STRATEGY CASE. English Version. Case written by the company

Transcription

1 STRATEGY CASE English Version Case written by the company without prior written permission of Pfizer Canada. This material is for use at the Jeux du Commerce 18 case competition only.

2 BACKGROUND & INDUSTRY Company Overview Pfizer Inc. is a global research-based pharmaceutical company founded in 1849 by German- American Charles Pfizer and his cousin Charles F. Erhart. At the time of its inception, the company produced only one medication, an antiparasitic by the name of Santonin. This medication was an immediate success and kick-started Pfizer's growth in the 1880s. Throughout the 19th and 20th Century, Pfizer continued to grow, producing Penicillin during the Second World War and being key pioneer in medication development at the time. By the 1950s, Pfizer had established offices in major world markets such as Belgium, Brazil, Canada, Mexico, Panama, Puerto Rico, and the United Kingdom. In 1960, the company relocated its medical research laboratory operations out of New York City to a new facility in Groton, Connecticut. During the 1980s and 1990s, Pfizer developed, produced, and began marketing some of the most globally notable and successful prescription medications including Celebrex, Lipitor, Norvasc, and Viagra to name a few. Today, Pfizer Inc. is the world's leading research-based pharmaceutical company, with offices in over 20 countries around the globe. Operating in a vast variety of markets, Pfizer has grown to become a very powerful brand known for its trust, quality, and reliability in the healthcare field. Pfizer has a strong presence in Canada. The company s Canadian head office is located in Kirkland, Quebec, which is where all marketing for prescription medications occur. The Canadian head office for Over the Counter (OTC) medications, such as Advil and Centrum, is located in Mississauga, Ontario. Under Canadian law, Pfizer Canada is subject to the local Canadian healthcare marketing regulations. Over time, Pfizer has also developed expertise in the following Research & Development (R&D) therapeutic areas: Cardiovascular and Metabolic Disease, Immunology, Inflammation, Neuroscience, Oncology, Vaccines and Pain and Sensory. This goes to demonstrate Pfizer s ever-evolving exploratory research based business model and its commitment to the wellbeing of all of its stakeholders. (See Exhibit 1) Strategy Case 2

3 Concepts and Dynamics to Consider: Canadian Innovative Pharmaceutical Companies: These companies invest more than $1 billion every year into R&D to find new ways of treating and curing illnesses and diseases. Canada has some of the best researchers and scientists in the world, and a vibrant life sciences sector. Some of the world s greatest medical discoveries have come from Canadian scientists; insulin is a great example of how Canadian innovations change and save lives. At present, there are more than 500 new products in development in Canada, including therapies focused on cancer treatments, infectious diseases and vaccines. These products have the potential to help Canadians and people all over the world live longer and healthier lives. Highly regulated industry: The pharmaceutical industry is relatively complex due to numerous factors, and is highly controlled by government regulations. One very important concept to understand is that globally and locally, each market needs to comply with the country s legislations governing the industry. Violations are publicly reported. In Canada, the following regulatory bodies are in place: o Health Canada: In order to obtain product approval from Health Canada, stringent requirements must be met through controlled studies in which the efficacy and safety of a product are demonstrated. o Advertisement and Promotional Activities: These activities are as well governed by a body of Health Canada that ensures that advertising of prescription medications for HCP s and Consumers is accurate, balanced, evidence-based and is consistent with the approved usage of the medication. It as well ensures that interactions with HCPs are appropriate and reasonable. (See Exhibit 2) o Reimbursement: There are provincial and private insurance plans. Provincial plans cover government workers, the elderly and people that cannot afford healthcare. People that work for private companies have private insurance plans that provide healthcare benefits to its employees. Once products are approved by Health Canada, various reimbursement bodies review the medication to determine the value (cost/benefit ratio) it brings and how much payers can afford and are willing to pay for the medication. It can take up to months to get provincial and public reimbursement of the medication. (See Exhibit 4) Strategy Case 3

