The New Building Blocks for Blockbusters - Pharmaceutical Executive


The New Building Blocks for Blockbusters

Pharmaceutical Executive

Pharma companies that adopt diagnostics-led strategies need to address three issues. First, they need to shift marketing resources from promoting specific products to promoting diagnostic testing. Second, they must time the development of the diagnostic to coincide optimally with the development of the therapeutic. And third, they must develop business models that will motivate physicians and diagnostics providers to participate. Of these three, shifting promotional resources should be the easiest, because it is fully within the company's control.

Timing the diagnostic investment is slightly more complicated. Companies can delay developing the diagnostic until the therapeutic is approved, or close to being approved, or they can choose to develop the diagnostic in parallel with the therapeutics. The decision about when to begin diagnostic work requires weighing its risks, rewards, and complexity. A decision to delay development of the diagnostic can reduce the risk that the diagnostic will have to be abandoned because of failure of the therapeutic. But it increases the risk that the diagnostic will not be available during product launch, which would have a negative effect on the drug's revenues. Developing a diagnostic to be launched in parallel with a drug therapy requires R&D and commercial units to come together at an early stage to formulate and execute a dual development strategy.

Who Calls the Shots
Reimbursement is the trickiest issue. Ideally, the public-health benefits of additional testing will be so readily apparent that private and government payers will find it difficult to refuse reimbursement. Absent such a compelling argument, the industry will need to find alternative funding mechanisms without running afoul of fraud and antikickback statutes. The disease-management efforts some companies are exploring may be useful in this regard. Cost reductions resulting from new "lab on a chip" technologies may also aid this effort.

To date, the industry has been amply rewarded for dispensing therapies and has not needed to devote much effort to developing and promoting diagnostics as a way of promoting therapeutics. But as blockbusters become harder to find, undiagnosed populations represent significant untapped revenues. A subset of them may never become an attractive market, but many are good potential customers. The industry can no longer afford to ignore them.

Keep It Simple The single-pill strategy seeks to simplify the lives of those who are already taking multiple medications. Specifically, it seeks to address the needs of millions of patients who have been diagnosed with multiple concurrent conditions and take multiple drug therapies, as well as the needs of those who take multiple drugs for a single condition. Today, physicians mix and match products from different companies to arrive at "combination" therapies, one patient at a time. Although the benefit of such an approach is that it results in therapies tailored to the needs of individuals, the downside is that it requires thousands of physicians to experiment with their patients to determine which combination of drugs delivers the best results. It also requires patients to take several drugs, possibly at different times during the day, which reduces patient compliance.

The solution is a single-pill therapy in which several drugs, previously independently marketed, are combined into one. This approach may not be economical for all possible combinations of diseases, but many diseases coexist frequently enough to make it worthwhile. Areas that may be worth investing in include high blood pressure and high LDL (low density lipoproteins) or high blood pressure and low HDL (high density lipoproteins) or dyslipidemia, which is also characterized by elevated glucose and triglycerides. A systematic review of co-morbidities, patient demographics, the preferences of prescribing physicians, and other related data, within and across therapeutic areas, will reveal many interesting and attractive patient segments for the single-pill approach. (See "The Single-Pill Solution,")

The single-pill strategy raises many interesting possibilities and a whole raft of questions for marketers: Could a company increase revenues by combining a second-tier product with a market leader? Would two market leaders completely knock out the competition if combined in a single pill? What about a combination of two strong number-two or -three products in their respective indications? How can market leaders and underdogs, respectively, exploit this strategy, and whom will it favor?


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