2009 hastings essay

8/9/2019 2009 Hastings Essay

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14 H A S T I N G S C E N T E R R E P O RT July-August 2009

cooperative tandem, one with the other, but in direct compe-tition. Precommercial planning and marketing, in short, is alegal but unethical practice when applied to humanly vital in-dustries such as the pursuit of medical cures.

Marketing and R&D

What is precommercial planning and marketing? A re-cent podcast at Pharmavoice, a Website for life-sci-ences executives and other healthcare-service related profes-sionals, was entitled Pharmaceutical Marketing and Plan-ning: Securing Future Success through Meaningful Differen-tiation. The guest speaker was Laurie Lucas, founder of L3Healthcare Marketing, LLC, which explains its objective thisway: The pharmaceutical market is evolving rapidly, growingin complexity, and there is less time to maximize a productspotential. Medical communications are critical to under-standing the target therapeutic area, and to communicating aproducts unique attributes.6 The less time here refers tothe length of time under patent during which a firm can sell

and accrue profits for a drug. Since a patent is taken out uponthe formulation of a molecule and several years elapse beforethe drug is developed, approved, and brought to market,companies are always seeking to shorten the time betweenpatent registration and product launch. The clinical researchphase and the approval process can hardly be made shorterthan it has been already. Lucas wishes to teach her clients thatby starting the marketing prior to the launch itself, the periodof time before the drug can be sold can nevertheless be lever-aged to improve profitability during the commercial phase ofthe drug. She refers to this, using the general parlance, as pre-commercial planning and marketing.

Many people assume that a drug goes through a three-steppipeline:

Research DevelopmentMarketing

This model, if it was ever accurate, is certainly not sustain-able now. If you start just with discovery and development ofa product and only subsequently think about marketing it,you risk bringing to market a product that may have had onlymodest potential for commercial success to begin with. Logi-cally, you would want to have a little market research mixed inwith the drug R&D: you would have market researchers gath-er data at clinics and hospitals, and you would use this data to

select among research proposals for drugs with the greatestmarket potential. Or, executives might go to the laboratoryand solicit research into known diseases. In this case, the lab-oratory personnel need not be bothered with marketing con-siderations per se. They might take their orders from thosewho have the markets needs clearly in mind, but their scien-tific work would not otherwise be affected. A flow chart ofthis sequence might be:

Market ResearchResearchDevelopmentMarketing

This model was apparently accurate for many historicalcures, and it remains the image the pharmaceutical industryprojects to the public about how it operates. But this modelhas in fact ceased to apply. Given the time crunch for gener-ating profits from a drug, this model, too, is not sustainable.Precommercial planning and marketing is the attempt tocompress the sequence by involving scientists and incorporat-

ing their research capacities directly into the marketingprocess. This is the integration of marketing and R&D.

Beginning in the 1990s, pharmaceutical marketing execu-tives began speaking obsessively about the integration of mar-keting and R&D. The first to do this may have been WilliamSteere, Jr., who was promoted from the marketing depart-ment to CEO at Pfizer in 1991. In his book Generation Rx,Greg Critser describes Steeres priorities for the companyupon assuming command. There were three. The first onewas get marketing and research closer together. The secondone was get marketing and research closer together. And thenhe said the third one was get marketing and research closer to-gether.7

The procedural details of this transformationand atransformation clearly was what was entailedwould have tobe worked out by field officers such as Laurie Lucas. A whitepaper produced by her firm, L3 Healthcare Marketing, de-clares that Pre-commercial marketing requires the collabora-tion of multiple brand stakeholders, including clinical affairs,pre-clinical, regulatory, legal, medical affairs, and marketing.Everyone involved should have an understanding of the broadcommercial issues that will or are likely to affect the productwhen it reaches the market, as well as the elements that createvalue for a product.8 In 2002, at a roundtable entitledWhen Worlds Collide: The Unleashed Power of Market-