4 Timelines to bring a product onto the market: A brand-name innovative medication is originally discovered and developed by a research-based pharmaceutical company, such as Pfizer. During this research and discovery phase it is estimated that an average of $2.6 Billion is spent on bringing a prescription medication to market over a period of years, which includes the cost of failures. It is also important to note that during this period of heavy investment the launch company invests heavily not only in the medication itself but in the therapeutic area as a whole and provides educational information about the therapeutic areas to both healthcare professions and patients. Once a promising compound has been identified, Pfizer needs to apply for patents in order to protect its intellectual property, the medication s active ingredient from being replicated by other manufacturers. These patents are put in place to allow companies such as Pfizer to sell and market their medication exclusively and recuperate their research and development costs. Pharmaceutical industry investments are as well made in the Life Science sector to further advance research and understanding of various disease states. Funds that are recuperated are reinvested into Research and Development to find novel solutions for health conditions such as cancer or hypertension. Despite the fact that pharmaceutical patents last around 20 years, the actual commercial life is normally 5 to 6.5 years due to the requirements to gain reimbursement of the medication. (See Exhibit 3) Loss of Patent: Once a patent expires on a brand-name innovative medication, the unique active ingredient in the medication is revealed by Health Canada and may then be produced by 3rd party manufacturers. These 3rd party medications are known as Generic Medication. A noteworthy point about generic medications is that since there are very low research and development costs associated with the product, the medication is able to be sold for a fraction of the cost of the original brand (approximately 10% of the original branded medicine price). Access to New Therapies: For countries that encourage high use of generic products such as New Zealand, patients do not have access to most current and advanced therapies. For example, once a new oncology product is launched in the US, it is not available until 3-4 years after the US launch and in some cases not available at all since governments are not willing to reimburse the new innovative branded product. Strategy Case 4

5 KEY EXTERNAL STAKEHOLDERS AND THEIR ROLE IN THE INDUSTRY There are many external stakeholders that play a monumental role in how the industry functions and contribute to the overall reputation of the pharmaceutical business sector: Health Care Professionals (HCPs): A health care professional or healthcare provider is an individual who provides preventive, curative or rehabilitative health care services to people, families or communities. HCPs include family doctors, specialty care doctors, nurses and pharmacists. In Canada, there are about 38,000 general family practitioners/primary care physicians. HCPs are highly exposed to the pharmaceutical industry in various ways. For the most part, HCPs will be seen by pharmaceutical representatives to receive information on promoted medications, continuing education events and will attend congresses which are organized by medical associations and sponsored by pharmaceutical companies. Similar to the general public, they consume media news and they themselves are patients that use pharmaceutical products. Some HCPs also work with the pharmaceutical industry as researchers, speakers and consult on advisory boards. (See Exhibit 5) Provincial Government and Private Payers: Once products are approved by Health Canada, Provincial Government and Private Payers determine review the medication to determine the value (cost/benefit ratio) it brings. They will determine whether the medication is reimbursed for the patient. These groups are facing stable or contracting drug budgetary pressures. Advocacy Partnerships with Patient Associations: Patient groups are focussed on providing education and advocacy for greater patient and physician choice in the availability of drugs available to treat their conditions. They as well advocate for R&D investments into advancing treatments. These groups can range in size and scope. Pharmaceutical companies engage with the patient associations for educational initiatives and advocating for reimbursement to ensure greater patient choice. Examples of these groups include the Canadian Lung Association, The Arthritis Society, the Canadian Cancer Society. Strategy Case 5

