The Issue: Unlike Brand 1, the developer boasted substantial experience in the drug class and therapeutic area. Without that know-how,
Brand 2 might have never made it out of the gate; the market was already saturated by established brands struggling to win
First-in-Class vs. Me-Too Budgets
From previous experience, the team knew where to hit its target—at niche sales levels, because several brands were already
competing for a limited patient population. Even if Brand 2 secured a few years of steady revenue flow, it was a me-too product
that already had a short and difficult life cycle.
The Strategy: Brand 2 invested tens of millions of dollars more than Brand 1. At the start of launch, Brand 2 had niche-level goals and
blockbuster-level budgets. The company had to make a splash because it was entering a saturated market, so it invested tens
of millions of dollars more than Brand 1.
The team decided not to concentrate most of the spending in Phase III (the way Brand 1 did), because, in launching a me-too,
it had to convince patients and doctors to switch the brand they were currently using. This meant marketing Brand 2's fewer
negative side effects to patients; to doctors, the company claimed Brand 2's drug tolerability encouraged patient compliance.
Here's where deeper pockets and marketing experience pushed Brand 2 forward. To remedy the lag in promotional activity, the
company lavished marketing resources on Brand 2: The brand team spent nearly $45 million between FDA submission and the end
of the drug's first year on the market. It may seem like Brand 2 was putting all of its eggs in one basket, but the team knew
aggressive marketing efforts would pay off.
With so little time, the company concentrated funding to help the product catch up to where it needed to be.
Although Brand 2's commercial development could have benefited from earlier preparation, the company was able to create a
profile that highlighted an unmet medical need in its patient population. Brand 2's promising clinical profile proved essential
to the brand's success; its positive attributes helped win patient loyalty and a share of the market from well-known brands.
The Result: Between the close of Phase III trials and product launch in the United States, marketing spend increased by a whopping 1,000
percent. The most significant allocations went to developing a product promise, competitive strategy, positioning, and basic
branding. During this time, the developer invested $400,000 in market research to understand the market and craft the brand's
message for its small target audience.
To make up for lost time, aggressive funding continued in the brand's first year on the market. In the end, marketing allocations
jumped from only $2.2 million in Phase III, to more than $20 million in Brand 2's first year (see "Brand 2 Makes a Push,").
The brand team continues to invest heavily in advertising and promotion to drive awareness of Brand 2's advantages, and it
has fielded a substantial sales force to carry the message into doctors' offices. If the drug climbs toward its revenue goals,
the company will have the flurry of late-marketing activity to thank.
Innovators and Me-Toos
Brand 1 and Brand 2 highlight another telling fact about US launches: It is far more expensive to enter an occupied US market
as a me-too product than to launch as a first-in-class drug (see "First-in-Class vs. Me-Too Budgets," left).
The study concluded that me-too blockbuster brands—launching against well-armed competitors in highly lucrative markets—wielded
budgets nearly 400 percent larger than their first-in-class counterparts. Even the relatively low-spending niche brands show
a sharp divide. Follow-on products spent twice as much as first-in-class drugs.