Sanofi Kazakhstan Generics Leadership Strategy 2014
To solve this case one needs to design a leadership strategy in generics segment for Sanofi. Sanofi has been one of the market leaders for many years in Kazakhstan, but current advertising restrictions and local competition create some barriers for generics sustainable growth in retail sector. You need to suggest a new strategy for the portfolio development, distribution and marketing in order to become the leader in cardio and antibiotics segments of the generics market as well as triple sales volume by 2017.
CONTENTS
CONTENTS 1 2 INTRODUCTION
4 MARKETING IN THE PHARMACEUTICAL INDUSTRY: SPECIFIC FEATURES
SANOFI – GLOBAL LEADER IN HEALTHCARE
5 GENERIC MEDICINES
3 PHARMACEUTICAL MARKET OF KAZAKHSTAN
6 SANOFI GENERICS
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APPLICATIONS
Sanofi Kazakhstan. Generics Leadership Strategy 2014
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INTRODUCTION
3 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Introduction
Alimzhan, Head of Retail Sales in Generics Segment at Sanofi, was driving his car along Astana streets in the morning. He was heading to an important meeting with the Deputy Minister of Health of Kazakhstan, which he has carefully prepared for with his colleagues the day before. Alimzhan had been working for multinational corporations for many years and got used to a tight schedule of flights, meetings and negotiations at the top level, so he was prepared for an important and busy day. Alimzhan was waiting for his meeting at the reception room, where TV was on. While watching an advertisement of a well-known shampoo Alimzhan thought that, unlike players in the FMCG industry, pharmaceutical companies face a much bigger challenge to enter a market and gain share in it. His team has recently received a longawaited license for a new drug, so the time to implement their marketing and distribution plans for it has come. Of course, drug marketing had many limitations, but on the other hand, many opportunities too. One of these opportunities was the reason why Alimzhan came for a meeting to Astana.
Sanofi became a key partner and comanager of an important conference «Value-Based Healthcare» for doctors. The conference had long been on the Health Ministry’s agenda, but numerous organizational issues needed to be worked through. Alimzhan needed to clarify numerous organizational issues as more than 1,000 physicians from all over Kazakhstan planned to participate in this conference. “It’s a good opportunity to introduce new products, — thought Alimzhan, — and to declare that Sanofi is a leader in the generic drugs market”. Those are precisely the kind of targets which he and his management have set for themselves for the short term – to become the undisputed leader in Kazakhstan in the generic cardiovascular drugs and generic antibiotics sectors, and to triple the sales in these categories within the next three years. Certainly, hiring more medical sales representatives may seem the obvious thing to do in order to achieve high sales figures, but this would not be the optimal solution. Moreover, in accordance with the limitations that the management has put in place, the number of employees can only be increased by up to 15% annually, and only if such an increase is justified.
The existing product portfolio of generics was to be revised. Optimization process has already been launched based on the analysis of current performance, market trends and competitors behavior. Alimzhan expected, that these changes would influence working relations with medical representatives, promotion mix, as well as the price of each product in generics portfolio. Alimzhan already had certain plans regarding more effective distribution: working with medical sales representatives, and increasing the number of ‘fields.’ The groundwork was also laid for developing the concept of patient-oriented pharmaceutical marketing. Alimzhan and his colleagues need to put together all these elements and provide management with a comprehensive strategy of gaining leadership in the generics segment by 2017. In order to achieve desired performance this strategy needs to cover such aspects as distribution, marketing and portfolio management. Finally Alimzhan was invited to the office of the Deputy Minister. He walked vigorously into the meeting room and greeted his colleagues...
Sanofi Kazakhstan. Generics Leadership Strategy 2014
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Sanofi – global leader in healthcare
5 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Sanofi – global leader in healthcare
Sanofi is a global leader in healthcare, aiming to satisfy needs of both current and potential customers by providing and designing solutions for protection of their health. The company’s products help billions of people across the world. Sanofi Group develops, produces and distributes innovative drugs aimed to prevent and cure diseases, as well as improve quality of life for patients. Sanofi demonstrates rapid and steady growth in seven major areas: emerging markets, vaccines, OTC drugs, innovative drugs, veterinary medicines, treatment for diabetes and rare hereditary diseases. The company is the undisputed market leader in producing vaccines and veterinary drugs. Every year Sanofi improves lives of millions of people thanks to their global presence and strong R&D department. Sanofi-aventis was formed in 2004, when French companies Sanofi-Synthélabo and Aventis merged into a new Sanofi-aventis (the name was shortened to Sanofi in 2011). Both companies were previously formed through mergers. In 1999, Sanofi (formerly a unit of Total) and Synthélabo (formerly
a unit of L’Oreal) merged into SanofiSynthélabowas. Aventis was formed as well in 1999 when Rhône-Poulenc SA merged with German Hoechst. Today Sanofi continues to grow. In 2009, Sanofi Group acquired Zentiva (Czech generic product manufacturer), market leader in Central and Eastern Europe in the generics segment, as well as Merial — one of the world leaders in the field of veterinary medicine. In 2011, Sanofi invested 15 billion euro into acquisition of Genzyme — one of the largest biopharmaceutical companies in the world that achieved success in the development of drugs to treat rare diseases. Sanofi has more than 110,000 employees. In each country, Sanofi offers high quality products adapted to the local market. It owns 116 production sites in 40 countries: 58 of them are located in Europe and 17 in North America. In 2011 performance of factories increased, and, at the same time, fundamental requirements for quality, service, environmental impact and safety were established. Kazakhstan is one of the 193 countries around the world, where Sanofi has its
representative office. The most successful markets for the group in 2014 have been the developing countries, where the sales figures for the second quarter of 2014 went up by 16.5% compared to the same period in 20131. “Sanofi-aventis Kazakhstan” was established in 1997 and rapidly became one of the largest pharmaceutical companies in Kazakhstan. Nowadays, Sanofi-aventis Kazakhstan aims to keep its leading position in pharmaceutical segment, as well as to become leader in generics. The group’s strategy is aimed at ensuring long-term sustainable development and is based on three key principles: to increase innovation in research and development, to use external growth opportunities, and to adapt the organizational structure of the group for the challenges of the future. Sanofi development is based on a structured policy of acquisitions and partnerships that foster and reinforce the existing platform for long-term growth and increase the capitalization of the group.
