Vladislav Gurin :: BioTech & Pharma consulting

Brands create value both for the company and to those that decide to use them. This is done by a dual quest of differentiation on tangible dimensions but also on intangible dimensions.
This quest is often not simultaneous: most brands start as the mere name of a product innovation. Once they achieve success, they are copied and the intangible dimension created by the communication of brand identity creates a form of protection: products may be similar but consumers choose one brand instead of another. This is the effect of habit, of proximity, of leadership and pioneering aura, and essentially of the need for reassurance. However, protections do not last: there is a need to recreate a material differentiation by innovation that delivers tangible benefits through improved products or services.
Very few sectors demonstrate the value of branding as much as the pharmaceutical sector. This sector is dominated by the ideology of progress through science. Those prescribing drugs are rational and make what they perceive as the best choice for the patient. Normally this should imply a product-driven market, in which brands are a forbidden word.
Recent research has shown however that medicines have a personality, as do all brands.
‘Personality‘ means that both generalist physicians and specialists find it possible to attribute human personality traits to medicines.
Not only did they not refuse to answer questions about brand personality, but statistical data analysis showed that some of the personality traits they ascribed to drugs were correlated with prescription levels.
You will see that the anti-ulcer medicines that are most prescribed are described as more ‘dynamic’ and ‘close’ than other forms of medication. A product, an active ingredient cannot be dynamic or close; a brand can. Thus brands of drugs do have a mental existence and influence in the minds of the prescribers. Interestingly too, although they recognised the products themselves as being totally identical and saw two brands as fully similar in the functional benefits they delivered, respondents prescribed one three times more frequently than the other. However the chosen one was endowed with significantly more ‘status’ than the less chosen one. Status is an intangible dimension created by impressions of leadership, of presence, of proximity to the doctors, of intensity of communication. It is created by marketing once the drug has been developed. Once created, this serves as competitive edge against ‘me-too’ products, at least before a new drug replaces the existing one as market leader.
This example illustrates the fact that even in the high-tech sector, brands are a psychological reality, which operate even in the context of rational decision makers who are disposed to make optimal rational decisions.
Choice is always a risk: products increase the range of choice, and thus of perceived risk.
Brands make choice easier by reducing the likelihood of choosing alternatives to the market leader.
The choice of the English word ‘likelihood’ here is interesting because it implies both a statistical concept (probability) and the mediating process by which alternatives are being more chosen (they are more ‘likeable’).
Branding is thus a consumer-oriented response to the problem of decision making in opaque and dense choice environments.
Brand spontaneous awareness and positioning (linking to a need) are short cuts that are very helpful for decision making. Brands do create a decisional bias: as such they facilitate choice and reduce perceived risk.
These examples illustrate the relationship between the product and the brand: there is a natural interaction between them. Brand mission determines what products or services should be created. These innovative products endowed with a value-adding identity create attractiveness, and encourage trials, repeat sales and loyalty despite incoming copies and low-cost alternatives. However, new disruptive innovations may shift clients’ value curves, hence change their preferences. This means that the brand cannot be defended only through intangible values: even the much admired Jaguar brand went broke and had to be bought by Ford to enable it to regain the capacity to make high-quality and hightech cars for today’s exacting new affluent consumers.
Prescription therefore typically follows a ‘two-steps flow of influence’ model.
Communication with leaders creates status and reputation, which then makes it necessary for people to be informed about this brand that everyone is talking about: familiarity with the product follows this desire
created by its reputation. Tomorrow, for certain chronic illnesses, it will be even easier to carry out direct to consumer (DTC) information advertising, mentioning the laboratory and the active ingredients of the drug, but not the brand.
Today, the role of the internet in the dissemination of information to patients, who know more on the subject than their general practitioners do, and interrogate them about the new brands and compounds, is being measured. When updating this research, the patient’s own point of view should be included as a new lever in medical prescription. Thanks to the internet, patients arrive at their doctor’s office already well informed: they have heard about this treatment or that drug on a blog, a forum, a website, in a women’s magazine and so on.
Doctors need to generate loyalty among their clients and are reluctant to act against the patient’s wishes, even if they can. For chronic illnesses, the patient’s feelings on the unpleasantness of the treatment also play a part. Price should also be integrated as a new lever: in fact, the preoccupation with reducing health expenditure is now shared by doctors themselves.
Another studies showed how certain facets of the laboratory’s image can directly influence medical prescription. This is why, in today’s global drug marketing, it is first necessary to establish the laboratory’s credibility, one country at a time. In this way it can then enjoy the source effect.