ing/R&D Collaboration, one executive observed, At Takeda we believe that the opportunity is integrating early andthrough target product development profiles, making surethat everyone is going in the same direction.9 He describedthe drug Trovan as an ideal example of such integration.10An-other executive said, At AstraZeneca R&D people started toembrace more of the entrepreneurial mindset and understandcustomer needs betterin other words, the institutional re-organization under the direction of marketing. We struggledinitially, but it eased once the R&D folks truly understoodwhat we were all working toward, which is value enhancement.We were all trying to figure out how to have an impact on thebottom line. And an executive from Wyeth concluded, You

cant have a blockbuster without [integration].In these and many more comments we hear that integra-tion of marketing and R&D is the first important step towardwhat marketers in many consumer goods industries call valuecreation. Since the internally created value has to mirror whatexternal stakeholders will value also, its counterpart is valuedemonstration. Value creation and demonstration thereforemirror the distinction between internal and external stake-holders. If creatingvalue is the focus of the pharmaceuticalcompany team, with implications for how therapies are iden-


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H A S T I N G S C E N T E R R E P O R T 15 July-August 2009

tified and researched, the complementary task is demonstrat-ingthat value to the world outside the company.

This distinction is more analytical than practical. The or-ganizational approach to creating value internally in fact bearsa strong resemblance to demonstrating value to externalstakeholdersregulators, physicians, and insurers who mustbe brought on board in the drug marketing process. In the-

ory and practice, value creation and demonstration work bestwhen they are absolutely simultaneous and perceptually coin-cident in the minds of all stakeholders, internal and external.Lucas speaks of the collabora-tion of internal team membersand external experts. Since theinternal teamwhich includessales reps, regulatory, publi-cation planners, and in-housephysicians employed as market-ing personneland the externalactorswhich include physi-cians and the publicboth

need to be convinced of the newproducts value in order to max-imize its commercial potential,the responsibility of marketingalso extends across this divide.

The practical implication ofthis is that even from the outsetthe entire team, including labresearchers, is devoted todemonstrating the efficacy andsafety of the product yet to beborn. The new flow chart be-

comes:

Value Creation/Demonstration (Marketing Research)R&D

Marketing Control

A fuller schematic that temporally juxtaposes clinical andcommercial strategies is produced as a prelaunch strategy mapused by the SDC Group consulting company. The mapshould be read not as a static set of procedures associated witheach prelaunch stage, but as an emergent set of strategic con-siderations. Even before phase I trials, thought leadersmeaning influential doctorsare developed.11 Publicationsare brought out to begin the awareness campaign and to ini-

tiate a paper trail for future citations. Franoise Simon (presi-dent of the SDC Group) and Philip Kotler estimated in 2003that thought leader development accounted for 20 percent ofmarketing costs and was rising.12 By comparison, direct-to-consumer advertising in 2004 accounted for only 14 percentof pharmaceutical spending.13 In the preclinical stage,thought leaders can communicate unmet medical needs andshape the design and endpoints of Phase I and II clinical tri-als. Thus, depending on what thought leaders learn fromdoctors and patientsand what selling points they are able tocommunicate to them regarding the promise of a drug still

in developmentclinical trials can be altered accordingly.Thought leader participation in successive trial phases is itselfpart of the procedure aimed to ensure awareness and adoptionat the time of launch. Opinion leaders drive the second-mostcrucial premarketing component, that is, publications. Thereis a close correlation between successful launches and aggres-sive publication programs.14 Laurie Lucas calls this value

through data.Simon and Kotler are not speaking the language of coop-

eration between marketing and science but of the strategic in-tegration of the two at everystep under the direction of mar-keting. Marketing must own thepipeline, not just react to itsoutcomes. As one of the execu-tives from the When WorldsCollide roundtable said, Thecompanies that do it right donttalk about R&D and market-ing. If you can get the key peo-

ple to all be brand managersto look for brands rather thanjust compounds . . . Branding isabout the ownership of ideas.The Cox-2 inhibitors are themost recent examples of owningthe science from day one. TheCox-2 inhibitors, of course, areVioxx, Celebrex, and Bextra, aclass of drugs associated withthe most florid marketingmalfeasance in recent history.

