Eli Lilly Cymbalta

10 Pages   |   3,241 Words

Case Analysis – Eli Lilly Cymbalta

Table of Contents
Executive Summary. 3
Strategic Issues and Problems. 4
Analysis and Evaluation. 4
Competitive Analysis. 4
Key Lessons from Market Research on Physicians. 6
Findings of Patient Segmentation Study. 7
Alternative Courses of Product Marketing. 8
Recommendations. 10
  The case analysis pertains to the issue faced by Eli Lilly to create strategy for a successor medicine for Prozaic. Prozac is a very successful product of Eli Lilly contributing $2 billion per year revenues from antidepressant drug. The issue is highly pressing because there are only a few years remaining for patent protection of Prozac to expire. Major competitors of Eli Lilly are Pfizer, GSK and Wyeth that have patented alternate medications with slight different properties. To compete in this fiercely competitive environment, it is a common practice for drugs manufacturers to employ direct-to-consumer advertising. The new product will need to compete with competitive offering of other competitors and generics in the market.
 

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Interviews which were carried out with different physicians revealed that there is a large number of depression patients which also have an ailment of pain in upper body. The incidence of pain was not only reported by general physicians, rather interviews with psychiatrists also confirmed the presence of pain among depression patients. Psychiatrists are more empathetic towards reporting of pain by their patients of depression. They believed that pain was caused by underlying physical conditions and were more willing to treat pain associated with depression. The characteristics of antidepressant which are most relevant for decision making process of the target market are safety feature of the product, minimization of side effects and dosage of the product. Price is found to be an important factor of purchase decision determination among almost all segments.
The recommended strategy for Eli Lilly is to launch Cymbalta as soon as possible without waiting for either a one-day trial or pain-relief approval from FDA. A single-day dosage and pain relief are the product attributes which are going to be established later on. Clinical trials and FDA approval for pain relief can continue simultaneously to product launch. Strategic issues and problems faced by Eli Lilly are multifarious. The central issue is to device a successor strategy for Prozac. Prozac is a very successful product of Eli Lilly Company and the marketing team at Eli Lilly is faced with the challenge of selecting one strategy for marketing a replacement product for Prozac among five available alternatives. The issue is highly pressing because there are only a few years remaining for patent protection of Prozac to expire. If issue is not resolved and solution implemented before expiry of patent protection, then Eli Lilly will lose its competitive edge and its $2 billion per year revenues from antidepressant drug will dry up when generic versions of the same Prozac could be sold by competitors. The complexity of the issue if heightened by the fact that it is not clearly known how much time is left before Prozac’s patent protection will be eliminated by the court of law. The problem is to reach a decision which can be implemented within time limit, minimizes side effects of anti-depressant drugs and offers features which are more desired by the target market and is favored by regulatory authorities, as well.

Analysis and Evaluation                       

Since the problem presented in the case has multiple dimensions, a number of different approaches have been used for analysis of the issue. The issue is not simply making a singular decision, rather the cross functional teams at Eli Lilly need to take a number of decisions in succession pertaining to the successor product. Assessment and analysis undertaken in this segment will systematically investigate the following areas:
  • Weighing three criteria for selection of one product alternative; namely, efficacy, presence of toxicity and meeting previously unmet needs
  • Even after one product alternative is selected, prioritizing objectives of clinical trials need to take place
  • Whether to conduct a new set of clinical trials with the objective of establishing once-a-day dosage
  • Whether to delay submission of Cymbalta (a highly probable selection) for marketing approval for FDA
Some of the approaches used in the analysis focus on external environment, while others pertain to internal analysis of the company.
Competitive Analysis the market for anti depressant comprises of more than a hundred and twenty people worldwide. The cumulative market of anti-depressant drugs is almost eleven billion dollar in the year 2000. Several competitors partake of this eleven billion dollar market. Clinical depression comprises of a condition which lasts for more than two week and interferes with patients’ routine and normal activities. To category to this market, major players like Pfizer, GSK and Wyeth have patented alternate medications with slight different properties. The strongest competitor in anti-depressant product category is Wyeth with its brand of Effexor. The market share among these major players is almost equally divided except Wyeth with a market share of thirty six percent and sales in excess of three billion dollar annually.

 Eli Lilly does have considerable competitive edge in this highly competitive market based on supremacy of its existing brand Prozac. To compete in this fiercely competitive environment, it is a common practice for drugs manufacturers to employ direct-to-consumer advertising and to alter side-effects profile of the drugs with the objective to position their product slightly different from those of competitors.
Figure 1 - Competitor Market Share (self-drawn)
Even though, the mechanism through which these products work is the same in most part, yet these firms attempt to change small portions of their product offering to maximize benefits of pain relief and other minor benefits to the patient. The role of generic versions of the drug as a competitor in the current market is quite limited because majority of products have patent protection from being manufactured as generic versions.

