Consider Bayer's success in evolving Adalat (nifedipine) to address new markets. The product was launched in the mid-1970s
as an anti-anginal therapy, taken three times a day. Bayer expanded Adalat's label to include hypertension, introducing a
long-acting form to address this lucrative market in 1985. As a result, Adalat sales continued to grow until they exceeded
$800 million a year by the early 1990s. By 1991, Bayer had again laid the groundwork for a new form of Adalat, this time releasing
a once-daily dosage form to match the emergence of competitive products with a similar duration of action. As a result of
Bayer's success in identifying new indications and dosage forms early in Adalat's lifecycle, its sales continued to climb
to $1.17 billion by 2000—a quarter-century after the drug was first commercialized.
Speed the product on its way. The cost of bringing a major pharmaceutical product to market is estimated to more than $879 million. Of the R&D costs (about
70 percent of the total), the later stages are by far the most expensive; phase I, II and III clinical trials represent 35
percent of all R&D outlays. Although the focus of attention at this stage is naturally on getting the product approved by
regulatory authorities, it is important in the total context of product lifecycle management that vigorous prelaunch activities
are under way to create heightened awareness of the forthcoming product.
Launch acceleration is now a vital ingredient in product lifecycle management, because every month shaved off the time to
market can be measured in additional sales. PPD, a provider of services to assist drug discovery and development, illustrates
this using the example of a fictitious product having annual revenues of $11 billion, gross profit of $8.8 billion, operating
income of $3.3 billion, and operating income/share of $1.12 billion. According to PPD, if this company could bring a $2 billion
blockbuster product to market three months earlier, it would increase its operating income by 14 cents per share. If the product
could be brought to market six months faster, operating income/share would rise by 27 cents.
Comarketing can be a potent means of ensuring that a product reaches peak sales quickly after launch. Crucial to GlaxoSmithKline's
marketing of Zantac (ranitidine) was a policy of selecting comarketing partners, such as Menarini in Italy, the country where
Zantac was launched. This was especially valuable in countries such as Italy, Germany, and Japan, where GlaxoSmithKline did
not, at the time, have a high profile among physicians; its marketing partners were chosen as native companies with a good
but not overwhelming presence. Having two sales forces ready to promote their brands of ranitidine meant that early product
growth exceeded all expectations. It was also an excellent boost to company morale in other countries.
Create a franchise. A therapy franchise is more than the sum of its parts. It is about dominating a particular therapeutic area through the creation
of a complementary range of products. The range may be as few as two; in the hypertension field, AstraZeneca has the angiotensin
II antagonist Atacand (candestartan cilexetil), which had an 8.7 percent share of the market (but 65 percent growth rate)
in 2000. But AstraZeneca also has another antihypertensive, its ACE inhibitor Zestril (lisinopril). Zestril forms part of
the same therapy franchise with Atacand, which is recommended in the treatment of mild-to-moderate hypertension, while Zestril
is used in more severe cases. By treating the two as complementary products, AstraZeneca has been able to sustain Zestril's
growth while launching and growing Atacand. This flies against the predictions of many analysts, but the facts are there:
Atacand is challenging the market leader Cozaar (losartan), which is produced by Merck.
Not every company is fortunate enough to have two successful products in the same therapeutic area. Our survey reveals that
in-licensing is emerging as a favored means of developing a franchise, by adding products that complement the uses of an existing