Building Big Pharma Brands

http://www.expresspharmaonline.com/20100715/market01.shtml

With an eye to become more visible to their customers, Indian pharma companies realise that they need to get into a major branding exercise, especially as attention shifts to the over the counter (OTC) sector. Usha Sharma analyses ... The Indian pharmaceutical industry has emerged as one of the most attractive markets globally as its growth continues to outperform the growth of the global industry & particularly markets such as US & in the EU. According to the Ministry of Commerce, domestic investment in the pharma sector is estimated at $ 6.31 billion. With intense competition, it is becoming more important to build an emotional bonding & a relationship of trust & comfort with the customer to ensure loyalty & hence consistent sales. Hence there is a need to differentiate a product from competition & establish a positive image of the drug & the company in the eyes of the customer. In fact, a distinct brand image is the best security a company is likely to have against competition. Therefore companies are spending more & money with an extensive effort on brand building. This is seen mostly in pharma companies which have over-the-counter (OTC) products like Dabur, Paras, P&G, J&J, GSK, Pfizer, Emami , Piramal, Ranbaxy & Heinz are some of the leading players in the Indian OTC segment. Overall, well renowned brands like Revital (Ranbaxy), Smyle, Glycodin (Alembic), Crocin (GSK), Moov, Ring Guard, Itch Guard, DCold, Krack (Paras Pharma), Lactocalamine, Supractive, i-pill (Piramal), Digene (Abbott), Gelusil (Pfizer), Sugar free (Zydus),etc. have succeeded in establishing customer loyalty & positive brand images. The importance of branding in the pharma industry is also evident from the several brand acquisitions in the recent years. The fact that 25% of Pfizer's revenues come from one brand (Lipitor) has often been cited as the importance of branding. While no amount of marketing can yield profits for a failed product,explains Hitesh Gajaria, Executive Director KPMG, it is also true that attractive graphics and design, good packaging play a role in prescription medication, as there are a large number of products that the physician is exposed to on a daily basis. The sustainable growth is driven by strong socio-economic drivers luring several domestic companies, many of which have been predominantly export market-focused, to expand their presence and build a stronger foothold in the Indian market. Gajaria emphasises on thrust of the pharma OTC branding in the current scenario, A brand can be termed successful in the pharma sector if doctors are motivated to prescribe it. It may be important to link a desired emotion with the brand because it is often observed that the best way to grab attention is by evoking an emotional response. Most importantly, it is vital that the product should be efficacious & able to deliver. Shakti Prasad Chakraborty, President of India Region Formulation Lupin shares Lupin's branding strategy and highlights the product relevance in the market, Lupins flagship brand 'Suprax' in the US or 'Tonact' in India will still resonate with paediatricians and patients alike, so it is important to us to form this association. Branding pharma products is much like any other brand-building initiative. The goal is to make your own brand distinguishable against products that are becoming increasingly similar in the decision-makers mind. However, there are some peculiarities to branding in the pharma industry.

Building brand equity

"A decade ago the product brand used to be the strongest point of recall but we have observed a gradual move towards association with the corporate brand name. Pharma companies and its products are not consumer goods and the demand for most of them is need-based so the emphasis on both the corporate and product (identity) is that much stronger" - Shakti Prasad Chakraborty President of India Region Formulation Lupin "OTC products are comparatively cheap as compared to ethical branded products. In today's scenario, the whole world is looking for reduction of medicine cost and all big Indian pharma companies" - Vinod Chitalia Chief Executive Officer Lifeline Industries "Branding exercises for pharma products in India do not have any specified guidelines. there are regulations for marketing. Currently, there is no specific law which prohibits the advertising of prescription drugs although industry practice is not to advertise prescription-only drugs" - Hitesh Gajaria Executive Director KPMG