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Sanofi annual report 2014
Sanofi Kazakhstan. Generics Leadership Strategy 2014
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Pharmaceutical Market of Kazakhstan
7 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Pharmaceutical Market of Kazakhstan I Kazakhstan Market Overview
Kazakhstan invests heavily into healthcare development. Today almost 4% of GDP account on these sector and further growth is expected. By 2015 public health expenditure will increase up to 7% of GDP. The Good Manufacturing Practice (GMP) standard, which will be implemented in the country by the end of 2014, should additionally bring a new level of quality to the generics market and lead to an increase generics volume. The government owns 80% of medical institutions in Kazakhstan, thus the government plays a significant role in medical sector. Appointed as a WTO member, Kazakhstan brought its medical regulations in line with international standards2. All imported and locally produced pharmaceutical products must be registered in Kazakhstan. The agency responsible for registration is the Committee for Pharmacy under the Ministry of Health. National Center of Expertise under the Ministry of Health administrates the approval process for all pharmaceutical products that need to
be registered in Kazakhstan. This process consists of various clinical tests, which verify and confirm safety and quality of pharmaceuticals. In 2009 the Unitary System of Medicine Distribution project was put into operation and it made possible to reduce medicine costs and buy it directly from manufacturer. The government purchases and then provides medicinal drugs, devices, equipment and services to citizens free of charge within the framework of the Guaranteed Volume of Free Medical Aid (GVFMA). This support is given in the following areas: HIV, respiratory illnesses, newborn and maternal health, prevention and treatment of hepatitis B and C, oncology, tuberculosis, cardiology and gastroenterology. In 2013, the cost of medications per citizen amounted to 68 Euro per year.
According to the beginning of January 2014 data, 773 hospitals and 2163 shortstay clinics operate in Kazakhstan. Based on the results of the first quarter of 2014, state authorities forecast that hospital capacity will reach 102 773 patients. Over 50,000 doctors and 130,000 medical personnel operate with more than 10,000 registered pharmaceuticals in Kazakhstan.
Kazakhstan Market Overview
According to the Ministry of Health every second citizen is taking medicines without a prescription from a doctor, and almost half of the population follows drug advertisement.
http://www.astanazdorovie.kz/en/exhibition/ healthcare-in-kazakhstan
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Pharmaceutical Market of Kazakhstan I Market Structure
Kazakhstan pharmaceutical market has almost doubled in the recent five years: 612 M Euro to 1322 M Euro3. Prescription drugs products represent 70% of pharma market. Key drivers of growth were generics and original drugs. Recently the growth of original drugs slowed down; last year increase was equal to 6%. At the same time generic products segment grew by 15%. Local production makes up for 12% of the total pharmaceutical market. Local manufacturers produce basic pharmaceutical products that do not require innovative technologies. Market demand for specific complex pharmaceuticals is covered entirely by import goods. The first ten countries providing 68.6% of import in value and 54.5% in volume terms in 2012 were Germany, France, Russia, India, Hungary, Belgium, Italy, Slovenia, Austria and, the USA. Top 5 drug sales in Kazakhstan include drugs for treatment of digestive system diseases and metabolic disorders, respiratory system and cardiovascular system diseases, antimicrobial medicines and sex hormones. Retail channel is the growth engine for Kazakhstani market with double growth rate vs. Budget channel (state purchased pharmaceuticals). Retail segment accounts for 62.5% of the whole market; the
remaining 37.5% is the budget segment. All segments of the retail channel demonstrate strong double-digit growth and positive trends for growth in future. Generics share in retail segment is equal to 35.8%, in 2014 August year today growth is 21.5%. Budget segment continues to decelerate due to governmental attempts to control budget spending while keeping volume growth. In MAT6 basis (most representative period to analyze budget channel), original products are almost flat in growth, while generic products grow. Generics share grew by +1.2% since MAT August, 2014. Cardio generics each year gain more and more market share over the original drugs because of a lower price. More than 45 companies operate on the cardio generics market in Kazakhstan. However three of them account for 50% market share of the total cardio generics market in value terms. Sanofi’s bestseller is Lozap (molecule Lozartan) with 7.6% of cardio generics market share in value terms. However the most popular cardio generics molecules are Enalapril (19%) and Lisinopril (13%), which are used to treat high blood pressure (hypertension), congestive heart failure and to increase survival probability after heart attack. Data on the world antibiotics generics industry shows that the average original drug price is almost 4 times higher than
the average generic drug price ($137.90 vs $35.22)5. Every Kazakhstan pharmaceutical distributor provides antibiotics: over 200 brands are registered on the market with broad-spectrum drugs among the leaders (over 26% of the market share).
Market Structure
Central Asia IMS analysis: Market trends and Sanofi performance. August 2014. 4 Moving annual total - the total value of a variable, such as sales figures for a product, over the course of the previous 12 months. This is a rolling yearly sum, so changes at the end of each month with data from the new month added to the total and data from the first month of the period taken away. 5 National Association of Chain Drug Stores, Industry Facts-at-a-Glance. 3
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Pharmaceutical Market of Kazakhstan I Key Kazakhstan Generics Market Players
Cardio One of the key players on the market is The KRKA Group that is engaged in the development, production, sales and marketing of human health products (prescription and self-medication pharmaceuticals) as well as animal health products. Also this company runs health resort services for tourists. Its production sites are located in Slovenia, Poland, Russia, Croatia and Germany. Subsidiaries outside Slovenia are engaged in the marketing and/or sale of The KRKA Group products. The company is focused on development of high-quality private brand generic pharmaceuticals that offer added value and are sold under Krka’s own brands. Its key market in Eastern Europe and CIS is Russian Federation. Its other important markets in this region include Ukraine, Kazakhstan, Uzbekistan, Georgia and Azerbaijan. KRKA is a leader in cardio generics with 28.7% of market share in value terms. 58% of cardio generics sold in Kazakhstan are produced by its Russian manufactory. The main products in this segment are Enap and Zyllt. One of the leader in cardio generics in Kazakhstan is Enap. It is used like an antihypertensive agent to treat coronary heart disease and heart failure.
Zyllt contains Clopidogrel molecule that is an oral, thienopyridine-class antiplatelet agent used to inhibit blood clots in coronary artery disease, peripheral vascular disease and cerebrovascular disease. Headquartered in Hungary, Gedeon Richter Plc. is an innovation-driven specialty phar-maceutical company. The Richter Group produces about 200 pharmaceutical products in more than 400 presentations6. Its product portfolio covers almost all important therapeutic areas, including gynecology, central nervous system and cardiovascular. With its key ACE inhibitor7 Diroton Gedeon Richter has 10 % of Kazakhstan cardio generics market share. Diroton accounts for 63.6 % of company’s total cardio generics sales in Kazakhstan. Antibiotics Dr. Reddy’s Laboratories Ltd is a pharmaceutical company based in Hyderabad, Telangana, India. It entered Kazakhstan market and registered its first products in 1994. Its key therapeutic areas are anti-infective, gastroenterology, pain management, dermatology, cardiology, nutraceuticals, respiratory and oncology.
Generic formulations is the biggest part of company`s business offering over 200 generic versions of expensive innovator medicines. Dr. Reddy’s antibiotics market share is 21% because of sales of the most popular antibiotics Ciprolet. Ciprolet is one of the oldest generic brands of antibiotics in Kazakhstan, having been registered in 1994 and boasting widespread use with different diagnoses.
