May 2007
Tough times agead for Amgen
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I am sure there will be some executives at Amgen who will be reading the Long Tail after possibly losing possibly $2 billion in sales from it's top selling product Aranesp. What surprises me is that most pharmaceutical companies continue to rely on blockbusters to drive their profits at a time when it is getting harder and harder to develop and launch blockbuster products.



Lilly went through this when their top selling product Prozac came off patent and Pfizer is preparing to lose it's $10 billion drug Lipitor to patent expiration in the near future. Pfizer tried to develop a follow up product to Lipitor but after some early negative press they decided to pull continued development. This is another example of relying too much on one product to drive sales and profits. Investors for many years have been told to "diversify" their portfolios but in the pharma business it seems to be "milk the product and drive sales for every dollar we can get back".


Today's New York Times, in its Editorial section, called for an end of the practice of pharmaceutical companies reimbursing physicians for using their products. It is of course legal to do so but this is a case when following the law may lead to the bad practice of payments driving off label or high use by the medical community. In any case the pharma pricing people are going to have to formulate new pricing models that allow drugs to succeed while limiting payments to physicians who prescribe them. Of course the reason that these payments are so important is that our current health system does not allow adequate, in some cases, cost reimbursement for using these drugs but as long as there is money to be made by prescribing them you can bet medical practices will count on these dollars towards their bottom line.


There a lot of issues with the cost of pharmaceutical products and what I have presented here is a simplification of one of the issues but what I am so puzzled about is how these high paid CEO's continue to earn the big bucks without the ensuring that their companies are financially sound even if they lose their biggest seller. It's called scenario planning and in this case Amgen may be caught with their pants down. When I was at Lilly and we lost the Prozac patent we immediately implemented a plan called Year-X in which ALL expenses were curtailed, raises were kept to a minimum and bonuses were put on hold. The result is that Lilly is slowly rebounding although this author feels that they are relying too much on Zyprexa sales which were $2.4 billion last year.


During World War II, as the allies were driving deep into Germany, General Patton prepared for a major offensive by German forces. Many commanders felt that essentially the war was over and that the troops would be home for Christmas, after all the German army was finished and they had never mounted a winter campaign since the days of Fredrick the Great but Patton felt that the data he looked at supported an attack by the enemy and prepared scenarios for a response. CEO's in a sense are commanders and even in good times, especially in good times, they need to anticipate worst case scenarios and be prepared to react with speed to ensure that their company can weather the storm. It's time for them to earn those salaries not to retire with millions in stock options.
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The Internet bringing wired physicians together at last
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It looks like a physicians portal has finally got it right and figured out that the power of the Web to bring people together and collarborate can lead to success. Sermo.com now has over 10,000 physicians registered and judging from recent posts to the site it looks like the their slogan is right "Why consult with one collegue when you can consult with thousands?".



According to a recent article in
Digital Communications;


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Sermo.com is the fastest growing online community created by physicians, for physicians, today announced that it has exceeded the 10,000 registered physicians mark -- just six months after launching. Growing at a rate of more than 600 physicians per week, Sermo has become the "go to" destination for physicians nationwide to share observations from their practices and exchange medical insights as they are happening. U.S. doctors logged more than 6,000 hours and viewed nearly 1 million pages on Sermo in March alone, as they shared the latest observations from the front lines of medicine about the effectiveness of drugs, devices and treatments.


What a great idea and a great tool for wired physicians who are time pressed to attend meetings and conferences. Here are some of the recent posts on Sermo.com;


* Can Gabapentin be used for hot flashes?
* Given the injuries associated with chiropractic care, do you refer your patients to chiropractors?
* Have you seen hearing loss caused by Azithromycin?
* Which is the best quinolone for respiratory infections?
* Do you examine older kids and adolescents without a parent present?
* Do you agree with Novartis discontinuing Zelnorm?
* Have you experienced compassion fatigue?
* With new drugs coming to market all the time how long do you like to wait before prescribing them?
* Is it ethical to Google your patients?
* Is Cymbalta good for Fibromyalgia?
* Which Brand Name Drugs are better than Generics?
* FDA sleeping pill warnings -- Have they gone too far?


