Chapter Three: The Cozaar Challenge
Chapter Three: The Cozaar Challenge
Chapter Three: The Cozaar Challenge
According to IMS (TPM, June 2005), MSD is ranked yth in the market in terms of
annual revenue, with a market share of 3%. To put this in perspective, Synofi-
Aventis is ranked 1st, with a market share of 7%. Up until September 2004, MSD
had been growing relatively well. Figure 3.1 below, shows MSD sales for the last
three years. However, in September 2004, MSD lost its largest product VIOXX,
which was also the second largest product in the total SA market; and this had a
huge impact on MSD. VIOXX was withdrawn from all international markets
because of safety concerns relating to a new clinical study that showed that
VIOXX may cause increased risk of cardiovascular events such as heart attacks
and strokes during chronic use.
For MSD (SA) the loss of VIOXX meant the immediate loss of a projected R100
million in sales for 2005 alone. However, the bigger problem for MSD relates to
the effect that the VIOXX withdrawal would have on both long range sales
forecasts (and targets) and long range resource allocation plans. Consequently
MSD's management have had to develop and implement strategies to redeploy
unused sales force and marketing staff; and simultaneously increase sales
amongst remaining product lines. Management has also had to focus on more
innovative ways to reduce the overall cost of sales and marketing, and optimise
ROI.
27
challenge of having to deliver even greater growth over 2006/7 than was
originally anticipated. Only in this way will MSD be able to deliver on their long
range targets and avoid downsizing over the next 2 years . E-marketing is one of
the possible vehicles for driving growth of these products and as a result, both
SINGULAIR and COZAAR have already begun investing resources accordingly.
Figure 3.1 below, shows COZAAR sales over the last five years. Up until January
2004, the month that introduced new legislation and PMB, the COZAAR
franchise had been growing steadily at a rate of 14% year-on-year. Sales have
since flattened out in response to new legislation, PMB and restrictive managed
health care reimbursement.
40 ,000 .,.----·---,--·-------~--
o+-.,.---.,.---.,.---.,.---~~~~~~~~~~~~~~-r~-+o
~~##~~~~~~pp~~ftP~~~~~~
#~~&#~~&#~~&#~~&#~~&#~
1- - r otat MSD - coZAAR I
28
In spite of this COZAAR is still MSD's largest product now that VIOXX is gone.
COZAAR currently contributes 20% to MSD's bottom line. COZAAR is expected
to achieve R57.4 million over 2005, which represents a 6% growth over 2004-
see figure 3.2 below. Currently COZAAR holds a 6% market share in the total SA
Hypertension Market and a 26% market share (ranked 2nd) in the constructed
AliA market- see figure 3.2 and 3.3 below.
5,700 - - - ---·--
5,200
4,700
RANDS
(OOO's) 4,200
3,700
3,200
2,700
2,200
1,700
1,200
-" Cl. u > u
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07- 08- 09- 10- 11 - 12- 01 - 02- 03- ()4.. 05- 08- 07- 08- 09- 10- 11- 12- 01- 02- 03- ()4.. 05- 05-
00 00 00 00 00 00 W W W W W W W W W W M W ~ ~ ~ ~ ~ ~
Now with the loss of VIOXX, the COZAAR sales and marketing team have been
set the challenge - to achieve an 8% growth in 2006, just months a way from
patent expiration. COZAAR was originally projected to achieve R58 million over
2006 but an 8% growth would mean that this has been effectively raised to R62
million. This is indeed a huge challenge considering the fact that COZAAR is also
operating in the most tightly regulated and restricted , crowded and most cutthroat
segment of the SA pharmaceutical market- the Hypertension (C09) market.
3.4.1 Strengths
COZAAR and COZAAR COMP have provided excellent results in lowering blood
pressure. In controlled trials, COZAAR lowered blood pressure comparable to
other classes of antihypertensive therapy, including ACE inhibitors, calcium-
channel blockers, beta blockers and diuretics . The results of a pooled meta-
analysis of 51 published, randomized , controlled trials showed that COZAAR is
highly effective in controlling blood pressure comparable to other angiotensin II
antagonists. Other studies have shown that COZAAR provided consistent 24-
hour blood pressure reduction .
30
COZAAR is also an anti-hypertensive agent that has been proven in two Multi-
center Landmark Trials, to have significantly reduced mortality and morbidity in
patients with high blood pressure and specific co-morbidities.
In the RENAAL Trial, for the same reduction in blood pressure in hypertensive
patients with Type 2 Diabetes and Micro/macro Albuminuria , COZAAR
significantly reduced the primary composite endpoint of End Stage Renal
Disease (ESRD), Doubling of Serum Creatinine or Death by 16% (p=0.02).
COZAAR also significantly reduced the incidence of ESRD by 28% (p=0.001)
and Doubling of Serum Creatinine by 25% (p=0.006). This was the first time that
any product had proven to be superior to conventional antihypertensive therapies
in reducing the incidence of ESRD in Type 2 Diabetic patients (Brenner BM et al.