The more complex a product becomes, or the higher the value ascribed to it, the greater the opportunity for value-added influencers to make a significant impact.

Consumers are influenced consistently and substantially by professionals. The real choices or decisions facing us are too difficult to take. We need shortcuts. Sometimes their advice is sought, other times it comes at us uninvited. Nevertheless, consumers listen to. It’s easier if the expert makes the decision for us. The professions that customers listen to are varied, not restricted to the white collar professions. They are listed below:

• Doctors
• Lawyers
• Financial advisers
• Builders
• Teachers
• Journalists
• Academics
• Taxi drivers
• Hairdressers
• Dentists
• Gardeners
• Architects
• Council officials
• Hotel concierges
• Travel kiosk staff

Especially in the biotech, biochem, pharmaceutical and medical sectors, the role of specific academics can be extremely influential. Not only do some educational institutions play a prominent part in the day-to-day fabric of some sectors, but the major vendors lean heavily on their academic links in order to leverage the kudos of perceived thought leaders. Besides academics are rarely even considered by sales or marketing staff as having any effect on a company’s profits and expectations. They’re often wrong. The answer is that we tend to believe people with expertise and professional standing. Academics have been proven for decades to be heavily influential.

Unlike the product launch, the brand launch is, from the very beginning, a long-term program.
Such launch will modify the existing order, values and market shares of the category. It aims at establishing a new order and different values and at impacting on the market for a long time. This can only be achieved if people are convinced of the brand’s absolute necessity and are ready to give it all they have.
In order to keep staff, management, bankers, clients, opinion leaders and salespeople mobilised for the long term, the company must be driven by a real brand project and a true vision. The latter will indeed serve to justify, internally and externally, why the brand is being launched and what its essential purpose is.
Creating a brand implies first drafting the brand’s programme, which underlies the brand identity and positioning. Presenting the brand in a programmatic format (Table 1) is fruitful.

Table 1. Underlying the brand is its programme.

It indicates where the brand stems from, where it draws its energy, what big project lies behind the brand. This is useful as a step in the brand thinking process itself, before the brand identity prism and brand positioning are defined.
Many brands no longer know why they exist, so they would be quite unable to answer questions such as those in Table 1 defining the brand programme. Such questions reflect a philosophy at the opposite of niche tactics.
Only those who are driven by a grand project within can actually set out on the long trip of brand making.

Prior to the passage of the U.S. Federal Food, Drug and Cosmetic Act in 1938 that legitimized physicians as “learned intermediaries” and required a physician’s prescription for a pharmacist to dispense a drug to a consumer, Direct-to-consumer advertising (DTCA) was the overwhelming communications vehicle for promotion. Following passage of the 1938 legislation, DTCA declined sharply. The 1962 Kefauver-Harris Amendments to the Federal Food, Drug, and Cosmetic Act shifted regulatory jurisdiction from the U.S. Federal Trade Commission (FTC) to the U.S. Food and Drug Administration (FDA), which to this day has responsibilities for regulating prescription drug promotional materials, both for physician- and consumer-oriented promotions.

The 1962 amendments outlined basic requirements for acceptable prescription drug marketing: Prescription drug promotional materials cannot be false or misleading; they must provide a “fair balance” coverage of risks and benefits of using the drug; they must provide a “brief summary” of contraindications, side effects, and effectiveness; and they must meet specific guidelines for readability and size of print. After some controversy involving the DTCA of an anti-arthritic drug in 1982, the FDA asked industry to comply with a “voluntary” moratorium during which time the FDA would assess the impact of DTCA on public health. In 1985 the FDA announced that the combination of current regulations and the Kefauver-Harris Amendments was sufficient to enable it to adequately regulate DTCA so as to protect public health, and that hereafter DTCA would be required to meet the same standards and criteria as promotional material aimed at health care professionals.

For a number of years, the FDA interpreted the “brief summary” provision as requiring the advertiser to provide the detailed information contained in the drug’s FDA-approved product labeling, thereby confining it to print form, typically in small print. However, under FDA regulatory precedents, there were two conditions under which firms could avoid the “brief summary” in TV advertising: first, if the advertisement were “help-seeking” in that only disease symptoms were mentioned, but no name of any drug was given, and the other was when only the name of the drug was mentioned without specifying its indicated use.

As DTCA began to grow in the mid-1990s, the FDA’s regulatory discretion was tested, and thus in 1997 the FDA felt obliged to clarify its regulation of prescription drug advertising, particularly for television ads. According to the FDA’s 1997 guideline clarifications, instead of requiring the lengthy “brief summary” taken from the product label insert, advertisements now needed only to include “major statements” of the risks and benefits of the drug, along with directions to information sources in addition to a physician, such as a toll-free phone number or a Web site.