The differentiating factor is that pharma companies deal with an intermediary, ie the doctor, controlling what consumers might or might not end up purchasing . So most branding activities in the Industry do take that into account and most marketing and communication programmes are focused on building brand equity with the doctor, reasons Chakraborty. If you are marketing the fifth or the 15th drug in a therapy class, the task at hand becomes all the more complex and difficult to make sure doctors remember your brand, he says. According to Chakraborty, Doctors and patients both tend to recall of the corporate brand and then drug name. A decade ago the product brand used to be the strongest point of recall but we have observed a gradual move towards association with the corporate brand name. Pharma companies and its products are not consumer goods and the demand for most of them is need-based so the emphasis on both the corporate and product (identity) is that much stronger. Moreover in some markets globally, beyond patent expiry, drugs compete on price alone. Pharmacists can substitute cheaper generic products for name brands on a patient's script (unless otherwise stipulated by the prescribing doctor). Yet even if the product dies, the brand still lives. It is not possible to roll the brand over to a new product unless it is a reformulation, but you can keep certain elements of previous brands. Vinod Chitalia, Chief Executive Officer Lifeline Industries remarks positively on OTC branding through an explanation of successful companies name, OTC products are comparatively cheap as compared to ethical branded products. In today's scenario, the whole world is looking for reduction of medicine cost and all big Indian pharma companies like Ranbaxy, Cipla, Wockhardt, etc,have developed separate OTC generic divisions. MNCs like Novartis, Abbott are also trying to enter the OTC generic market in a big way considering the percentage sale of OTC in the long run. S C Sehgal, Chairman of the Ozone Group of company says, OTC branding helps the company earn greater revenue and also there is a large customer base in todays market. OTC brands are well known by the consumers and people do not have to have a doctors prescription for these medicines. They have been delivering high on consumers requirements and therefore have an impression in the minds of the consumer. People prefer more usage of these products and thereby helping the company to earn more revenues.

Corporate expansion is a strategic decision & should be related to a firm's objectives & mission. Various critical factors that need to be considered are market risk, returns from a new set-up, opportunity cost, resource availability, dominant market, etc. Hence, marketing strategy that should be considered during an expansion plan should be able to relate to the new target customer base & the market. This strategy can be devised only after a thorough analysis of the new market and customer base. Hence, while devising such a strategy, it is important to consider several factors such as demand for the product, brand image of the company, spending capacity of the new market customer base, etc. Smitesh Shah, CMD, Calyx Chemicals & Pharmaceuticals Ltd, gives details on branding expenditure saying, The brand spend always differs from company to company & its products reach, however most companies in the growth phase would need to budget for a minimum of 25-30 percent of sales as branding cost. Theres a huge opportunity as the market is substantially under-penetrated for OTC products. For a country of our size, a $ 1.9 billion market is tiny to say the least. It would need to be a mix of all as finally each one of these affects the corporate identity in its own unique way. However, from a domestic market perspective, the critical differentiation continues to be branding & marketing skill sets. He further emphasises that besides investing in creation of global assets & brands; investments in fixed assets expenditure like quality control & SHE (Safety, Health & Environment) are crucial and are the need of the hour.

The corporate and product branding helps the company to sustain its market value by creating the brand in the doctors clinic and thereby increasing its visibility to the patient visiting the doctor and also to the doctor for prescribing the medicine. The pharma companies should opt for product branding as it pays you more as it leaves a mark in the mind of the consumer whenever he/ she visit the doctor. , adds Sehgal. Gajaria says, Sales of OTC medicines in India are forecast to increase from $ 2.14 billion in 2008 to $ 5.05 billion in 2014, representing a CAGR of 17.69 percent. According to AESGP data, leading OTC categories include vitamins and minerals, cough and cold, gastrointestinal medications, analgesics, dermatologicals and herbal medicines. However, many prescription (Rx) drugs can be purchased without prescription, which has meant that OTC switching is not actively promoted. Sales of vitamins and minerals generated 24.2 percent of the Indian OTC pharma market's value. Product branding is an effective technique of increasing the sales of a particular product. Effective product branding can establish the presence of the product in the market and create a positive image of its use and efficacy without any necessary holding to the company name. He further elaborates with an example that, i- pill has very strong brand strength. Although the product was previously owned by Cipla and now belongs to Piramal Healthcare, it is still able to generate sales and has a hold on the emergency contraceptive market.
Company Allergen Inc Novartis Pfizer Mylan Laboratories Daiichi Sankyo Sanofi Pasteur Measures taken New entry in India- specialises in medications for infectious diseases In 2009, raised its stake in Novartis India . from 50.9percent to 76.4 percent In 2009, increased stake in Pfizer India, from 41.2 percent to ~71 percent Acquired Matrix Laboratories to strengthen generic presence Acquired Ranbaxy to strengthen generic presence Acquired Shantha Biotechnics via Mrieux Alliance

