One such drug is Pfizer's Xalkori (crizotinib), a "newly approved for a rare form of lung cancer, for which Pfizer plans to charge $115,200 a year per patient."
At that rate, Pfizer needs only about 9,000 patients worldwide to generate $1 billion in annual sales of Xalkori. In comparison, 1,671,000 Lipitor patients are required to generate the same sales figure. I demonstrate this in the following chart, which requires a logarithmic scale to represent both these numbers visibly on the same chart (see chart below).
Meet the New Big Pharma Economies of Scale: A smaller market can provide blockbuster sales as long as health plans back expensive therapies.
The catch is having diagnostic tests that pinpoint patients most likely to benefit.
Pfizer seems confident it can do this. "There's been a change of paradigm," said a Pfizer researcher. "The new school of thought is, 'If you find the patients that the drug will work in, and if you see enough benefit, we will find a way to get this to market.'"
The new drug development "paradigm" requires a new marketing paradigm as well. That marketing paradigm will focus almost exclusively on medical specialists such as oncologists.
Under the new marketing paradigm it will be difficult to justify broadcast direct-to-consumer (DTC) advertising (eg, TV) because it will cost too much to reach the small group of potential patients with such a broad brush (my guess is that pharma marketers only spend a lot on broadcast DTC when the target audience is greater than 10% of the adult population).
The Internet and especially social media is ideally suited to marketing to a small community of patients such as Linnea Duff who took crizotinib in a clinical trial. Linnea was featured in the Wall Street Journal article. Not mentioned in the article, however, was the fact that Linnea writes the "life and breath: living with lung cancer" blog, which she started during her clinical trial experience. The blog prominently features a "Pfizer Video" (see here).
I don't know if Pfizer paid Linnea to include the video on her blog -- she doesn't say one way or the other, although she did NOT include this equally nice video from the Massachusetts General Hospital (MGH), which ran the clinical trial in which Linnea participated. That video is available on YouTube (here).
I wish Linnea the best of luck -- she is still terminally ill and is "happy each day that she is given" as a result of her treatment.
Her story, however, is a powerful marketing tool and I am sure the future of pharma marketing will include many such patient stories that can circulate online among close-knit patient communities that previously were "orphans"; ie, neglected by the pharmaceutical industry.
[This post originally appeared in Pharma Marketing Blog.
Make sure you are reading the source to get the latest comments.]
Glenn McAnanama (@glenn_mcan) tweeted these insights: "at $100k per patient pretty much any promo touch would have a good ROI if it reaches right audience members" and "A lot of sales/marketing folks would fight hard against small niche high price strategies. Outside their comfort zone."
ReplyDeleteWhich implies that Pfizer may not adopt a new marketing paradigm for Xalkori, but stick to the tried and true; ie, broadcast TV DTC ads. I envision the pitch using Linnea Duff's experience as a model (maybe even featuring Linnea herself).
In the future TV ad for Xalkori that I envision, Linnea (or an actress) will open with " I had never smoked. Even though I was coughing and had shortness of breath, no one suspected I had lung cancer." Just as she does in her video.
The ad hints that if you have these symptoms, YOU too may have lung cancer. Ask you doctor for a simple test to see if you are at risk. Pfizer might even get into the business of performing these genetic tests so that it can make money even if the people it drives to doctors' offices don't qualify for treatment with Xalkori.
Such mass market advertising, IMHO, would scare many people unnecessarily and would be unethical. For targeted therapies, you should have targeted marketing. Let's hope that a "lot of sales/marketing folks" do NOT fight hard against marketing maxim.
Glenn speaks about "small niche high price strategies." I mentioned using the Internet and social media to do "niche" (ie, targeted) marketing. I don't believe these channels are "high price" at all. In fact, I believe them to be relatively inexpensive compared to TV.
Hi John
ReplyDeleteI think you partly misunderstood my tweets - as is a limitation of the medium so I guess I can expand here. I was complimenting the manufacturer for having the courage to target a niche in clinical trials and then price it appropriately high for that very high value niche. The easy route would have been a clinical trial for a larger pool of patients and mediocre efficacy and a much lower price. Your calculation of # of patients to get to a billion should be something pre-launch decision makers consider before phase 3 planning.
As for marketing, I wasn't suggesting that they would try to go broad in DTC but tater that because of the courage in the clinical trial trial design and pricing, they pressure was off the marketing folks - the main activity would be finding those patients. Online and through MDs would probably be the easiest route.
Glenn,
ReplyDeleteThanks for clarifying. I see that we agree.
Hello John, I would like to introduce myself; my name is Linnea Duff, author of http://lifeandbreath.wordpress.com/ as well as the woman featured in the WSJ article. For the record, I received permission from Pfizer to use their video in my blog, but no compensation (nor urging on their part). I highlight it because A. I like it and it makes me happy and B. I think it is a very hopeful video. It is also the only video (besides those I shoot myself) that I had explicit permission to post; hence the links to all other videos (including MGH's).
ReplyDeleteAnd thanks for the good wishes; I am hopeful that LDK 378 packs as powerful a punch as Xalkori did.
Linnea Duff
Hi Linnea,
ReplyDeleteThanks for the clarification.
John