Healthcare ad agencies chime in on recall incentives
February 11, 2010 – 11:16 am by Gina Monari
This month, General Motors took advantage of Toyota’s recall misfortune and public relations silence by revealing a shiny new purchase-and-lease incentive program targeting Toyota and Lexus customers. GM’s program running through February, allows Toyota owners who end their lease to receive up to $1,000 off a new or leased GM vehicle. The offer applies to the automakers Chevrolet, Cadillac, Buick, and GMC vehicles.
In the past, healthcare has followed consumer-marketing trends. Although the only major healthcare recall headliner so far in 2010 has been Johnson & Johnson/McNeil Consumer Healthcare’s massive recall of OTC drugs including Tylenol, Motrin, and St. Joseph’s aspirin because of a moldy smell that made people ill, there has also been the banning of Abbott Laboratories‘ controversial obesity drug Reductil across Europe due to cardiovascular safety concerns; Nipro Medical Corp.’s voluntary recall of All GlucoPro Insulin Syringes; the Class I recall of ev3 Endovascular Inc.’s Trailblazer Support Catheter; and BD’s worldwide voluntary recall of BD Q-Syte Luer Access Devices and BD Nexiva Closed IV Catheter Systems.
So, being the marketing-minded pharma gal that I am, of course, my first question was: ‘Where are all the pharmaceutical recall incentives?’
The Med Ad News Insider corresponded with Rob Peters, VP, professional strategy, MicroMass Communications Inc., and Nancy Drescher, VP, account director, AbelsonTaylor, to glean healthcare ad agency insight into the idea of pharmaceutical recall incentives.
According to Mr. Peters, with increased publicity on product recalls — whether in consumer goods or pharmaceuticals — the question of whether competitors can use the situation exists.
In the pharmaceutical industry, this has already been occurring, though in a much less visible way than the GM example, he says. In most cases, short-term gains may be possible, but those often come at the expense of higher scrutiny on remaining products and more difficult market entry for developmental compounds.
There are several reasons why branded products disappear from the market. Usually this is the result of patent expiry or a withdrawal related to a negative event or safety concern. When something like this happens, remaining market competitors may be able to use the situation to their advantage. Mr. Peters believes as a result of the complexity of FDA and regulatory issues, however, competitors can not usually adapt quickly enough to take advantage of the immediate situation, but can change strategy to accommodate the new market dynamic that evolves in the wake of the withdrawal.
Competitors faced with this opportunity have to assess whether there are actions they can take, or whether they should let market forces work on their own. If the withdrawal of a product results in a small market with little competition, remaining players may choose to stay the course.
“For example, when Novartis’s Zelnorm was taken off the market, Takeda’s Amitiza was suddenly the biggest branded player in the IBS market,” Mr. Peters told the Med Ad News Insider. “Since HCPs and patients had few other options, Takeda let market forces turn the tide rather than to respond.”
On the other hand, he says, if a highly competitive market remains, a company may react by shifting the messaging to focus on other competitors to establish its points of differentiation. In some cases, this may necessitate a company’s distancing itself from any perceived class effects before differentiating.
“When Vioxx was pulled from the market, for example, the response from Celebrex was not to also pull its product from the market, but to stop promotion, ride it out, and then come back with stronger language around the appropriate patients and the safety concerns for Celebrex,” Mr. Peters says.
In a similar manner, when the statin Baycol was taken off the market in 2001, safety became a more sensitive issue for competitors, and as a result, a point of differentiation in promotion. This was beneficial for in-market products, but made entry of later competitors like Crestor more difficult.
In certain cases, regulatory bodies play a key role in opening opportunities for potential gain. Recently, Genzyme’s manufacturing problems with Cerezyme prompted FDA to ask Shire and Protalix to submit new drug applications for their experimental drugs so that physicians could use them before formal approval. Shire and Protalix will likely benefit from that action, but there is nothing they themselves can initiate.
Patent expiry presents another interesting opportunity for companies to profit from a branded product leaving the market. In these situations, branded companies may choose to enter into a supplier partnership with a generic company and provide product in return for a greatly reduced, but enduring, profit. One example of this may be seen in a current online campaign by Merck in the hypertension market.
“The campaign is aimed at informing HCPs about the impending generic form of Cozaar, however, the campaign includes a message recommending that patients be put on branded product so that they can continue uninterrupted use of the drug—and at a lower price—once generics are available this spring,” Mr. Peters says.
Two possibilities exist for this strategy: 1) Merck may be trying to head off another drug from that class that goes generic a few months before they do,or 2) the company may have an agreement with a generic supplier to manufacture its drug.
Ms. Drescher says there have been examples of products and companies in the pharmaceutical space benefiting from the misfortune of competitors. The actions taken in response to the negative press associated with pharmaceutical brands, however, have typically come from other players in the space versus the pharmaceutical companies themselves.
“The most recent analog that best mirrors this example is the failure of Vytorin/Zetia to affect atherosclerosis progression by failing to slow the growth of plaque in the carotid arteries in the ENHANCE trial,” Ms. Drescher explains.
Soon after, Vytorin/Zetia suffered another blow when the SEAS trial delivered disappointing results. Not only did the brand fail to affect outcomes in aortic stenosis patients, there was an observed increase in the risk of cancer.
“Physicians were quick to turn to generic simvastatin as a result,” Ms. Drescher says. “Astra Zeneca’s Crestor also benefited as the product was already indicated for the treatment of atherosclerosis and had just demonstrated an impact on cardiovascular outcomes in the JUPITER trial. Managed care companies were additionally quick to promote the lower cost — and lower co-pay — alternative simvastatin directly to patients in their plans taking Vytorin and Zetia.
Ms. Drescher cites an example that dates back to the ’90s, which took place in the highly competitive antihistamine market. Claritin had been held up for review for several years with FDA. With Seldane on the market and Hismanal already under review, FDA viewed Claritin as a me-too drug. It was classified as a low priority review, calling into question its efficacy — which was slightly better than placebo — and safety — concern with increased liver tumors in animals — given the two other nonsedating alternatives.
When serious cardiovascular adverse events were reported with Seldane, FDA required Dear Doctor letters to be issued regarding its impact on QT interval prolongation and ventricular arrythmias. As the number of incidences increased, FDA updated the Seldane and Hismanal labels and required their promotions and packaging to include a black box warning. In addition, the agency recognized the benefit of having an alternate safe, nonsedating antihistamine on the market, and approved Claritin not long after.
“Given the negative publicity around Seldane and Hismanal, physicians and patients turned to Claritin and it quickly became the market leader,” Ms. Drescher says.
In both cases, other forces — whether physician, patient, managed care or FDA — were responsible for pushing a competitive brand, she says. In the case of branded competitors, the pharmaceutical companies used promotions and messaging to reinforce their brand benefits, but the push, and desire, for an alternate choice was already in play.
“In the case of generics, managed care organizations typically have the most to gain from a move to a generic competitor, so they tend employ aggressive marketing tactics to generate a switch,” Ms. Drescher says.
