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Will Global CME Follow Global Pharma?
As the forthcoming enlargement of the EU will push global marketing even further to the front of the agenda, what does it mean for the pharma industry?

It is unlikely that Alain Baxter is in favour of global marketing in the pharma industry. In fact, if he were asked, he would probably have some quite strong views on the subject. After winning Britain's first over Olympic ski medal last year in Salt Lake City the Scottish skier was stripped of his bronze medal in the men's slalom after testing positive for the banned substance methamphetamine. He insisted that the traces of this substance came from a US Vicks nasal stick, which is slightly different from the British version approved by his team doctor. Mr Baxter was eventually cleared of cheating and allowed to continue skiing, but his medal was not returned and all because, one might say, of the pharma industry's increasing fondness for global branding.

A planet of brands

Procter & Gamble, with its range of Vicks brands, is certainly not alone in pursuing global marketing strategies. Multinationals now tend to only want to develop products that will have the scope to be globally marketed. Given the size of the top-tier pharma companies, they really need each new chemical entity to generate upwards of $100 million annual turnover. The only way to achieve this is through global branding.

The shifting market conditions within the pharma industry over the past five to ten years have increasingly made a global approach to marketing more important. A particularly key criteria these days is 'time to peak sales'. Even though patents have the same duration as before, market exclusivity can no longer be relied for as long as in the past. The first in a new class of drugs to come to market probably has only one to two years of market exclusivity before a competing product is launched. This compares with the situation early in the last decade when some five to seven years of exclusivity could have been expected.

"The impact of this means that for a new product launch you need to get your time to peak sales as short as possible," says Alasdair Mackintosh, VP of Cap Gemini Ernst & Young's Life Sciences practice, "and one of the benefits of the strongly co-ordinated marketing approach is being able to make the shape of this curve sharper upwards."

Build high

Part of the function of such a co-ordinated global approach to marketing is really all about looking to the future, not only in terms of identifying which therapy areas to look at but also in terms of contributing to the research side of the business. "I would see supporting and directing the R&D effort as the primary purpose of a global marketing role," says a senior industry marketing source, "in addition to their role in managing the lifecycle of brands."

Increasingly, companies' marketing departments are specifying what sort of product they want, in terms of dosage, efficacy and treatment endpoints, allowing the development of launch and anti-competitor strategies while a product is still in clinical development. Alternatively, such a strategic focus can identify what products to buy-in, as, for example, GlaxoSmithKline did with Bayer's erectile dysfunction treatment and Viagra rival Levitra.

Stormy weather

"When you look at how marketing is organised, most companies have got global product teams and at least at the stage prior to a product launch all of the activity is managed on a central basis," says Alasdair Mackintosh. What really differentiates them is how they judge when to operate globally and when locally. This is a particularly contentious issue because what management simply sees as a 'global approach to marketing' can be seen by individual countries as 'having a global approach imposed on them'.

"A lot of companies see global marketing as being something which is effectively what the US is doing. A number of global marketing teams are based in the US and perhaps don't have a detailed understanding of the European environment or Japan or other markets. So it can be difficult sometimes to persuade markets to adopt global marketing recommendations on branding, positioning, etc," says a senior industry marketing source. With the US as the single biggest world market and increasing numbers of companies looking to move their head offices there, this produces an understandable, though regrettable, tension within companies. Inevitably, there will be a certain amount of local brand knowledge based in each country, just as sometimes individual territories will have to bend to the will of the global company. "If there is no sense of local ownership of the brand than there is less inclination by the local territory to implement that brand successfully and you see it done in the UK with American companies very often," says Chris Doyle, Senior Product Manager, Napp Pharmaceuticals.

However, it is not just the likes of Pfizer, GSK and the other top tier companies who are pursuing a global marketing agenda. Even some niche pharma companies are looking to operate if not yet on a global scale then certainly an expanded one. Global marketing for orphan drugs or niche products obviously has a different meaning from that applied to a potential new blockbuster. Traditionally, the only route open to those smaller companies looking for a bigger market for their products has been through out-licensing or strategic partnerships, but ideas about branding have opened up the area. "We're starting to think about it at our company," says the medical director of one pharma company, "although we've always been just a niche marketer within the UK and Ireland."

The smaller companies do face one barrier in particular to global marketing - cost. Ensuring you have the correct registration dossiers for multiple territories and that your trademark and patents are fully registered does not come cheap, especially when you have to contract out a lot of this work due to company size. "It's expensive and very time consuming to organise global patenting," says the medical director. The smaller organisations often find that global marketing is turned into a lengthy process with the employment of all sorts of outside staff needed to facilitate it. Moreover, it is a high-risk strategy, especially for one product companies, of which there are still a surprisingly large number. Indeed, it was only in the early 1980s that SmithKline and French, now part of GSK, withdrew from the Greek market altogether because they couldn't get adequate reimbursement for their core product, Tagamet.

Gigantic brands

Just as the smaller companies face a number of challenges in adapting to a global marketing approach, larger companies have yet to fully master it. Indeed, there is some debate as to how far global marketing needs to go with regards to one common name for example. "I find it very strange that there are so few examples of global brand names," says a senior industry marketing source, "it does seem odd that companies can't get this critical aspect of brand development aligned in terms of global trademarks."

Certainly, three of the top five selling drugs in 2001 did not have a global brand name. The two biggest selling drugs, Merck's Zocor and Pfizer's Lipitor, are highly recognisable brand names. However, the three next best selling drugs all had more than one trade name: AstraZeneca's Prilosec is also know as Losec, Pfizer's hypertension treatment is either Norvasc or Istin, and Johnson & Johnson's anaemia treatment is either Procrit or Eprex.

There is still wide scope to improvements in global marketing. "The small and medium-sized companies are learning from the mistakes that the global companies are making in failing to tailor messages to local territories," says Chris Doyle. "One of the benefits of the mergers and acquisitions has been global scale in marketing, but at the level of detail the medium-sized companies are often being just as innovative," agrees Alasdair Mackintosh.

Trompe le monde?

The rise of global marketing is another instance of pharma looking to emulate the successes seen in the consumer marketing world. Here, companies like Proctor & Gamble and Unilever are the model, with highly centralised, highly recognisable product portfolios. Perhaps a little bit too recognisable if you happen to be a Scottish skier.

One of the problems with operating on a global scale is that just because a product is a global one does not mean that it is the same throughout the globe. We are not dealing with a fizzy drink or a chocolate bar here of course but human medicines that are tailored to the various markets they are produced for. The classifications that different markets have to work with are not all the same. For example, how do you market the uniquely British classification of 'pharmacy' medicines? How about a product that is marketed as an over-the-counter one elsewhere but is a prescription only one in this country?

The impending enlargement of the EU will certainly make things very interesting for marketers as it brings access to a market of around 250 million people, after centralised approval. It will also bring with it problems of different reimbursement and social security systems, not to mention the ABPI's £1 billion-a-year bÍte noire parallel imports. Ultimately, the challenge will be for companies to reconcile the sometimes divergent demands of acting successfully on both a global and a local scale.

Dominic Tyer, Pharmafocus