Ahh…The statement dreaded by a lot of companies, and people, in the business world today: “spend money to make money.” As a Business Development professional in animal health/Pharma, I have been fortunate to work with many great companies and products during different life cycles. Products come off patent, and generics are ready to march on in and take up market share. Usually companies just plan on revenue losses that are associated with generics competition and move on. However, some do not.
In a July 9, 2013 article, Forbes.com showcased how Pfizer has been successfully defending their blockbuster drug Lipitor against generic competition since December 2011. According to an AARP case study, Lipitor is expected to bring in $3 billion dollars in sales in 2015. Pfizer has been able to hold onto sales and project big sales numbers by, among other things, two key moves that I want to highlight:
– Spending over $1 billion dollars in consumer advertising during patent years to promote brand usage (from 2000 – 2010)
– Providing consumers with coupons to reduce co-payments and encourage patronage to branded Lipitor
Obviously, the plan laid out in the report goes deeper than just these two tactics, however, the theme of investment jumps out loud and clear in these two examples. Success for any product has to be multi-faceted and not one dimensional. A good product, right category, great strategy and implementation of that strategy help drive success. However, in today’s crazy economical world, a lot of companies when faced with challenges (such as a drug coming off patent) pull back the reigns and don’t invest in protecting their brand. If that little, simply stated idea of “spending money to make money” is approached the right way, it may not be as taboo as some people make it out to be. And maybe, just maybe, there will continue to be more stories like this.