The level of DTCA has increased considerably since 1994 (Tab. 1). The growth trend has been quite steady, and in particular there appears to be no material change in the slope of the trend line following FDA publication of the 1997 clarifying guidelines. After leveling off in 2002, by 2003 total DTCA spending increased to about $3.2 billion and to $4.1 billion by 2004, with most of the growth consisting of television advertising.

Table 1. Prescription drug promotion expenditures

I believe that we are on the precipice of a new age that I like to think of as the Customer Service Revolution (CSR). Technology is influencing our live more than at any other time in history. But the technological advances we have experienced in the last twenty years are almost nothing compared to those that will occur in the next decades.

Customers literally have a world of choices. I purchase pharmaceuticals from the other side of the world on a regular basis. I do work for clients thousands of miles away simply with the click of a button. Things happen quickly and people expect fast service.
Small businesses can look like large corporations with some smart promo packages and a good website.
As business owners and operators we all have access to new and developing markets and new sources of customers. It doesn’t take a lot to start and run your own business. Pay a few fees and register a name, and bingo — you are a business owner and operator. This means that we are all facing increased competition, and I believe that the competition we face today is nothing compared to the competition we will face tomorrow.
As competition for market share becomes tougher, manufacturers and suppliers have to be highly competitive in their pricing if they want to stay in business.

But the main thing that gives one business an advantage over others is customer service.

Those businesses that are smart enough to realise that their future success lies with increasing levels of customer service will prosper in the coming decades.
The consumer backlash against having to stand in long queues in banks, dentistries, pharmacies and other institutions, or against being put on hold for long periods of time, is allowing room for smarter operators to come in and develop their own market share simply by offering better levels of service at the same price.

Customers today are time short and demanding.

They know that they have choices, and they are prepared to take their business elsewhere if the service is poor or prices aren’t competitive.
I believe that more customers are lost through lousy service than through poor pricing. If people don’t return your phone calls, don’t deliver on time and don’t thank you for your business, you will take your business elsewhere. And once a customer is lost, it’s very hard to get them back.
So, while this is a testing time for many businesses, there are also enormous upsides.

Customer service is one of the easiest and cheapest ways to improve in any business.

Normally it involves just changing the way things are done. As the Customer Service Revolution goes on, your business can either grow stronger and be a leader in your field, or it can be left behind to wallow with the majority of others.

But finally it’s up to you, dear readers, remember you and only you are the final decision makers. That’s why I would like to wish you to succeed in your business, choose the right way, just go ahead of the future and simply stay the leader in your area.

Sincerely yours,

Vladislav Gurin,
Editor-in-Chief

The manufacture of pharmaceuticals is a complicated process, comprising numerous steps leading from raw materials to finished formulated product. That finished product is the API (active pharmaceutical ingredients), and it is this product, along with the necessary inert ingredients, packaging, and labeling, which the FDA licenses.
A drug manufacturer’s plan for producing a given medicine, which must pass muster with the FDA before the agency permits its distribution, contains a number of steps:

• Planning — A strategy for ordering the raw materials.
• Sourcing — Choosing the suppliers that will deliver the goods and services. Suppliers could be domestic or international.
• Making — This is the manufacturing step. Manufacturers schedule activities necessary for production, testing, packaging, and delivery. Manufacturing is also the most timeintensive portion of the supply chain. Manufacturing involves making the API and its conversion to the final dosage form, as mentioned above. More than one manufacturer may be involved, and manufacturing can take place in the United States or abroad. A pharmaceutical company may contract several chemical steps to foreign firms and then import the resulting intermediate compounds needed to complete the manufacture of the API domestically. The manufacturer can also outsource the manufacture of the API abroad; when it does so, the FDA closely monitors those plants. Conversion of API to the final dosage form may occur domestically or be “outsourced’’ to a foreign plant.
• Delivering — This is the “logistics’’ portion of the manufacturing and supply plan. Companies coordinate the orders from customers and choose transporters who carry the product to customers, such as wholesale distributors and pharmacies. Finally, the pharmacy dispenses the finished medicines to patients.
• Returning — This is the system for receiving defective and excess products back from customers and supporting customers who have problems with delivered products (including reimbursement).

This is a great question and one that we would all answer a little differently. Balance means something different for each and every one of us, and to find out what it means for us is the first step to achieving it.

