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In the first year a new pharmaceutical product is available, its company may spend anywhere from $1 million to nearly $50 million on marketing, according to a new report released by research firm Cutting Edge Information.
The report, "Post-Launch US Marketing: Promotional Mix, Decision Support and Market Access" ( www.cuttingedgeinfo.com/postlaunchmarketing/index.htm ), examines marketing budgets for nine drug brands in their first, second and third years on the market. The data shows that larger products -- brands with higher sales expectations -- spend dramatically more than drugs with modest revenue goals.
Potential blockbusters, for example, spent more than $150 million over the three-year span. Smaller niche products, however, spent less than $30 million. According to the study's lead author, Eric Bolesh, such trends are not surprising.
"Everyone expects a larger brand to spend big bucks," Bolesh said. "The important thing is to understand the underlying factors that contribute to each product's budgeting. Teams allocate their dollars in very different ways."
One first-in-class brand, for example, allocated 24% of its promotional budget to advertising in medical journals and another 40% to medical education. The company behind the drug knew it had to teach the market about its innovative new product, and it invested heavily in this educational effort.
On the other hand, another brand team dedicated 64% of its budget to sampling, since it knew it had to get samples of the drug into the hands of doctors and patients if it wanted to drive sales.
"No matter what the absolute dollars are," Bolesh said, "these brand teams make very specific choices about how to allocate their resources."
"Post-Launch US Marketing: Promotional Mix, Decision Support and Market Access" provides a comprehensive breakdown of brand promotional spending, excluding sales force budgets, in the first three years on the market. The report details the most critical areas of brand investment, including:

   - Promotional mix (e.g. detail aids, samples, speaker programs and
     journal ads)
   - Decision support (market research and competitive intelligence)
   - Market access (e.g. reimbursement and pharmacoeconomics)

For more info: www.cuttingedgeinfo.com

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