Hillary M. Wilson

26 February 2013

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Today’s Focus: The Mature Brand 2012 may be have been the year that the patent cliff reached its height – with $33 billion

of sales at risk – but the impact of loss of exclusivity will continue to reverberate across the decade, with more than $290 billion of prescription drugs sales due to be exposed to generic competition between now and 2018.

A series of products are near simultaneously going off patent. In years past, the rates of erosion were substantially less.

Sales from a single new drug are insufficient to compensate for a series of existing ones expiring.

No doubt, the patent cliff is reshaping the industry, but the good news is that the market for prescription drugs will grow by 3.1 percent per year between 2011 and 2018.

What this means for efficiency experts? …it’s time to work differently and with less.

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Example Opportunities to Do More With Less in Pharmaceutical Marketing

• Established Brands Agency Consolidation

• HOW: Working with Strategic Sourcing

• My Value Card Analysis

• HOW: Data Collection & Analysis

• A Mature Brand Model

• HOW: Redesign the Process

• Leveraging Service Representatives

• HOW: Value-add Analysis

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Case Study An Established Brands (EB) team is organized so that one brand team member

handles a certain Advertising area for all the Established Brands: for example, one

person handles HCP Advertising, one person handles Consumer, one person handles

Digital, and so on. The dept. includes Brand A, Brand B and Brand C as well as other

mature brands. Since each brand had their own Advertising agency for these

services, this is a highly inefficient way to use agencies since each person handling their

area has to deal with several Agencies that support each brand.

Issues:

• Based on the size of the brands and the promotional budget there were redundancies in Account Management and Fees that were costing a great deal of money.

• With a small team of marketers the responsibilities were siloed due to little collaboration between Agencies of Record (AORs). This was especially true in Consumer and HCP

• The EB team needed better collaboration across channels to be as efficient and resourceful as possible with messaging and tactics

• Established Brands needed an agency with a proven track record of working with peri/post Loss of Exclusivity brands to support innovative non-personal selling models.

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Straddling Multiple Agencies for Different Brands

Marketer HCP

• Brand A AOR#1

• Brand B AOR#1

• Brand C AOR#1

Marketer Consumer

• Brand A AOR#2

• Brand B AOR#2

• Brand C AOR#2

Marketer

Managed Markets

• Brand A AOR#3

• Brand B AOR#3

• Brand C AOR#3

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Established Brands

9 AORs

Actions Taken• The Established Brands team put out a Request for Information (RFI) to identify

agencies that fit our criteria of being able to stretch from HCP to Managed Markets and

Consumer. If they could not “do it all” then they were asked them to define how they would

handle covering all of the business (i.e. consultants, holding company partners)

• The RFIs were evaluated and a Request for Proposal (RFP) was issued to 5 agencies.

• The RFP gave specific assignments to the agencies including Case Studies from work on

other Established Brands, how they would do internal branding of the EB team and an

innovation challenge based on having an imaginary slush fund.

• The agencies had the opportunity to come in and present to the team.

• The EB team was able to identify 1 AOR that both demonstrated a high level of knowledge and experience with Established Brands and the ability to work across all areas of the business.

• Within 1 month all marketing assets had been transferred to the new AOR and they had begun handling all of our day to day business for all EB products.

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Results• Established Brands was able to identify 1 AOR that both demonstrated a high

level of knowledge and experience with Established Brands and the ability to work across all areas of the business.

• Within 1 month all assets were transferred to the new AOR and they had begun handling all of our day to day business.

• Total agency fees were reduced by approximately $2m annually.

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Case Study Established Brands was asked to give back promotional budget in 2012. Because of this

many programs needed to be cut including the My Value Card patient savings program for

Brand A.

At the time, the My Value Card Program was viewed by the team as a necessity to keep

the level of revenue Brand A was currently bringing in.

• Nevertheless, the brand decided to stop all dissemination of My Value Cards to the sales force as of May 2012.

• The expectation was that the amount of activations of new cards would decrease. This would be followed by a decrease in claims shortly thereafter.

• Instead claims continued to increase resulting in Brand A exceeding revenue targets.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000 PTD Cumulative Claims

0

500

1,000

1,500

2,000

New Enrollments

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Actions Taken• Working with the co-pay card vendor and a third party analytics partner an Impact Analysis was performed on the My Value Card Program.

• Finding: Most patients on the program were continuing patients. In addition, the continuing patients were least impacted by the co-pay program in remaining adherent. The conclusion was that continuing patients were “Adherent” patients already and the card was not driving incremental revenue.

