Blockbuster drugs … building and sustaining billion dollar brands in a fast-changing world of healthcare

July 6, 2017

Blockbuster drugs, those medicines that bring in more than $1 billion in sales every year, are the holy grail of drug development. They can make a pharmaceutical company and send them to rock-star status among investors, as evidenced by the rise of Gilead Sciences after the launch of its hepatitis C treatments.

New CEO of GSK, Emma Walmsley said that the £81 billion pharma company will focus on developing blockbuster drugs, rather than what it has done in recent years, diffusing their efforts by rolling out many more new launches, with lesser impact. She claimed GSK would be “returning to its glory days of science and innovation, which saw it produce leading asthma drug Advair.”

What are the next blockbusters?

Top of the list of blockbuster drugs to be launched in 2017 (ranked by FiercePharma in terms of projected 2022 sales), is Ocrevus, the Roche multiple sclerosis drug that’s promising to shake things up in more ways than one. In clinical trials, the drug outperformed Merck KGaA’s standard therapy Rebif, and it’s also gone where no other MS drug has gone before, posting positive data in patients with the primary progressive form of the disease.  Analysts think Sanofi and Regeneron hot-shot Dupixent (dupilumab) could make a big splash in severe atopic dermatitis, assuming payers don’t get in the companies’ way.

However there are critics of the blockbuster mindset too. “The system has served us well in terms of developing good new medicines, but in the past 10-20 years there has been very little breakthrough in innovation,” says Dr Kees de Joncheere at the World Health Organisation. Of the 20 or 30 new drugs brought to the market each year, “many scientists say typically three are genuinely new, with the rest offering only marginal benefits,” he says.

How to launch a blockbuster?

Finding a new blockbuster is difficult. Walmsley’s GSK predecessor called it trying to find a needle in a haystack. And even when you do, the smart science could still fall foul of commercial or regulatory hurdles. It might often be easier to find an existing drug, and consider how to scale it up. I like the simple 5S model developed by Harvard’s John Quelch as a checklist of what matters when seeking to build a blockbuster. It combines some aspects similar to launching any other product, in B2B or consumer markets, but also with other aspects unique to healthcare:

  • Sheer size. A blockbuster has a transformational impact on a company and an industry, often opening up new markets worldwide. Blockbusters break sales records and exceed expectations. Around 100 pharmaceutical brands exceed $1 billion in annual sales. Procter & Gamble has 23 such brands.
  • Speed. It’s not just the sales volume, it’s the speed of the sales trajectory. Remember that the original blockbuster was a bomb that could destroy an entire city block. Blockbuster brands address pressing consumer needs so well that they often enjoy vertical sales lift-off. Think Viagra.
  • Scarcity. A blockbuster brand is often in such high demand that stock-outs and shortages occur in the market. Remember the consumer lines to buy the new i-Phone As imitation is the sincerest form of flattery, the speedy availability of counterfeits is another indicator of popularity.
  • Sustainability. A blockbuster brand is not a one hit wonder. It is a gift that keeps on giving. Remember Intel’s Pentium chip. Or look at the seven Harry Potter books and the five companion movies. Adding DVD and merchandise sales, and theme parks etc., Advertising Age valued the Potter economy at $15 billion.
  • Sizzle. A blockbuster does not just address an important need. It does so in an exciting and accessible way. Pfizer’s Lipitor was not the first cholesterol reducer but superior marketing and sales made Lipitor number one. And, in the movie world, remember the magical and memorable special effects in the Star Wars series.

Blockbuster drugs have a limited patent life.

After 14 years on the market, the most profitable prescription drug in history, Lipitor, came to the end of its protected life – it became a generic – there for anybody else to copy, usually more cheaply.

To me, it is a symptom of the industry still engrained product-centric thinking. A consumer-centric company wouldn’t have these challenges in the same way. The patent relates to the product not the brand per se, so being able to develop a brand model that elevates the brand concept above the product is crucial to creating a brand that can be sustained beyond the moment when anybody can make the product. Here are a few of the techniques I have found useful

  • Build the brand beyond the product – in most other industries brands have come to identify a consumer need or aspiration, and can support a whole range of products and services. The brand resonates much more closely with the consumer because it is about the benefits (outcomes) not the features (drug), and so can continue to uniquely do this after patent expiry.
  • Connect with the patient, not just the physician – there his a huge shift in focus in healthcare to become more patient-centric (most big pharma company mission statements say thats why they exist!). Within regulation, find ways to engage patients as primary consumers.
  • Extend the brand to services – within the brand concept, introduce services that are relevant to each audience – payers, pharmacists, physicians as well as patients – based around ease and convenience, support and advice. They become sticky and indispensable parts of the treatment.
  • Branding of devices – with increasing ways to deliver drugs, such as non-invasive injections, devices can be distinctive and an enduring advantage. Maybe reducing packaging costs and waste too. More importantly, they help to build the brand more visibly, around trust and habit.
  • Create brand platforms – as companies specialise in certain therapeutic areas, then their brands can work across the different products, like is normal in consumer brands. This platform approach reduces the risks to the brand if one product declines, sustaining presence and familiarity.
  • Change the business model – pharma companies should build into their strategies an approach for non-patent later years, flexing pricing and distribution models to respond to this, even creating new multi-year business models with payers, and managing portfolios for evolution.

Healthcare world is changing rapidly

We have already discussed the shifts in power in the healthcare market. Towards patients, with each stakeholder more actively engaged in a shared approach to treatments, a focus on successful outcomes for patients, and preferably to sustaining wellbeing.

Many companies have become more specialist – including an increasing focus on rare diseases, the development of more convenient single-dose regimens, and more affordable treatments. Novo Nordisk, for example has found success through focus on diabetes. Genentech goes further, and focuses on increasing personalisation of drugs. As DNA profiling becomes relatively cheap and easy, then the ability to customise therapies more closely to the needs of patients becomes important.  Whereas previously one drug would be used to treat different types of cancer, for example, now different strains can be treated with a specific medicine. The growth in gene editing, could accelerate the decline of blockbuster thinking.

Blockbuster drugs in some ways are still about product-thinking, push-marketing, average-audience thinking. They need to evolve in their approach. There is nothing wrong with having a few big concepts – Apple is the classic example of having only a small number of product lines (iPhone, iPad, iMac etc). Tesla has even fewer (three car types). But they have infinite customisation – partly in terms of the product features (16GB v 32GB, black or silver, etc) but mainly in customer use (App store, content, etc).

Blockbusters can still matter in this world. But with new thinking.

Footnote: The biggest drugs right now

Here are the world’s current top selling drugs (at end of 2016, annual sales):

  • Enbrel, $8.7bn … Enbrel is owned by Amgen, Inc. and is a treatment for arthritis and psoriasis. Amgen has reportedly raised the price of Enbrel by 80.3 percent since 2013.
  • Abilify, $9.3bn … Abilify is owned by Otsuka Group and is prescribed for serious mental illnesses such as severe depression, schizophrenia and bipolar disorders. The cost of Abilify can run around $900 per month for patients suffering from these conditions.
  • Sovaldi, $9.4bn … Sovaldi is owned by Gilead Sciences and is used for the treatment of Hepatitis C. After gaining FDA approval for Sovaldi in 2013, Gilead priced a 12-week dose of the drug at $84,000.
  • Lantus, $10.3bn … Lantus is owned by Sanofi and is used for the treatment of diabetes. A 2015 Bloomberg report found that the price of Lantus has increased in wholesale by more than 160 percent in the last five years.
  • Humira, $11.8bn … Humira is owned by AbbVie and is prescribed for the treatment of arthritis, psoriasis and bowel diseases. IMS Health data show the price of Humira having risen 126 percent from 2011 to 2014, the largest jump of any top 10 drug.

Peter Fisk works with many of the world’s leading pharma companies including Bayer, GSK, Pfizer, Novo Nordisk, and others – delivering innovation and strategy consulting projects, executive workshops and advisory, and keynote speeches. More articles on healthcare by Peter include:

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