Vioxx and the End of an Era 7 Reasons We Can’t Stuff the Genie Back in the Bottle Donald Phillips CEO Single events don’t equate with trends. Some events serve as powerful indicators of broader forces. The withdrawal of Vioxx, and its ramifications, speaks volumes. In 2005, a new era in the pharmaceutical industry begins. As external conditions changed, professional promotion, DTC, and thought-leader visibility strategies have not kept pace. The marketing implications are striking. The Seven Reasons 1Many powerful interests outside the pharmaceutical industry now concern themselves with what the industry does (and how). Their interventions increasingly influence industry pricing, operations, and marketing flexibility. 2The Medicare Modernization Act will force the federal government to become a major player in fighting rising healthcare costs, including the costs of pharmaceuticals. Expect more government-sponsored head-to-head comparisons and pharmacoeconomic analyses that drive more segment and niche marketing. 3Blockbuster thinking will decline. Fueling growth via blockbusters creates an inevitable need to expand markets. Yet, unrestrained consumer-style marketing of drugs leads to serious and unabated criticism — and consequent regulatory and legislative pushback. 4Segment and niche marketing will replace blockbuster thinking. Forces in science, economics, and regulation are converging to curtail the effectiveness of blockbuster thinking. 5Corporate, portfolio, and industry branding will become more critical. Poor public understanding of risk, science, and economics has led to unrealistic expectations about costs, discovery, and safety. Unrestrained promotion of individual brands adds fuel to the fire. 6 Weak visibility strategies have led to challenges to off-label and related marketing practices just as the pharmaceutical industry accelerates its discovery of the diverse therapeutic uses of new and existing complex molecules. 7Product-driven branding risks positioning pharmaceutical firms largely as manufacturers of “pills,” a visibility that invites commoditization. Pharmaceutical firms need to build corporate brands that emphasize their role as providers of healthcare services. The Visibility Agenda for 2005 and Beyond: Truly Integrated Communication To counter growing threats to operating flexibility and margins, attention to portfolio, corporate, and industry reputation must at least rival attention to individual brands. True integration of public affairs, marketing, and communications must increase in importance. And, these all must align. This is the best way for pharmaceutical manufacturers to help the U.S. healthcare system respond to its fundamental challenges. Among these challenges: managing over-use, under-use, and misuse; improving patient communications; promoting compliance; increasing safety; and enabling access. The Bottom Line Professional and DTC visibility strategies aren’t enough anymore. A more complex visibility model must emerge. Attention to industry, corporate, and portfolio brands requires a model that links external intelligence, public affairs, marketing (in its broadest sense, which includes product development), and sales. Healthcare needs the pharmaceutical industry as a full-fledged player. Vox Medica Inc., Philadelphia, is a full-service healthcare advertising and communications company. For more information, visit voxmedica.com. March 2005 VIEW on Advertising The Promotional Mix

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