Effects of losartan on renal and cardiovascular outcomes in patients with Type 2
diabetes and nephropathy. N Eng! J Med 2001 ; 345:861-869).
In the LIFE Study, for the same reduction in blood pressure in hypertensive
patients with ECG-LVH, COZAAR significantly reduced the primary composite
endpoint of Ml , death and stroke by 13% compared with atenolol (p = 0.021) .
COZAAR also significantly reduced the incidence of stroke by 24.9% compared
with atenolol (p = 0.001 ). This was the first time ever that any antihypertensive
had proven superiority over another active comparator (Dalhof B, et al.
Cardiovascular morbidity and mortality in the Losartan Intervention for Endpoint
reduction in hypertension study (LIFE): A randomised trial against atenolol.
Lancet 2002; 359: 995-1 003).
It is because of these two landmark studies that COZAAR has now been
identified as a product with molecular specific pharmacological properties proven
to save lives and improve q~ality of life. Accordingly the Angiotensin Receptor
Blockers (AliAs) have recently been included on the SA Hypertension Society's
31
Treatment Guidelines for first line and unconditional use in patients with
hypertension and:
(1). Type 2 Diabetes Mellitus with Micro/macro Albuminuria
(II). Left Ventricular Hypertrophy (LVH) - See slide 2 below for the SA HT
Societies Recommendations on Compelling Indications
ACT 131 has made provision for the use of newer classes of innovative ethical
medicines that have been proven to reduce morbidity and mortality; or
significantly improve quality of life. The innovative medicines alluded to are
included onto the PMB treatment guidelines and PMB formularies, but restricted
for use in what they call "Compelling Indications". For companies like MSD who
are fortunate enough to have innovative products like COZAAR, included onto
these lists for use in specific patients, there is still an opportunity to leverage a
focused market niche strategy based on differentiation. The challenge for MSD
will be to capitalize on these provisions by developing very powerful marketing
campaigns to leverage the relevant clinical data and differentiate COZAAR as the
referenced AliA on the treatment guidelines.
Angina
Prior Ml or Coronary Artery 8-blocker or CCB (rate lowering preferred)
Stenosis 8-blocker and ACE1 (ARB if ACE1 intolerant)
Post Ml 8-blocker and ACE1 (ARB if ACE1 intolerant)
Heart Failure 8-blocker and ACE1 (ARB if ACE1 intolerant)
AND Aldosterone antaqonist
Left Ventricular
Hypertrophy (confirmed by ARB (preferred) or ACE1
ECG)
(Source: SA Hypertension Society Treatment Guidelines, SAMJ, March 2004, Vol.94, No.3)
32
3.4.2 Weaknesses
"COZAAR has not yet overcome the problem of "class effect" and as a
result suffers the consequence of in-class substitution."
Currently COZAAR is the most expensive AliA in the marketplace and sells at a
single exit price of R167 excluding VAT. COZAAR correspondingly has a R33
premium over the cheapest product in the class. As a result, many customers
choose to follow a "class effect" argument to justify their use of the cheaper AliAs
when treating even those patients with compelling indications. One would think
that recent product withdrawals like VIOXX from the Coxib class, BAYCOL from
the Statin class and TROVAN from the Flouroquinalone class; would have put
people off using this argument, but it has not. It would seem that the temptation
to save money far outweighs the logic that motivates that products within classes
may differ in efficacy and safety.
"COZAAR reps have too few calls and not enough t ime available per call to
overcome the "class effect" and as a result, suffer the consequence of in-
class substitution. "
33
One explanation for MSD's inability to differentiate COZAAR may relate to the
fact that COZAAR reps are finding it more difficult to see their physicians and
when they do, the time afforded to them is limited . Under these circumstances
they are unable to effectively leverage the results of LIFE, RENAAL and the
South African Hypertension Societies Recommendations on Compelling
Indications; to change customer perceptions and behaviour. Presenting clinical
trials is a complex and time consuming task; add to this the time necessary for
persuasion , and one can see that 7 minutes is just not enough.
3.4.3 Opportunities
"9/1 0 medical aids now reimburse COZAAR without co-pay in patient with
Compelling Indications i.e. hypertensive patients with Type 2 Diabetes and
Micro/macro Albuminuria and/or evidence of Left Ventricular Hypertrophy
(LVH)"
34
"Patients with Compelling Indications represent 20-40% of the hypertensive
population in SA (1-2million patients); and COZAAR has the potential to
domin·ate in this niche segment"
35
"To help overcome problems relating to physician accessibility and the
decline in rep productivity, the NCRA was established to serve as a vehicle
for traditional CME and differentiation"
3.4.4 Threats
36
3.5 SUMMARY OF THE COZAAR 2006 MARKETING PLAN
• To achieve a 28% market share in the AliA market by December 2006. This
represents a 2% point increase vs. a market share of 26% achieved in June
2005 .