Key azakhstan Generics Market Players
Established in 2002, Nobel AFF is a leading local pharmaceuticals producer in Kazakhstan with expanding operations throughout the CIS. The company launched production in 2004 with six drugs. Nobel AFF is proud to be GMP certified and the preferred contract-manufacturer of international pharmaceutical companies in Kazakhstan. The company’s production facilities are also used in the quality training of healthcare professionals from across the country while government programs provide stable growth for the demand of local manufacturer Nobel AFF is the nearest competitor to Dr. Reddy`s having a 16% market share. Their portfolio of generic antibiotics includes eight brands with Zitmac and Flunol their leading two. Zitmac is in a group of drugs
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Gedeon richter, company brochure, 2014
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ace inhibitor is a pharmaceutical drug used
primarily for the treatment of hypertension (elevated blood pressure) and congestive heart failure.
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Pharmaceutical Market of Kazakhstan I Key Kazakhstan Generics Market Players
called macrolide antibiotics and is designed to fight bacteria in the body. Zitmac is used to treat many different types of infections caused by bacteria, such as respiratory infections, skin infections, ear infections, and sexually transmitted diseases. It is an adrenocortical steroid, prescribed for skin disorders such as itching, redness, dryness, crusting, scaling, inflammation, and discomfort. The history of World Medicine started in the USA, having stemmed from a family business that began with the production and marketing of only a couple of products. World Medicine has a diversified portfolio, which includes more than 350 medicines in areas such as medicine as therapy, neurology, endocrinology, cardiology, rheumatology, gastroenterology, urology,
pulmonology, and others. An affiliated company was founded in Kazakhstan in 2008. World Medicine’s market share is 11% in antibiotic generics, having a balanced portfolio based on four brands: Orcipol, Fluzamed, Ziromin, Doramycin. Orcipol is a drug used to treat bacterial infections. Fluzamed is used to treat infections caused by fungus, which can invade any part of the body including the mouth, throat, esophagus, lungs, bladder, genital area, and blood. Ziromin is used to treat many different types of infections caused by bacteria, such as respiratory infections, skin infections, ear infections, and sexually transmitted diseases, while Doramycin is used to treat exacerbation of both chronic and acute bronchitis.
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Pharmaceutical Market of Kazakhstan I Trends and New Sources of Growth
PMR predicts an increase in the proportion accounted for by generic medicines in Kazakhstan’s pharmaceutical market over the next few years: “This will occur because of the country’s internal policy, which assumes that the volume share of domestic companies as a proportion of the overall market will have increased to 50% by 2014. Given that there are few Kazakh innovative medicines, the government’s assumption will affect the generic market (and branded generics in particular) more than innovative drugs”, said Agnieszka Skonieczna, PMR Senior Pharmaceutical Market Analyst and report coordinator. Foreign investors consider Kazakhstan to be an attractive market for investment. In 2011 and 2012 several foreign investors signed agreements with Kazakh manufacturers. According to the Association of Foreign Pharmaceutical Manufacturers, foreign pharmaceutical companies have invested
at least €78m into Kazakhstan over the past two years, with this trend expected to continue. However, we expect the current policy to attract more foreign generic manufacturers than innovative manufacturers because of the fact that the reimbursement policy is relatively undeveloped in the country. In addition, the Russia-Belarus-Kazakhstan Common Economic Area will allow increases in imports of generics produced throughout those countries to Kazakhstan. Finally, the GMP standard, which will be implemented by the end of 2014, should bring a new level of quality to the generic market and lead to an increase in the amount of quality branded generics.
CARS for generic medicines in CIS countries, 2013-2015 17,10 %
16,00 %
Kazahstan
Russia
Trends and New Sources of Growth
Source: report «Generic and innovative drug market in CIS countries: Russia, Ukraine, Kazahstan/ Development forecasts for 201 3-2015», PMR, 2013
PMR’s forecast for 2014-2015 is still positive while the company valued the Kazakh generic market at $383 million in 20158.
PMR , http://www.pmrpublications.com/ downloads/pharma
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Marketing in the Pharmaceutical Industry: Specific Features
13 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Marketing in the Pharmaceutical Industry: Specific Features I The Legislative Ban on Advertising of Medicines in the Media
The Government of Kazakhstan pays great attention to the legal regulation of drug information published for end consumers. The legislation of the Republic of Kazakhstan uses various measures to prevent the dissemination of inaccurate and incomplete information about medicines among its population, and also aims to reduce levels of self-treatment without medical advice. The requirements for advertising of medicines are set forth in the Code of RK. Advertising of medicines throughout Kazakhstan’s media is outlawed. The amendments in the law has prohibited the advertising of drugs in newspapers, magazines, radio and TV since November, 2014. Information about medicines is now only to be published in special issues for medical staff in a professional language and with the use of medical jargon/ terminologies. The majority of the local population believes that information concerning for what ailments a medicine can be applied
is useful and should be made public in pharmacies and clinics. In response to requests from citizens the government is considering canceling an amendment for drugs sold without a doctor’s prescription, although advertisements of prescription forms would be prohibited. In addition, in accordance with the legislation of Kazakhstan it is prohibited to advertise unregistered drugs, advertise without a license, and to use children in advertising (including the use of children’s voices) other than for the advertisements of drugs for children. Advertising of medicines cannot be placed on billboards and public transport, as well as in or on buildings that are not related to the prescription of drugs. Pharmaceutical companies do not have the right to distribute ad samples of their products on prescriptions. Medical staffs, who prescribe medication to patients, are not legally entitled to distribute the promotion of medicines, except for scientific and educational purposes and to inform their patients.
Limited in the channels of promoting their products, companies use alternative marketing channels (including digital advertising) and “dark” marketing. Kazakhstan legislation partially regulates these channels and advertising, protecting the general public from unfair, unethical, or false information, which could harm their health. Examples of such wrongful information include cases when medicines have been compared with competitors’ products. Lawful advertising material may not imitate other manufacturers’ corporate style. Advertising that contains false or potentially misleading information about the medicine and the manufacturer, such as false expiry dates, or the omission of anticipated effects of use, is equally unlawful. Advertising that discriminates against individuals who do not use the advertised product, or exerts subconscious influence on the consumer, is banned as well.
The Legislative Ban on Advertising of Medicines in the Media
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Marketing in the Pharmaceutical Industry: Specific Features I Interaction with Physicians during Medicament Distribution
Recent reforms in Kazakhstan bear testimony to a tighter control of the sales of pharmaceuticals to the public, and of the medical sales representatives’ influence upon doctors and medical personnel. The easiest way to exercise such control is to limit communication between the representatives and the medics to monitored public spaces.
medics by promising them material benefits for promoting a certain firm’s products. Such activities, or even the most trivial gifts made to doctors, are punishable by law in Kazakhstan. Some manufacturers ignore this, but companies that value their reputation only use legal channels of advertising and distribution of medicines in their strategies.
