The Medicines Company UGBA 106 Marketing Final Written Analysis of a Case Stephanie Zau Wenwan Sophie! "ang "i #u Gra$e! Chen %arena &ulanont
SWOT Analysis Strengths Uni'ue (usiness )o*el+a$'uires *rugs in late stage *e,elop)ent Clear an* $on$ise $riteria for sele$ting a new *rug to a$'uire -ower pro*u$t ./% $osts Short (reake,en perio*s after pro*u$t laun$h igh return on in,est)ent ratio if pro*u$t is su$$essful •
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Weaknesses Weak (a$kup pro*u$t C&203 an* 4S2135! 4n,estors ha,e little $on*en$e $on*en$e 7ro*u$t laun$h takes an a,erage of 10 years ery spe$i$ seg)ent of a target )arket 89pensi,e $o)pare* to generi$ *rugs %i:$ult )arket entry (e$ause of high pri$e •
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Opportunities Aging population Unite* States is the )ost prota(le *rug )arket 7res$ription *rug (usiness e9pan*ing • •
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Threats Go,ern)ent an* )anage* $are organi;ation pressuring *rug $o)panies to lower *rug pri$es Growth in generi$ *rug )arket •
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The Challenges 1! &o $on,in$e hospitals that Angio)a9 is a (etter alternati,e to eparin ! &o for)ulate an e?e$ti,e )arketing strategy that *i?erentiates Angio)a9 fro) eparin an* to fa$ilitate a*option in hospitals 3! &o persua*e hospital a*)inistrators to a$'uire Angio)a9 in a hospital 6! &o seg)ent an* target )ost in@uential an* prota(le hospitals ! &o instill $on*en$e in in,estors ! &o *e,elop strategies to a$'uire a pro*u$ti,e *rug pipeline
Recommendations 1! 8)phasi;e the a*,antages of the *rug rst (efore pu(li$i;ing the pri$e <0 =! Corre$tly pre*i$t initial sales (y utili;ing infor)ation a(out the )arket an* statisti$s >! %e,elop a uni'ue selling propositionD position Angio)a9 as the )o*ernE no2i))une2rea$tion anti$oagulant lowering the risk of heart atta$kE )aor (lee*ing an* *eath 3! Break into the )arket (y initially targeting *o$tors 6! &arget large an* )e*iu) hospitals ! 7ro,i*e spe$i$ infor)ation to in,estors that show hospitals will a$'uire their *rugs ! 4n$lu*e a )ore sophisti$ate* s$reening pro$ess
Overview of Product "escription Angioma! A (loo* thinning *rug E or anti$oagulantE that re*u$es the likelihoo* of artery (loo* $lots 4t is spe$i$ally *e,elope* for Hhigh risk patients un*ergoing a (alloon angioplastyI 4t $an treat patients with heart atta$ksE unsta(le anginaE eparin 4n*u$e* &hro)(o$ytopenia 4&! an* patients who ha,e un*ergone $oronary artery surgery Cost of goo*s sol*D >0 per *ose Strengths 8?e$ti,e in =0 )inutes %oses are He9a$tingI an* H$rispI Jo i))une rea$tion 7er$entage of patients e9perien$ing )aor (lee*ing is 1K= of that of eparinLs 8li)inate *eath rate .e*u$e* rate of heart atta$k an* nee* for a repeat angioplasty 0 of ti)eE re'uires only 1 *ose • • • •
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Weaknesses Cost <0 ti)es an* pri$e* >0 ti)es higher than eparinE the generi$ alternati,e Alternati,e is a wi*ely use* *rug •
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Promotion# Place and Price Promotion 4nno,e9D )arketing ser,i$es r) A,erage of 3 years of e9perien$e .elationships with *o$tors an* phar)a$ists A$a*e)i$ ournal arti$les 7resentations at tra*e shows Me*i$al #ournals ighlight short$o)ings of eparin Weeken* getaways+ $reate a*,o$ates in the )e*i$al $o))unity Wor* of )outh •
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Place ospitals Fo$us on 00 angioplasty $enters %i,i*e* into 3 sales regions &argeting 3> 00K1=00! of )e*i$al $enters that perfor) angioplasties
Price Un*eter)ine* >0 *ollars to pro*u$e Before a$'uiring Angio)a9E Biogen proe$te* that Angio)a9 woul* $ost 100 per *ose to pro*u$e with an i)plie* selling of 1000 per *ose