Foreign companies too, in recent years, are increasing their focus on India as a key market. Besides Abbot, which very recently did a multi-billion dollar deal to acquire the domestic formulations business of Piramal, the table below illustrates efforts of some other global pharma giants to increase their presence in India: Kiran Das, General Manager- Exports & Herbals, Anglo-French Drugs & Industries further elaborates Gajaria's view commenting, The pharma companies with its brands that have gained an OTC status (products that technically are to be dispensed only with prescription but have patients asking for them by brand name) due to usage over a long period of time, focus on bettering the brand image through various branding exercises. These companies also focus on the corporate branding at the retail & wholesaler front. The segments that have good support for OTC sales are vitamins, dermatological, analgesic, cough syrup & anti inflammatory. We can see lot of branding activities being carried out for these products. The focus of branding in these segments remains on doctors & retailers. Visibility & availability play an important role here. Chitalia highlights the brand value of pharma products & brand loyality commenting that In the pharma industry, a product is sold by brand name, its like a wine. Pharma industry enjoys royalty by way of brand value creation. All MNC's or big pharma companies earn their maximum top line & bottom line from the first few brands. It is seen from the sale of companies like Ranbaxy & Piramal Healthcare. He predicts that, In the coming six to eight months one more Indian pharma giant is about to follow a similar path. Hence Indian pharma companies want to develop brands which can sustain the companys profitability forever. In fact, corporate branding initiatives impact individual product branding initiatives and need to go hand in hand, and can help organisations leverage their positive image on the retailer and patient front, this is one of the biggest reasons why pharma companies dealing with OTC products focus extensively on building corporate image. They do this with product branding followed by corporate branding through commercial advertisements in media. The focus is to highlight both the product and the corporate brand. Joy Chatterjee, Manager - Product, Mankind Pharma , emphasises on brand image & its thrust in the competitive market. For Mankind Pharma a well known name in the OTC branding sphere, he says, Branding

is an extremely important marketing strategy in the Indian pharma Industry. It is important to build an emotional bonding & a relationship of trust with the customer to ensure loyalty & hence consistent sales. Indian market is highly fragmented & hence a distinct brand image will make brand equity. Some leading companies and their brands
Sr. No 1 2 3 4 5 Company Pfizer GlaxoSmithKline Nicholas Piramal Ranbaxy Novartis Product Corex, Becosule Vicks Action 500, Crocin i- pill Revital Voveran Therapeutic use Cough Multi Vitamin Cough and cold Fever Emergency contraceptive Energy and fatigue Analgesic

Ethics of pharma marketing The major legislation for pharma regulation is the Drugs & Cosmetics Act, 1940 (DCA) & its subordinate legislation, the Drugs &Cosmetics Rules,1945 (DCR). Drug Prices Control Order, 1995, Drugs (Magic Remedies) Objectionable Advertisement Act, 1954 & Pharmacy Act, 1948 are other regulations which have a bearing on the pharma business in India. The legislations apply to the whole of India and to all categories of medicines, whether imported or manufactured in India. The legislation is regulated by the Central Government (Ministry of Health & Family Welfare) in New Delhi, which is responsible for its overall supervision and enforced by State Government through its Food and Drug Administration (FDA). Trade names are regulated by the Trade and Merchandise Marks Act (TMMA). Gajaria points out that though Branding exercises for pharma products in India do not have any specified guidelines, there are regulations for marketing. The industry is mostly self-regulated with industry organisations formulating guidelines, which again impact only their members. Giving more details Chatterjee reveals that,The Drug and Magic Remedies (Objectionable Advertisement) Act mentions a list of ailments for which no advertising is permitted. The DCG(I), in collaboration with the OTC committee of the Organisation of Pharmaceutical Products of India (OPPI) has also decided that OTC advertisements for categories like digestives, antacids, cough liquids, vitamins tonic/cap, analgesic/ cold tabs, antiseptic creams, glucose powders, band-aids, baby gripe water, medicated skin products can be broadcast on TV.
"The focus on branding is getting higher as there is a general shift observed in the power of the consumer to directly take medication and seek alternatives when at the retailer's" - Kiran Das General Manager Exports and Herbals Anglo-French Drugs & Industries "Branding and marketing would most certainly help a company to go a long way, however sustainable and profitable growth would largely come from continuous focus on quality" - Smitesh Shah Chairman and Managing Director Calyx Chemicals and Pharmaceuticals Ltd "The Pharma companies should opt for product branding as it pays you more as it leaves a mark in the mind of the consumer whenever he/ she visit the doctor. Branding also helps in the visibility of the product and the company"

