Why mega-pharmaceuticals target the USA first

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By: Wise Marketer Staff |

Posted on December 6, 2005

Pharmaceutical companies continue to rely on the US market for the greatest return on marketing investment for their best-selling products, according to an industry study by Cutting Edge Information, which found that so-called "blockbuster brands" dedicate 50% to 65% of their global marketing efforts to the US market.

According to the study, brand team leaders continue to focus marketing efforts on the US because a greater percentage of revenue is derived from the US market than other global markets. Direct-to-consumer advertising, which is less restricted in the US that in other regions, is another reason why these companies focus their attention on marketing blockbuster brands in the US.

Eric Bolesh, a research team leader with Cutting Edge Information, explained: "Because the US offers a highly profitable market for blockbuster brands, companies spend more than twice as much to market their big products there than they do in other markets. They invest the most where they make the most." That, combined with a market that makes it easier to connect directly with pharmaceutical end-user consumers, makes much more straightforward the marketer's decision about where to spend the most marketing dollars.

Marketing budgets
Cutting Edge found that blockbuster brand teams (the marketers in charge of products that are slated to achieve peak global sales of more than US$1 billion annually) invest almost 50% of the average brand's commercialisation budget on advertising efforts.

Companies with blockbuster brands spend an average of US$115.4 million on US marketing efforts in the time between pre-clinical and the first 12 - 18 months on the market. And, according to another Cutting Edge Information report ('European Pharmaceutical Marketing: Launching Successful Brands') the average spend for European marketing efforts during this same period equates to only Euro 43.7 million (approx. US$53.0 million).

The report
The new report, entitled US Pharmaceutical Launches: Marketing Spend and Structure', is available from Cutting Edge's web site - click here. It investigates financial and human resources dedicated to 18 brands between Phase III clinical development and the first 12 - 18 months following product launch, and profiles Allergen, Eli Lilly and Gilead.

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