For some people it means no stress at all, having everything in perfect order, living a perfectly healthy life, feeling energised, calm and under control.
For others - it is cutting back the workday from 18 hours to 14 hours, the number of coffees from 10am to 5 pm. . . You get the picture.
This is not an article with scientific approach about spiritual enlightenment, but a practical advice (step-by-step tips) to help you find your own balance between your business and other aspects of your life. As you work through it you will form your own mental picture of how you would ideally love your life to look and feel.

The following list identifies the ten reasons for getting out of Work & Life balance. Of course, there are many more, but these are the biggest  most common culprits:

1. Overwork — simply putting in too many hours and being a slave to your business.
2. Financial problems — struggling to make ends meet in the business and worrying about how you will pay your bills.
3. Overcommitment — agreeing to do giant work for too many people and not leaving enough time or energy for yourself.
4. Poor stress management — not knowing how to manage your own stress or not being able to admit that it is a problem.
5. Relationship — with partners, family and friends, co-workers and customers.
6. Poor lifestyle — eating badly, lack of physical exercises, and alcohol and drug abuse.
7. Lack of direction — feeling trapped and isolated in the business and uncertain about your future direction or goals.
8. Lack of bounds — being too accessible to too many human-beings.
9. No space and time to rejuvenate — no holidays, time outs, hobbies or amusements to remind you why you do what you do.
10. Negative environment or negative people around you every day.

Nowadays the global drug problem is being contained. In 2006/07, the global markets for the basic illegal drugs – the opiates, cocaine, cannabis, and amphetamine-type stimulants – remained considerably stable. Particularly notable is the stabilisation seen in the market of cannabiods, which had been expanding rapidly for some time. In line with a long-term trend, the share of total drug manufacture that is seized by law enforcement has also increased – some 42% of global cocaine production and 26% of global heroin production never made it to consumers.

Of course, within this aggregated picture, there remains considerable variation. Most notably, heroin production continued to expand in the conflict-ridden provinces of southern Afghanistan. While global heroin consumption does not appear to be growing, the impact of this surge in supply needs to be monitored carefully.

In general, most indications point to a levelling of growth in all of the main illegal drug markets. This is really good news and may indicate an important juncture in long term drug control. A stable and contained problem is easier to address than one which is expanding chaotically, provided it is seen as an opportunity for renewed commitment rather than an excuse to decrease vigilance.

Most indications are, however, that Member States do have the will to re-commit to drug control. Although it is outside of the scope of this article to assess policy, the estimates and trends contain several examples of progress forged on the back of international collaboration. The extent of international collaboration, the sharing of intelligence, knowledge and experience, as well as the conviction that the drug problem in the world must be tackled on the basis of a ‘shared responsibility’ seem to be growing and bearing fruit.

A number of HIV attributes and its mode of infection conspire to render creation of an effective vaccine less than straightforward. These factors include:

• HIV displays extensive genetic variation, often even within a single individual. Such genetic variation is particularly prominent in the viral env gene whose product, gp160, is subsequently proteolytically processed, yielding gp120 and gp41.
• HIV infects and destroys T-helper lymphocytes, i.e. it directly attacks an essential component of the immune system itself.
• Although infected individuals display a wide spectrum of antiviral immunoresponses, these ultimately fail to kill the virus. A deeper understanding of what immunity elements are most effective in combating HIV infection is required.
• After initial virulence subsides, large quantity of cells harbour unexpressed proviral DNA.
  The immune system has no method of identifying such cells. An effective vaccine must thus induce the immune system to:
  (a) bring the viral infection under control before cellular infection occurs; or
  (b) destroy cells once they begin to produce viral particles and destroy the viral particles released.
• The infection may often be spread, not via transmission of free viral particles, but via direct transmission of infected cells harbouring the proviral DNA.

