited to one of Merck's products, not with Merck as a company of committed, passionate people focused on creating healthier lives.

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