Sunday, November 28, 2010


A Biotech cluster is a region, which is concentrated with interconnected businesses, suppliers and affiliated institutions in the biotech field.

In other industries, business clusters start with a large company, which attracts suppliers into the region. Technology entrepreneurs spin off from the large company and form smaller new companies. These new companies in turn attract venture capital and management talent, which help in the formation of more companies. The formation of biotech clusters on the other hand is way different from the traditional formation of business clusters. Discovery research in Universities as well as funding from NIH gives rise to intellectual property. This IP attracts biotech entrepreneurs to the region who develop the core technology and identify potential products. This in turn attracts venture capital and other investments. These start up companies form strategic alliances with big pharmaceutical companies for product development, marketing and distribution. Hence these clusters become hubs of activity with rapid entry and exit of organizations and individuals.

Governments in different countries are realizing the potential of Biotechnology to create new industries and are keen to develop and commercialize new discoveries in this field. However some countries like Japan and Germany where the governments are spending billions of dollars to create a biotech business clusters, have been unsuccessful. On the other hand UK and US have managed to develop successful biotech clusters. Even in the US regions like LA, Chicago, New York City have been unsuccessful in creating biotech clusters even though these regions have strong research universities, access to venture capital and favorable government policies.

Source: Meldman, M. and E. Romanelli, “Organizational Legacy and Internal Dynamics of Clusters”, working paper, University of Toronto, 2006

Analysts believe that what's missing in these regions is a rich social network to promote innovation. Such a network connects scientists, entrepreneurs, managers, venter capitalists and organizations, which allow the quick flow of information within and across different companies. Thus companies have easy access to a deep labor pool of scientists as well as managers and investors, which improves the efficiency of the industry. Moreover, biotech is a very risky field where the chances of loosing a job or a business running on loss are relatively high. In such cases social networks also provide job opportunities to a vast number of people.

Experts in the industry believe that ‘location’ has a strong influence on the prosperity of a Biotech start up company. Many experienced biotech executives and investors believe that start-ups should be located near a biotech cluster region. This would allow the involvement of experienced professionals and investors, thus enabling active collaborations and dialog. These are steps that are essential in taking the start up company to the next level.

However as the biotech industry grows, it remains to be seen whether the benefits of social networking in clusters outweigh the challenges of IP infringement and stiff competition within these clusters.


Creating successful Biotech Clusters.

Wednesday, November 17, 2010

Sex Sells

Oral contraceptives, more commonly referred to as “the pill," are used to prevent pregnancy by changing estrogen levels. Oral contraceptives accounted for approximately $4.3 billion in revenue dating back to 2006, 74.7% of which were within the U.S. The pill is considered a lifestyle drug, making marketing campaigns vital to the success of sales of the drug. How is this industry marketing to consumers around the world and handling the topic of sex?

Below are three videos from Asia, India, and the US. While watching the videos notice the ages of the actors, the reasons for taking the pill, and the use of humor!
Can more be done to advertise in these and other countries? How can companies use advertising to break into more conservative countries where the topic of sex is taboo?



Thursday, November 4, 2010

Pfizer Example to Product Name Variation

Just as an add-on to this week's blog-post, we wanted to show an example of the differentiation in some product names based on countries. For this example, we're going to look at a very serious drug, Lupron (leuprorelin), which is indicated for the treatment of prostate cancer. Lupron has grossed over $2 billion in worldwide sales as of 2009 (IMS Health). As everyone knows, the diagnosis and treatment of cancer has grown rapidly over the past decade and it is drugs such as Lupron that help reduce the kill rate of terrible diseases.

Drugs treat people regardless of where they come from. But companies cannot just go out and simply offer the treatment with the same marketing strategy country by country. Companies often adapt their product name/logo to suit the cultural and language differences that exist in our global in point -- Coca Cola. The same is true for drug products, like that of Lupron.

Let's take a look at the variation in names and who sells the product in some countries:


Product Name

Marketing Company

Argentina, Brazil, Canada, Chile, United States, Venezuela



Australia, Belgium, Czech Republic, France, Hungary, Israel, Malaysia, Mexico, Netherlands, New Zealand, Portugal, Russia, South Africa, Singapore, Switzerland, Turkey




Enantone, Trenantone


Denmark, Finland, Norway, Sweden






Enantone-Gyn, Enantone









Hong Kong, Thailand, Italy,





Sun Pharma






Ireland, United Kingdom








Lucrin Depot






S. Korea

Luphere Depot

Daewoong Pharmaceuticals

The variations are very similar and there is no real definition of these words. So why do they need to change the names depending on the country? We can't find the direct reason. It's not like Lupron is an offensive word in any of these countries. So I pose this question to the world. Why is this done?

Wednesday, November 3, 2010

Marketing Drug Products--Direct Strategy?

