At this year's BHBIA meeting Cory Inglis and Nicola Stephens from Wyeth Europa explored the concept of the need for market research to be done better and earlier in a product's life cycle, and perhaps a different emphasis with regards to who is the customer of market research? In the first of a two part article, Cory will review this idea of the need for research to be done better and earlier. In next month's Third Tuesday Cory will review the five specific actions that market research should deliver in order to be a true strategic partner in the development of the brand.
Cory Inglis 
20 May, 2008
The Rx Factor – Will the brand become a Michelle McManus, or a Leona Lewis?
At this year’s BHBIA meeting Nicola Stephens from Wyeth Europa and I explored the concept of the need for market research to be done better and earlier in a products life cycle, and perhaps a different emphasis with regards to who is the customer of market research?
We argued that one of the ramifications of not having this early insight into the potential of the brand, the therapy area and the market, is potentially restricting access to products, both commercially for the company and ultimately for the patient.
Therefore we argued that Market research, in markets such as the UK, where there are additional hurdles to access the market, should lead the way in understanding the future by inputting into Global clinical strategy and that the market research function should have a central role in the development of products both clinically and commercially.
Over the next two editions of Third Tuesday I will provide a full overview of the presentation. This month by examining the theme and next month the five specific actions that market research should deliver in order to be a true strategic partner in the development of the brand.
If we begin by examining the concept of the “Rx Factor”, the theme of the 2008 BHBIA conference, as a metaphor for the pharmaceutical industry. Reality television shows have truly been one of the phenomenon's of the 21st century with new technology reinvigorating a format as old as TV itself. The talent competition. With telephone voting ensuring a revenue stream and a means of quantifying success, high spend TV shows look and feel very special. This is the power of marketing and one of the best examples of the product development process and product launch.
For all products in the pharmaceutical industry, getting a new product to market is a risky business. For every molecule that is tested thousands of hopefuls are discarded, before making it into human clinical trials, just like thousands of aspiring pop wannabe’s who fall by the wayside before facing the boot camps. For every molecule that makes it into man thousands are eliminated before entering phase 3 trials just like the thirty eight of the fifty wannabes fail before eventually performing before the live studio audience.
For
every product that enters phase 3 trials, many still fail to meet the primary
endpoints and fall by the wayside just like the 12 finalists in the live studio
who perform in front of the audience and one become the winner. The product
that gets launched - the Pop star that makes it - that has the X Factor.
This concept builds upon a hypothesis and again in line with the theme of the conference the metaphor is that of the x factor. In his autobiography Simon Cowell stated that one of his fundamental rules of having a successful career and in particular a successful launch for a “wannabe” in today's crowded pop music market place is building upon existing fame whether this be acquired through media TV or film.
There are numerous examples of this from the novelty records of Mr Blobby and Zig and Zag, those capitalising upon the successful TV show, usually soap operas such as Martine McCutcheon who briefly achieved pop success, to those with more longevity such as Kylie Minogue who first launched herself on the back of Neighbours in the late 80's. Not all product launches have this platform, Not all products are so lucky, lucky, lucky.
This development process is the X factor.
To support Simon Cowell's hypothesis from an academic perspective. John Grant in his book 'The New Marketing Manifesto' argues that in order for brands to be successful and survive in the 21st century 12 rules must be adhered to. One of these rules is "building a community of support". Creating both involvement and engagement in the brand.
Social networking- facebook, bebo and linkedin are all taking markets by storm in their commercialisation of networks and it is this very creation of a network that is exactly at play with X factor. In pharmaceuticals we develop and call these networks - trial investigators and in marketing and sales parlance - the key opinion leaders.
In the x factor we watch as thousands of participants in the first round auditions are whittled down in a Darwinian manner to just one winner. Throughout the process we follow the winners emotional journey following their highs and lows, their development and we become engaged, we become engaged with the person, we become engaged with the brand they become, So much so, that we WANT to want to pick up the phone and vote for them.
From the producers point of view our paradigm should be that we want the brand to continue, we want them to succeed and as we all know, if you open the first page of any marketing text book, the word want will be taking pride of place. This fundamental principle of want or demand is central in any marketing challenge, in any industry, whether it be pharmaceuticals or pop stars having the X factor.
There is a victor in the X factor, through the process judges, or regulatory hurdles being cleared in order to decide which brands are assessed through the public vote, the brand with the highest market share wins.
This is where the perception of the judges transfers to the commercial performance of the public, paying to vote through their calls. In essence specifying which brand they prefer.
Much like the regulatory authorities deciding which drugs will or will not be open to the healthcare marketplaces version of the public vote. The prescribers will decide, by voting with the pen which brand becomes dominant. Once a pharmaceutical brand is launched, harnessing and leveraging that essential clinical support and translating it into prescribing and usage is key in order to gain, grow and retain market share.