• To achieve a 7% market Share in the AHT market by December 2006. This
represents a 1% point increase vs. a market share of 6% achieved in June
2005.
37
3.5.4 Tactical Imperatives
38
e Focus on Uncontrolled hypertensive patient on >2 agents to add
on I switch to COZMR
e Differentiate COZMR from the competition, and thereby ...
e Increase Depth of prescriptions amongst High Potential general
physicians and Specialists
e Accelerate growth vs. competition
For
'* High potential general physicians and specialists treating hypertension
0 COZMRis
e The only antihypertensive agent that has demonstrated both a
reduction in ESRD in hypertensive patients with T2DM and a
superior stroke risk reduction, beyond effective BP control, in
patients with LVH
e A powerful partner in helping physicians in their effort to reduce
uncontrolled HT
0 Because COZMR provides
e Useful downloads included downloadable versions of Clinical Trials
and Slide Shows. Physicians were also able to access and print
many of the graphic resources by clicking on the images. Powerful
blood pressure reduction in uncontrolled hypertensive patients
e Provides a proven dosing regimen (50mg, 50/12.5mg, 100/25mg)
39
3.5.7 Segmentation and Targeting
COZAAR Sales reps will target only on the following physician segments:
e Priority 1 physicians: High Potential Medium Share
e Priority 2 physicians: High Potential High Share
e Priority 3 physicians: High Potential Low Share
Medium Share
59 41 27
41 12 7
89 38 18
150 7 9 19 571
22486253 14 % 1550 3232 10% 1022511 9 6%
R 1 298.09 R2 129 .12 R 3 427 .57
4657754 11% 444 1223 1 1% 39235 19 9%
R 56.59 R 92.8 1 R 149.4 1
1348 1095 579
114 47 41
19 4 6
78 16 17
2238 822 725
1790 57 0 7 11% 77704 33 5% 65 17 50 5 4%
R 6 84.5 1 R 1 864.83 R 2 113 .0 8
3316272 8% 22435 11 5% 2500 635 6%
R 25.89 R 70.55 R 7 9 .94
145 1 617 60 5
(Sources: IMS, Sands, June 2005; Medpages, June 2005; MSD Genesys 2005
update)
While the COZAAR promotional message will target the following patient
segments:
• Patients that have one or both of the Compelling Indications, namely;
e Hypertensive patients that have Type 2 Diabetes and Micro/macro
Albuminuria
e Hypertensive patients that have evidence of LVH
40
• Patients with uncontrolled hypertension who are already on two or more
anti hypertensives
23%
0Promotion • Congresses
•Medical Education 0 Marketing Programs
0PR Programs • Exte rna I Affairs
•Market Research o E marketing
oA isina
MSD has traditionally promoted their medicines via traditional channels that
included: sales reps, medical journals and continued medical education (CME)
seminars. The MSD sales force is large in comparison to other pharmaceutical
companies and comprises mostly of university and college graduates I under-
graduates. These employees are equipped with the necessary disease
management training, product knowledge, selling skills and marketing support to
empower them to out-think and out-manoeuvre their competition. It is also
41
important to note that at MSD the sales force is still regarded as the most
effective promotional resource and accounts for over 60% of the company's
marketing costs. However, recent sales force feedback and recent call report
data (call rates, reach and frequency metrics), suggest that in spite of the value
they add, doctors are unable to give MSD sales reps the time and attention they
require to develop relationships and to effectively promote their products. The
increasing number of "no see" visits and "reminder" details recorded; suggests
that the sales force no longer wield the influence of relationships and promotional
power they once did. The low frequency associated with limited opportunities has
resulted in larger intervals between sales calls, shorter call durations and higher
costs associated with travelling and waiting. The challenges facing the sales rep
have always related to physician accessibility, time and the relevance and quality
of the mess.age, but it is clear that these barriers are higher now than before.
In the case of conventional detailing, the personality and knowledge of the sales
rep will often constitute an advantage, but this can also make it difficult for the
COZMR marketing and product managers to ensure that their promotional
messages are communicated consistently throughout the sales force.
Finally, there has been a tendency for MSD sales reps to classify and target
physicians incorrectly. In many situations it has been noted that sales reps have
categorised physicians as being A-physicians, not according to their potential to
42
use high amounts of the product, but according to their accessibility. This has
lead to serious inefficiencies in sales and marketing activities at MSD and in the
COZMR business unit.
So the question remains - "If time in front of the physician is becoming more
difficult for the COZMR rep to achieve, would a strategy that integrates e-
Profiling and e-Detailing into the sales and marketing process, not offer multi-
channel synergies that will provide MSD with more opportunities to differentiate
COZMR and thus provide COZMR with a competitive advantage over its
competitors?" (Burgess, 2005)
3. 7 CHAPTER SUMMARY
43