As you can see there are some pretty good subjects being addressed here by physicians who are hungry to collaborate with other HCP's. The post on compassion fatigue is especially interesting given that physicians have to see a lot of patients during the day and may not have the time they would like to site and counsel patients on treatment conditions and issues.

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This is a great example of Web 2.0, using the Internet to bring people together rather than push information. It's long over due and pharma should take notice of this great site because this is just a small example of how the pharmaceutical industry can bring people together to talk about issues that issue THEM.



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$600 Million fine is not enough
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The fine levied against Purdue pharmaceuticals for aggressively marketing Oxicontin and then lying about its potential for addiction is not high enough to send a message to the drug industry that this type of behavior will not be tolerated. The FDA should have put these executives in jail and fined the company $2 billion as this would have told drug industry exec's that if you lie and put patients health at risk your going to be held accountable.



This plea agreement is a sham and for Purdue pharma will be just another expense on the balance sheet. Oxicontin has made billions of dollars in profits over the years and the government should have gone after Purdue where it really hurts..their pocketbooks. I mean here you have a drug company admitting that they lied and as a result putting patients health in jeopardy. This is more than unacceptable this is an outrage and these executives need to go to jail to be held personally accountable. Yes they were each fined but I am sure the company will help them out with that or that they will cash in some of their options to cover the fines.


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I would not have accepted the plea agreement I would have proceeded to trial and alerted opposing counsel that their clients had better get used to group showers and wearing orange jump suits. I would have appointed somebody from the FDA to personally oversea ALL of Purdue's marketing material for the next 5 years and then I would have confiscated the profits from the product for the periods in question. This is the only way to deal with people who put profits ahead of patient health especially when they commit a criminal act and lie about it. It's time to get tougher with weasels.

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Implications of headlines for DTC marketing
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If DTC marketers don't feel that the recent rash of negative headlines (Oxy Cotin maker lied about addiction, J&J and Amgen possibly promoting higher dosing of medications) is going to effect their campaigns then they are living in a fantasy world. These stories are going to continue to chip away at the credibility of pharmaceutical companies to deliver relevant information to patients and cause more consumers to research all treatment options.


The headline in NBC News last night could not have been more dramatic: The maker of Oxicontin lied and has to pay a $600 million fine. The front page of Wednesday's New York Times details how doctors are making a lot of money by prescribing anemia drugs. Welcome to the world of information where everything is transparent. Unfortunately most DTC marketers will continue to live in their own world oblivious to the damage these headlines do to their campaigns. They believe that consumers can be "sold" and that we see something on TV and then go ask our doctor for that medication. Rumor has it that they also believe in the tooth fairy !

These headlines do have implications for DTC marketers regardless of what the polls or research say. With the current political climate, gas reaching $4.00 a gallon and a impending change at the Presidency consumers are going to be even more skeptical of anything that corporate America has to say. Here are some possible implications for marketers;

-Consumers are going to do a hell of a lot more research. They may not trust their physicians recommendations anymore if they believe the physician is motivated by drug industry dollars. Consumers will seek out more health information online with credibility of content being a key driver.

-New Products: Wait and see? Some patients may take a wait and see attitude on new products to ensure that they are indeed safe and effective. However patients may ask the FDA for speedy approval of new products that may extend life for potential fatal conditions such as cancer.

-Separate credible information from promotional information: Don't sell too hard let consumers make up their minds. Present the facts and let consumer be your jury.

-Be transparent: If their are issues surrounding your product admit it upfront and inform the public what YOU are doing to address these issues.

The power continues to shift from markers to consumers and as along as the pharma industry continues to screw up and is driven by corporate greed consumer will become more and more skeptical of marketers product claims.
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Whistle blower suit against J&J (Caught with their hands in the cookie jar?)
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I don't get it? How many ways can the pharmaceutical industry continue to screw up and in the process put patients health at risk in pursuit of profits? The latest example comes from a whistle blower lawsuit from a couple of ex J&J salespeople who have provided the Wall Street Journal with a wealth of information on the promotional practices of Procrit. If even there is a slight truth to some of the allegations then the FDA should hit J&J where it hurts..their pocketbook.


