Introduction Biocon is an integrated biopharmaceutical company incorporated in 1978. Earlier focused on fermentation, Biocon entered the biopharmaceutical market in 1996 recognizing the huge growth potential in the biopharmaceutical space. Biocon started producing generic drugs to enter the market and now were ready to launch a proprietary drug BIOMab in collaboration with the Cuban firm CIMAB.
BIOMab, to be used in biological therapy treatment, had been tested for head and neck cancer and had successfully completed the phase-2 trials which showed a 100% patient response to the drug when used in conjunction with chemotherapy and radiotherapy treatments. Based on the results, the company had filed for accelerated approval and were anticipating an approval from Drug Controller General of India (DCGI) in the next few months. Problem Statement When and how should Biocon launch BIOMab in the Indian market? Issues
Launch Decision: Whether BIOMab should be launched immediately without waiting to conduct the phase-3 trials Pricing: How should BIOMab be priced given the price of the competitor’s drug (Erbitux) Distribution Channel: Should BIOMab use the traditional pharma channel or bypass the wholesalers and retailer and adopt a “direct to doctor” strategy Marketing Communication: How should BIOMab be advertised direct to the consumer Analysis Launch Decision: According to the Biocon team, there were three strategies that could be adopted to launch BIOMab.
Immediate Launch without phase-3 trialsLaunch generic cancer drugs immediately and launch BIOMab after phase-3 trialsLaunch both BIOMab and generic cancer drugs simultaneously •First mover advantage over Erbitux •Save time and resources on further clinical trial •Erbitux, which will complete phase-3 trials before launch, is likely to use this to spread the message that BIOMab is still unproven • Build the reputation of Biocon as the first Indian company to have developed a proprietary drug•BIOMab will be launched as a proven product •Will lose the first mover advantage to Erbitux Launching of generic drugs will help Biocon build a positive brand perception with oncologists •This would also help Biocon build a sales capability before BIOMab is launched •Might dilute Biocon’s image as the first Indian company to have developed a proprietary drug •Will lose the first mover advantage to Erbitux•First mover advantage over Erbitux •A multiple product line would help Biocon to reach out to oncologists •Might dilute Biocon’s image as the first Indian company to have developed a proprietary drug Pricing: Factors influencing pricing of BIOMab Currently, only small percent of the cancer patients can afford expensive cancer drugs given the fact most Indians do not have health care insurance. Also, 95% of BIOMab’s patientsw would be self paying. Pricing BIOMab at a lower price could make it more affordable to patients •Due to local players’ practice of pricing drugs at a substantial discount as compared to global firms’ prices, pricing BIOMab would be affected by the perception generated that Indian drugs are cheaper than global firms’ drugs Distribution Channel: Points of consideration For traditional channel distribution, the advantage lied with the fact that most oncologists had close, long-term relationships with hospitals and pharmacies, which would aid the distribution of BIOMab. This, finally, had the convenience factor as well. •BIOMab needs to be refrigerated and handled carefully, conditions which was difficult for local pharmacies to replicate •Removing the middlemen involved in the traditional channel also had obvious financial benefits •BIOMab was a new product as compared to Eurbitux, which had a successful history of three years, thereby being a disadvantage to it
Marketing Communication: •For a drug that is used for a life threatening disorder like cancer, the primary decision maker is the doctor •In a disease segment like this, providing support and information to patients also becomes an important criteria leading to drug acceptance •Celebrity endorsements are helpful in enhancing the brand of a product when the consumer pool is large and the product desires a mass appeal
Recommendations: Launch Decision: •Launch generic cancer drugs immediately and launch BIOMab after the phase-3 trials. The generic drugs should be distributed using the traditional channel, as they don’t have any special handling requirements. Launching these drugs before BIOMab will pave the way for the impending BIOMab launch, as well as create a brand perception for Biocon in the oncology drugs market.