Chakraborty shares his expert knowledge on advertisement ethics saying, Safety is a major concern when the FDA considers reclassifying a prescription drug as OTC. Most OTC drugsunlike health foods, dietary supplements including medicinal herbs & complementary therapies -have - S C Sehgal Chairman of the Ozone been studied scientifically & extensively. However, all drugs have benefits & Group of company risks, & some degree of risk has to be tolerated, if people are to receive a drug's benefits. Defining an acceptable degree of risk is a judgement call. Labels on OTC drugs, which are required by the FDA, can help people understand a drug's benefits and risks as well as how to use the drug correctly. Often, the labels of OTC drugs do not list the full range of possible side effects, which is a cause of major concern as consumers may buy the drug on the basis of the brand name alone which may not necessarily be the appropriate medication for their ailment.

Product branding for global markets is an entirely different ball game. There is a vast difference in the branding strategies for regulated and semi-regulated markets and hence no uniform strategy can be applied. Most regulated markets such as US and EU are highly commoditised or are gradually moving towards commodity generics. Hence, product branding doesnt have much role in these markets. Yet, despite these significant changes in the worldwide pharma market, the greatest advantage of such a branding exercise is its potential for improved financial performance. Global branding and shareholder value go hand in hand. Chakraborty also reveals global regulatory practices saying,The regulatory environment is becoming more standardised between countries. With the establishment of the European Medical Evaluations Agency (EMEA), which approves drugs for all the members of the EU, the borders are coming down. Japan has also adapted its approval system to facilitate the entry of Western products. And then there is direct to consumer (DTC) advertising. While doctors and healthcare professionals remain the targets for pharma marketing, companies are preparing for the spread of DTC and consumer-style branding beyond the shores of the US. The introduction of global branding anticipates the transition to a more consumer driven market. Das point outs, The OTC branding and advertising guidelines are not very well laid out at the moment and will get defined over a period of time. With few product advertisements (i-Pill CIPLA, Unwanted Mankind, etc) having stirred up consumer groups and prominent doctors and individuals into action, it is only a matter of time before a guideline comes into place. Most advertisement and branding activities are highly individual company driven and will remain so in the future also. Das shows the benchmark of successful branding in India, The focus on branding is getting higher as there is a general shift observed in the power of the consumer to directly take medication and seek alternatives when at the retailer's. The easy availability of information on various conditions also has helped expand the self medication market. Time constraints in meeting a doctor for minor ailments also leads to expansion of OTC sales. Pharma companies realise the importance of the change and are hence actively pursuing branding initiatives to expand business growth. Das admits that not many studies have been done to evaluate branding strategies conducted by companies. According to him, The pressure of market competition and challenging targets push such studies to the back burner. The easiest way to evaluate impact of strategies is by monitoring internal sales performance and market share gain as reported by IMS. Marketing strategy of an organisation largely depends on product portfolio and is guided by the future directions set out in terms of segments and products of interest. The IFPMA (International Federation of Pharmaceutical Manufacturers and Association) code is an excellent guideline set out for ethical medical marketing. The guideline will be suitable for all marketers who have focus primarily on the Doctors to generate prescription sales. With severe pressure to contain costs, companies need to build brands to overcome these pressures, opines Chakraborty. The mega mergers were a way to contain costs & find new products, yet big companies still need about five new blockbuster products each year to return the promised growth. Companies need to get their marketing right, & get it right sooner rather than later, & global branding cuts marketing costs & allows a much faster & higher profile roll-out. There are more similarities than differences in attitudes between countries. Providing you do your market research properly, global advertising the best way to establish global branding will finally be possible, he says . Shah however makes an important point hen he concludes , Branding and marketing would most certainly help a company to go a long way However sustainable and profitable growth would largely come from continuous focus on quality.