In 2012 the government launched the electronic prescription project. Manual prescriptions will be gradually replaced by a digital equivalent. Medical facilities, pharmacies and the Ministry of Health will be utilizing the same programme. The pharmacist will be able to see what has been prescribed by a doctor to his patient before the latter even goes to the pharmacy. The pharmacist will also use this programme to note that he issued the patient with the recommended medical product. Each prescription has a unique code attached to it, and the patient will be unable to purchase medicine with the same prescription on more than one occasion.
Sales representatives of pharmaceutical companies aim to form the required image and brand recognition, as well as a high level of trust towards medical products. The work carried out by medical representatives takes the form of personal contact with potential clients – usually doctors and pharmacists – and they spend a major part of their working time journeying between medical facilities to conduct talks with medical personnel. In order to fulfil his daily norm of visits, a medical representative can only devote a few minutes to conversing with each medic. Moreover, by visiting a doctor during working hours, the representative usually accesses the medic’s cabinet out of queue, distracts him, and takes away patients’ time. This method of interaction between the pharmaceutical companies and the consumers is ineffective. Therefore, the pharmaceutical industry is currently following the trend of multichannel marketing of medical products. Interaction with the doctor, the pharmacist and
Doctors who work at state medical facilities in Kazakhstan are only allowed to prescribe international off-patent medicines to the patients. Pharmaceutical companies’ sales representatives are not allowed to influence
the patient should not be limited to one communication channel. Otherwise, it is not guaranteed to succeed. Widespread use of the internet is considerably more cost-effective for the pharmaceutical companies, and covers a much wider audience. This way, new online solutions, such as social networks, online communities, long-distance education, and specialized websites, will get a wider exposure.
Interaction with Physicians during Medicament Distribution
Furthermore, amongst the major trends in distributing medical products, the strengthening of communication through professional publications is most significant. Clinical conferences also remain a promotional tool, as they do not contravene the changes in legislation. The idea behind organizing such conferences is to provide doctors, manufacturers and representatives of pharmacy chains an opportunity to interact with each other. Certain companies have brought innovative ideas of interacting with medics onto the market. For example, companies are offering doctors free transportation from home to work, or the other way round. During the journey, the doctors can converse with medical sales representatives of pharmaceutical companies. Such an idea has numerous benefits. First of all,
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Marketing in the Pharmaceutical Industry: Specific Features I Interaction with Physicians during Medicament Distribution
it creates psychological comfort for the doctor, and increases his loyalty towards the company, since he is undertaking the journey of his own accord. On his part, the medical representative has more time than usual to talk to the doctor and familiarize him with various medicines. Moreover, the representative is not depriving the doctor of any working time. There are plans at the government level to create a web portal that will control the movement and activities of sales representatives. In the context of stronger state regulations, it is important for the government to provide all the players on the pharmaceutical market with sufficient information about the rules – what is and is not allowed for the purposes of advertising and
promoting products. Experts suggest that professional information (informative materials, directories, computer libraries, postgraduate education) ought to be provided to the doctors by the state. For the purposes of providing the public with high-quality professional information about medicines, the medical information centre RCRZ (Republican Centre for Health Development) was established in 2009 at the initiative of the Ministry of Health of Kazakhstan. During the first five months of 2014 alone, more than 15 000 residents of the country obtained advice about the correct use of medicines through the call centre, as well as through the official website, where all their questions were answered.
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Marketing in the Pharmaceutical Industry: Specific Features I Patient Centered Marketing
All over the world, pharmaceutical companies strive to become more clientoriented. Many such companies amend their marketing strategies by moving away from “sales pushing” and towards the development of quality partner relations with end users and the incorporation of customers’ needs and desires into the business strategy. In the pharmaceutical sector this approach is commonly referred to as “patient centered”. Recently, pharmaceutical companies started to focus on their capabilities and resources pertinent to cooperation regarding satisfying the everincreasing level of patient demands. Patient-centered care emerged as a fullyfledged medical model in the 1970s, thanks in large measure to family physicians at the University of Western Ontario in Canada, led by Ian R. McWhinney, MD. Under pay-forservice or shared-savings reimbursement models, pharmaceutical companies will increasingly be rewarded based on patient outcomes. This moves the focus away from treatment based on indication to proven results for individual patients, removing the incentive for companies to market to volume and increasing the incentive for such companies to play a greater role in preventive care. The customer is changing with the patient now at the center of the value equation.
Recognizing this shifting landscape, providers – the traditional pharmaceutical companies - are adapting their models to prioritize service and care outcomes. The future commercial model of successful pharmaceutical companies must have at its heart the development of genuine partnerships with healthcare providers, payers and other key groups that prioritize quality patient outcomes. There are foundations to build on – the established pharmaceutical commercial model is in some areas already heading in this direction. Some oncology products in Europe, for example, are priced and reimbursed based on outcomes. During the commercial evaluation of a product in the early stages of development, companies prioritize candidates with label claims that show additional therapeutic or safety benefits over best-in class – otherwise payer reimbursement is compromised. The majority of companies are actively developing account management approaches. This means two things: Working closely with providers on new solutions for specific patient populations and critical care groups and accessing patients who are not engaged with the right regimens — a historically difficult proposition. Pharmaceutical companies nonetheless can play a role
based on accumulated knowledge about specific disease states, data and patient behaviors. Working with providers on issues such as population healthcare can provide a win-win-win situation: Patients receive more appropriate care, providers and payers reduce treatment costs, and pharmaceutical products play a central role in delivering the outcome. Pharmaceutical companies should partner with healthcare organizations in order to reach the endcustomer – the patient – more effectively, improve efficiency and reduce costs.
Patient Centered Marketing
Achieving genuine partnerships and a shared focus on the patient with providers and payers will result in a broad-based, holistic and accelerated evolution of the commercial model. As such, this will develop quality of customer (prescriber, provider, patient, and payer) insights; value propositions; customer-facing roles and responsibilities; performance management; channels; training; and systems and processes that support the model in an integrated manner. Dr. Ethan Basch, MD, Associate Professor of Medicine and the Director of the Cancer Outcomes Research Program at the Lineberger Comprehensive Cancer Center outlined what he believes are the key steps to improving drug development and allowing it to be more patient-centered. Step one would be for the drug developer to identify
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Marketing in the Pharmaceutical Industry: Specific Features I Patient Centered Marketing
patient-centered outcomes (symptom, functional, and other outcomes affected by a disease or product and important to patients) through direct patient feedback. Next, pharmaceutical companies should establish plans for measuring and analyzing patient-centered outcomes at structured meetings between the drug development team and the regulatory agency. This would be done throughout the development life cycle of the agent. Patient-reported outcomes would be included in drug labels to help both patients and their providers with treatment decision-making. This would create a pathway for information about fatigue and health-related quality-of-life domains, facilitate qualifications of existing patient-reported outcome measures, and suggest measures of cross-cutting patient reported outcomes that perform well in multiple subpopulations.
