Principles and Practice of Pharmaceutical Medicine

$6602 million was spent on free drug samples to
physicians,

$3537 million was spent on office promotion,

$1337 million was spent on DTC advertising
(see below),

$705 million was spent on hospital promotion,

$540 million was spent on advertising in medical
journals (Maet al., 2003).

In 2001, this had increased to an expenditure of
$20 000 per physician (Engler, 2003). Pfizer
reported spending almost $2.9 billion on advertis-
ing in 2001, while Bristol-Myers-Squibb spent
more than $1.4 billion on advertising and promo-
tion with an additional $3.9 billion on marketing,
selling and administration. Merck increased sales
staff by 1000 in the United States alone in 2001,
with 85% of its 78 000 employees engaged in non-
research activities. Brand name drug manufac-
turers in the United States employed 81% more
people in marketing than in research in 2001
(Families USA, 2002).
As in all business, 20% of the brands, 20% of the
customers and 20% of the marketing activities
generate 80% of the profit. Marketing and selling
now typically takes up to 40% of sales revenue
(James, 2004).

Strategies

For any product, there is a range of approaches for
marketing. The most successful strategies are coor-
dinated and clearly focused on the target audience
and brand values.
Marketing strategy is the broad idea of how a
company’s strengths are used to achieve its objec-
tivesandhowtoallocateresourcestobestmeetsales
targets. Understanding how the product compared
favorably with its competitors, in terms of efficacy,
safety, convenience or cost, is crucial. Increasingly,
new products are modifications of older ones, in
pursuit of greater efficacy or fewer side effects.
However, selling branded products on the basis of

cost is progressively more difficult with increased

use of generics and cost-effectiveness strategies by

prescribers. Pharmaceutical companies now tend to

eitheruseahighlyfocusedclinicalstrategyshowing

theuniquefeaturesoftheirbrandwhichgiveitvalue

to prescribers, or develop a unique set of conditions

around a brand such as continuing medical educa-

tion (CME) support or research funding, in order to

create brand loyalty (James, 2004).

Strong marketing strategies target real segments

of the potential market which have similar needs.

The brand is promoted to these customers in a way

that is designed to maximize its strengths and

minimize its weaknesses. Prediction of the future

market and uniqueness of approach are ways to

beat the competition (Pharmaceutical Marketing

Live, http://www.pmlive.com).

Marketing strategies have traditionally been

built around the following four Ps:

Product – development of the brand concept,

plus other services associated with the brand

such as diagnostic, monitoring, drug delivery

and education support.

Price – the only element to generate revenue, the

crucial engine of market success and driver of

profitability.

Place – activities to ensure that the product is

easily available and assessable to customers,

including distribution channels and discount

systems.

Promotion – communicating customer benefits

and building brand reputation and trust from

customers (James, 2004).

Additionally, two new Ps are also relevant:

Political relationships with organizations

responsible for payment

Patients – who have increasing economic input

into their care and access to information (James,

2004)

Many pharmaceutical companies have weak mar-

keting strategies (Pharmaceutical Marketing

51.8 MARKETING BUDGETS 657