Contradictory Notions of Value

What is meaningful to marketers may be meaningless toscience and vice versa. Medical, scientific value consistsin a discoverys capacity to explain phenomena verifiably andthen be applied to reduce human suffering from disease. Mar-keting value, by contrast, is fluid, relative, and contingent onperceived utility. Marketing value is measured in accordancewith its ability to achieve product differentiation, which refersto the process of making ones product offering appear uniquein the marketplace and superior to those of ones competitors.Product differentiation is in many ways the prime directive of

all marketing.In the integration of marketing and R&D across contem-porary medicine, we find fewer and fewer expressions of sci-entific valuean outright cure for Dread Disease X, or afrank evaluation of the many-sided approaches to delaying ormanaging diseases we cannot yet cure. Instead, we find in in-creasing abundance the promotion of marketing values andthe gargantuan effort to demonstrate these to the differentstakeholders whose cooperation is required for the successfullaunching of the product. Marketing and scientific conceptsof value can but need not overlap. What is valuable to mar-

Given the time crunch for

generating profits, drug

companies try to integrate

marketing and R&D by

incorporating scientists

research capacities directly

into the marketing process.


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16 H A S T I N G S C E N T E R R E P O RT July-August 2009

keters can be meaningless, dangerous, and costly to everyoneelse.

For pharmaceutical marketers, as we have seen to especial-ly great effect in the heyday of the industrys quest for block-busters since the early 1990s, pharmaceutical value has oftenbeen a marketing proposition, not a scientific one. The num-ber of me too drugs that have been proposed since then is a

predictable outcome of the integration of marketing andR&D. The very expression me too is telling: the develop-ment of these drugs creates marketing value through the sub-segmentation of existing markets.15 The ethical violationsstem from the same source as the drag on innovationname-ly, the uncontrolled pursuit ofmarketing values and the com-pany philosophy this reflectsand produces.

When we look at pharma-ceutical companies ethical vio-lations, we tend to concludethat greed (as reflected in exces-

sive marketing) and individualunethical decisions are toblame. To some degree, theyare, but we should not lose sightof the nonprosecutable organi-zational norms that lie behindthese abuses and that both fuelethical breaches and dampenthe impetus to develop innova-tive products. By organizationalnorms, I mean the marketingpractices that have at their back

sound managerial principles,marketings peculiar but accept-ed form of apprehending mar-ket needs, and the unrelenting requirement to adapt to apatent-driven competitive commercial environment.

What should strike us most in the marketing practices thathave come to light in various court trials is how routine theyappear to be. The spectacle of the trials is in this sense a dis-traction, since it focuses our attention on violations. But theviolations stem from marketing practices that are not at allcovertin fact, they are positively embraced.

As the system is now organized, patents encourage drugfirms to sideline the uncertain and difficult search for pio-

neering cures to serious diseases in favor of what they callmeaningful product differentiation strategies. In thatscheme, meaningfulness is defined relative to an image of nov-elty, efficacy, and safety that firms endeavor to influencethrough myriad forms of propaganda. The vast resources ex-pended on defending and promoting what Alastair Mathesonaptly calls corporate science are bleeding us of health care re-sources and muddying the scientific and clinical waters inwhich bona fide researchers must also swim.

Publicly Funded Research?

Any discussion aimed at realigning existing arrangements,much less granting oversight responsibility to govern-ment, is likely to arouse fears about meddling in the privatesector. Nevertheless, the point has been reached where neitherthe interests of public health nor the private patient are being

served by an industry that has, officially or otherwise, beenentrusted to deliver a significant portion of our health prod-ucts.

