Market Segmentation the Way to Go for Big Pharma
With blockbuster drugs seemingly a thing of the past, pharmaceutical companies need a new approach to making money—and thinking smaller may be just the thing.
That was the message KGI students heard at Focus Track Fridays on Dec. 2 from keynote speaker Stephen Eck, PhD, MD, a longtime pharma industry executive. With experience working at Pfizer and Eli Lilly, and now vice president of oncology medical sciences for Astellas, Eck has seen the triumphs of aiming wide by drug manufacturers who scored big with Viagra, Lipitor and others.
But these days big-dollar drugs aren't making it to market, and the industry has no one to blame but itself, says Eck, who showed students a lengthy list of recent pharma projects that never made it out of clinical trials.
"They didn't fail because God said so, they failed because they were bad ideas," he said. "When you have a lot of money, you can pursue marginal ideas. But now the industry is shrinking, and companies need to be more efficient."
Which is why the smart thing to do, according to Eck, is for the industry to move towards market segmentation, "the next big change for companies."
The old, blockbuster model meant developing drugs that could be sold to a wide population of patients—many of whom benefited from the treatment. But not everyone got better, because the one-size-fits-all approach couldn't address the diverse nature of human biology and the genetic imprint which makes no two people alike, especially when it comes to curing what ails them.
Eck sighted Schizophrenia as an example. A great deal is known about this disorder, many different types of Schizophrenia have been determined, and a variety of different drugs are available to patients. But there's no precise way of deciding how to give which drug to which patients, other than through trial and error. Oftentimes people are administered a pill because on average it's been shown to work for others, which leaves a lot of room for failure for each individual.
But with tremendous advances in human genetic research now available to the healthcare industry, drug companies can, and should, focus their discoveries on narrower segments of people, according to Eck. Not only will this strategy yield greater efficacy for pharmaceutical products, it will also make them profitable.
"By having a smaller segment with a bigger effect," you can make money, he argued, because "people will pay for certainty" if it's shown that a new drug is really effective for treating their personal health.