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Marketing in the Pharmaceutical Industry: Specific Features I Medicine Marketing Features
Pharmaceutical marketing, sometimes called medico-marketing or pharma marketing in some countries, is the business of advertising or promoting the sale of drugs. The pharmaceutical companies’ budget greatly exceeds their research budget. Marketing in the pharmaceutical industry differs from marketing in the FMCG, where half of the spending on marketing is consumed by product samples and prototypes, and the other half by advertising. Marketing in the pharmaceutical sector includes three main areas of spending. Publications in medical press take up 10-15% of the marketing budget, while promotional materials take up 20-25%. The largest share of the budget is spent by the pharmaceutical companies on organizing medical conferences and various scientific events. Brand safety Brand safety is at the forefront of any discussion with pharma advertisers. According to research from the Winterberry Group9, healthcare and pharma advertisers, more than those in any other industry, understand that brand safety is crucial. There have been many efforts throughout the industry to make the process of brand safety transparent by creating standard operating procedures. In June 2010, the
Interactive Advertising Bureau (IAB)10 created a set of standards which included guidelines on inventory vetting. These standards outline “prohibited” and “nonstandard” content characteristics. While these types of initiatives move the industry forward, and it is important to participate in them, pharma advertisers still rely on their own definitions of safety. For that reason it is essential to make sure safety guidelines adhere to pharma advertisers’ definitions. IAB Inventory guidelines: Prohibited content: Illegal activities (i.e. drug-related content), warez (i.e. illegal file sharing), spyware/malware, copyright infringement. Non-standard content: unmoderated, user-generated content, extreme graphics, explicit violence, profane content, hate content, under construction content, incentivized content. Next feature of medicine marketing is information by colleagues In the pharmaceuticals market, the positive opinion of key decision-makers and colleagues on certain drugs is extremely important. Respected physicians usually give information about cases from their practice and may mention and recommend some medicines to their colleagues and students. Physicians also acquire information through informal contacts with their colleagues,
including social events, professional affiliations, common hospital affiliations, and common medical school affiliations. Some pharmaceutical companies identify influential colleagues through commercially available prescription writing and patient level data. Doctor dinner meetings are an effective way for physicians to acquire educational information from respected peers. These meetings are sometimes sponsored by pharmaceutical companies who use social network analysis to identify key leaders in the scientific community.
Medicine Marketing Features
Articles in specialized medical journals Activities once considered independent of promotional intent, including continuing medical education and medical research, are used, including paying to publish articles about promoted drugs in medical literature, and the alleged suppression of unfavorable study results. By publishing research, analytical overviews and other useful information pharmaceutical companies can increase their own brand power. Digital marketing in the pharmaceutical sphere Since online marketing channels are not regulated by Kazakh legislation regarding the advertising of medicinal products, they are becoming more popular among
eMarketer, Winterberry Group Research. Advertising Professionals in North America Who Believe that Brand Safety is a Meaningful Issue, April 2010 10 http://www.iab.net/about_the_iab 9
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Marketing in the Pharmaceutical Industry: Specific Features I Medicine Marketing Features
pharmaceutical companies. Digital marketing allows companies to reduce field sales force costs, build relationship with customers, learn from online information, and harness web media. One of such digital marketing instrument is email publications, which allows for the creation of targeted messages. It can also deliver the agenda of leadership and their insight directly to the people who are interested in such information, rather than the brand. Online media with useful content provides an addition reach to customers. Blogs, web social networks, podcasts, video debates, shared research, can help generate greater levels of traffic from search engines.
Go to market strategy Another powerful tool for promotion is the go to market strategy. Go to market strategy is a part of marketing strategy usually useful for a new product launch. The main aim of this strategy is to reduce costs for ineffective channels of product promotion and distribution. To implement this approach the company must identify clearly which product they want to introduce to the market, for what target group of customers and how they going to sell it? To create this, go to market strategy plan must focus on a narrow part of the market, and put all its attention to make targeted offers and targeted promotions of a product.
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Generic Medicines
21 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Generic Medicines I What is a Generic Drug?
Most countries provide patent protection of new medicines. This legal act protects drug composition and technology against copying by other manufacturers. When the effect of patent protection of the drug runs out, the legislation allows other manufacturers to bring to market reproduced drugs – generics, i.e. drugs, which are similar to the original. Generics are drugs that are manufactured under the international nonproprietary name or under a new proprietary name that is different from the brand name of the drug developer. Generics may differ substantially from the original manufacturing technology. Thus generic drugs might be manufactured with a different degree of purification, crystallization method, or raw material dispersion. The substance of a generic drug may contain inactive components whose makeup differs from that of the original. These medications may be different in texture, color, and smell. However, the active drug substance is always the same.
Technological differences in the manufacture of generic drugs can have a positive or negative impact regarding its effectiveness compared to the original drug. Despite the fact that generic drugs are considered to be interchangeable with the original, there are researches that dispute the admissibility of the use of clinical trials of the original for the licensing of generic drugs. Medical aspects of competition lies in the fact that in order to prevent negative consequences of the usage of generic drugs physicians must have clear criteria for comparing generics with originals.
Deciding which drug to buy is up to the patient and the decision is based on his or her preferences and financial capabilities. The Good Manufacturing Practice (GMP)11 standard, which will be implemented in the country by the end of 2014, should additionally bring a new level of quality to the generics market and lead to an increase generics value.
What is a Generic Drug?
Generics are identical to the original drug by the chemical composition of the active substance. They are interchangeable with the original drug in the therapy and the prevention of disease. Since recently, in accordance with the laws of the majority of countries, the attending physician do not assign a specific drug and only indicate the international nonproprietary name of the active ingredient in the medicament.
