Direct To Consumer Marketing For Nexium Marketing Essay
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 2542 words||✅ Published: 1st Jan 2015|
In the last decade of the twentieth century, industry witnessed many strong players who were manufacturing drug for gastro esophageal reflux disease, commonly known as heart burn. The leader in this segment was AstraZeneca plc. A London UK based pharmaceutical major, which manufactured and marketed drugs under the brand name Nexium and Prilosec. The patent of prilosec, one of the world’s largest selling drugs, was scheduled to expire in 2001.generally, once patent expire, low cost generic version of the drug enter the market which decrease sales of branded drug.
If you need assistance with writing your essay, our professional essay writing service is here to help!Essay Writing Service
The company was, however, not ready to let go of its cash cow so easily. It developed team in 1995 called the shark fin project team to design defense strategy against generic competitors that would allow it to maintain its market leadership. The team which consisted marketers, lawyer and scientist and their answer were Esomeprazole (Nexium), which we as mirror image of Omeprazole (Prilosec).
Through its promotional effort, the company sought to switch users of Prilosec to Nexium. In the US, the company launched one of the costliest marketing campaigns to achieve its objective. Analyst felt that the company had succeeded in its lifecycle management strategy .Nexium soon developed into blockbuster drug and as of 2006, it was the world’s second largest selling drug. The company had also succeeded in maintaining its number one position in the gastrointestinal marketing drugs market and as of 2007.
The Risk of sale decrease
Prilosec was a cash cow for AstraZeneca and as it says above, its patent of the brand set to expire in 2001, the company was in danger of losing its market leadership in the PPI market as well as treatment for acid related disease market. Generally, when a drug loses patent protection, generic competition forces a drop in price up to 80% within one year and this makes the product lifecycle curve of the drug look like a shark fin. That means sale of drug decrease suddenly after patent expiry.
Avoiding Shark fin was very important for AstraZeneca as competition from generic versions of Omeprazole could lead to huge erosion in the sales of Prilosec. This will result in loss of 40% of company’s total revenue. Company appointed a team to find out solution of this problem.
Work of The Shark Fin Project team
In the year 1995, company, formed a team of experts which included marketers, lawyers, and scientists, who studied Prilosec and came out with around 50 possible solutions to outsmart the patent-expiration peril. By 1996, the team had shortlisted 18 options, which included options such as designing a version of Prilosec that would work faster or have a longer duration of action or be more efficacious, introducing a different formulation (such as a liquid or extended-release version of Prilosec), combining it with a different heartburn remedy (such as a combination of Prilosec and Pepcid), etc. For any of these products to qualify, it had to pass the following tests:
It had to perform better than Prilosec
It had to be patentable
It had to be technically feasible
It had to be possible for it to hit the market before the entry of generic versions of Prilosec
Developing a new drug that was better than Omeprazole was a tough task, the team decided to use chemical reengineering to design a better version of the existing drug so that it could be patented.
Like any other drug, Omeprazole (the generic formulation of Prilosec) contained a left handled isomer and a right-handled isomer (so-called “S” and “R”) which were mirror images of each other. According to the Shark Fin Projects team’s study, removing one of the isomers from the drug would improve the drug’s side effects profile and also improve its performance as only one isomer was responsible for the therapeutic effect. More importantly, the new drug consisting of only one isomer could also be patented as a new invention. One of members of the Shark Fin Project said, “It wasn’t just about the money-we wanted to do good things,”
Through chemical reengineering, AstraZeneca came out with a molecule that contained just the “S” isomer of Omeprazole and the new molecule was called Esomeprazole. The company decided to brand it as ‘Nexium’, a combination of the word ‘Next’ and ‘Millennium’. AstraZeneca intended to replace the sales of Prilosec with Nexium. But before that there was much that had to be done.
The company conducted four clinical trials comparing Nexium 40 mg with Prilosec 20 mg in erosive esophagitis. Two of these trial results were reportedly unfavorable but the other two were favorable for the new drug. A trial that compared Nexium 20 mg with Prilosec 20 mg, marginally better healing rates (90 percent vs. 87 percent). Armed with the results of the positive trials, AstraZeneca applied for marketing approval for Nexium in various countries.