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Customers# Competition and Colla$orators Customers Competition Colla$orators %o$tors ospital 7har)a$ists ospital A*)inistrators High risk patients un*ergoing a (alloon angioplastyI • • •
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eparin+)ost wi*ely pres$ri(e* anti2 $oagulant in a$ute $oronary heart treat)ent Co))o*ity *rug Sol* (y )any *i?erent )anufa$turers < a *ose to pro*u$e 10 pri$e per *ose Main short$o)ingsD Unpre*i$ta(ility igh risk of (lee*ing A*,erse rea$tions •
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UCB Biopro*u$ts pro*u$ing Angio)a9 4nno,e9+pro,i*ing salespeople with an a,erage of 3 years e9perien$e an* ha,e $onne$tions with *o$tors an* phar)a$ists in the )e*i$al in*ustry •
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Challenge %& &o $on,in$e hospitals that Angio)a9 is a (etter alternati,e to eparin
Angioma! •
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&akes into e?e$t in =0 )inutes Jo i))une rea$tion .e*u$e* risk of (lee*ing
'eparin •
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&ake into e?e$t in < to = hours A*,erse rea$tion igh risk of (lee*ing
Ta$le A Phase /// Results for 01ery 'igh Risk2 Patients Outcome within ( "ays of 'eparin )*(+, Angioma! )*-., Treatment %eath
03
00
eart Atta$k
36
=0
Jee* for a .epeat Angioplasty
=3
<>
89perien$e* Maor Blee*ing
11
<>
Challenge %& •
Using Angio)a9 will (e less $ostly than eparin ▫
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.e*u$e $ost of $o)pli$ations .e*u$e patientLs hospital stay
A**itional $osts in$urre* fro) $o)pli$ations ▫
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eart Atta$kD 000 %eath CostsD 000 &hese $osts are JN& rei)(urse* (y insuran$e $o)panies
Challenge %+ 6Challenge %& 7s Ta$le A Phase /// Results for 01ery 'igh Risk2 Patients Ta$le 4 Phase /// Results for 0'igh Risk2 Patients 5ndergoing an Angioplasty Outcome within ( "ays of 'eparin Angioma! Treatment
)+#&3&,
)+#&-&,
%eath
0<
0<
eart Atta$k
><
==
Jee* for a .epeat Angioplasty
<
<3
89perien$e* Maor Blee*ing
5= &o $al$ulate=3 a** patients Fro) &a( AD ery Fro) &a( BD igh igh .isk Angiom .isk 'epar 'epar Angiom su?ering fro) $o)pli$ationsE we apply the following for)ulaD in a! in a! 03
00
0<
0<
36
=0
><
==
=3
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<3
11
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5=
=3
<1> O <1> 2
163 163 2 53 53 O
Total add. % of add.# of total patients: = patients* patients “high risk” or “very high Very High Risk: risk”
01=6!P10!050!05
Challenge %+
&o pri$e Angio)a9 at a )utually (ene$ial $ost Fro) the $aseE the total nu)(er of angioplasty patients is 00E000 patients Sin$e the Me*i$ines Co)pany only in,estigates 5< of all angioplasty pro$e*uresE we nee* to )ultiply (y 05< &o su))ari;eD
High and Very High risk patients = (0.92)(percentage of all patients)(700,000) High
risk patients O 05E>00 patients otal patients O =<
patient
Challenge %+ PSee Challenge R1 &a(le for nu)eri$al *ata for referen$e &henE we assu)e that ea$h patient re'uire* 1 *ose of eparin an* that ea$h ,ial of eparin $ontains 1 *ose &he a,erage *ose of Angio)a9 is 1>3 *oses &'g.
dose of &ngio$a per patient O 0!1 *ose! Q =0!<3 *oses! O .*+ doses Fro) the $aseE the $o)pany in,estigates =<
Pricing :;+< per dose Pros •
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With Angio)a9E $ost of ea$h operation will (e 5E510E with insuran$e paying hospitals at a @at rate of 11E300 &hereforeE the hospital will not lose any )oney &he hospitals will gain >6Kpatient >66 2 ><0! Sin$e thereLre =<E1<0 is slightly a(o,e Me*i$ines Co)panyLs pri$e @oor >00! &he *rug with help with hospitalLs reputation (etter2'uality *rug!