Documents in a lawsuit filed against Johnson & Johnson by two former salesmen show how the pharmaceutical giant sought to boost sales of its blockbuster anti-anemia drug Procrit by offering contracts that fattened doctors' profits and urging its salespeople to push higher-than-approved doses. According to todays Wall Street Journal;

Dean McClellan, who worked for 12 years at J&J's Ortho Biotech unit selling Procrit, saved 15,000 pages of company memos, contracts and other work-related documents in a storage unit and shed he built off his garage. He says he was forced to retire in 2004 because the company told him his sales increases weren't high enough. He believes the company wanted him out because of his age, which was 55 at the time. Angry, he agreed to join a whistleblower lawsuit by another former Procrit salesman, Mark Duxbury. A brief filed by J&J says Mr. Duxbury was fired in 1998 for racial and sexual harassment. Through his attorney, Jan Schlichtmann, Mr. Duxbury says he was a star salesman for Ortho whom the company turned on after he told the truth about their business practices at a court-ordered deposition.



The Office of Inspector General of the Health and Human Services department put out new compliance guidelines in 2003 saying that marketing the spread may be in violation of anti-kickback laws. The Justice Department has been investigating drug companies for such marketing practices, resulting in big settlements of $875 million for TAP Pharmaceuticals in 2001 and $355 million for AstraZeneca in 2003. After extensive debate, Congress overhauled the Medicare reimbursement system in 2005 to prevent such practices. But drug companies continue to offer large buyers big rebates, which they say are lega

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Mr. McClellan's documents on the marketing of Procrit show that in 2004 -- after Amgen Inc.'s competing drug Aranesp came on the market -- J&J made offers that would allow buyers of Procrit to receive discounts off an already-reduced price as well as rebates. For example, an internal company memo calculates that a physician who bought nearly $1 million of Procrit over 15 months would get a check for $237,885 back, or 24%.



Another J&J program offered hospitals an incentive to buy Procrit and shun Aranesp: discounts on purchases from across Johnson & Johnson's product line -- including some huge-selling drugs and medical devices sold by different subsidiaries -- if the hospital used Procrit at least 75% of the time when prescribing anti-anemia drugs. In addition, J&J created a "Right of First Refusal" contract for doctors, requiring them to allow Ortho Biotech to make a counteroffer if Amgen's Aranesp price undercut Procrit

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Mr. McClellan also alleges the company pushed doctors to prescribe a higher dose years before it was approved as safe and effective by the FDA. For years, the company focused on educating health care providers on Procrit's medical benefits, he says. But in the mid-1990s at a national sales force meeting, an Ortho executive announced that the division was moving to promote what it called "QW dosing," switching patients from three, 10,000-unit doses a week to a single, 40,000-unit dose in cancer patients, Mr. McClellan says.



At that time, that dose wasn't approved for cancer patients. Many years later, the FDA approved the dose in cancer patients, but before then, pushing the unproved dose would have violated FDA rules.



Where the hell was management and where the hell was ethics in all this? Hidden under the financial calculator no doubt. And does the pharmaceutical industry really believe that stories like this won't circulate among patients and HCP's? Does the pharma industry really believe that patients are going to continue to "buy-in" into DTC for new products with a track record of "profits over scientific benefits"?

The successful new CEO knows that everything their company does is transparent in a world where information is readily available. Unfortunately the pharmaceutical industry continues to set standards of bad conduct in pursuit of the almighty dollar while pretending to be concerned about patient health. Take notice marketers: the public is not going to buy this anymore and marketers can no longer tell people what to think and buy.