In addition to this, the Shark Fin team also prepared meticulously to delay the entry of generic competition to Prilosec through lawsuits. In fact, meanwhile Astra had try to get more patent of Prilosec such as patenting the processes of manufacturing the drug, patenting the method of using Omeprazole etc. With these patents the company planned to engage the generic competitors in lengthy litigations. Datamonitor observed, “It has built up tight fence around Prilosec through formulations and indications, which protect specific aspects of Prilosec’s production, formulation, and use for 13 years beyond the basic patent expiry in 2001. Moreover, in the US, entering into litigation was beneficial for the company as the generic version of the drug. This was beneficial for the company as it would have to contend with only one company for another six months and the erosion in sales during that period wouldn’t be too dismal. Such delaying tactics would also give company more time to switch existing customers of Prilosec to Nexium.
With there being little difference between Nexium and its predecessor, analysts expected that the success of the brand would depend solely on how successfully the drug was marketed by the company. Some Analysts were skeptical about the prospects of the new brand as it not only had to fend off competition from generics but also from existing PPI brands. “The question is how well will they be able to position this drug so that’ll mitigate the patent loss of Prilosec . Will it be as big as Prilosec? I doubt it,” said Robert Kirby, an analyst at Edward Jones.
The company received marketing approval for the drug in the EU in July 2000 and in the US in the February 2001. Nexium was launched with a lot of sample being given to the doctors by the sales force. Research of ImpactRx in the US suggested that the sales force a disproportionate amount of their detailing time with the doctors to promote Nexium. The sales force spent the time trying to convince the doctors that Nexium was better than Prilosec. The company also ensured that the doctors were exposed to more sales pitches for Nexium than any other drug for acid related disease.
In the US, the company increased sales force by four times. In addition, it also launches a high decibel advertising for Prilosec to compete with its generic version.The company leveraged on the distinct purple color of market Nexium. The Nexium was launched with same purple color. There were ads on the TV and Radio, in print and on the internet .The initial ads on TV started with “I am every man and every woman who ever suffered from frequent, persistent heartburn.” It went on to describe problem in more detail and then said, “But today there’s purple called Nexium. It’s from the makers of Prilosec.”After talking about the effect and side effects of Nexium the ad ended with line “Relive the heartburn, heal the damage. It’s possible with today’s purple pill called Nexium.”
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.View our services
According to analyst, the promotional campaign unfolded by AstraZeneca for Nexium was one of the costliest for a drug. According to IMS Health, in 2001, the company spent US$478 million in the US to promote Nexium. The company was said to have spent US$16 million in a single month of promoting the drug. In 2002 and 2003, the company was supposed to have spent US $183million and $257 million respectively on promoting the drug.
Initially, the company priced Nexium slightly lower than Prilosec but as the former getting more acceptance, it moved to a similar price for it. It also tried to induce trials of the new brand through inserts in magazines to offer a “free trial” of Nexium to the consumers. The company website also offered a “free trial”.
As part of its online strategy, the company initiated e-detailing to doctors, a virtual press office and web casting for doctors, educational scientific portals such as Gastro source for gastrointestinal tract specialist, and a separate educational portal for general practitioners. These initiatives could be localized by local marketing companies. In addition to this, the Prilosec sites were rebranded to Nexium.
The company continued vigorously promoting the drug in the mass media in the subsequent years. In later communications, the ads ended with pay-off line ‘better is better’. In September 2004, ads featuring actor and singer James Naughton were shown. As of 2007, Nexium was still one of the top spenders in DTC advertising.
Results of AstraZeneca’s Marketing strategy
That AstraZeneca had succeeded in defending its market was clear. Analysis felt that the company had successfully switched the Prilosec to that Nexium sale. The sales of Nexium between 2000 and 2006 were a whopping US$19.58 billion. According to the company, between 2000 and 2006, 126 million prescription of Nexium had been written globally, and as 2007, more than 7 million Americans were using Nexium.