• The data showed 2 things:

• There would be minimal impact to the Brand A business by shutting down the offering to Continuing patients

• The focus of the co-pay card program needed to be on New Patients, a smaller group and less expensive to support with a savings card.

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Results• A decision was made to continue the offer the My Value Card on-line to all patients.

On-line enrollment into the My Value Card program is low, but it still offers the perception of affordability of the brand on a high traffic brand.com, which is especially important for new patients.

• We changed the My Value Card offer to only be available through our Live Call Adherence program which only reaches out to NBRx patients limiting the use of the card to New Patients.

• To continue to build our RM database we are offering a one-time coupon through Point of Sale programs in Pharmacy to patients that are presenting with a new Rx (defined as not filling at that pharmacy for the past 180 days) to avoid abandonment at the Point of Sale.

• The savings from this change in program was approximately $4.5m on a $12m budget with no forecasted negative revenue impact.

Learning: Challenge Assumptions – Test Hypotheses – Take Risks

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Identify options to: Determine optimal spend Optimize profitability Grow revenue

Determine growth potential of the brand

Identify how Company should approach the brand long-term

Objectives

Brand B, although important, is not a Company priority

Unless a business case can be made for additional investments, the plan is to look primarily at scale-back scenarios

Options will focus only on Brand B

Guiding Principles

Brand B, a mature brand close to its patent cliff, developed investment scenarios with the following objectives and guiding principles in mind:

Case Study

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Brand B Investment Scenarios

Base Case

Scenario 1

Scenario 2

No Change in Current DP or FF (Field Force through June 2012)

Remove majority of DP and all FF (October 2011)

Retain DP, Remove FF, Initiate Non-Personal Promotional Activities (January 2012)

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Identified PotentialScenarios

Defined Key Promotional

categories

Completed internal and

external audit of “best in class” non-

personal tactics

Identified appropriate vendors and

tactics per scenario

Reviewed promotional

response analogues with AOR

Gathered additional

insights from internal

teams

Analyzed and refined

targeted level of “detailing”

Designed promotional mix for each

scenario

Brand B Mature

Brand Model

Actions Taken

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Base Case: No Change in Current

DP or FF (Field Force through June

2012)

Scenario 1: Remove majority of DP and

all FF (October 2011)

Scenario 2: Retain DP, Remove

FF, Initiate Non-Personal

Promotional Activities (January

2012)

• Low risk option• Maintain current plan• Mix of direct field force

promotion and non-personal selling initiatives

• High risk option• Success of “Walk away”

scenario unknown

• Medium risk option• Full non-personal promotion

tactics to replace direct promotional efforts

• Net sales close to Base Case with increased profitability

Brand B Mature

Brand Model

Recommendation

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E-Sampling

Patient Programs/RM

MM Access Pharmacy

Non-Personal Digital

Non-Personal Print

HCP Pharmacist

& Patient

Optimizing Efficiency Late in the Life Cycle

Key Tactics

• First ever “Mature Brand” business model established at the Company.

• Multi-channel non-personal business model developed utilizing tele-sales, web/internet, mobile apps, e-sampling, and direct mail to maintain prescriber awareness and loyalty without field sales representatives

• Direct to Pharmacist programs aimed at minimizing switches to generics

• Enhanced Patient and Caregiver support via website, RM, pharmacy and savings programs to foster loyalty and improve adherence

TeleSales

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Results

• Finished well over 100% of revenue target for Brand B

• Gave back almost $3m in promotional budget

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Case Study• A certain therapeutic market has always been crowded and is now becoming highly

genericized. There was a massive reduction in direct promotion by most major branded

drugs in 2011. With a market that was not very sensitive to promotion the decision to pull

back on promotional spend was the right one.

• However, samples continue to be the single largest driver of business for Brand C. With

the launch of a second product in the same therapeutic space Brand C share of voice was

declining rapidly. There was still a business case to deliver samples, but detailing was not

opportunistic enough nor value-added for prescribers.

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Actions• Sales force leadership still perceived value in sampling Brand C which allowed their

representatives to gain access to present the new launch product.

• Target physicians still perceived value in receiving a sample, but not a detail of a mature

product.

• In 2012, Brand C moved to a 100% Service Rep model where delivery of samples to

~40,000 targets was the only promotional activity by the field force.

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Results• Brand C was well sampled in 2012

• Brand C finished at over 108% to goal with a direct promotional budget that was cut by

nearly 50% in 2011.

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