I propose sequestering pharmaceutical R&D as a strategicand humanitarian industry, in the same sense as one speaks of

national defense-related indus-tries such as aerospace or, for-merly, telecommunications andsemiconductors. No one wouldargue that these industries havenot generated scientific break-throughs, or that the eventualcommercialization of these tech-

nologies has been unprofitable.Only the dogged faith of free-market devotees that break-throughs spring not from pater-nalistic expert systems but fromindustrial competition stands asan obstacle to accepting thisframework.

Merrill Goozner argues thatthere has been a huge misper-ception about the sources of sci-entific creativity in the pharma-

ceutical and biotech industries.He shows that the inception ofdrugs which have truly made a

difference in recent years and which will make a difference inthe twenty-first century can almost always be found in thevast biomedical research enterprise funded by the federal gov-ernment.16 If he is correct, then an appropriation of the re-search function of the pharmaceutical industry to federal re-sponsibility, with the aim of separating marketing and R&D,will disable the vast machinery of tendentious, marketing-dri-ven science without making useful invention less likely. Thecorruption described at the beginning of this essay will bemitigated, and rare diseases and those suffered mainly by poor

people would get the research and development attentionthey deserve. There would be tremendous health care savingsfrom the dismantling of the vast marketing expenditures de-voted to marketing-adjunct R&D, to the production of drugsshowing no advantage over their predecessors, and to thecompetitive carpet bombing of doctors offices with sales reps.

The public has much at stake in how pharmaceutical re-search is conducted; its participation in the industrys gover-nance should reflect that investment. At present, the publicsparticipation in pharmaceutical governance is restricted be-cause pharmaceutical companies, as private enterprises, are

Pharmaceutical value has

increasingly become a

marketing proposition, not

a scientific one. What is

valuable to marketers can

be meaningless, dangerous,

and costly to everyone else.


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H A S T I N G S C E N T E R R E P O R T 17 July-August 2009

legally entitled to keep most of their practices, strategies, anddata (market and scientific) secret. The privilege that has beenafforded the private sector to determine what our health carepriorities should be derives from the incongruous belief that,as Richard Henry Tawney put it nearly a century ago, Theenjoyment of property and the direction of industry are con-sidered to require no justification, because they are regarded

as rights which stand by their own virtue, not functions to bejudged by the success with which they contribute to a socialpurpose.17

In an age in which treatment of the sick is increasingly de-pendent on pharmacological intervention, there is work alsofor salesmen and market researchers. Encouraging pharma-ceutical industry marketers to concentrate on their expertiseof commercialization and distribution can also yield manygoods. We can seek their help in assessing clinicians needsand treatment outcomes, in devising inventive schemes fortreatment adherence, and for helping in the logistical man-agement of the delivery of medicines to patients who so des-perately need them, both at home and in other parts of the

world.

1. F. Simon and P. Kotler, Building Global Biobrands(New York: FreePress, 2003), 147.

2. As I was revising this essay, the following appeared in my home-town newspaper: The conclusions were clear: Women who took hor-mone therapy drugs were at increased risk for breast cancer, heart dis-ease, stroke and blood clots. The findings were so strong that researchersstopped a clinical trial in 2002, five years early, because it would havebeen unethical to continue giving the drugs to women. But that sameyear, the University of Wisconsin-Madisons School of Medicine andPublic Health began a medical education program for doctors that pro-moted hormone therapy, touted its benefits and downplayed its risks.For the next six years, thousands of doctors from around the countrytook the online course that was funded entirely by a $12 million grantfrom Wyeth Pharmaceuticals, which makes the hormone therapy drugsused in the study, Prempro and Premarin. J. Fauber and S. Rust, AreDoctors Loyalties Divided? UW Course for Doctors Pushed RiskyTherapy,Milwaukee Journal Sentinel, January 25, 2009.

