Achieve High-Impact Pharmaceutical Sales Through Strategic Alliances

Adam Gusman, Best Practices LLC

After just over a year on the market, anti-cholesterol drug Lipitor rang up $1 billion in worldwide sales despite being the fifth drug in its class, making it one of the most successful product launches in history. How did manufacturer Parke-Davis (Morris Plains, NJ) accomplish this feat? They were not alone—the blockbuster is co-promoted through a progressive strategic alliance with rival company Pfizer (New York).

"The nature of strategic partnerships is changing," according to one pharmaceutical marketing executive. "They are now performed out of strength—not out of weakness." The strategic alliance for Lipitor, built during a four-month courtship, was a marriage made in heaven: Pfizer provided the sales and marketing muscle to make Lipitor a true blockbuster, while Parke-Davis offered Pfizer a powerful drug in the huge anti-cholesterol market.

Thanks to the success of co-promotions like Lipitor, leading pharmaceutical companies are now keenly aware that the right strategic alliance can have a powerful impact. But identifying a partner is only the first step toward developing a successful strategic alliance. How can a company overcome the myriad challenges associated with co-promotion partnerships—managing sales, marketing, and launch activities, not to mention the relationships? The Best Practices in Pharmaceutical Alliances and Co-Promotions report, recently published by Best Practices LLC (Chapel Hill, NC) and the Mattson Jack Grp. (St. Louis), shares the winning strategies and practices that distinguish 26 successful strategic alliances, including partnerships struck by companies such as Glaxo Wellcome (Research Triangle Park, NC), Pfizer, and Bristol-Myers Squibb (New York).

"High-performing co-promotion partners create and structure the original deal with an eye toward implementation success," said Keith Symmers, vice president of Best Practices LLC. "Then they plan and execute activities that foster sharing and partnership at each stage of the promotional effort. These elements create an environment of knowledge sharing, which translates into a wider reach and increased sales."

Through extensive interviews with pharmaceutical executives, Best Practices LLC and the Mattson Jack Grp. identified the top five key drivers of strategic alliance success:

• In structuring the deal, seek partners whose culture, strategy, and needs fit your own.
• Involve senior management in communicating the strategic importance of the partnership.
• During preparation for product launch, create a dedicated operational team from each organization to oversee and manage the co-promotion process.
• Co-brand products to instill a sense of ownership in sales representatives.
• Mirror sales territories to facilitate partner communication and coordination.

The report provides a road map for helping pharmaceutical companies get the most out of this increasingly important element of sales and marketing strategy. Findings are arranged according to five critical areas: product launch, marketing management, sales management, relationship management, and deal making.

Executives involved in successful co-promotion efforts emphasized the importance of clearly communicating the rationale for the deal throughout the organization. By articulating the overarching needs and benefits of co-promotion, sales and marketing personnel are more likely to treat their co-promotion counterparts as partners. And it is essential to repeat this message early and often during the co-promotion. "Co-promotions are contrary to what pharma is all about," said a director of business development. "We are very competitive, with a winner-take-all attitude. These deals are outside the original character of our normal operations, so successful co-promotions overcome this mindset to develop and foster a win-win attitude."

Best Practices LLC is a research and consulting firm that provides clients with access and intelligence for achieving world-class excellence through its study of the best business practices, operating tactics, and winning strategies of excellent companies.

The Mattson Jack Grp. is a global consulting firm that provides strategic services to the healthcare industry, mainly the pharmaceutical segment. MJG's projects cover a wide variety of strategic issues, from qualitative and quantitative market research analysis to optimal development and commercial plans for new products.

For more information: Keith Symmers, VP, Best Practices LLC, 6320 Quadrangle Drive Suite 200, Chapel Hill, NC 27514. Tel: 919-403-0251, ext. 227. Fax: 919-403-0144. E-mail: ksymmers@best-in-class.com.