Recent Study Reveals Interesting Pattern In Timing Of Pharmaceutical Marketing Allocations

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Recent Study Reveals Interesting Pattern In Timing Of Pharmaceutical Marketing Allocations

29th November, 2006

Marketing a pharmaceutical product requires companies to be attuned to the timing of various marketing activities. Part of this challenge is allocating marketing dollars to support these critical activities during key stages in a product's development.

An interesting pattern emerged from a study by pharmaceutical business intelligence leader Cutting Edge Information. It found that brands, regardless of peak annual sales, followed a similar spending behavior during product development stages. For example, in Phase II, the three brand categories -- blockbuster, mid-level and niche -- spent between 2.4% and 3.3% of their overall marketing budgets to perform key marketing activities. This overarching spending pattern is often overlooked because the budgets themselves are vastly different in terms of absolute dollars. For instance, the 2.4% for blockbuster brands in Phase II translates to $2.82 million, while 2.6% for niche products only amounts to $530,000.

"When examining the bigger picture, distinct patterns emerge and underscore the importance of making certain marketing investments at various points in product development," said Eric Bolesh, project team leader and chief author of this report.

Although these similarities are noteworthy, the developers must allocate their marketing resources in a manner that proves most valuable to their individual brands. Unique brand situations and challenges call for companies to make decisive moves in support of their drugs. Brand 18, for example, launched on a condensed timeframe in which nearly all marketing activities started in late Phase III. This situation forced the company to provide 51% of Brand 18's overall marketing budget during Registration and Launch, when the brand was scrambling to execute activities that would normally have been completed earlier.

"US Pharmaceutical Launches: Marketing Spend and Structure" tracks US marketing resources for 18 brands from the pre-clinical period through the first year on the market.

Each brand profile breaks down the resources that support major components of product commercialization, from core branding activities and market research to advertising and initial sales force investments. Cutting Edge Information studied brands from companies of different sizes and backgrounds, including Eli Lilly, Johnson & Johnson, Genzyme and Millennium.

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