In class, there has been a lot of recent discussions about brand image, corporate branding strategy and approaches to global marketing. As we saw in the Kraft-Cadbury case, there was a distinct difference in the perception of the Nestle and Kraft corporate brands versus their product brand counterparts. This is mainly due to the corporate structure and the visibility of the product labels as opposed to the corporate logo. This "umbrella" strategy is also inherent within the pharmaceutical industry, where corporations release drug products that mainly speak for themselves in terms of their marketing power.

One thing that you have to understand about the pharmaceutical industry, is that pure consumer marketing does not truly exist. Yes, you'll see Lipitor TV advertisements time-to-time or the little clouds representing depressed beings not taking Zoloft. These blockbuster drugs are so well entrenched in the consumer's minds because...well, most people know someone who takes them. Most consumers who are in need of such drugs will opt to purchase the medication because it has a positive reputation and good credentials (meaning it works!). Consumers do not prefer one drug over the other because Pfizer has a stronger brand image than Novartis. Just as Nestle's Nestcafe brand stands strong on its own, Pfizer's Lipitor can transcend borders and fill consumer's cholesterol needs.

Regulations on direct to consumer advertising have made it more difficult for pharma companies to boost product awareness, and it turn, their corporate brand image. In 2006, the US General Accountability Office reported that pharma spent $4.6 billion on consumer advertisements and $7.2 billion promoting to physicians. In the EU, this type of marketing is banned, and therefore pharma companies have to employ different strategies to get their products in the minds of consumers. Currently, only the US and New Zealand are legally allowed to broadcast such commercials.

Zoloft Commercial in US

Most drug companies do not market via what's called direct to consumer advertisement. Rather, they have much different marketing strategies, especially when transferring manufacturing operations into foreign countries. For the most part, pharma and biotech companies pitch marketing to other businesses and do so by attending large conferences and traveling to various company sites. Another methodology is to push drugs into the hands of the physicians that control prescriptions. This can be quite a sticky issue and it is currently being tightly controlled by the legal system in the US. In other semi-regulated countries, preferential prescriptions may not be such a problem.

Then the only thing to really ask is how can a US pharma company market with a solid product make its way to Europe, Asia Pacific, or the BRIC countries? This is extremely complicated...but the basic answer is through partnerships and distribution agreements with well-established players in those local markets. Let's take Medtronic's bone morphogenic protein-2, called InFuse. This product helps in bone healing after surgeries. Medtronic manufactures and markets this product in the US, but has established an agreement with Pfizer for exclusive marketing in Europe. Medtronic still receives royalty kickbacks and benefits by extending its name on the label (manufacturer) in European countries. For Japan, which is a tremendous pharmaceutical market on its own, Medtronic reached out to Astellas (ranked 21 in global sales) for local marketing of its product.

The idea that drugs are driven by different market forces compared to typical consumer goods is reflected in Interbrand's ranking system. Do you see any pharmaceutical companies making the list? No you don't. These companies are immense, some with nearly $63 billion in revenues (J&J). So how do you quantify the brand power of these products? The answer is that you can't because its a whole different ballgame with completely different economic and political pressures. This does not mean there is no marketing only means that the strategy is completely focused on the product and its competitive advantages.

Monday, October 11, 2010

Corporate Social Responsibility

Corporate social responsibility is a form of corporate self regulation integrated into a business model whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. CSR, also known as corporate citizenship, sustainable business (SRB), or corporate social performance is not a very recent concept. However, due to industrialization, the impact of various businesses on society, and the growing number of well informed and educated general people, companies have now shifted focus to meeting various societal challenges while still making large profits.

In 1995, Shell, one of the world's major energy companies was boycotted for the way it dealt with the disposal of the Brent Spar, its oil storage facility. Shell faced a lot of criticism from groups like Green Peace and this incident nearly brought the company bankrupt. It was after this episode that CSR really jumped on top of the global agenda for most organizations. Since then, CSR has continuously developed into a must have policy or a complete business framework for organizations around the globe. Companies started developing plans to manage the expectations of their stakeholders, manage the way they do their business more responsibly, and also take care of the environmental impacts of their business.

During the AIDS catastrophe in Africa in 2000, the pharmaceutical industry was accused of making money out of the drugs which provided some relief to AIDS patients and not accepting their responsibility towards society. Since then, major pharmaceutical companies like Merck, Pfizer, Eli Lily, Johnson&Johnson etc. have adopted corporate social responsibility as a business strategy in an effort to communicate and demonstrate their commitment to their employees and targeted consumers in a manner that insures product safety. Product liability is a key factor in determining a company’s success in the global market. Hence, pharma companies are now voluntarily developing 'responsible business standards' with individual regulations and standards more stringent than the international standards in order to establish confidence among the firm's core constituency. This helps to generate goodwill among the stakeholders and in turn increases profits for these companies. CSR reports or sustainability reports of some top pharma companies such as Pfizer, GlaxoSmithKline, Eli Lily, Merck, Johnson&Johnson address issues such as child labor, workplace conditions, employee relations, community involvement, customer information, environmental performance and its progress against last years commitments and more.