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&ough to sell in the (eginning Jee*s )oney to *e,elop pipeline *rugs or for future ./%
Challenge %* &o $orre$tly analy;e the initial sales $on*ition when (reaking into the )arket Current Company Adoption Pro?le >acts Markete* as ar* to sell in initial )onths *ue to la$k of e,i*en$e Halternati,e in results an* hospital representati,e *ou(ts to heparinI %o$tors will see Angio)a9 as an e:$ient an* safe new alternati,e fro) short2run results hospitals will see Angio)a9 as a $ost e:$ient alternati,e in the long2runE as they see less $ost in$urring in$i*ents May e,en take a *ip in sto$k pri$es *ue to in,estor skepti$is) 7re*i$te* in$rease in sales after a few )onths after targeting larger hospitalsE positi,e *ata woul* Pro@ected Trend >irst ear ); in@uen$e other $onsu)ers Buarters, 7ossi(ly )ore in,estors will start taking interest in Me*i$ines Co First yearE Me*i$ines Co woul* pre*i$t a net loss •
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Challenge %; &o for)ulate an e?e$ti,e )arketing strategy that *i?erentiates Angio)a9 fro) eparin an* to fa$ilitate a*option at hospitals >acilitating Adoption 4reak into the market $y targeting doctors and pharmacists ?rst /nnove! "octor Approach 7ro,i*e free Angio)a9 sa)ples for *o$tors ost presentations on the (enets of swit$hing to Angio)a9 for hospital *o$tors &he 7ush 8?e$tD Free sa)plesKknowle*ge of Angio)a9 in*u$e *o$tors to persua*e phar)a$ists an* a*)inistrators to $onsi*er Angio)a9 •
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/nnove! Pharmacist Approach 7ro,i*e logisti$s an* soli* *ata on how )u$h )oney they $an sa,e (y swit$hing to Angio)a9 4n a**itionE re)in* the) that patients woul* lower their risks of heart atta$kE *eathE nee* for a repeat Angioplasty an* )aor (lee*ing &he 7ush 8?e$tD -ower phar)a$euti$al in,entory $ost in*u$es phar)a$ists to persua*e •
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/nnove! Administrators Approach Show $on$rete *ataKresear$h results on how )u$h they $an sa,e an* how )u$h they $an lower their patientsL risk of heart failures Bun*le the o?er with 'uality assuran$eK$usto)er ser,i$e •
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Angioma!Ds 5niEue Selling Proposition Position Angioma! as the modern# nosideeFect anticoagulant lowering the risk of heart attackGma@or $leedingGdeath eparin
Angio)a9
-ess 8?e$ti,eD takes < or = hours to assure su$$essful *rug a*)inistration
More 8?e$ti,eD only takes =0 )inutes for it to take e?e$t
7ossi(ility of 4))une .ea$tion
Jo 4))une .ea$tionSi*e 8?e$ts!
.isk of 7atient %eathKeart Atta$kKJee* for .epeate* AngioplastyKMaor Blee*ing
-ower risk of 7atient %eathKeart Atta$kKJee* for .epeate* AngioplastyKMaor Blee*ing
Unpre*i$ta(ilityre'uires $lose )onitoring when a*)inistering
7re*i$ta(lere'uires little )onitoring when a*)inistering Angio)a9!
igh .isk of Blee*ing
-ow .isk of Blee*ing
Challenge %3 &o persua*e hospital a*)inistration to a$'uire Angio)a9 in a hospital
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Uses the *rug Jee* to pri)arily fo$us on the *o$torsT Sales representati,es )ust e)phasi;e the (enets of Angio)a9 Why it is a (etter $hoi$e+ e*u$ate on a*,antages Shoul* JN& )ention negati,es ie high $ost! Nn$e $on,in$e *o$torsE then will ha,e a lea* to phar)a$ists
+9 Pharmacists •
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Carries the *rug a,e annual (u*get Are rewar*e* for )eeting an* (eating the (u*get Must ustify $ost of new *rug to hospital a*)inistrators an* get the a**e* e9pense a**e* into the (u*get Jee* to show hospital that will a$tually (e sa,ing )oney (y using Angio)a9 ▫
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Challenge %3 *9 'ospital Administrators
Appro,e the *rug for ongoing use in the hospital Most i)portantT %e$i*es if it )akes e$ono)i$ sense to a$'uire the *rug Appro,al fro) *o$tors an* phar)a$ists is $ru$ial for *oor to a*)inistrators Must show that the *rug will not only (enet the patients an* *o$tors )e*i$allyE (ut also the hospital nan$ially Angio)a9 will lower any potential a**itional $osts Angio)a9 will (e less $ostly than eparinT See 7ri$ing Sli*e for nu)eri$al e,i*en$e