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Off label use of anemia drugs..was it supported?
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The tale of anemia drug use in the US is taking more turns and twists than "curve ahead" road in San Francisco. According to an article in this mornings New York Times, doctors are gaining a financial benefit for prescribing the drug and the more they prescribe the more they make. The drug companies simply say "what we are doing is legal" but frankly that is not enough and it's time for the FDA to come down hard on Amgen and J&J if they find that they supported this practice


The anemia drugs when used according to the label maybe safe and effective but the problem seems to be that physicians in this country are using it off label and as such have been getting millions of dollars in payments from the pharmaceutical industry. How does the pharma industry respond? "What we are doing is perfectly legal". What a bunch of duckers and a load of crap.
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The FDA needs to determine if Amgen and J&J knew about the off label dosing and if they did what did they do to inform physicians that the drug had not been tested at these higher doses. My guess is that they knew of the higher dosing but chose to turn away because after all it provides millions of dollars in sales to the bottom line. However what is lost in this whole myriad if misinformation and turning a blind eye is patients health. According to the article;

Dr. Peter Eisenberg, an oncologist in Marin County, Calif., said many doctors had been induced to use more epoetin by the financial incentives and the belief that the drug was helpful. “The deal was so good,” he said. “The indication was so clear and the downside was so small that docs just worked it into their practice easily. “Now it’s much scarier than that,” he said. “We could really be doing harm.”



And of course the drug companies involved did not conduct clinical trials at the higher doses..why should they there was no financial incentive and could only harm a potential blockbuster?

This is why the pharmaceutical industry continues to reap the scorn of the media. This is what is wrong with the pharmaceutical industry and frankly it is this authors opinion that the FDA should come down really hard on Amgen and J&J if there is ANY information that showed these companies promoted off label use. The FDA is supposed to protect us from dangerous drugs and it seems that in this case they failed to intervene when the drug companies conducted business as usual. the problem is that business as usual should not endanger patients....




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Huge DTC budgets are not needed if you can innovate
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Starbucks is one of the best known brands i the world yet this marketer spends less than 2% of its annual budget on advertising. They probably realize that spending $100 million, primarily on TV, to reach certain awareness levels is old school marketing that provides little ROI for the brand. There are a lot of innovative ways to reach your target audience and raise awareness of the brand but most pharma marketers would rather continue to spend millions of TV or Golf because they are stuck in the past where marketers told consumers what to buy.


Imagine if you will an open house event where top chefs from your city prepare great meals for you to sample. There's just one catch...all these meals are heart healthy and have low cholesterol and the event is sponsored by Lipitor. Then there could be a weekend park or beach cleanup sponsored by Boniva because a little exercise can help maintain strong and healthy bones. These are the kind of grassroots efforts that some marketers are doing to enhance their brands. What is the pharmaceutical industry doing? Hosting a golf tournament because God knows men with ED play golf (or one of the executives wants to play a round with Tiger Woods).

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We all have to learn to be able to do more with less but in the pharmaceutical industry DTC marketers don't yet understand that. If the budget is too small to allow a successful campaign that will meet reach and frequency numbers they still will spend the money just to be able to say " we did it" or add the campaign to their resumes. DTC marketers very rarely think outside the box when it comes to the development and strategy of campaigns. They'll spend millions of dollars to develop and refine messages but they won't allow agencies to become strategic partners. Pharmaceutical companies are also great at promoting people, with no marketing background, into senior executive positions where they can be "dazzled" my marketers manipulation of data to show that current DTC campaigns are successful. I saw this happen a lot at Lilly.

There are marketers who continually innovate (Apple, Starbucks, BMW) and then there are pharmaceutical marketers who only look at barriers not opportunities. The pharma industry has been hiring consumer marketing people for DTC roles the problem is that old marketing methods are s dead as analog technology. Until the budgets get tighter and tighter marketers may continue to have that google eyed look of a kid in a candy-store with a $20 bill.
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Why the pharmaceutical industry continues to step on mines
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I had a chance this week to go back into the New York Times archives and research the complete stories on Lilly's Zyprexa. Since I worked at Lilly and was aware of the stringent regulatory environment I was trying to understand how this could happen, but after listening to a number of people within the industry the question became "I am surprised this doesn't happen a lot more". It's only a matter of time before another product gets called under the microscope only to find that mistakes were made along the way....mistakes that could endanger patients health.

