The author used quantitative data from sources such as Verispan and IMS—including information on prescriptions written, therapeutic drug regimens, and different marketing activities—to create mathematical equations that determined the marketing category from which pharma companies receive the most value.
The results show the need for heavier professional marketing earlier in a drug's lifecycle. For example, in one study focused on marketing tactics used for three antihistamine drugs (Allegra, Claritin, and Zyrtec), Narayanan concluded that Allegra and Claritin could have increased revenues by four to 14 percent if they followed the same detailing pattern as Pfizer's Zyrtec, which involved heavier detailing at launch.Pharm Exec talked to Narayanan to learn more about his research.
PHARM EXEC: Why did you choose pharmaceutical marketing as the focus of your studies?
NARAYANAN: I was struck by the absence of formal research reflecting the industry as it currently exists. Pharma has gone through some dramatic changes in the last 15 to 20 years, which haven't really been focused on research—for instance, all the direct-to-consumer changes that took place in the 1990s. The drug industry also has expanded tremendously in the last few years, and detailing has increased significantly.
Did you find any unexpected results in your research?
I didn't go in with very many expectations, simply because there's been a paucity of prior research, particularly in physician marketing. However, I discovered consistently that detailing had a much higher return-on-investment than direct-to-consumer advertising.
Pharma can receive up to twice as much revenue from detailing than from DTC. For every dollar spent detailing, firms should expect about $10 back in revenues. Direct-to-consumer advertising, on the other hand, is more in the range of a $5 or $6 return.
What is also interesting is that firms can benefit from putting dollars into detailing earlier in a drug's lifecycle. The first few months are very important to build up market share for a drug. And yet, if you look at actual allocations made by pharma, it's not clear that everybody's internalizing this fact. There are some firms that actually ramp up detailing well into the lifecycle of the drug.
I also found that physicians differ significantly in terms of how quickly they learn about new drugs. Physicians who are fast learners tend to be less affected by detailing later in a drug's lifecycle, but [they can be hugely influenced] early on. The opposite is true for slow learners.
In the antihistamines study, why was one marketing method better than the others?
We found that there were significant benefits to frontloading detailing in the early periods after launch. One benefit is that detailing influences physicians through the process of learning about that drug. They learn about that drug, they learn about its characteristics, how it treats the condition, and all the side effects. That strategy might make a physician prescribe a drug to his or her patients.
If you look at the detailing patterns, Pfizer's had a huge amount of detailing [during] the first 20 months after the launch of [Zyrtec]. And then they reduced it over time, whereas the other firms had different patterns. We found that Pfizer's strategy made the most sense.
Did it translate to more sales?
It translated to more revenues and presumably more profits early on. If patients are prescribed a drug, and if it works for them, they often don't want to switch. So getting your foot in the door early is very important, and I think that Pfizer's strategy worked.