Nexium had consistently featured on the list of the top ten largest selling pharmaceutical brands. For instance, for the year 2005, IMS health ranked it third behind Pfizer Inc. For the year 2006, IMS health ranked Nexium second behind Lipitor. The drug was also ranked second drug topic 200 Top Brand Name Drugs by Retail Dollar in 2006.
Success of Marketing:
Analysts felt that the results reflected AstraZeneca’s marketing prowess. Especially in the US, its marketing has resulted in a very strong launch as it grasped 16.3 % of all new prescriptions for PPIs. This made it the most successful launch of a drug for acid related disorders. Experts in marketing and strategy also appreciated the way it leveraged on the brand name of Prilosec to build Nexium brand. Analysts felt that AstraZeneca had benefited tremendously by engaging consumers through multimedia. Its online initiative for the brand was also appreciated. For instance, in 2004, more than 5 million people visited Nexium’s purplepill.com website and 500,000 registered for free trial of the drug.
The marketing of Nexium also earned AstraZeneca and its ad agencies a number of awards. For instance, in 2007, AstraZeneca and Saatchi & Saatchi Healthcare won the silver in the MM7M awards in the ‘Best use of Direct Marketing to the Consumers’ for its ‘Purple plus Adherence Program’.
Analysts felt that Nexium was yet another example of the trend among pharmaceutical companies of coming up with a single isomer version of an existing blockbuster drug as a defense strategy against generic competition. Such life cycle management strategy was becoming very common, but not all company that adopted this strategy succeeded, they said. Analysts felt that through its successful life cycle management strategy the company had been able to come out with a new drug, patent it, and launch it successfully, without having to spend the nearly $800 million and two decades that were required to develop a new drug from a scratch.
According to Kellogg School of Management’s Dean, Dipak C Jain, AstraZeneca’s strategy in the US was an excellent example of the application of the sandwich strategy. He felt that the company had not only defended its market but had also expanded it through product and pricing innovations. On the other hand, it had promoted Nexium at a premium price with messages such as ‘today’s purple pill’ and ‘better is better’ while Prilosec OTC had been priced lower than the generic versions of the drug. “With proactive planning, AstraZeneca had effectively sandwiched the generics on the price and quality dimensions,” he wrote.
AstraZeneca planned to continue managing the lifestyle of its key growth products in the GI, cardiovascular, and oncology therapeutic areas. It also planned to maintain its leadership position in the GI market. The company said, “We aim to maintain our number one position in the GI treatments through continued market penetration for Nexium worldwide, coupled with high quality innovation and productivity in the research and development of the GI therapies.”
Analysts felt that much of AstraZeneca’s present and future success in the GI therapeutic area hinged on the Nexium. By 2007, the company had succeeded in getting Nexium approved for healing and prevention of ulcers associated with NSAID(non steroidal anti-inflammatory drug) therapy in Europe, and for the reduction in the occurrence of gastric ulcers associated with continuous NSAID therapy in patients at risk of developing gastric ulcers in the US. It had also got the drug approved for the treatment of GRED in children (12 years and above) and for the treatment of a rare disease called the Zollinger Ellison Syndrome. The intravenous formulation of Nexium was approved in 68 countries including the US, for the treatment of GERD for patients who were unable to take capsules.
In addition to it, the company was also aggressively defending its patient for Nexium. AstraZeneca had six patents for Nexium (5,714,504; 5,877,192; 56,369,810; 6,428,810; 6,875,872; 5,948,789) which were scheduled to expire from 2014 through 2019 .The company planned to launch a number of line extensions of Nexium in the future. The company was also collaboration with POZEN Inc. on the development of PN-400, an anti-arthritic drug candidate that used Pozen’s proprietary drug combination technology to combine Nexium with the anti-inflammatory drug, Naproxen.
AstraZeneca’s marketing strategy give really good example about how Pharmaceutical Company can get success on basis of its marketing strategy. In addition it also proves that marketing strategy of product mainly important to attract more patients and more prescription. Company also protects its cash cow greatly and more effectively by strong marketing strategy.
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: