Market Research

MattsonJack’s William Bagwell, A C Nielsen BASES’ Therese Glennon and Paragon Research & Consulting’s Dr Robert Zelnio, discuss breakthrough developments impacting our industry’s marketing trends.

NGP. How has the availability of technology changed market research methodologies, approaches and the expectations of pharmaceutical companies towards their new products’ success rates?

TG. As in many industries, technology has contributed to greater speed and productivity of market research through on-line interviewing methods and more efficient data processing, and as a result, richer insights through more sophisticated analytic techniques. For example, technology has enabled better simulation in interviews of the decision-making process in treating different patient types, as well as more complex simulation of a wide range of potential scenarios for the clinical and commercial profiles of products in development. Armed with these data and accompanied by advanced choice models, pharma companies have improved ability to optimize compounds along the product development process to increase the odds of clinical, regulatory and commercial success, or where appropriate, contingency plan for managing risks. In some situations technology can have a downside too, sometimes enabling too much emphasis on granularity, and as a result shifting the balance from strategic to tactical, and quantity over quality of insights.

RZ. Utilization of new marketing research technology, methodologies, and approaches creates an expectation among clients that market research will enable:

• More efficiently collected and reported data
• Easier integration of primary and secondary data
• Better commercial trade-offs earlier in the development process
• Improve investment decisions to support better early lifecycle portfolio decisions
• Establishing the relative value of a product portfolio
• Earlier definition of brand positioning
• Enhance pre-launch forecasting

Use of the internet as a preferred data collection tool, both qualitatively and quantitatively, has had the greatest impact on changing marketing research methodologies and associated pharmaceutical company expectations. The greatest impact has been on clients’ expectations that all methodologies are internet-appropriate without compromising results and that potential decreases in field time equate to reduced required analytic time. For many clients, the need for speed has superseded the need for comprehensive data analysis and interpretation and, in some cases, analytic precision. This is especially true when it comes to projects that require advanced methodologies.

WB. One of the major changes in market research methodologies in the past few years has been the explosion in collecting data over the internet. Past data collection techniques involved in-person or telephone contact, which required the participant to commit to being interviewed at a specific time and place. With the advent of the internet, participants can access surveys 24/7 at a time of their convenience.

One of the ways in which technology has affected pharmaceutical companies’ expectations of success is that everyone is expected to make decisions much more quickly because so much more information is available virtually instantaneously. However, the basic principles of a solid marketing approach should still apply to ensure product success – i.e., understanding the market and the advantages and disadvantages your new product brings to the market – and all appropriate steps such as positioning, messaging, etc., need to be followed.

NGP. Define the role you see market assessment playing in the very early stages of product development.

RZ. While market assessment in phases II and III is common, market assessment in even earlier stages of product development is often overlooked. Yet, market assessment in phase I or earlier is a prerequisite for all early stage product development or portfolio decisions and plays a critical role in improving a company’s future growth and profitability. Companies must now factor new criteria into an integrated clinical, regulatory and commercial evaluation, such as: evolving clinical and regulatory endpoints, competitive pipeline probability, economic outcomes to rationalize reimbursement and access, globalization of data, patient compliance to therapy, new influencer segments such as employers, therapeutic trends, generic base with therapeutic area, and degree of drug differentiation.

Even more critical, is the role market assessment should play in an organization’s ability to make trade-off decisions within the company’s development portfolio. Market assessment must be applied both as a basis to define go forward portfolios and to apply to individual projects. Correct development decisions now have to be made in phases I or II or even earlier to ensure future growth and success.

WB. Understanding the market in which one is developing a new product is extremely important. It is important to understand the potential size of the market from an epidemiology basis, including incidence or prevalence, depending on the specific therapeutic category. Market assessments must include the competitive set, both current and future. In addition, pricing and reimbursement challenges to be faced and size of promotional spend needed to support a successful product launch are key components of a thorough market assessment.

In addition, understanding the minimum requirements for a product to achieve success in a specific market is critical to the assessment of a product. Maximizing R&D funds by stopping development of noncompetitive products sooner would be a great benefit. Early identification of needs in the treatment marketplace also allows product development to proceed in a way that ultimately gives greater benefit to patients.

TG. Certainly, this is a critical decision point in the product development cycle for setting the long-term strategy of a product, or ideally a portfolio of opportunities in a therapeutic category. At this stage, market assessments should help to inform: Where the product will play within the treatment paradigm and therapeutic category? What key hurdles should be achieved to improve the probability of clinical, regulatory, and commercial success? What’s required to create sustainable differentiation? And, for companies with a portfolio of products in a therapeutic area, how should the various opportunities be prioritized and staged relative to each other?

Accordingly, a good market assessment would uncover the unmet needs, both on the surface and discover the latent needs, which together can lead to real innovation in treatment. Ultimately, the market assessment needs to inform good marketing and clinical trial design strategy in order to achieve higher probabilities of clinical, regulatory and commercial success at each subsequent stage of development.

NGP. How can pharmaceutical companies take advantage of their research partners’ capabilities to assess risk, re-ignite an existing brand or extend a product line?

WB. MattsonJack, like many marketing research companies, has been partnering with pharmaceutical and biotechnology companies for the past 20 years. Our consulting staff is composed of very knowledgeable personnel, most with more than 20 years of pharmaceutical experience. This in-depth experience gives us a true understanding of the risks and issues that our clients face. For instance, we minimize client risk by using our skilled staff and state-of-the-art techniques to provide not only good information but also solid recommendations regarding strategy or tactics.

More specifically, advanced quantitative techniques such as tradeoff analyses allow pharmaceutical companies to assess risk of a new or re-launched product vis-à-vis particular product or market characteristics, such as a particular FDA indication or side effect profile. By understanding the impact on share, companies will be prepared to state the bounds on the risk they take, especially regarding new product development. Bounding risk has become a critical requirement for investing increasingly scarce resources in a way that maximizes returns while diminishing chances of making mistakes.

The best way for a pharmaceutical company to take advantage of everything that research firms now offer is to move beyond engaging them to do single, narrowly defined projects. Research partners need to be exactly that: partners. It is in the self-interest of pharmaceutical companies to develop longer-term engagements and facilitate research firms becoming strategic and tactical allies.

TG. It really is the spirit of partnership that is one of the most critical ingredients to gaining the most out of any relationship with an external agency, whether it’s market research, advertising or consulting.

Partnership alone is not enough though, it’s important that pharmaceutical companies engage with the “best” agencies to jointly create systematic “best practices” for addressing their most common and critical business issues. By engaging a highly qualified agency, and partnering with them systematically over time, you also gain improvement and synergies over time. In our experience at BASES, when we’ve been able to go beyond the transaction level and get to the partner level, it not only results in better value at the level of the project delivery, but also better value creation to impact the business in a broader sense (e.g., generalized strategic learning that can be applied across the client company’s business to create growth, best practices development to create scale and standards, increased credibility of results, and R&D initiatives to improve over time). Unfortunately, it usually takes significant investment in time and energy to find and nurture those relationships, but when it works, it’s a win-win not only for the pharma company and agency, but for the physicians and patients we all aim to collectively serve through our work in the industry.

RZ. Marketing research may be the only means for obtaining the information needed for risk assessment. And, it should be considered crucial to support the creative development and marketing decisions required to extend the life cycles of existing brands or evaluate the advisability of product line extensions.

Pharmaceutical companies need to recognize the importance of integrated marketing research programs beginning five to seven years prior to launch rather than the usual 18 months out when marketing research is commonly initiated. The success of a New Chemical Entity (NCE) as well as product line extensions lies in effective decision-making made during these early, formative years. Cohesive, effective and timely research will be the required tools to make earlier commercial decisions. Thus the role of market research becomes critical in the execution of many important decisions and activities including but not limited to: clinical design; regulatory strategy; message platform and positioning; economic justification; market shaping; and public relations.

The success of NCEs and product line extensions is now achieved or not achieved based on decisions made significantly prior to their launch.

In the case of re-igniting existing brands, market research is the tool to justify and support new product positioning, to establish the focus of post marketing studies, or even new indication development.

NGP. What factors ensure accuracy in predictions for highly segmented and relevant markets, e.g., physicians or particular patient populations?

TG. Our experience has shown that direct input from physicians and patients themselves are the best raw ingredients for accurate predictions of demand. This is true for highly innovative products and specialized markets, as well as for broadly penetrated categories or less innovative treatments. The BASES system, for example, works across therapeutic categories, in different industries around the globe because you can rely on potential users of a product, in this case physicians and patients, to give claims about their intended behaviors that relate systematically to what they will actually do in market. Naturally, there are high degrees of overstatement, and in some cases understatement, between potential prescribers’ and patients’ claims and their actual behaviors, but it’s systematic and scalable, even in highly segmented or specialized markets. We’ve empirically studied these tendencies and as a result have been able to create a validated model for adjusting claims to accurately predict market performance across a wide range of therapeutic categories. Of course, other major factors such as sales and marketing support play an important role in developing accurate predictions as well, but the starting point for accuracy is direct input from physicians and patients. They are a far better gauge of potential demand than analogs or epidemiology trends alone.

RZ. Although physician behavior remains the hallmark of market performance, patient involvement and compliance, employer influence, evolving government purchasing power, generic fulfillment, roles of specialists, and third party access to products all have grown in influencing the value of markets. All of these parameters must be considered to ensure accuracy in predictions. It is important to recognize that changes in any one of these parameters may have a significant impact on prior predictions, potentially requiring adjustments to intended strategies and the actions based on those predictions.

WB. We consider many factors in determining appropriate market definitions. Patient segmentation often is determined by classification of diseases into mild, moderate, or severe, such as with Crohn’s disease. Stage of disease is a common scheme for cancer patients. These classifications are derived from a combination of a thorough review of the medical literature, including textbooks and newly published clinical trial results, and primary qualitative research with key opinion leaders and practicing physicians. This research will also confirm the specific specialties that pharmaceutical companies should call on.

Techniques developed to facilitate micro-marketing to highly specific market segments from other industries are now available to pharmaceutical companies. We have found that increasingly refined techniques permit the needs of very specific subpopulations of patients to finally be identified and met. It continues to be critical, however, that researchers have a profound knowledge of diseases and physician needs in treating them; otherwise, highly accurate, albeit meaningless, predictions are produced.

NGP. How have pharma companies performed (for example, in the past year) as far as applying quantitative or qualitative methods to measure ROI in DTC efforts?

RZ. The measurement of ROI for DTC is still primitive. Marketing research can obtain basic measurements such as reach, awareness, recall, physician request and other traditional advertising assessments. However, the current state of the art has failed to progress the matching of sales trends with DTC placements (or the occurrence of other promotional events). It is simply not possible, at present, to correctly attribute any observable returns to specific DTC ads or promotional events. Instead, observed returns are likely to result from a combination of advertising, promotion, and environmental events. Furthermore, the investment in DTC and promotion, in general, and any observed returns need to be analyzed longitudinally with appropriate NPV discounting. The pharma companies are simply not investing in the kinds of basic research needed to develop the methods that will accurately measure the ROI associated with unique DTC ads or other promotional events.

Also, the companies are still not investing in more sophisticated quantitative research needed to evaluate the impact that DTC has on commercial issues such as: impact on market definition; persistence and compliance; level of patient knowledge; change in treatment paradigms; and health outcomes

WB. One of the challenges in this type of research is that there are many different measures and different strategic objectives. The return can be revenue, scripts, starts, share, for example, depending upon the strategy.

In the early days of DTC, pharmaceutical companies showed a great deal of zeal in entering the consumer marketplace with broad-market advertising but showed decidedly mixed results. Consequently, a great deal of money was expended with poor returns, and results that could not even be adequately measured. More recently, there has clearly been advancement in making DTC more effective and targeted.

Additionally, developments in data warehouses and monitoring methodologies have made it possible to have analytical reporting and statistical analysis of the returns for DTC efforts that make the expenditures both efficient (biggest bang for the buck) and effective (bang in the right place). The level of sophistication has advanced to such a degree that pharmaceutical companies may rival the more traditional advertisers that contend for consumers’ attention in measuring the returns from their investment.

TG. In consideration of the PhRMA guidelines, in the last couple years the companies we work with have had greater interest in understanding how to optimize the ROI of DTC efforts with a mix of unbranded or educational campaigns and branded campaigns. For example, we help them identify when to launch the branded campaign relative to the unbranded campaign, how to create synergy between the unbranded and branded messages, and to quantify the relative investment that should be allocated to unbranded versus brand focused communication. We’ve also seen a trend toward companies wanting to work with us to optimize the entire marketing mix, and not just understand the effects of DTC in isolation, which is a welcome development.

NGP. What breakthrough developments have had an impact on the industry’s overall marketing trends?

WB. DTC advertising has moved the decision about disease management and choice of product from the exclusive role of the physicians to the dynamic between patient and physician. Concomitant with this has been the development of significant data warehousing and CRM tools, which have been more common in other industries. These new tools have allowed pharmaceutical companies to develop a level of customer intimacy with physicians and knowledge of patients’ needs that would have been impossible just a few years ago. These developments have worked together to the advantage of all concerned: doctors, patients, and pharmaceutical companies.

The increased access that consumers, have to the internet has also changed marketing trends. It is not uncommon for consumers to research their conditions and to arrive at physicians’ offices better informed or perhaps misinformed. As a result of this, most pharmaceutical companies now maintain sites geared to consumers that explain their products in consumer-friendly language as well as provide information about the condition itself.

TG. In many respects, it’s actually the lack of breakthrough developments that is having the most impact on the industry’s overall marketing trends. The US pharmaceutical market is facing several consecutive years of slowing, single digit sales growth and pressure on earnings due to the lack of large new products to replace the current blockbusters going off patent, compounded by a number of current environmental factors. As such, companies are looking for ways to be even more effective and efficient in their sales/marketing and R&D investments, and also relying on more joint ventures, licensing and acquisitions to bring products to market. There’s much greater scrutiny being paid to optimizing the marketing mix and effectiveness of marketing messages.

RZ. Breakthrough developments having an impact on pharma’s overall marketing trends have been plentiful and come from a variety of sources. Some of these key developments include: DTC advertising influence on patient and physician behavior; early integration of commercial decision making in clinical development; globalization of data to support regulatory approval and brand positioning; partnerships – this is an area in which more market research is required; growth of generic market share and impact on NCE development, brand and corporate strategies. The result is the need for even greater promotional speed, deeper understanding of traditional and non-traditional and customer segmentation, integration of commercial activities, and global intelligence to deliver brand success.

William Bagwell: “The level of sophistication has advanced to such a degree that pharmaceutical companies may rival the more traditional advertisers”

Therese Glennon: “It’s actually the lack of breakthrough developments that is having the most impact on the industry’s overall marketing trends”

Dr Robert Zelnio: “The role of market research becomes critical in the execution of many important decisions and activities”

William R. Bagwell, R.Ph., Senior Vice President, is responsible for Marketing Research at The Mattson Jack Group, Inc. (MattsonJack). Mr. Bagwell has been with MattsonJack since 1998 and has more than 26 years of pharmaceutical industry experience, beginning in 1980 as a pharmacist in the U.S. Army Medical Service Corps. Bagwell’s career includes management positions in marketing research, research and development administration, product management, and regional marketing during nine years at Mead Johnson, a division of Bristol-Myers Squibb. In addition to his expertise in marketing and primary marketing research, Mr. Bagwell has a vast understanding of audited sales and secondary prescription data, having spent four years in information management at Walsh America prior to its merger into NDC Health. Mr. Bagwell has an M.B.A. in Marketing and a B.S. in Pharmacy.

Therese Glennon, VP, Pharmaceutical Practice Leader BASES The Nielsen Company. Therese started her career at BASES in 1990 and was responsible for forecasting and consulting in various food, OTC healthcare and household products categories. In 1997 she entered the pharmaceutical industry, where she led market research for brands across various lifecycle stages and therapeutic categories, including animal health, metabolics, cardiovasculars, and virology. Most recently, she served as a Director, Worldwide Market Research at Bristol-Myers Squibb. Glennon rejoined BASES in 2004 to lead the company’s growing forecasting and consulting business servicing the pharmaceutical sector. In her tenure at BMS and BASES she has co-authored publications for the International AIDS Conference (2002) on the topics of compliance and persistency and segmentation of HIV patients, and for the Pharmaceutical Management Science Association on linking physician-level survey data and in-market prescribing behavior (2006) and forecasting innovative pharmaceutical products (2007). She has a BA in Applied Mathematics and a MBA in Marketing.

Dr. Robert Zelnio founded Paragon Research & Consulting in 1991 after 15 years of practicing marketing research from consulting and academic settings. At Paragon, in addition to his management duties, Zelnio maintains responsibility for all phases of both qualitative and quantitative primary research, specializing in the most advanced analytical techniques such as conjoint analysis, choice analysis, perceptual mapping, and other specially designed modeling techniques using multivariate methods.

Prior to founding Paragon, Zelnio held vice presidential positions with two other marketing research consulting firms, tenure-tract faculty appointments with the University of South Carolina and the University of Iowa, and adjunct appointments with The Philadelphia College of Pharmacy and Science (now University of the Sciences) and The Wharton School, University of Pennsylvania. He also practiced pharmacy in hospital and community settings.

Zelnio has authored chapters in textbooks on questionnaire design, multivariate analysis, advertising, and the future of pharmaceutical marketing research.