Valuable lessons can be drawn from competitor analysis. For instance, the market supremacy of Wyeth is found to be based on the fact that its brand Effexor also promises consumers relief from adjoining conditions other than depression. The drug is marketed to consumers as a cure for depression along with proven benefits to social anxiety disorder, panic attacks and generalized anxiety. Pristiq also gain its competitive edge from its adjoining function. Pristiq has the added functionality of enabling improved metabolism of the user.

Another reason for which Pristiq has gained a competitive edge in a comparatively short period of time is that the packaging of product is also available in lower dosages. Eli Lilly should, therefore, tend to choose the product option which can treat adjoining ailments along with depression and which can be made available to consumers in smaller dosages, rather than being restricted for a maximum intake of once or twice a day.  
Competitor analysis also shows that patent on a few competitors’ products is about to expire too. This implies that the marketing effort of Eli Lilly will need to compete with those of other competitors in the market.

Key Lessons from Market Research on Physicians the market research in which physicians were inquired about the needs of the market and the preferences for attributes of the new product was highly helpful of product development and subsequent decision making. It has been found in competitive analysis above that that those products have a strong presence and a competitive edge in the market which derives their strength from treating those adjoining conditions which are found in patients of depression.

Interviews which were carried out with different physicians revealed that there is a large number of depression patients which also have an ailment of pain in upper body – most commonly parts of neck, shoulders and head – and convulsions. Back pain was also reported by a sizeable number of physicians who were interviewed during the course of the study. This revealed that at this point in time, those formulae of depression treatments would be highly receptive in the market which also contains pain relief properties along with the central function of treating depression.

The incidence of pain was not only reported by general physicians, rather interviews with psychiatrists also confirmed the presence of pain among depression patients. In fact, psychiatrists mentioned that majority of their depression patients seek professional pain therapy. This fact also provides the valuable lesson that the incidence of pain contains so much importance amongst patients that they are willing to spend money to seek relief for this factor.

A highly interesting observation made during the interview process was the fact that psychiatrists were more empathetic towards reporting of pain by their patients of depression. They believed that pain was caused by underlying physical conditions and were more willing to treat pain associated with depression. On the other hand, physicians were found to be of the opinion that the pain associated with depression is more psychological than physical.
Several of the physicians interviewed didn’t take pain reported by depression patients seriously and expressed that they instructed their patients to take simple aspirin to treat this pain. Physicians also mentioned that they instructed their patients to use their will power to overcome pain. The finding from interviews is that the focus of the marketing effort – incase the new product of Eli Lilly contains pain relief properties – should be on psychologists rather than physicians.  

The most important finding form the interview process is the desired product properties mentioned by physicians and psychologists. The characteristics of antidepressant which are most relevant for decision making process of the target market are safety feature of the product, minimization of side effects and dosage of the product.

Those products are favored by the prescribers which can be administered once a day, rather than the one which in smaller quantities at various times during the day. This corresponds to ease of use for the patients since they only have to remember taking one dosage of the medicine during the day. Drugs which are administered once-a-day are also favored by doctors as compared to the ones which needs to be administered several times during the day. Avoidance of certain side effects of anti depressant drugs is highly important is decision making of both prescriber and the patient. Anti depressant drugs are known to decrease libido among men and women both. There is a very lucrative opportunity for a product in the market which does not characterize traditional side effect of decreasing libido among patients. In fact, avoidance of side effects rated higher in terms of frequency of being mentioned by the interviewee than pain relief features.

Weight gain is also a commonly reported side effect of depression medication. Avoidance of this side effect is also mentioned by both psychiatrists and physicians as an important factor in decision making. During the interview process, interviewee’s expressed the desire for development of an anti depressant which does not lead to weight gain by slowing metabolism process of the body.

Of course, the efficacy of the product in its original function, that is treating the depression, should be high and experimentally proven. Contemporary drugs prescribed for treatment of depression, including Prozac, has an effectiveness which is in the range of 58% to 75%. Higher rates of effectiveness in treating the condition will lead to greater propensity of physicians to prescribe the medicine.

Findings of Patient Segmentation Study the patient segmentation study was highly effective in terms of identifying sub-groups within the market of depression patients. The study found out that there are seven segments found within depression patients’ market. The largest, and consequently most important, segment of target audience is the one termed as Functioning Fran. This segment of target audience majorly comprises of women, who are relatively easy to treat due to little or no complexities in the ailment. Symptoms of depression are comparatively mild in this segment and severity of anxiety symptoms is low.

The second most important market segment also comprises predominantly of women which relatively older (average age around fifty years) and this group is highly sensitive to prices of the medication. Low purchasing power of this group is due to the fact that majority of people in this age group are retired and have little disposable income to spend significantly on their medication. Hence, it should be taken care during treatment of this group that the cost of the product is kept low. Lesser margins in the price of the product can be made up by the fact that medication period of this segment is longer comprising on average of seven years.