6 The Media: Information about the pharmaceutical industry can come in many different forms: news articles, internet chat rooms, social media, etc. The media plays an integral part on the perception of the pharmaceutical industry and their reach is endless. The Canadian population not only consumes Canadian based news but due to close borders to our southern neighbour, the average Canadian also consumes a large amount of Americanbased news. Approximately 5 years ago, there were some cases in which certain pharmaceutical companies undertook inappropriate practices. The reports were highly publicized and resulted in significant fines that had to be paid by the pharmaceutical manufacturers. Many self- regulations were put in place by the pharmaceutical companies. However, the negative perceptions may still linger and can affect the way Canadians believe business is done in our market. The cost of medicines constitutes approximately 14% of the overall Canadian expenditure on healthcare. The government has set budget with the goal of not increasing or reducing the overall expenditure on drugs. In light of this, there has been a great deal of negative media centered on the high cost of branded versus generic medications. Unfortunately, what the reports fail to mention is that the revenue from the branded drugs go into funding R&D for new breakthroughs in areas such as oncology and that Canadians have later access to innovation in medicines due to the delays in reimbursement which take up to months. The General Public and Patients: Throughout one s life, there are many moment where an individual will need healthcare and will benefit from the medications offered by the pharmaceutical industry. In all of their business efforts, Pfizer makes it their utmost priority to be patient-focused. Whether it is creating an advertising campaign or developing strategies for access to medication, the well-being of the patient is at the center of their decisions. The general public and patients consume the majority of their information about the pharmaceutical industry via the media and internet. Rarely does the general public know about the stringent regulations governing the industry to ensure that companies are Strategy Case 6

7 operating in an ethical manner. Major news headlines and negative press articles are what normally generates a great deal of controversy about our industry and taint the perception of consumers. CURRENT INDUSTRY S BUSINESS PRACTICES Field Force Representatives and Sampling: The role of a field force representative is to bring information to HCPs about their products and the therapeutic area in accordance to the brand strategy. Their objective is to engage in meaningful dialogue to understand the needs of HCPs and identify how their product and services can be an appropriate solution, all while achieving their sales objectives. Field force representatives deliver their brand message and information through 1:1 appointments, in between two patients, at the pharmacy counter or through lunch and learn sessions. One way for HCPs to get familiar with the company s products is through sampling. Depending on the therapeutic area, representatives will have samples of their product to deliver to their key target HCPs. Continuing Health Education (CHE): The mandate of a representative is also to organize continuing education events for the HCPs in their territories or regions. CHEs are important to HCPs as they deepen the knowledge on the therapeutic area. CHE events are often sponsored by one or many pharmaceutical companies however the content is created and delivered by health care professionals. Continuing education events are conducted strictly for educational purposes and promotional activities are not allowed. This means that the information must be unbiased towards a product or the company sponsoring the event. Direct to Physician Advertising: As previously mentioned, physicians and other health care professionals are exposed to industry advertising in many different ways. Representatives are equipped with branded promotional tools on their products, all approved and reviewed by Canadian Regulatory bodies, to help them deliver their key messages to their customers. At congresses, there are often company booths and sponsored symposiums (presentation). Physicians will also Strategy Case 7

8 receive targeted promoted communications through and/or by fax. Lastly, physicians are also exposed to promotion and other media advertisements through commercial channels. Corporate Philanthropy: Pfizer Canada along with several other pharmaceutical companies embark on sponsorships such as the Canadian Paraolympics, West Island Cares, Pfizer Matching of Employee Charitable Donations, and Company-Wide Charity Volunteer Day. ISSUES The pharmaceutical industry is constantly scrutinized by the media and in turn pharmaceutical companies have a less favorable reputation with the general public. The following are some of the major issues that innovative pharmaceutical companies, such as Pfizer need to deal with: 1. Education Gap: Lack of education on what it takes to bring an innovative product to the market and the investments required by pharmaceutical companies to provide patient and HCP education about therapeutic areas and advancements these new products bring to the medical community. 2. Lack of knowledge across key stakeholder groups about the stringent processes and governing bodies that regulate the pharmaceutical business in Canada. 3. Misconceptions and misunderstandings about how innovative medicines vs. generic medicines are priced in Canada and the various investments into R&D. 4. Outdated and viewed as ethical practices of the pharmaceutical industry from the past that discredits our ethical practices of today. 5. Fake news and/ or ill-informed and untruthful media publications tainting the corporate image. 6. Lack of feedback mechanisms from consumers/patients to HCPs and governments on impact of having access to innovative brand medicines Strategy Case 8

