Pharma: short tail?
The news earlier this week that Pfizer was stopping development on two late stage drugs in development should be a warning on what's coming.
By on Feb 25, 2009The news earlier this week that Pfizer was stopping development on two late stage drugs in development should be a warning on what's coming. Pfizer officially said that the reason they were ceasing development was that these drugs showed no promise of increased efficacy versus current products on the market. However one has to wonder if the real reason is that the sales of the drugs are forecasted to be low for Pfizer to allocate resources.
Much has been written about the Long Tail which essentially says that organizations have to learn to expect sales of more products with lower sales volume than depend on a few products with really big sales volume. It seems that pharma is not only addicted to the "blockbuster" sales model they are having a hard time of developing a new business model.
With the downturn in the economy healthcare maybe changed forever as empowered patients treat healthcare like any other consumer product and take a more active roll in determining healthcare treatments. Consumer packaged good marketers understand that this is not a time "to sell" but rather to engage consumers in conversations around the brand. They are trying to get closer to their customers while big pharma wants to get bigger and add layers of management between them and their customers. It does make sense, after all it's about profits and Wall Street not patients.
Pfizer has made several moved to try an anticipate the loss of the Lipitor sales when it comes off patent soon. Lilly is going to lose patent protection on its biggest selling drug Zyprexa soon and when replacements are in the pipeline payers want to know that they are significantly better than generics in head to head studies. This means more development time and money and less time recouping expenses. This in turn means that drugs which may benefit a smaller patient population will not make it to market or be pulled from the market if sales don't live up to the forecast.
I read a lot of business magazines and case studies of what marketing and business executives are doing now to better compete in the future where consumer behavior maybe forever changed. Some get it, some do not; the ones that do get it will be better able to compete in the future those that do not will lose customers and business. President Obama, last night, said that we have to stop worrying about the short term and focus more on the strategic long term things that make this country better. The problem with that is that pharma is way too focused on the short term and Wall Street than patients. It's always been about business but it seems now that is true even more.