Writing CSR reports is an art, which many top companies have not mastered yet. It can be quite tricky to represent the information in a sustainability report appropriately. According to the report ‘Branding and cure: a consumer perspective on corporate social responsibility, Drug Promotion and the Pharmaceutical Industry’, Eli Lily provided better public information about its marketing code of conduct compared to Pfizer, the world’s biggest pharmaceutical company. Does this mean that Eli Lily is a better corporate citizen than Pfizer? or has it just cracked the code for writing a good sustainability report faster? As a stake holder, would looking at a company’s CSR report be enough to judge appropriately whether it is a socially responsible company or not? Are shareholders ready to invest in businesses that focus on CSR which might give a high ROI only after long period of time rather than a short horizon?

Below are the links to the CSR reports of some of the top pharmaceutical companies:

Sunday, October 3, 2010

You can get that fixed!

               In 2008 1.3 million Americans underwent medical procedures outside the U.S.   Medical tourism, where patients travel abroad for healthcare procedures, is a growing phenomenon.  With procedures costing as little as half the price while offering higher nurse patient ratios than U.S. medical facilities, U.S. board certified doctors, and hotel-like recovery suites it is easy to see why this choice is gaining popularity. The possible destinations cover the globe. For example, India is a well-known destination for heart surgery and Phuket, Thailand is highly visited by patients seeking cosmetic surgery. The breadth of surgeries available abroad is extensive, ranging from dental work to sex changes.  For ten years this market grew steadily, but it experienced a slowdown in 2009-2010 along with most other markets.  Most advertising for medical tourism is done online through websites such as, reflecting an interesting global marketing approach. Are there opportunities for medical tourism to continue to grow?  In light of current global financial crisis and other risks, such as an outbreak of antibiotic resistant bacteria, will medical tourism be able to rebound?  Do the benefits outweigh the drawbacks for seeking investment in the medical tourism market?

Advantage over US
$ 6,000
Face Lift
Breast Augmentation
$ 8,000
Breast Reduction
Complete Liposuction
Gluteal Augmentation

-          Discounted procedures (2005 heart value replacement: US-$200,000 vs. India-$ 10,000)
-          International hospitals have gained global reputations
-          Lack of health insurance is the most common factor for medical travel
-          Consumer confidence has picked up
-          220 million baby Boomers in the U.S., Canada, Europe , Australia,  and New Zealand
-          Steady growth
-          High unemployment rates
-          Decreased international travel
-          Political and economic instability in some of the countries offering medical procedures
-          NDM-1 (New Delhi metallo-beta-lactamase 1): antibiotic resistant bacteria that is being passed through medical procedures


Wednesday, September 22, 2010

Happiness Index / Culture

Hey class,

Just a quick thought from class on this past Tuesday. Do you think the happiness index is statistically significant and/or actually is valid in correlating to average work hours? To me this is quite individualistic and cannot be trended accurately.

In addition, the discussion regarding cultural implications of marketing in Turkey and India was a bit flawed. It is clear that Turkey is at a cross-roads in terms of political stance on secularity vs. implementing more religious tendencies across politics and other social programs. However, it is also very clear that the country as a whole would like to benefit from involvement with Western countries....that cannot be ignored. The bottom line is that religious views are personal and do not have to be sacrificed by implementation of a secular government.

Marketing of cosmetics, as was mentioned in class, is no different between the religious and "modernist" groups within Turkey. The harder industries would be those that are clear offenses to the Muslim faith...such as excessive alcohol consumption.

In India, the cast system determines social progress. It is also known that India is one of the most diverse countries, with tons of varying languages and religious beliefs. While marketing in India is superficially geared to the rich and poor separately, it should be strategically aligned to the preferences of varying cultures within the country. But just as in many other countries, the new generations dominate goods and services that are demanded within the country, while adhering to traditionalist views.

The in-class video paints a good picture of the urban, technological expansion happening throughout the country, but does a terrible job in showing the reality of the rest of the population. Yes, agriculture is suffering and some of those villages are not being represented in the best way. However, most of the population lives around/near/in the cities. As the cities become way too overpopulated, they expand outward. Companies began outsourcing operations to the outskirts of the cities...which means infrastructure gets built up and the suburbs expand.

Any additional thoughts on yesterday's discussion? As the professor pointed out, Turkey and India are extremely complex culturally and therefore have significant impact on the marketing of various products.