In the previous ten years of the twentieth century, industry witnessed many strong players who were manufacturing medication for gastro esophageal reflux disease, often called heart burn. The leader in this segment was AstraZeneca plc. A London UK based mostly pharmaceutical major, which made and marketed drugs under the brand name Nexium and Prilosec. The patent of prilosec, one of the world's largest offering drugs, was scheduled to expire in 2001. generally, once patent expire, low cost general version of the medicine enter the market which lower sales of branded drug.
The company was, however, not ready to let go of its cash cow so easily. It developed team in 1995 called the shark fin job team to create protection strategy against universal competitors that would let it maintain steadily 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 work, the company looked for to change users of Prilosec to Nexium. In the US, the business launched one of the costliest marketing campaigns to achieve its purpose. Analyst felt that the company had been successful 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 business had also succeeded in maintaining its number one position in the gastrointestinal marketing drugs market and by 2007.
The Threat of sale decrease
Prilosec was a cash cow for AstraZeneca as it says above, its patent of the brand establish to expire in 2001, the business was in danger of shedding its market management in the PPI market as well as treatment for acid related disease market. Generally, whenever a drug loses patent protection, generic competition makes a drop in cost up to 80% within twelve months which makes the product lifecycle curve of the medication look like a shark fin. That means sale of medication decrease suddenly after patent expiry.
Avoiding Shark fin was very important for AstraZeneca as competition from common variations of Omeprazole could lead to huge erosion in the sales of Prilosec. This may result in loss of 40% of company's total revenue. Company appointed a team to discover solution of this problem.
Work with the Shark Fin Task team
It had to perform much better than Prilosec
It had to be patentable
It needed to be technically feasible
It had to be easy for it going to the market prior to the entry of universal variants of Prilosec
Developing a fresh drug that was better than Omeprazole was a hardcore job, the team decided to use chemical reengineering to design a much better version of the prevailing drug so that it could be copyrighted.
Like any other drug, Omeprazole (the generic formulation of Prilosec) comprised a left handled isomer and a right-handled isomer (so-called "S" and "R") that have been mirror images of every other. According to the Shark Fin Assignments team's study, removing one of the isomers from the medication would increase the drug's side effects account and also improve its performance as only 1 isomer was responsible for the therapeutic effect. More importantly, the new medicine consisting of only one isomer may be patented as a new invention. One of associates of the Shark Fin Task said, "It wasn't just about the money-we wished to do good things, "
Through substance reengineering, AstraZeneca arrived with a molecule that included just the "S" isomer of Omeprazole and the new molecule was called Esomeprazole. The business made a decision to brand it as 'Nexium', a combo of the term 'Next' and 'Millennium'. AstraZeneca intended to replace the sales of Prilosec with Nexium. But before that there is much that had to be done.
The company conducted four specialized medical trials contrasting Nexium 40 mg with Prilosec 20 mg in erosive esophagitis. Two of these trial results were apparently unfavorable however the other two were favorable for the new drug. A trial that compared Nexium 20 mg with Prilosec 20 mg, marginally better therapeutic rates (90 percent vs. 87 percent). Armed with the results of the positive studies, AstraZeneca requested marketing acceptance for Nexium in a variety of countries.
In addition to this, the Shark Fin team also ready meticulously to wait the accessibility of common competition to Prilosec through lawsuits. In fact, meanwhile Astra got try to get more patent of Prilosec such as patenting the operations of processing the medicine, patenting the method of using Omeprazole etc. With these patents the business planned to engage the generic competition in prolonged litigations. Datamonitor witnessed, "It has built up tight fence around Prilosec through formulations and signs, which protect specific aspects of Prilosec's development, formulation, and use for 13 years beyond the essential patent expiry in 2001. In addition, in the US, entering into litigation was good for the business as the common version of the medication. This was necessary for the business as it would have to cope with only 1 company for another half a year and the erosion in sales throughout that period wouldn't be too dismal. Such delaying methods would also give company additional time to switch existing customers of Prilosec to Nexium.
With there being little difference between Nexium and its own predecessor, analysts expected that the success of the brand is based solely on how successfully the medicine was marketed by the company. Some Analysts were skeptical about the potential customers 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 have the ability to position this medication so that'll mitigate the patent loss of Prilosec. Might it be as large as Prilosec? I question it, " said Robert Kirby, an analyst at Edward Jones.
The company received marketing approval for the medicine in the EU in July 2000 and in america in the Feb 2001. Nexium was launched with a whole lot of sample being given to the doctors by the sales force. Research of ImpactRx in the US advised that the sales force a disproportionate amount of the detailing time with the doctors to market Nexium. The sales force spent the time trying to convince the doctors that Nexium was better than Prilosec. The business also ensured that the doctors were exposed to increased sales pitches for Nexium than other medication for acid related disease.
In the US, the company more sales power by four times. In addition, it also launches a higher decibel advertising for Prilosec to contend with its universal version. The company leveraged on the distinct purple color of market Nexium. The Nexium premiered with same purple color. There have been ads on it and Radio, in print and on the internet. The initial ads on Television started out with "I am every man and every female who ever experienced frequent, continual heartburn. " It continued to describe problem in more detail and then said, "But today there's purple called Nexium. It's from the producers of Prilosec. "After talking about the effect and side effects of Nexium the advertising ended with brand "Relive the heartburn, repair the damage. It's possible with today's purple supplement called Nexium. "
According to analyst, the promotional advertising campaign unfolded by AstraZeneca for Nexium was one of the costliest for a drug. Matching to IMS Health, in 2001, the company put in US$478 million in america to market Nexium. The company was said to have spent US$16 million within a month of promoting the medication. In 2002 and 2003, the company was likely to have put in US $183million and $257 million respectively on promoting the medication.