What the producers of these TV programmes want to happen is that we continue in our engagement and purchasing of the performer, the brand, and continue to buy after the product launch. As such, by winning, the TV show becomes the marker of potential success, purely an “attribute that constitutes a part of their overall product profile” and we can see that product launches in this market have a parallel to pharmaceuticals in that they vary in their ongoing levels of success.
However there is a well known saying that is outlined on every financial investment that states that past performance is no predictor of future events or success, we can see that despite pre launch awareness and usage (through telephone votes) the continued success of the winning brand is not certain.
In all cases there is a disconnect between the number of people who voted for the performer in the final, and the number of records sold. Indeed the effect is multiplied when album sales are the metric of success. It also illustrates that brands have differences in both perception and commercial reality. Gareth Gates, for example, was the perceptual frontrunner before losing out to Will Young in actual votes, and subsequent single and album sales.
Some products however get this spectacularly right! Leona Lewis has developed into a global phenomenon by gaining the approval of the judges and the public and launching one of the most successful pop careers ever. Enjoying hits both in the UK and the US, akin to pharma where market penetration in the US is pivotal in enjoying global brand success
Yet Leona’s transformation, when we met her, from 21 year old receptionist to global phenomenon didn’t begin at the first audition, although it is romantic to believe that it did. Leona’s product development began 16 years earlier at age 5 when she attended the Sylvia Young Theatre school and stayed in performance related education, writing her first song at age 12 and self funding her development. The point here is that at the first audition the product was all ready primed for launch. In pharmaceuticals it can take anywhere between 8 and 12 years to develop the average drug from discovery to launch. Approximately the first half of this process simply involves establishing the safety and potential efficacy of the drug through the pre clinical, phase 1 and phase II trial periods; so the decision to move into a pre-launch phase and begin phase III trials is likely to be taken roughly 4 years prior to launch atypically, or 6-7 years more typically.
Of the drugs that move onto this phase it is estimated that only about 50% will eventually make it to market; the other half presumably falling victim to a combination of poor trial data, unexpected safety issues, and regulatory authorities who not impressed enough with the results – in essence simply not getting enough votes all round. Given that some 50% of drugs entering phase III will never reach the marketplace is there an argument then that this is a legitimate point to begin market research or would it be a waste of valuable resources?
We need to put this into perspective. In the UK alone £9 million per day is spent on pharmaceutical R&D much of which is spent on products that never achieve sales. Spending on pre launch market research in the pharmaceutical industry is miniscule by comparison. However, we believe that by conducting market research at this early stage we can provide and add real value.
As we have seen the concept of 100,000 participants in a talent contest with one winner is analogous with the pharmaceutical drug development process, with many trial products not successfully navigating through the regulatory hurdles.
Like the X Factor, the Pharmaceutical industry has its very own prescribing factor panel of judges. Our Simon, Louis and Sharon traditionally are those of the efficacy, safety and quality of a product which must be proven in order to get a product licence.
However in recent years environmental bodies such as NICE have added a fourth hurdle, for both the product to clear in order for the company to successfully commercialise the product, and for the patient to access the benefits of the brand.
The Clinical development process has played to the needs of three judges however in recent years the Fourth judge has vetoed the success of some products by demanding new and perhaps different talents of its performers, namely pharma co-economic data and thus potentially restricting access to the market. For the new series of the Rx factor there are even rumours of a fifth judge, that of the difficulties of implementation, but that is a whole different article.
One of the central truths of fourth hurdle requirements is that the changing demography of the western world, will increase demands for healthcare resource, and increase the necessity for control of expenditure. Spend per capita cannot increase exponentially and so the cost effectiveness of interventions need to be examined The role of NICE and IQWiG in Germany is the tip of the iceberg. Other countries that are publically funded will follow suit. Insurance premiums in non publically funded areas will rise as the number of treatments are available and as people live longer. If one thing is certain in the future, market access is here to stay and whose role will only continue to increase.
The doomsday scenario therefore is that some $800 million is invested and the physicians are prevented the use of a brand – more crucially patients are denied its benefits because of insufficient or poor quality clinical and cost effectiveness data.
Clearly some, or most of these decisions are made at a global level so therefore understanding the clinical, commercial and perceptual environments for a brand is important. Input into trial design from “additional hurdle markets” such as the UK and Germany is pivotal.
Historically, the UK was seen as a clinical reference point because of the stringent trials conducted and robust results published, now, additionally it is being viewed as a reference point for cost effectiveness analysis by other countries. The effect and reputation of NICE is spreading. This in combination with the cross referencing by country specific regulatory agencies means that both brands and regulatory systems are becoming aligned and more global.
Next month we will explore how robust market research conducted better and earlier has a key role to play.
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