When a drug's patent expires, its PR efforts must continue to create value for the brand.
Over the next four years, more than half of today's blockbuster drugs are expected to lose patent protection, opening the door for competition from lower-cost generics.
For the pharmaceutical industry, profit losses can be significant, frequently amounting to as much as half to three-quarters of a drug's market share.
If history is any indicator, few drug companies will choose to stay the course on their promotional efforts once they're no longer the only players in the market. Many companies will simply channel their resources into their next blockbuster. Others will re-launch the product in a new way, such as seeking over-the-counter (OTC) status for a prescription drug.
But even if the drug is no longer a top-seller for a company, pharmaceutical executives can still take advantage of the equity that's in a brand, healthcare PR professionals say.
"The brand itself is not going off patent - it's the product," says Nancy Turett, president and global director of health at Edelman. "If [drug firms] plan in advance, there should be an ability to build up an equity in that brand."
In practice, however, pharmaceutical companies often fail to follow through on their branding efforts, instead pulling resources from a brand that they've spent a decade trying to build.
"The pharmaceutical model means that [after a product's patent expiry], we no longer pay attention to it," says David Wood, CEO of Interbrand Wood Healthcare. Wood notes that the current model has become problematic for two reasons: it discounts the connection that drug companies have established with patients, and it is unsustainable.
"The problem today is that the industry does not have productive pipelines," he says, adding that firms will be unable to replace all the blockbusters that are coming off patent in a short time. "Maybe in the future we're going to understand that our brands do have value."
Benefitting from PR
Off-patent brands do not get aggressive PR support, Wood notes, but they should. It is PR that can mitigate the loss of patent protection for a brand-name drug.
"I think it's like anything else. If the brand stands for quality, and [patients have] gotten good results with it, they may be less inclined" to switch to a generic version, says David Catlett, partner and director of global healthcare at Ketchum.
The category into which the drug falls - whether it's a lifestyle drug or one for a serious condition - will also make a difference, he adds.
Indeed, a survey released in May by Medco Health Solutions, a pharmacy benefit manager, found that individuals become increasingly less likely to switch to a generic drug as the severity of their condition increases. The study found, for instance, that while 79% of 1,000 survey respondents would use a generic drug to treat the flu, only 47% would use a generic drug to treat heart disease.
Karl Schroff, president of Biotech Media, notes that the life-threatening drug category offers the greatest opportunity for PR. Pharmaceutical companies "need to have a presence, a corporate presence, in the therapeutic category," he says. "PR has much more impact for the life-threatening drug."
It is in this therapeutic category that drug companies can highlight the difference that they are making in patients' lives. They can also cultivate partnerships with physicians, who, with insurance companies, are the gatekeepers to prescription medications.
Pharmaceutical companies also need to consider what a brand has come to mean for patients, Wood notes. "We spend eight or 10 years building a connection" to a particular drug, he says. "It becomes a part of [a person's] life."
There are already indicators that healthcare PR practices have begun to take lessons from consumer industries in establishing that connection.
"We've taken a lot of consumer messages to heart," says Susan Isenberg, EVP and GM of Edelman's New York health practice. "There is an ability to segment the messages. We can be much more targeted."
The integration of consumer and healthcare practices also has become increasingly common. Belsito & Co. is one example of a medical communications company that launched a consumer practice, called Demand, which is headed by consumer marketing authority William Daddi.
"When it comes to consumer marketing, [the campaign] has to take into account the psychological and the emotional," Daddi says. "The consumer side has done that very well."
Pharmaceutical companies can use many of the same tactics. Daddi offers migraine sufferers as an example. "Those who [have migraines] get the sense that others don't really understand ... how debilitating the condition is," he says. "[They] understand the condition in a way that is unique."
Ask any PR professional to name an example of an off-patent drug that has effectively leveraged its brand equity, and there's almost a universal answer: Schering-Plough's Claritin. The allergy medication was successfully repositioned in 2002, slightly ahead of its patent expiry, when the Food and Drug Administration deemed it safe enough to sell without a prescription.
Edelman is Claritin's PR agency. "Claritin actually stands for something," Turett says. "It's more than testimonials - because you want to do something that's not only positive but also differential."
AstraZeneca faced a similar PR challenge when its gastrointestinal blockbuster Prilosec lost patent protection in 2001. AstraZeneca repositioned the product as Prilosec OTC, and leveraged patients' affection for "the purple pill" to launch next generation Nexium.
But Turett notes that not all drugs lend themselves to that sort of repositioning. "One of the challenges is to know when not to build a brand," she says. "There are more options [besides] continuing to build a brand."
But Schroff disagrees with how pharmaceutical companies react when a generic competitor enters the picture. He says that companies "inevitably keep prices high" throughout the life of the patent, then slash prices and abandon their marketing efforts.
Instead, he notes, pharmaceutical companies should slowly lower prices while using PR to build loyalty.
"You can't just walk away," he says. "Real branding reacts to competitive pressure, competitive attacks."
Taking advantage of media interest
From a media relations standpoint, patent expires have become stories unto themselves.
"[The media covers it] as a business story," notes Shoba Purushothaman, CEO of The NewsMarket, a web-based portal where broadcast journalists can search and download video content. "Five years ago, we weren't aware of [patent expires]."
Journalists are also more aware of the pharmaceutical company behind the product, setting up an opportunity to make an old drug more newsworthy, Purushothaman adds.
"What some drug companies have done is that they have taken the trend information and shared it with the media," she says. By doing so, they "turn the attention away from, 'We don't have anything new,' to 'We have the leadership and the credibility.'"
But this awareness means that drug makers must also think about the overall perception of the firm, especially at a time when polls show that the industry's reputation is at an all-time low.
Isenberg notes that drug companies have undertaken more social responsibility programs. Pfizer, for instance, recently unveiled an initiative to offer low-cost drugs to the uninsured.
GlaxoSmithKline is using advertising and PR to link the high price of brand-name drugs to future research projects that the drugs will fund.
"We need to cure cancer; we need to cure Alzheimer's," says Michael Pucci, VP of external advocacy at Glaxo. "And we need the money to invest" in that research,
Pucci notes that drug companies have always had a tradition of providing free drugs to low-income patients. But they are now doing more PR to link themselves to those programs.
"The industry has to wake up; we have to engage," he says.
What's in a name
Branding is a relatively new concept in the pharmaceutical industry, a reaction to a changing marketplace that has become increasingly sophisticated and cutthroat.
It was only when drug marketing became more competitive - and more consumer-oriented - that companies started to see the value of a brand.
"We needed brands as a platform once we started talking to consumers," says David Wood, CEO of Omnicom's Interbrand Wood Healthcare, which works with pharmaceutical companies to develop and promote brands and brand names. "When arenas become more competitive, you begin to look at other weapons you can use in the war of competition."
A generic name describes the drug's chemical makeup - and has meaning only to physicians and scientists, Wood notes. It has "no heart, no soul," he says. "If you have a brand name, such as Viagra, that name, Viagra, means all sorts of things to male customers ... that have nothing to do with its generic name. All of those messages are contained in the brand name, not the generic name."
Before the advent of direct-to-consumer marketing, drug makers focused more on what the product did, rather than how to differentiate it within a class of drugs.
Ten years ago, the Food and Drug Administration hardly put any weight on what a drug was called; the agency now rejects about 30% of new drug applications because of unacceptable brand names, Wood says.
"I think that the pharmaceutical industry is still in its infancy in its understanding of brands, in its belief in brands," he says, adding that the industry also has the wrong concept of how to leverage the equity in a brand once a drug goes off patent.
"It's really remarkable because, as an industry, we develop huge brands."