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Challenge % &o seg)ent an* target )ost in@uential an* prota(le hospitals
Segmentation
Harge 'ospitals )+<< centers, 89tensi,e a)ounts of Angioplasty 7ro$e*ures 89hi(its (ig in@uen$e on a*)inistrators -arge network in )e*i$al in*ustry •
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Targeting
olu)e an* lower )argins Jegotia(le pri$esE $o)pro)ise )argins for (oth hospital an* Me* Co)p Foot 4n %oor allows pro*u$t to (e noti$e* ar*est to rea$h *e$isionE too )any seg)ents nee* to agree to e?ort 4n,est lot of ti)e an* e?ort • •
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Medium 'ospitals )3<< centers, A,erage Angioplasty 7ro$e*ures 89hi(its so)e in@uen$e on a*)inistrators Me*iu) network in )e*i$al in*ustry
ar*er to negotiate )argins Me*io$re returns on in,est)ent ratio &ough to penetrateE internal $on@i$ts
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Small 'ospitals )-<< medical centers# .* AngioplastyGcenterGyear,
Con,in$e few *o$tors to $on,in$e whole hospital 8asiest seg)ent to enter )arket •
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Challenge %Ioal 'ave Angioma! replace 'eparin for Angioplasty Procedures Harge 'ospitals JS
Medium 'ospitals JS
Small 'ospitals KO L
-arge hospitals are *i:$ult to (reak intoE S)all hospitals howe,er the rewar* will (e highE (e$ause on$e are not as we (reak into the )arketE Angio)a9 will re$ei,e attra$ti,e as large i))e*iate re$ognition as s)all an* )e*iu) hospitals an* hospitals look up to the large hospitals )e*iu) hospitals Moreo,erE on$e we get the *ealE the sheer si;e of &he a)ount of large hospitals ensure ,olu)eE an* $onse'uently ti)eE e?ortE an* )ore )argins )oney re'uire* to $on,ert s)all By targeting -arge an* Me*iu) ospitals an* hospitals outweigh su$$essfully $on,erting the) into Angio)a9 the prot )argins! usersE the pull e?e$t a?e$t S)all hospitals the we $an get (y 600 )e*i$al $enters! in that they woul* ha,e to selling to the) $on,ert as well *ue to pressures fro) patients Angio)a9 an* general )e*i$al tren* •
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Challenge %( &o instill $on*en$e in in,estors
1! 7ro,i*e in,estors with spe$i$ 'uantitati,e an* 'ualitati,e infor)ation that suggests a$'uiring a $ertain *rug will ha,e signi$ant (enetsE nan$ially an* )e*i$allyE to hospitals
8sta(lishes a $onne$tion (etween the in,estors an* the $o)pany Up*ates will eli)inate any *ou(ts in,estors )ay ha,e
Challenge % &o *e,elop strategies to a$'uire a pro*u$ti,e *rug pipeline 1! A )ore sophisti$ate* s$reening pro$ess to in$rease the possi(ility of su$$ess Currently $riteria only fo$uses on ti)e an* )oney A** )ore spe$i$ re'uire)ents to e9isting $riteria 4n$lu*e )ore in*ustry se$tor analysis in their *rug sele$tion pro$ess Analy;e the (ig pi$ture ! Su(2li$ensing rights of faile* *rugs to other $o)panies to in$rease re,enue Mini)i;e e9pen*iture ▫
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Challenge % /S&3. • •
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Stop *e,elop)ent of 4S2135 Woul* nee* another =0 )illions *ollars to nish resear$h an* $lini$al trials A**itional 3 years Cannot a?or* to spen* as )u$h )oney on *e,eloping one *rug if there is a possi(ility of 4S2135 not (eing appro,e* A**iti,eE $o$onut oilE has not gaine* F%A appro,al as an a**iti,e in nasal )e*i$ation ▫
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Stop *e,elop)ent of C&203 %i?erent fro) pre,ious two *rugs Unknown if the *rug works as not $o)plete* 7hase 1 trials 8'ui,alent to *e,eloping own *rug %rug was not relate* to the $o)panyLs goal Ha$'uire*E *e,elope* E an* $o))er$iali;e* phar)a$euti$al pro*u$ts in the -A&8 S&AG8S NF %88-N7M8J&I C&203 only in the early stages ▫
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Keed to acEuire new drugs with more speci?c criteria and known successN
Conclusion and Takeaways 1! 4n*ustry se$tor analysis is $ru$ial to the su$$ess of a pro*u$t on the )arket ▫
Assess )ultiple areas su$h as $o)petitionE $onsu)ers an* o,erall )arket
.e*u$ing risk (y *istri(uting risk a)ong se,eral *i?erent pro*u$ts
>! Aspe$ts of the pro*u$t )ust (e )utually (ene$ial to the $o)pany an* the $onsu)er