3. See D. Healy, The Engineers of Human Souls and Academia,Epidemiologia e Psichiatria Sociale16, no. 3 (2007): 205-11; S. Sismon-do, Ghost Management: How Much of the Medical Literature IsShaped Behind the Scenes by the Pharmaceutical Industry? PLoS Med-icine4, no. 9 (2007): e286; S. Sismondo, ed., Special Issue on Inter-sections of Pharmaceutical Research and Marketing, Social Studies of Science34, no. 2 (2004); A. Petryna, Ethical Variability: Drug Devel-opment and Globalizing Clinical Trials,American Ethnologist32, no. 2(2005): 183-97; R. Moynihan and D. Henry, The Fight against Dis-ease Mongering: Generating Knowledge for Action, PLoS Medicine3,no. 4 (2006): e191; K. Applbaum, Pharmaceutical Marketing and theInvention of the Medical Consumer, PLoS Medicine3, no. 4 (2006); K.

Applbaum, Getting to Yes: Corporate Power and the Creation of a Psy-chopharmaceutical Blockbuster, Culture, Medicine and Psychiatry 33,no. 2 (2009): 185-215.

4. Government Accountability Office, New Drug Development:Science, Business, Regulatory, and Intellectual Property Issues Cited asHampering Drug Development Efforts, 2006, http://www.gao.gov/new.items/d0749.pdf.

5. M. Goozner, GAO: Drug Innovation Lags Despite High DrugPrices, Gooznews on Health, December 19, 2006; http://209.85.229.132/search?q=cache:akdAKwFemfUJ:www.gooznews.com/archives/2006_12.html, accessed June 18, 2009. Another study revises the

estimate of nonbreakthrough applications to 92 percent; P. Shetty,More Creative Thinking Needed On Drug R&D, YaleGlobal Online,http://yaleglobal.yale.edu/display.article?id=5678.

6. L3 Healthcare Marketing, LLC, home page, http://www.l3hm.com/index.php, accessed June 29, 2008.

7. G. Critser, Generation Rx (New York: Houghton Mifflin, 2005),91.

8. L3 Healthcare Marketing, Pharmaceutical Marketing and Plan-

ning: Securing Future Success through Meaningful Differentiation,http://www.l3hm.com/documents/L3_Pre-CommercialWhitepa-per0508.pdf, p. 1, accessed June 30, 2008.

9. W. Koberstein, When Worlds Collide: The Unleashed Power ofMarketing/R&D Collaboration, Pharmaceutical Executive, September1, 2002, http://pharmexec.findpharma.com/pharmexec/Current+Issue/

When-Worlds-Collide/ArticleLong/Article/detail/29963.

10. Trovan later became infamous for the ethical research abuses as-sociated with its testing practices in Nigeria.

11. Thought leaders are also known as key opinion leaders orKOLs. An excellent description of how KOLs are recruited and the pur-poses they serve can be found in A. Matheson, Corporate Science andthe Husbandry of Scientific and Medical Knowledge by the Pharma-ceutical Industry, BioSocieties3 (2008): 355-82.

12. Simon and Kotler, Building Global Biobrands, 147.

13. J.M. Donohue, M. Cavasco, and M.B. Rosenthal, A Decade ofDirect-to-Consumer Advertising of Prescription Drugs, New England

Journal of Medicine357 (2007): 673-81.

14. Simon and Kotler, Building Global Biobrands, 147.

15. Arguments have been offered in favor of the utility of me toodrugs, the most robust of which is that drugs in the same therapeuticclass might offer differential efficacy and side-effect profiles for differentpatients. This is true and offers some qualification to the criticism ofthese drugs. Factually, however, the number of me too drugs among anarrow range of profitable therapeutic classes is disproportionate, andthe distinguishing profiles among these tend to be narrower than adver-tised. My argument here is that drug companies do not pursue the pro-duction of me too drugs with the aim of offering medically meaning-ful differences, but rather to win easy market share in markets where de-

velopment of these drugs contributes to their absolute growth.16. M. Goozner, The $800 Million Pill: The Truth Behind the Cost ofNew Drugs(Berkeley: University of California Press, 2004), 8.

17. R.H. Tawney, The Acquisitive Society(New York: Harcourt, Braceand Company, 1920), 24.

2009 hastings essay

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