TRIPS is the most significant agreement on intellectual property of the 20th century. More than a 100 ministers signed it on behalf of their nations in the magnificent Salle Royale of the Palais des Congrès in Marrakesh on 15 April 1994.
TRIPS is one of 28 agreements that make up the Final Act of the Uruguay Round of Multilateral Trade Negotiations, the negotiations that had begun in Punta del Este in 1986. Another of those agreements established the WTO, and it is the WTO that administers TRIPS.
TRIPS was the first stage in the global recognition of an investment morality that sees knowledge as a private, rather than public, good. The intellectual property standards contained in TRIPS, obligatory on all members of the WTO, would help them to enforce that morality around the world.
In India, generics industry warned of dramatic price increases in essential drugs that would follow from the obligation in TRIPS to grant 20-year patents on pharmaceuticals.
TRIPS is about more than patents. It sets minimum standards in copyright, trade marks, geographical indications, industrial designs and layout-designs of integrated circuits. TRIPS effectively globalizes the set of intellectual property principles it contains, because most states of the world are members of, or are seeking membership of, the WTO. It also has a crucial harmonizing impact on intellectual property regulation because it sets, in some cases, quite detailed standards of intellectual property law. Every member, for example, has to have a copyright law that protects computer programs as a literary work, as well as a patent law that does not exclude microorganisms and microbiological processes from patentability. The standards in TRIPS will profoundly affect the ownership of the 21st century’s two great technologies – digital technology and biotechnology. Copyright, patents and protection for layout-designs are all used to protect digital technology, whereas patents and trade secrets are the principal means by which biotech knowledge is being enclosed. TRIPS also obliges states to provide effective enforcement procedures against the infringement of intellectual property rights.
No one disagrees that TRIPS has conferred massive benefits on the US economy, the world’s biggest net intellectual property exporter, or that is has strengthened the hand of those corporations with large intellectual property portfolios. It was the US and the European Community that between them had the world’s dominant software, pharmaceutical, chemical and entertainment industries, as well as the world’s most important trade marks.
The rest of the developed countries and all developing countries were in the position of being importers with nothing really to gain by agreeing to terms of trade for intellectual property that would offer so much protection to the comparative advantage the US enjoyed in intellectual property-related goods.
For instance, an Australian study of copyright royalty flows during the 1990s showed that Australia paid out to overseas copyright owners around Aus$1.2 bln more than it received. Another Australian study showed that the cost to Australia of the TRIPS provision which extended the patent term of 20 years to patents already in existence could be as high as Aus$3.8 bln.
In Australia, as is the case in all small- to medium-sized developed country economies and developing country economies, the vast bulk of patents is in foreign ownership.
Sometimes we were told that ‘we will be eventual winners from intellectual property’. While it is good to be optimistic about one’s distant destiny, it does not explain why normally hard-nosed trade negotiators would take the highly dangerous route of agreeing to the globalization of property rules over knowledge that had brought their countries so few gains in the past. Of the 3.5 million patents in existence in the 1970s, the decade before the TRIPS negotiations, nationals of developing countries held about 1%.
Developing countries such as South Korea, Singapore, Brazil and India, that were industrializing, were doing so in the absence of a globalized intellectual property regime.
More disturbing for developing countries is the development cost of an intellectual property regime. The basis of competition lies in the development of skills. The acquisition of skills by newcomers disturbs roles and hierarchies.
After India built a national drug industry, it began exporting bulk drugs and formulations to places such as Canada. A developing country which had acquired skills threatened those at the top of an international hierarchy of pharmaceutical production – the US, Japan, Germany and the UK.
Australia has shown in the field of wine-making that the acquisition of skills can upset a European-led hierarchy of wine quality and production. The French have responded, in part, by insisting on protection for geographical indications, a form of intellectual property protection allowing them to claim, for example, exclusive use of the ‘Burgundy’ and ‘Champagne’ labels.
Underneath the ideology of intellectual property there lies an agenda of underdevelopment. It is all about protecting the knowledge and skills of the leaders of the pack.
The answer to the question about why developing countries signed TRIPS has much to do with democracy – or rather, its failure. Put starkly, the intellectual property rights regime we have today largely represents the failure of democratic processes, both nationally and internationally. A small quantity of US companies, which were established players in the knowledge game, captured the US trade-agenda-setting process and in partnership with European and Japanese multinationals drafted intellectual property principles that became the blueprint for TRIPS. The resistance of developing countries was crushed through trade power.
One answer to this might be that corporations are entitled to lobby, and, in any case, developing countries agreed to TRIPS through a process of bargaining among sovereigns. It is indeed true that big corporations are entitled to lobby. It is important that big business makes its views and policy preferences known to government since around the globe it represents hundreds of millions of jobs and investors. However, that lobbying in relation to property rights should take place under conditions of democratic bargaining.
Democratic bargaining matters crucially to the definition of property rights because of the consequences of property rules for all individuals within a society. Property rights confer authority over resources. When authority is granted to the few over resources on which the many depend, the few gain power over the goals of the many. This has consequences for both political and economic freedom within a society.
The stakes are high in the case of IP rights. Intellectual property rights are a source of authority and power over informational resources on which the many depend – information in the form of chemical formulae, the DNA in animals, the algorithms that underpin digital technologies and the knowledge in books and electronic databases. These resources matter to communities, to regions and to the development of states.