Most noticeable finding of patient segmentation study is that those segments of patients who are characterized by severity of symptoms and adjoining conditions of depression is considerably low. The percentage of depression patients who report continuous restless, a dramatic change in appetite and a very high degree of remission is low. Those segments of patients which are easier to treat comprises of a major percentage of the whole.
Meanwhile, those segments of depression patients who report pain is considerably high. Of the seven market segments, only one segment of the market termed as ‘Hurting Helen’ didn’t report pain associated with depression. For this reason, pain relief is a highly important factor in determining purchase behavior among the intended target market.

Patient segmentation study didn’t merely comprise of examination of patient needs through directly questioning them, rather it also involved interviews with physicians. Price is found to be an important factor of purchase decision determination among almost all segments. One possible explanation for price sensitivity in this medication category is that depression medication needs to be administered for a fairly long period of time. Patients are, therefore, weary of high priced medication even if promises to provide greater relief from symptoms and adjoining conditions.
Alternative Courses of Product Marketing there are a number of alternative courses of action even after Cymbalta is selected as the medicine to be chosen as the successor of Prozac. These alternatives are discussed as under:

i) Cymbalta is launched with a once-a-day approval for MDD but with no FDA approval for pain indication. If this course of action is taken then the product will not have any key differentiation with the other products which are present in the market. The course of action will be comparatively time consuming since drug trials for once-a-day will need to be carried out. Trials for once-a-day administration are to be carried out which are much more complex and time consuming than several-times-a-day trials. Incidence of side-effects is higher for once-a-day concentrated dosage.
This course of action entails that Eli Lilly will have to conduct additional clinical trials for around an year, only to gain a product attribute which is not sought by its customers very highly. After all, taking a medicine twice a day only constitutes a slight unease for the market segments as compared to once-a-day dosage. The dosage factor is not likely to have a significant impact on increasing the demand for the product. During the interviews, a small proportion of physicians and psychologists had mentioned dosage of the product as a determining factor in decision making. By pursuing this course of action, Eli Lilly will be forced so waste valuable time only to gain a minor advantage.

i) Cymbalta is launched with an FDA approval for pain relief and only twice-a-day approval for MDD  the second possible course of action is to save valuable time for once-a-day trials and to focus on the attribute of pain relief for Cymbalta. The above analysis of physician responses and research conducted with patients showed that pain relief is a highly sought-after attribute for an anti-depressant. Pain associated with depression was expressed as a problem by a large number of respondents in the surveys. This implies that Eli Lilly can gain a huge competitive advantage over other competitors by associating Cymbalta with pain relief. This positioning of the product is likely to create a highly favorable response amongst the target audience. It has been mentioned above that it is imminent that a large number of generic products will be launched in the market and Cymbalta is required to be differentiated from the hoards of other products available in the market. The benefits for Eli Lilly are likely to be multi-folds since pain relief as a market is quite huge in itself. Those patients who resort to take aspirin or other pain relief products along with depression medication has to face to side-effects of upset stomachs associated with generalized pain relief medicine.

The link between depression and pain is not very clearly understood yet. Nonetheless, pursuing this course of action will cause significant delay for launching the product in the market. Eli Lilly will need to carry out trials for Cymbalta as an independent treatment of pain irrespective of depression. This also implies that Eli Lilly will have to file for two FDA approvals rather than one. Therefore, both time and financial resources expended through this course of action are much higher than the alternate one. If the court orders patent protection of Prozaic to be removed before Cymbalta has completed its round of trails for pain medication and FDA approval, then the company would lose billions of dollars worth of business to generics and competitor brands. The analysis reveals various considerations for the product launch decision. It is concluded that meeting the time limit is the most important consideration than creating an initial differentiation of the brand or perfecting the dosage. The recommended strategy for Eli Lilly is to launch Cymbalta as soon as possible without waiting for either a one-day trial or pain-relief approval from FDA. This course of action will enable the organization to launch a successor to Prozaic one year before the patent runs out. Eli Lilly will be able to retain its market share in the anti-depressant category and revenue stream through this course of action.

The rationale for this strategy is that Cymbalta currently meets three most important criteria for a medicine launch. It is found to be effective for treatment of depression and it meets previously unmet needs of providing greater relief from the condition than contemporary medicine. A single-day dosage and pain relief are key strengths of the product; however, they are going to be established later on. Clinical trials and FDA approval for pain relief can continue simultaneously to product launch.

The differentiating factor of Cymbalta of pain-relief property can be established among physicians and users can be established later on. The competitive advantage and positioning can be created later too. 60 gm dosage for a single-day administration is also a value-added feature which can be attended to after product launch. It is not recommended at all to delay much needed product launch for Prozac-successor due to attention to minor details. 
It is essential to create milestones of success to implementation of the above mentioned recommended strategy. For the first year of launch, the target of the marketing team should be to attain a market share of ten percent of the anti-depressant drug market. For the second year, the target set for the development and marketing team should be to complete pain relief trials and FDA approval as a pain relief medication. For the third year, the benchmark of the organization should be to conclude trials for once-a-day dosage for Cymbalta. The five-year target of the organization should be to attain a positioning in the mind of the consumers as a pain-relief medication as well as an effective anti-depressant.

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