11
http://www.gmpua.com/
Sanofi Kazakhstan. Generics Leadership Strategy 2014 22
Generic Medicines I Patent Protection for Pharmaceuticals
Companies producing original medicines undertake complex new medicine development, making huge investments in scientific research before the production stage. Most of the costs for production of a new drug consist of the costs of development and clinical testing of its effectiveness and safety. Patent protection provides pharmaceutical companies with the temporary monopoly of the market in order to compensate them with for the research costs. The law sets the period of validity of patent protection for pharmaceutical products, which may vary depending on the country in which the pharmaceutical company is based. An extension of the patent term is always limited, and eventually the developer’s monopoly will end. Most countries, including Kazakhstan, have set a deadline of 20 years for patent protection. EU countries and the United States add an additional five years for added protection. Pharmaceutical research and production companies use a variety of strategies
to extend the exclusivity period of their medications on the market and reduce competition from generic companies. Research companies are interested in the maximum extension of time during which they are free to sell their goods at a profitable price for them, and to maximize their income from sales, using different methods of competition in this regard. For example, research pharmaceutical companies often experience lengthy litigation with generic production pharmaceutical companies, which are ready to start producing the first drug counterpart. They do this to delay time, when substitutes enter the market. Usually, the subjects of such trials are the systems of delivery or packaging, rather than the active substance itself. Another approach to reduce competition is to acquire generic companies. Sometimes research companies make an agreement with generic companies, asking to hold the release of the drug for a certain period of time, while many companies at the end of the patent period begin to release their
generic drug themselves. There are legal instruments for the extension of exclusivity of a drug on the market. In the USA, a patent may be extended if a company makes minor changes to the drug: for example, with regard the color or shape of the pills. Until the decision to extend the patent is made, the generic issue is not resolved. Patent protection of the altered product does not prevent the sale of the original product’s generics for as long as the original remains on the market. The new version of the drug with significant changes in its components can be patented, but will require additional costs for clinical trials. Also, under United States legislation, the company, which released the first generic version of the drug after the expiration of the patent, also receives a patent with protection from competition for a period of 180 days. Kazakhstan has no such practice of providing the benefits of patent protection for the generics that are first to enter the market.
Patent Protection for Pharmaceuticals
Sanofi Kazakhstan. Generics Leadership Strategy 2014 23
Generic Medicines I Generics Market
The generics market is currently being actively reshaped – many patents on drugs that were developed during the 1990s, and are in demand all across the world, are about to expire. By 2017, the predicted growth of the world’s generics is set at 36% in terms of value, compared with 27% of the world market in 201212. The fastest growing generics market worldwide is based in developing countries. In Kazakhstan the market share of generic drugs in 2013 was 38% in monetary terms. The subjects of competition in the generics sector are usually the lucrative, popular medicines. When several top-selling drugs’ patents’ expire at the same time in a short period of time there is a phenomenon, which opens opportunities for generic companies called «patent cliff.» There is a sharp decline in sales of original drugs, which occupy a large market share, and make billions of dollars in revenue volumes of pharmaceutical companies. Competition for the buyer on the consumer market, forcing pharmaceutical companies to significantly reduce prices of the original drug and the generic versions of themselves, occur with the release of generics. Typically, generics are sold at a much lower price than the original drugs. The difference can be up to 90%, but most of the generics cost 20-30% less than the original. Some license holders for a drug after a patent expires are forced to withdraw from the market, as their
manufacturing costs are not comparable to the new competitive price.
research already undertaken by the holder of a patent right is considered enough.
The structure of costs for manufacturing drug substitutes looks different. In the manufacturing cost generics have only expenditures directly on production. Manufacturers of generic drugs need not include development and research in the cost of drug. For the generics the volume of generic marketing costs are partly reduced; for example, through marketing campaigns to promote original drugs. Developing countries are buying patents for the production of medicines, and after the patent expires, will not pay for the use of the intellectual property and will produce their medicines at affordable prices.
In Kazakhstan, introducing new original products on the market, or conducting research on bioequivalence when registering a generic drug, does not require clinical trials to be conducted locally. Research that has earlier been conducted by the company in other countries is recognized. However, when registering generics, companies must provide data on bioequivalence with the reference product. Usually, the original product, or a product that is well known and well regarded on the Kazakh market, is used as the reference product.
Most countries require generics’ manufacturers to prove their bioequivalence to the original patented drug for licensing. For example, in Russia, for generic drugs instead of full-scale clinical trials, manufacturers are required to confirm a bioequivalence study and obtain the opinion regarding the toxicological parameters of the drug. This procedure lasts for approximately three months and requires the participation of at least 18 patients. The full original clinical trial of a drug usually lasts for about 18 months. To test a new drug requires at least 150 people. The conduct of clinical trials to confirm the safety and efficacy of the generic is not required. For licensing,
Generics Market
In addition to the chemical composition of the active ingredients in medications the parameters of the active substance release, solubility, absorption time, the duration and the withdrawal of the drug from the body, must match. For the purpose of standardization and the study of drugs’ interchangeability in October 2004, the Office of the FDA, the Food and Drug Administration United States launched an initiative to develop a uniform method of assessing the effectiveness of generic drugs - Generic Initiative for Value and Efficiency, GIVE. The aim of the program is to increase the number and variety of drugs substitutes available on the market. IMS Institute for health informatics. The Global use of Medicines: Outlook through 2017
12
Sanofi Kazakhstan. Generics Leadership Strategy 2014 24
Generic Medicines I Generics Market
On the retail market there are challenges of raising patients’ awareness about existing new medicines, as well as building confidence regarding a new brand. Many consumers believe that the savings in treatment can lead to unknown negative consequences in the future. In particular, one of the marketing methods to influence the distribution of competitors concerns spreading information about the low quality and lack of effectiveness of generic drugs compared with the original. Because of this, one would expect the patient to be suspicious of the cheaper drugs and regard them as counterfeit or fake products, but this is not the case. It should be noted that the decline in prices makes the drug more available for buyers from countries with developing economies.
The choice in favor of generics in public procurement can increase the cash reserve to pay for medical procedures and services to the public. Generic drugs are economically more advantageous for production and can reduce the shortage of medicines on the global markets. Apart from the generics, biosimilars are also being used as a substitute for the original medical product. Biosimilars differ from the generics in that the active ingredient in them is close to the original, but not identical in the chemical structure of molecules. Biosimilars require conducting more additional research and clinical trials during the development, which increases the cost of their production compared with the production of generic drugs.
