The importance of the economic value message

Jan 16, 2008
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By Steven Handley (steven.handley@rxcomms.com)

The pharmaceutical industry faces the major issue of top selling drugs losing their patent protection, allowing generic products to replace them at much lower prices.

This leads not only to the restructuring of the larger pharmaceutical companies to mitigate financial losses, but the subsequent job losses lead to insecurity and to cutbacks in research, sales, and marketing efforts.

This means the important benefits of major drugs are communicated less – or less strongly – thus creating confusion about which drugs actually improve the overall quality of patient life.

Far too often, internal communication of a drug’s economic value fails at the first hurdle because sales and marketing departments don’t understand the economist’s message.

This can lead to a mixed message about the products and to misconceptions among consumers about what the best treatment is for them – a generic product or the more expensive brand-name one.

If pharmaceutical companies fail to communicate the key messages about cost-effectiveness, budget impact analysis, burden of disease and the quality of life, their branded products will have a shorter life cycle.

This could allow those products to be totally outpaced by cheaper mass generics that may not necessarily provide the most effective therapeutic outcomes.

Dealing with the media – confidently

Jan 16, 2008
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By Julie Stauffer (julie.stauffer@rxcomms.com)

The media can be a powerful vehicle for raising your profile, getting your message out and gaining credibility, but not everyone feels comfortable confronting a reporter’s microphone. If the mere thought makes your palms sweat, take heart. The following tips will help you stay calm and in control during your next interview.

Buy yourself time

When a journalist calls, never feel pressured to answer questions on the spot. Find out what publication or program the piece is for, who the audience is, and what the angle will be. Then schedule the interview for a few hours or days later. Even 15 minutes will give you a chance to collect your thoughts.

Focus on key messages: Take that time to decide what key points you want to communicate. Make them clear and snappy and bring them to life with a few telling examples or statistics. Then rehearse everything out loud until it rolls off your tongue smoothly. Practice does make perfect!

During the interview, don’t be afraid to take the initiative

If the reporter’s question isn’t giving you the opening you want, respond briefly and then segue to one of your messages by adding “I think a crucial point to remember is…” or “the real key to this issue is….”


A few deep breaths before you begin will reduce muscle tension.

Worried you’ll forget an important fact?

For a print or a radio interview, keep a cheat sheet handy. And if you don’t know the answer to a particular question, just say so. Similarly, if an answer doesn’t come out perfectly, there’s no need to panic. Unless you’re doing live TV or radio, it’s fine to say: “I did a poor job of explaining that. Let’s try it one more time.” If you are live, a good trick is to say “in other words …” and then rephrase your response.

Duck the difficult questions

When a contentious question comes up, avoid it with a smooth segue. Briefly explain why you’re not prepared to respond:

  • “That’s outside my area of expertise”
  • “I don’t feel comfortable speculating on that”
  • “I can’t comment on that because of confidentiality issues”.

Then follow up immediately with a phrase such as “but what I can tell you is…” or “but the point to stress is…” and return to one of your key messages. Voilà – you’re back in control!

Is big pharma becoming big biotech?

Jan 16, 2008
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By Mary Gabb (mary.gabb@rxcomms.com)

Recent reports in the Wall Street Journal and The Economist describe an imminent seismic shift in business models for pharmaceutical companies, as current blockbuster drugs are set to go off-patent and a rapidly dwindling pipeline of new drugs are under development or are being reviewed for approval.

The result? Big Pharma may become Big Biotech (or Big Biopharma, as it now refers to itself) as the focus shifts to protein-based biotech products from chemical-based pharma products.

Pfizer, Inc. recently announced the closure of its Ann Arbor, Michigan (USA) laboratories, laying off 2100 employees. Pfizer also announced it will eliminate 10,000 jobs by the end of 2008. But they are not alone. In 2007, Astra-Zeneca reduced employee counts by 7600 and Bristol-Myers Squibb by 4350. Other big pharma companies have reduced their workforces in recent years as well.

Pharma companies appear to be shifting business models, from chemistry-based research for new drugs, to biologics-based research for new treatments using biotechnology. In fact, Pfizer opened a new biologics center in San Francisco in October 2007, and many of the major drug companies have acquired biotechnology companies in the last two years (see table).

Highlights of recent biotech acquisitions by pharma companies

Pharma company Biotech firm takeover Date announced
Roche Ventana Medical Systems June 2007
Pfizer, Inc Coley Pharmaceutical Group November 2007
Astra-Zeneca PLC MedImmune April 2007
Merck & Co. Sirna Therapeutics December 2006
Bristol-Myers Squibb Adnexus Therapeutics September

In addition, both Wyeth and Eli-Lilly have entered into collaboration agreements with biotechnology companies.

Why such a dramatic shift?

More than three dozen drugs will lose patent protection over the next four years. Moreover, the WSJ reports that 43% fewer new chemical-based drugs have been brought to market between 2002 and 2006 compared with the 1990s, despite more than doubling the R&D spending.

This paucity of potential blockbuster drugs, along with advances in diagnostics and data technology (high through-put gene sequencing, genomics, and personal phenotyping), and changes in regulatory processes (particularly at the US Food and Drug Administration), have provided an opportunity for biotechnology to emerge, filling in the healthcare gaps where pharma has been unsuccessful or neglected, namely more acute diseases or those that specific sectors of the population.

How will this affect health economists? As noted by The Economist, cost-benefit analyses will become even more crucial as health care payers consider the long-term benefits of innovative (and expensive) new biologic agents. Consider the decision by Britain’s National Institute for Health and Clinical Excellence to approve the use of Hercepin, a targeted cancer drug with a cost of nearly $50,000 per year, per patient.

Related articles

The Economist Beyond the blockbuster: drug firms are rethinking their business model (28 Jun 2007)
Beyond the pill: drug firms are casting about for new business models (25 Oct 2007)
The Wall Street Journal Big pharma faces grim prognosis (6 Dec 2007)
Paradigm lost: as drug industry struggles, chemists face layoff wave (11 Dec 2007)
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