If there is anyone naive enough to believe that, when drugs are being developed, drugs are marketed because they provide better health solutions then there is a bridge I want to sell you really cheap. Drug development is a business decision, that means that the key driving decision as to whether the drug will continue in development is the potential for sales dollars not "how many patients will it help". I know of at least two drugs in development at major pharmaceutical companies and what is being discussed internally is the potential for "off label sales". The sales people know that regardless of what the label says that a number of physicians will use these drugs off label and could add hundred of millions of sales dollars to the bottom line.

On the other side of the coin I also know of a drug that could be used to prolong the lives of patients with a certain type of cancer but that these drugs are getting reduced funding because the sales potential is very low. So what does all this mean? Well it brings us back to the age old paradox: is profit the underlying driver in pharmaceutical business decisions? But first let's take a step back here...Chrysler is for sale because of sagging sales and because the models they have introduced have little consumer appeal. When an automobile company decided to take a concept car to production they have to determine their break even sales point and project how many units need to be sold in order to maximize investment. This is traditional, standard MBA analysis. The difference is that these are cars, or SUV's that take people places they are not products that could save or enhance lives. Ahhhh, there's the rub...profit or patients health...shareholders or customers?

I'll be the first to admit that it's not easy being a CEO today. You have to please board members who look at a companies financial sheet for quantitative measurements of performance. Wall Street analysts can swing hundreds of millions of investor dollars to or from your company depending on what they want to hear and the regulatory environment is getting a hell of a lot tougher. Still, if I was earning millions of dollars a year and was guaranteed a golden parachute I would embrace this challenge. The problem seems to be, as I have written many times before on this forum, is that there is a real lack of business leaders in American industry today. Bill Gates is semi-retired and Microsoft has become a huge, slow bloated company, Steve Jobs is still a driving force with Apple but then again his compensation is valued well over $600 million and the auto industry compensates a new CEO from Boeing $24 million to report record losses and lay off thousands of people.

So what does all this mean for the pharmaceutical industry? Well first the company slogans don't mean a thing. "Answers that matter" should be "answers that matter for a price", "where patients come first" should be "where patients come first behind Wall Street, "working for a healthier world" should be "working for a healthier stock price". Pharmaceutical companies are public companies and as such have a responsibility to earn a return for investors.

George Merck in 1952 said
"Medicine is for people, not for profits.” I think that too many people in the industry have forgotten that and as long as they do the pharmaceutical industry will continue to go blindly into the mine fields that await them.
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DTC Ads driving customers online?
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Manhattan Research loves to issue data in press releases. The problem is that unless you know what the data says it's just statistics. Data should tell DTC marketers a story and help them gain insights into WHY consumers act the way they do....In the not-too-distant past, prime time television was filled with pharmaceutical advertisements urging prospective patients to call a toll-free number for more information. Thanks to the Internet and other emerging technologies, today's pharmaceutical marketers have an arsenal of new strategies at their disposal, making this call to action seems as antiquated as VCRs and dial-up modems. One of the most popular trends in pharmaceutical marketing over the past few years is the shift toward unbranded advertisements focused on building awareness for a certain condition, and, in many cases, encouraging consumers to visit a website for more information about that condition.


Many in the pharmaceutical industry have questioned the viability of this approach and whether it is actually effective in driving consumers to research a condition. A recent study from Manhattan Research demonstrates the impact of these advertisements on the health information seeking behavior of consumers exposed to these advertisements. The rankings are based on the comprehensive online consumer research study with 4,965 U.S. adults titled ePharma Consumer(R) v6.0: The Future of Integrated DTC Marketing.

    Top Conditions Researched Online Because of TV Ads


    1 Restless Leg Syndrome (RLS)


    2 Smoking/Trying to Quit Smoking


    3 Erectile Dysfunction


    4 Acne


    5 Human Papillomavirus (HPV)




    Source: ePharma Consumer(R) v6.0, Manhattan Research, LLC


"Unbranded advertisements are building awareness for certain conditions, and encouraging consumers to take action and research these conditions online," says Mark Bard, President of Manhattan Research. "In some cases, more than one-third of consumers researching a certain condition online report that research is the direct result of a television advertisement they saw. It is clear that unbranded ads are having an impact."