Sanofi Kazakhstan. Generics Leadership Strategy 2014 25
Sanofi Generics
26 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Sanofi Generics I Sanofi Generics Portfolio in Kazakhstan
Through its Generics Division, Sanofi uses innovation and adapted business models all over the world to make affordable, high quality generic medicines available to patients. Sanofi strengthens its commitment to provide patients around the world with reliable access to valuable and affordable high-quality, safe and effective medicines. The generic drugs have a lower cost than the originals and are therefore high-quality drugs at affordable prices for patients. In addition to being effective therapies, generic medicines also play an important role by enabling health care systems to invest savings in the development of future, innovative treatments. In order to meet the needs of more customers around the world, Sanofi enhances its diversification strategy on the generics market. Strengthening the position of Sanofi in this direction is particularly noticeable in emerging markets. The Sanofi group of companies has seen the addition of the generics company Zentiva in Eastern Europe, Kendrick in Mexico, and Medley in Brazil. In January 2011, Sanofi decided to create a European generic platform under the brand name Zentiva, covering the needs of Western and Eastern Europe, Russia and Turkey regarding quality drugs for the treatment and prevention of a wide range of diseases. The acquisition of Zentiva, which was done in 2009, led to many different issues related
to very strict internal compliance rules. For example, in Kazakhstan up until 2014, the generics business unit was more or less autonomous and required double reporting line (to Sanofi GM, located in Almaty, and to Zentiva GM in Prague) by business unit heads. All these changes and barriers had resulted in negative sales and financial results before 2014. Long-term strategies were undefined, the operating business model was unclear, and the business was losing its market share. Following the reorganization of Zentiva’s business subsection into Sanofi Generics in 2014, new targets were set for the new structure, different for each product. Targets were also set for each category of medicines collectively. To be more specific, there are two main categories: cardiovascular system and antibacterial, of which both include a wide portfolio of different products. The cardiovascular system, also known as circulatory system, is an organ system that permits blood to circulate and transport oxygen, hormones, carbon dioxide, and others, to fight diseases, stabilize body temperature and pH, and maintain homeostasis. In order to help human organisms to fight such diseases, Sanofi came up with wide range of CVS products. To be more specific, it includes Lozap/Lozap Plus, Valzap/Valzap Plus, Torvacard, Cordarone, Coronal, Rosucard, and Tritace. Tritace is an original product of Sanofi, which was transferred to the
generics department as part of portfolio promotion. Lozap is a modern drug for improving patients’ adherence to treatment of arterial hypertension, nonalcoholic fatty liver disease and metabolic syndrome. It reduces the risk of cardiovascular diseases (including strokes) and mortality in patients with hypertension and left ventricular hypertrophy. Valzap and Cordarone are used to treat patients who have suffered a myocardial infarction. Torvacard and Rozucard are used in combination with a diet designed to lower cholesterol levels. Coronal is used to treat patients with ischemic heart disease. Tritace affects the hormonal system regulating blood pressure and blood volume in the body. Regarding the antibacterial category, it is important to mention a few products that play significant roles: Mycomax, Ofloxin, and Azicid. Mycomax is used to treat diseases caused by fungal infections susceptible to fluconazole. Ofloxin is an antibiotic from the group with the top-selling pharmacological antibiotic in Kazakhstan, while Ciprolet (ciprofloxacin), is manufactured by Dr Reddys companies. Ofloxin has a uniquely high rate of bioavailability13 — 99 % and the percentage of excretion in the urine in the active form of the dose to 90 %, significantly outperforms these indicators regarding its competitors. Azicid is an antimicrobial preparation of system action, which exhibits enhanced activity against
Sanofi Generics Portfolio in Kazakhstan
The amount of drug that reaches its site of action in the body, the ability of the drug to be absorbed
13
Sanofi Kazakhstan. Generics Leadership Strategy 2014 27
Sanofi Generics I Sanofi Generics Portfolio in Kazakhstan
gram-positive microorganisms with harder permeable membrane. Sanofi has a retail market share of 4.2 % and is second place. Sanofi in the retail sphere has only 37.4 % of prescription drugs sales, among which half are generics. In Kazakhstan the generics market share is 2.2% and is in tenth place. However, because of the highly diversified portfolio of Sanofi generics in cardio is in second place and for antibiotics, fifth place. In the cardio generic market Sanofi has a strong position because of Lozap/Lozap
plus. It is a key driver with 71 % of Sanofi cardio generics portfolio. In general sales of Lozap indicate that it is even more popular than KRKA`s Enap drugs. Second place in cardio generics portfolio is Coronal with 15 % of Sanofi sales coming from this sector. The key drivers of antibiotic generics for Sanofi are Ofloxin and Mycomax with 77 % of Sanofi sales coming from this sector. In antibiotic generics the company`s market share is 4.8 %.
Sanofi Kazakhstan. Generics Leadership Strategy 2014 28
Sanofi Generics I Marketing of medicines by Sanofi
Marketing in the pharmaceutical business vastly differs from marketing in the FMCG. Achieving immediate sales of medicines is not the main task of a pharmaceutical company’s marketing strategy. Certainly, there might be dishonest players in every business, and some pharmaceutical companies bend the laws and ethical norms by purchasing prescriptions for doctors, offering the latter direct material benefits. However, the modern day ethical practice of distributing pharmaceutical products, which Sanofi adheres to, is to conduct a marketing campaign that is aimed at advancing the therapeutic concept, rather than selling the medicine. A pharmaceutical company can attain a leading position on the market with the help of a balanced product portfolio — a verified combination of quantity and quality of medicines. Furthermore, on the fast-changing pharmaceuticals market, it is important to have a business model that suits the current situation. Only a few years ago, the focus of Sanofi’s business was solely the manufacture of innovative products. However, the company’s business model takes into account the present day trends and demands, which allows it to become one of the leaders on the generics market. The marketing of generic drugs is a significant part of the business. At Sanofi, the spending on marketing channels roughly
corresponds to the spending on medical sales representatives and promotion. In turn, promotion includes the spending on organising conferences and other events, such as round tables, exhibitions and workshops; the costs of digital and printed branded advertising; and the placement of articles and advertising in specialised medical publications. The allocation of spending between these three methods of promotion is also about equal. Medical sales representatives are one of the key assets for pharmaceutical companies. They are not simply vendors – medicines can be sold to patients by the pharmacist in a chemist’s shop. A medical representative is tasked with forming the required brand image among the medical community, and selling the idea of the advantages of treatment regimens that involve Sanofi products to the doctors. Sanofi Kazakhstan employs 32 medical representatives. A professional medical representative has a good knowledge of the product portfolio and the marketing material. He is able to quickly find a way of approaching doctors, grasping their mood, and understanding what their needs are. Although a doctor does not directly benefit from the sales of specific medicines, he is the one who decides which medicine to prescribe his patient. Many people choose which doctor they turn to based on the experiences and recommendations of
their friends and acquaintances. In order to attain a high status among his colleagues and patients, a doctor needs his treatment regimens to be successful. High status and patients’ recommendations can lead to people queuing for a doctor’s services. Therefore, a doctor’s methods of treatment ought to be effective.
Marketing of medicines by Sanofi
Whilst visiting a doctor, a Sanofi medical sales representative tries to demonstrate the advantages of using the company’s products. He exhorts the doctor to the high figures of the product’s bioavailability, and offers the data about the results of clinical trials. The medical representative familiarises the doctor with the effects of various treatment regimens that involve a specific product, listing various facts to back up the claim that Sanofi products outmatch other products for the treatment of a particular pathology. Medical sales representatives have a very stressful job. On average, they spend 50 days per quarter in their ‘fields,’ ie. in close contact with doctors and pharmacists. Pharmaceutical companies use a special coaching method of training medical representatives, gradually improving their qualifications and enhancing the required skills.Duringthetraining,thestandardstepsin selling are being practiced: opening the visit, identifying the doctor’s needs, presenting the products and remedies, demonstrating the benefits, and closing the sale.
