$71 million to launch a new drug

Feb 24 2005

Mid-level pharmaceutical brands invest an average of $71 million in marketing between Phase III trials and the first year on the market, according to a new report from Cutting Edge Information.

Mid-level drugs are those products slated to peak at annual sales of less than $1 billion but more than $500 million. The largest of these products have a shot at blockbuster status ($1 billion in annual sales), but most drugs will fall well shy of that mark.

The study, "Pharmaceutical Product Commercialization: Phase III to Post- Launch Resource Allocation," examines marketing investments for 16 brands. The report concludes that mid-level drugs are important revenue drivers, but they occupy a middle ground that demands careful resource management. Though more significant than niche products, they cannot claim the resources of blockbusters slated to make billions of dollars annually.

To derive the greatest returns on mid-level products, companies carefully balance their resources. In their efforts to hit key objectives, it is not uncommon for brand teams to overload one spending area - market research, for example - at the expense of others.

According to Cutting Edge Information Senior Analyst Eric Bolesh, this "cap" on marketing investment sometimes levels the playing field for smaller companies. "In some situations, spending makes little sense beyond a certain point," said Bolesh. "That allows second-tier pharma companies and biotech firms to compete with deeper-pocketed rivals."

Cutting Edge Information's report, "Pharmaceutical Product Commercialization: Phase III to Post-Launch Resource Allocation" analyzes marketing spending and staffing for 16 brands, including six blockbusters, five mid-level brands and five niche drugs.

The report, available at http://www.pharmalaunch.com/ , includes the tools necessary to command higher budgets and greater staff support during product development:

• Detailed phase-by-phase breakdowns of spending and staffing levels for 16 major brands
• In-depth analysis into allocations for thought leader, advertising, branding and market research
• Resource allocation data for blockbuster, mid-level and niche products
• Strategic analyses of brands' answers to competitive, clinical and internal infrastructure challenges