9 7. Changing methods of information consumption of consumers/patients and HCPs (ie. increased use of Digital channels to get and send information and engage with audiences) MANDATE Pfizer has given you the mandate to develop strategic and tactical recommendations to measurably impact the company s reputation, sales, and enhancing HCP/patient/consumer interaction/feedback over the short term (1 year), medium term (3 year) and longer-term (5 year). The recommendation offered should include an analysis of the key audiences and prioritization of the strategies and tactics. Pfizer Canada Inc. is a big player in the pharmaceutical industry in the Canadian market. (See Exhibit 6) The strategic recommendation for Pfizer Canada should strive to foster an environment that is supportive and can help pave the way for the industry at large. Strategy Case 9

10 EXHIBIT 1: Strategy Case 10

11 EXHIBIT 2: Healthcare Professionals Advertising: Health Canada requires that advertising materials for all health products directed to health professionals are reviewed and pre-cleared by the Pharmaceutical Advertising Advisory Board (PAAB), an independent agency recognized by Health Canada. The PAAB ensures that advertising of prescription medications for HCP s is accurate, balanced and evidence-based. They review all advertisements, including but not limited to: journal ads, direct mail, detail aids, service vehicles, telemarketing and any audiovisual/electronic/internet advertising. Pfizer Canada operates under the strict rule that all of its marketing communications to HCP s and HCP projects must pass this verification process and adhere to PAAB s regulations at all times. The following are a few of the guidelines imposed by PAAB: All References must be listed and available when marketing a medication Claims must accurately interpret valid and representative research findings Company s own promotional material must not be the only sole support of findings All warnings must be bolded and apparent Advertisements will be deemed misleading if they have any of the following: o Failure to reveal a material fact o Off-label claims o Outdated or contradictory data o Conclusions from different studies o Use of non-clinical data for clinical claim o Data from an inadequately designed study o Lack of context o Misuse of statistics o Lack of prominence of bad news Along with those guidelines, all HCP advertisements must be preapproved by PAAB, a process which can take anywhere from 1-3months depending on the complexity of the Strategy Case 11

12 review and internal processes of the company in question. Furthermore, all advertisements must also pass an internal review by Pfizer s medical, legal and regulatory bodies. Consumer Advertising: Another large limitation is with regard to the Food and Drug Administration (FDA) regulations is that in a consumer advertisement, only the medication name, price and quantity can be stated in Direct To Consumer (DTC) advertising. This is extremely important as no information about the actual uses of the medication can be presented. This is due to the fact that prescription medications are prescribed specifically for the patient of that medication and not for the general public. In order to understand this, take for example the prescription medication Lipitor. In a Lipitor advertisement a marketer could use the name of the medication but not make any messages as to what the medication actually treats. These are very strict rules and in some cases even apply to the imagery associated with advertising which may hint at the indication of the product. Although branded advertising is quite strict, advertising that relates to simply a therapeutic area or disease state is not subject to the name, price, quantity rule. For example, a consumer advertisement that would only focus on educating the public on the signs of depression and importance to consult their doctor. When producing DTC advertisement, Health Canada requires that advisory opinions on messages directed to consumers for prescription drugs and on educational material discussing a medical condition/disease be provided by either PAAB or ASC (Advertising Standards Canada). PAAB or ASC provide advisory opinions on messages directed to consumers for prescription drugs and on educational material discussing a medical condition/disease to ensure that they meet the regulatory requirements. Advertising Standards Canada (ASC) is the national not-for-profit advertising self-regulatory body. As Canada s advertising self-regulatory body, ASC administers the Canadian Code of Advertising Standards (Code), the principal instrument of advertising self-regulation in Canada. The Code sets the criteria for acceptable advertising and forms the basis for the review and adjudication of consumer and advertising disputes. Similar timeline applies with regards to ASC approval and it must also be noted that in some instances both PAAB and ASC must be consulted as some advertisements are directed towards multiple stakeholders. Strategy Case 12

13 EXHIBIT 3: Strategy Case 13

14 EXHIBIT 4: Strategy Case 14

15 EXHIBIT 5: The following are slides from a study on HCP communication from the pharmaceutical industry: Strategy Case 15

16 Strategy case 16

17 EXHIBIT 6: Strategy Case 17

18 EXHIBIT 7: DISTRIBUTION PROCESS Strategy Case 18