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Sanofi Generics I Marketing of medicines by Sanofi
When opening a sales visit, the medical representative will aim to introduce himself to the doctor, and capture the latter’s attention. At this stage, he will make sure that the doctor has some spare time, and focus his attention on a specific group of patients. The medical representative may only talk about topics that are relevant to the work situation. His opening pitch has to be bright. He may use statistics, quotes, metaphors and similes to make the pitch memorable for the doctor. Then, as the conversation progresses, the medical representative will try to identify the problems that the doctor and his patients encounter during treatment, and to find out what the desired results are. The medical representative will enquire whether or not the doctor has the experience of using a suitable product, and ask about the determining factors that influence the medic’s choice of therapy. Once the problems have been identified, the medical representative will draw attention to the benefits of using the Sanofi product. He will demonstrate how the product on offer will resolve existing problems and their consequences in treating a specific group of patients, and how it will help achieve the desired results. Furthermore, the medical representative will demonstrate how the product will satisfy the doctor’s needs, on the account of the product’s attributes such as
its safeness, effectiveness, convenience, dosing frequency, cost-effectiveness, or prestige. After introducing the product, the medical representative’s next significant task will be to obtain the doctor’s opinion about the product, identify the essence of any objections or doubts that the medic may have, and provide one or two arguments to use the treatment. Dealing with objections is essential for the final stage of the sales visit — obtaining the doctor’s agreement to use the product for treating a group of patients, or arranging another visit, where problems will be discussed in more detail. On a typical working day, a Sanofi medical sales representative conducts around 14 working visits. Doctors are divided among the medical representatives, and they are ranked in accordance with their influence within the medical community, patient flow and company loyalty. On average, there are up to 200 clients — doctors and pharmacists — attached to each medical representative. All clients are segmented into three categories. Some clients are being visited by the medical representatives more frequently than others. As a rule, the frequency of visits is a unit of account, and depends upon the client’s category and his potential. For example, around five medical representatives are needed to visit 1160 therapists and
80 endocrinologists about the product Lozap, while visiting 300 cardiologists about all the available products may require three representatives. The calculations are based on the assumption that every doctor is being visited by a medical representative at least once a month, while the most influential specialists are being visited on a weekly basis. Therefore, the number of medics in a medical representative’s database may change, depending on the doctors’ potential. A short visit, lasting around 15 minutes, is sufficient for a medical sales representative to demonstrate the benefits of 4 or 5 products to the doctor. With him, the representative carries medical marketing materials, which are frequently stored in paper carriers, although from 2015, mobile tablets will be more widely used to provide the doctors with information. Sanofi representatives are categorically forbidden to give out test samples, as this would be equated with selling the product, and be viewed as an act of corruption. Gifting souvenir products, such as calendars and pens, is also forbidden. The medical representative’s main tool is a convincing presentation of the therapeutic concept. He ought to have a good grasp of pharmacological nuances to ensure that his presentation of the benefits of Sanofi products is helpful and clear to the doctor.
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Sanofi Generics I Marketing of medicines by Sanofi
Aside from working with doctors, the scope of a medical representative’s activity also includes the monitoring of pharmacies. The representative needs to make sure that once the patient leaves the medical facility with a prescription on his hands, the prescribed product is available to him in all the nearest pharmacies. Otherwise, the ultimate aim of pharmaceutical marketing — to sell the medical product — will not be achieved. The medical representative’s influence on a pharmacy is minimal. However, he can ensure that the pharmacist is aware of the existence of the promoted product, and if a customer presents a prescription that contains an internationally unpatented name, or an analogue that is unavailable at the pharmacy at the time, the pharmacist may offer the Sanofi product as a replacement. However, such activities are of a strictly informative nature, and are not supported by any material interests that pharmacies may have in selling the products of a specific firm. Another tool of pharmaceutical marketing is organising and sponsoring events that shape the public opinion within the medical community. Expert opinion plays
an important role in the choice of treatment regimens within the medical circles. Doctors listen to the recommendations of their mentors and respected colleagues. To ensure that their materials reach their colleagues, medics also take part in round tables that are organised and sponsored by pharmaceutical companies. Sanofi organises large conferences several times a year. Sanofi also sponsors a number of specially selected medics, for them to attend international workshops. The company organises all of this without asking for anything in return from the medical personnel, and reports to the external auditor about its activities. The peculiarity of modern day specialized media materials lies within the fact that increasingly, medical publications are available not only in printed form, but also in digital space, which has a wider audience reach. In order to strengthen the brand, marketing material used in specialized journals will include not only direct advertising, but also analytical articles, as well as reviews of products and therapy regimens.
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ApplicationS
32 Sanofi Kazakhstan. Стратегия лидерства в дженериках
Applications
Pharmaceutical retail and budget Kazakhstan market dynamic (Total market, M Euro)
Application 1. CAGR 2009 - 2013
Source: Sanofi
Sanofi Kazakhstan. Generics Leadership Strategy 2014 33
Applications
Promotional materials, the most useful from the doctors’ point of view
0
10
Application 2.
% of surveyed physicians 20 30 40 50
60
70
Advertisement of separate preparations Detailed description of the drug Brochures for patients Data from clinical trials (domestic) Information on the availability and price of medicines in pharmacies Data from clinical trials (foreign) Copies of scientific papers (domestic) Copies of scientific papers (foreign) Promotional brochures about the company Schemes (standards) of diagnosis and treatment Posters Price-lists of the company Medical literature Periodic medical publications (magazines) Catalogues drugs companies Reference books of drugs Monographs Information on CD and DVD players frequency of use by REPs
frequency of use by physicians Source: Comcon Pharma
Sanofi Kazakhstan. Generics Leadership Strategy 2014 34
Applications
Five key steps of medical representative visit to a client with optimal time spread
Application 3.
40 %
30 %
10 %
Visit opening
Identification of the needs
Presentation of product/therapy
10 %
10 %
Presentation of benefits
Sales closure Source: Sanofi
Sanofi Kazakhstan. Generics Leadership Strategy 2014 35
Applications
Sanofi Ofloxin generic characteristics in comparison with other drugs 0%
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
Application 4.
90 % 100 %
Ofloxacin Lomefloxacin Ciprofloxacin Norfloxacin Pefloxacin Moxifloxacin Sparfloxacin
bioavailability
percentage of excretion Source: Sanofi
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This case study was prepared by Changellenge>> — the leading case organisation in Russia www.changellenge.com info@changellenge.com vk.com/changellengeglobal facebook.com/changellenge
This case study was written for Sanofi www.sanofi.ru
37 Sanofi Kazakhstan. Стратегия лидерства в дженериках