For Big Pharma, drugs are a hard global sell

NEW YORK (CNNMoney.com) -- The successful launch of a blockbuster drug depends heavily on Big Pharma's ability to custom-tailor its sales pitch country-by-country, a difficult task in which few drugmakers excel, according to a study from research firm IMS Health.

The Connecticut-based research firm examined 4,225 drug launches and found that only 35 of them managed to dominate as the first or second market leaders within two years, in two or more countries.

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For a newly-launched drug to quickly seize market share, the sales force must understand the nuances of different countries and customize its promotion to match international health plans, said IMS.

Raymond Hill, general manager for IMS global consulting, said the launch study showed "there aren't that many people out there who actually know how to do it right."

The U.S. is a tough market, according to IMS, with barely over half of all launches here considered successful. The study also found that the sales reps' influence over doctors was more important in the U.S. than anywhere else in the world, though it also played a vital role in Japan and Italy. Sales reps were least important in the United Kingdom and Canada, where physicians generally refer drug coverage decisions to the state-controlled health care system.

"It's becoming increasingly difficult to get broad payment authorization from all the countries in Europe," said Jon LeCroy, drug industry analyst for Natexis Bleichroeder. "They're not accepting payments for new drugs unless they're almost seen to be revolutionary."

The IMS study underscored the importance of not only customizing the sales pitch, but recognizing who actually makes decisions about paying for the drugs. For example, doctors in Japan and Italy have more decision-making power about prescribing drugs that physicians in the U.K. and Canada, according to IMS, despite the fact that payment is conducted by public health systems in all these countries.

"I think [Big Pharma] needs to have a better understanding of where those drugs fit in the international marketplace and how those drugs are utilized in other countries," said Robert Toomey, drug analyst for E.K. Riley Investments. "I think there's a real risk with trying to overlay the U.S. market on every other market."

The study, which IMS calls "the largest quantitative assessment of launches ever conducted," identified the most successful launches of all time as Pfizer Inc.'s (up $0.11 to $24.73, Charts, Fortune 500) cholesterol-lowering Lipitor and sexual dysfunction drug Viagra, GlaxoSmithKline's (up $0.40 to $51.98, Charts) diabetes treatment Avandia, Eli Lilly & Co.'s (up $0.53 to $56.40, Charts, Fortune 500) anti-psychotic Zyprexa and Merck & Co., (up $0.02 to $50.52, Charts, Fortune 500) Inc.'s osteoporosis drug Fosamax.

Viagra succeeded, despite the lack of insurance and government coverage which forced patients to pay for it out-of-pocket, because the little blue pill was seen as "revolutionary" in treating erectile dysfunction, said LeCroy of Natexis Bleichroeder.

Lipitor succeeded, said LeCroy, because Pfizer's sales reps were armed with test results demonstrating that their drug was superior to competing cholesterol-cutting statins that were already on the market.

A drug's status as a unique "first-in-class" treatment had little to do with its launch success, said IMS. The study found that about two-thirds of successful launches were for "me-too" drugs, which are similar to products already available.

These drugs took over various markets by making them bigger, not just by taking over market share in stagnant industries, said IMS. Stirring up awareness in doctors and patients is critical to a drug's success, according to the study.

For example, Fosamax is considered an exceptional launch because Merck successfully raised patient awareness about the bone-devouring disease osteoporosis and the need to treat it, according to the research firm. As a result, more people sought treatment for the disease, creating a larger patient pool.

"[Successful drug promoters] don't set out to change the market; they set out to expand it," said John MacCarthy, vice president of global business management for IMS. "Essentially, you've got six months to get it right."

Despite the difficulties in making a new drug succeed across multiple markets, few drugmakers bothered to have a back-up plan in case the bottom fell out of their original launch. IMS found that only 7 percent of drug launches included a marketing strategy Plan B.