Initially, the company priced Nexium somewhat less than Prilosec but as the former getting more approval, it relocated to a similar price for this. It also tried out to induce tests of the new brand through inserts in publications to provide a "trial offer" of Nexium to the consumers. The company website also offered a "trial offer".
As part of its online technique, the company initiated e-detailing to doctors, a electronic press office and web casting for doctors, educational methodical portals such as Gastro source for gastrointestinal tract specialist, and another educational portal for general professionals. These initiatives could be localized by local marketing companies. In addition to this, the Prilosec sites were rebranded to Nexium.
The company persisted vigorously promoting the medicine in the mass media in the next years. In later marketing communications, the ads finished with pay-off series 'better is better'. In September 2004, ads displaying actor and vocalist James Naughton were shown. As of 2007, Nexium was still one of the very best spenders in DTC advertising.
Results of AstraZeneca's Marketing strategy
That AstraZeneca experienced succeeded in defending its market was clear. Analysis felt that the company had successfully switched the Prilosec compared to that Nexium sales. The sales of Nexium between 2000 and 2006 were an impressive US$19. 58 billion. According to the company, between 2000 and 2006, 126 million prescription of Nexium had been written globally, so when 2007, more than 7 million Americans were using Nexium.
Nexium had constantly included on the list of the most notable ten largest advertising pharmaceutical brands. For instance, for the entire year 2005, IMS health positioned it third behind Pfizer Inc. For the year 2006, IMS health ranked Nexium second behind Lipitor. The medication was also rated second drug subject matter 200 Top BRAND Drugs by Retail Money in 2006.
Analysts felt that the results shown AstraZeneca's marketing prowess. Especially in america, its marketing has resulted in a very strong launch as it grasped 16. 3 % of most new prescriptions for PPIs. This made it the most successful release of a drug for acid related disorders. Experts in marketing and strategy also appreciated just how it leveraged on the brand of Prilosec to build Nexium brand. Analysts noticed that AstraZeneca possessed benefited greatly by interesting consumers through multi-media. Its online effort for the brand was also treasured. For instance, in 2004, more than 5 million people frequented Nexium's purplepill. com website and 500, 000 listed for free trial of the medicine.
The marketing of Nexium also earned AstraZeneca and its own ad agencies a number of awards. For instance, in 2007, AstraZeneca and Saatchi & Saatchi Professional medical won the magic in the MM7M accolades in the 'Best use of Direct Marketing to the Consumers' for its 'Purple plus Adherence Program'.
Analysts experienced that Nexium was just one more example of the tendency among pharmaceutical companies of creating a one isomer version of a preexisting blockbuster drug as a protection strategy against generic competition. Such life cycle management strategy was becoming quite typical, however, not all company that implemented this strategy been successful, they said. Experts felt that through its successful life routine management strategy the company had been able to turn out with a fresh drug, patent it, and start it successfully, and never have to spend the almost $800 million and 2 decades that were necessary to develop a new medicine from a damage.
According to Kellogg College of Management's Dean, Dipak C Jain, AstraZeneca's strategy in america was a great example of the application of the sandwich strategy. He felt that the company had not only defended its market but experienced also expanded it through product and pricing innovations. On the other hand, it had marketed Nexium at a premium price with announcements such as 'today's crimson tablet' and 'better is better' while Prilosec OTC have been priced less than the generic variations of the medication. "With proactive planning, AstraZeneca got effectively sandwiched the generics on the purchase price and quality sizes, " he composed.
AstraZeneca planned to keep managing the approach to life of its key expansion products in the GI, cardiovascular, and oncology restorative areas. It also planned to keep its authority position in the GI market. The company said, "We aim to maintain our number 1 position in the GI treatments through continuing market penetration for Nexium worldwide, coupled with high quality creativity and productivity in the study and development of the GI therapies. "
Analysts noticed that much of AstraZeneca's present and future success in the GI therapeutic area hinged on the Nexium. By 2007, the company had been successful in getting Nexium approved for restoration and avoidance of ulcers associated with NSAID(non steroidal anti-inflammatory medicine) remedy in Europe, as well as for the reduction in the event of gastric ulcers associated with continuous NSAID remedy in patients at risk of producing gastric ulcers in the US. It possessed also got the drug approved for the treating GRED in children (12 years and above) and then for the treating a exceptional disease called the Zollinger Ellison Syndrome. The intravenous formulation of Nexium was approved in 68 countries like the US, for the treatment of GERD for patients who were unable to take tablets.
In addition to it, the company was also aggressively defending its patient for Nexium. AstraZeneca got six patents for Nexium (5, 714, 504; 5, 877, 192; 56, 369, 810; 6, 428, 810; 6, 875, 872; 5, 948, 789) that have been planned to expire from 2014 through 2019. The business planned to establish lots of series extensions of Nexium in the future. The company was also cooperation with POZEN Inc. on the introduction of PN-400, an anti-arthritic medicine candidate which used Pozen's proprietary medicine combination technology to incorporate Nexium with the anti-inflammatory drug, Naproxen.
AstraZeneca's marketing strategy give really good example about how exactly Pharmaceutical Company can get success on basis of its marketing strategy. In addition it also shows that online marketing strategy of product mainly important to attract more patients and even more prescription. Company also defends its cash cow greatly and more effectively by strong marketing strategy.
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