Behind the Propaganda-This Authors Opinion

DUH !!!!!! When I was at Lilly we used Manhattan Research and they can be a great resource for information but DTC marketers have to be careful not to use this information as the base for all decisions. It provides part of the picture but does not tell the whole story. All too often we look at data and fail to understand what it tells us. Let's take ED for example; it's no wonder that it is on the top researched list but it maybe there because aging baby-boomers are not able to "respond" like they used to when they were younger. As men age they require more sexual stimulation to engage in intimate activities and many men may feel that because of this they have ED when in reality they do not.

Restless Leg Syndrome is another condition that many people may have had but weren't aware that it was a "medical condition" until we were exposed to the DTC ads. A friend of mine saw the ads and commented that he had some of the symptoms. Upon going to his doctor to talk about the symptoms his doctor did a blood test which revealed he had Type II diabetes and the pain he was feeling in his legs was because he had started to experience some nerve damage.

It's alarming that 4 out of the top 5 conditions researched most online are lifestyle issues more than serious medical conditions. Yes smoking can lead to a wealth of health issues but smoking is all too often a choice that is made by people who are well aware of the risks involved. High cholesterol is a much more serious problem yet millions remain untreated. The education of consumers about dangerous conditions, high cholesterol, obesity and high blood pressure is where the drug industry has fallen short. Rather than educate a public about these life threatening diseases they would rather talk about ED or restless legs. Rather than integrate and combine strengths to inform and educate they would rather sell you a brand.

If the drug industry is to gain the respect of legislators and the public they have to do a hell of a lot more unbranded advertising on serious and potential life threatening medical conditions. It's time to stop continually talking about ROI and then say we are here to provide better health solutions for our customers. But then that would piss off Wall Street wouldn't it?


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Unless you have been there don't point fingers
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It was disturbing to learn this week, according to John Mack's survey, that BLOGS critical of the pharmaceutical industry are viewed more credible than BLOGS supportive of the industry. There's a lot wrong with the pharmaceutical industry from DTC marketing to CEO's who are so anxious to please Wall Street that the lose site of what we should be all about but unless you have worked in the pharma industry there is no way that you can sit on the fence and point fingers at people inside the house.



I don't believe that at any time in its history the pharmaceutical industry has been facing more challenges than the current environment. Wall Street demands profits, Congress wants accountability, people want real answers to health problems and CEO's continue to be shuffled in and out. As I have written many times on this BLOG before the industry is in dire need of strong leadership. Working in the pharma industry is unique and unless you have spent time on the inside I don't believe that you can understand the environment in which we work. In my 10 years in the pharma and health industry I have seen some amazing things including manipulation of data to support more money for DTC channels, senior managers making decisions about DTC marketing without an understanding of how to measure ROI's and personal agendas that lead to decisions of what is best for the person making them not the brand.


Yet as a pharmaceutical marketer I have chosen to make a stand and do what is right for my customers and patients. Are there that many people out there who purposely hide data from the FDA that could harm patients? Are there managers who make decisions based upon what is right for the balance sheet rather than the patient? The answer to these questions is probably yes. But these managers didn't just come into a company with the idea that sales is more important than patient health. It is started when people don't question numbers or data or don't have the knowledge to ask the right questions.


The pharmaceutical industry is at a crossroads. CEO's need to communicate throughout the organization that whatever else we do the patients always come first. As marketers we all have to put ourselves in our patients shoes and ask "what do they need and want". CEO's have to be strong enough to stand up to MBA Wall Street analysts whose slogan is "instant gratification takes too long" and pharma marketers have to be held accountable for everything they do.


It's easy to point fingers on the outside looking in but frankly there are no short term fixes for any of these problems. It's going to take time at a time when the marketing environment is changing as we speak. What is wrong with pharma is indicative of what's wrong with American Business..too many layers..too much emphasis on paychecks and not enough emphasis on being customer centric.
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