A Profile of Eli Lilly SSRI Drug Marketing
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The following is a marketing profile of Eli Lilly. More specifically of Lilly’s neuroscience drugs or anti-depression drugs. These include Prozac and Cymbalta with Prozac being the best selling drug of all time and Cymbalta being the replacement drug and currently the number two best selling drug in the U.S. Eli Lilly is a truly a giant company, they have operations all over the world and sell billions of dollars in drugs per year. Lilly has been the source of much controversy in recent years, due to their aggressive political lobbying and their numerous law suites. Despite all of this Lilly has seen major success. When Prozac went off patent the company lost their primary revenue stream. They were able to recover and with the aid of Cymbalta and Ceflex they have had large revenues. The marketing for anti depressant drugs is global. With the acceptance of depression as a disease more people are seeking treatment. With the convenience of taking a pill over undergoing years on intensive psychotherapy drugs have become a very common treatment. Lilly is limited to in their marketing efforts because of the shape of the distribution channel as well as the Food and Drug Administration as well as the Federal Trade Commission. They utilize drug reps to go into doctors offices and teach about Lilly drug products. They however have little influence when it comes to the doctor prescribing their drugs. They are able to advertise on TV and employ a pull strategy from drug takers. The drug industry is a large and growing industry and there is great opportunity for Lilly. Introduction Being a global drug company is not an easy task in the twenty-first century. Companies take years to develop drugs with many of them failing in testing. Governments put strict regulations on all aspects of the drug industry from development to marketing. With drugs being used by such a large population companies are also exposed to law suites when drugs do not work as intended. Despite this drug companies are still extremely successful and bring in billions of dollars in revenue per year. Among the major players in the drug industry is Eli Lilly. With revenues of $15 Billion in 2006, and profits of $2.6 Billion the company is certainly a global power (Business Week). History 
Eli Lilly and company has been in business for 130 years. Colonel Eli Lilly, a civil war veteran, started the company. He started the company with a few express goals; he wanted to initiate a company that made high quality pharmaceuticals, he wanted to only make prescription medicine, he also wanted to use cutting edge technology in medicine development. From this Lilly had his first major innovation, gel coating pills. The company grew to a national level with their efforts in producing insulin in the 1920s. Eli Lilly diversified in the 20th century with purchasing companies that made cosmetics, medical instruments, and pacemakers. Prozac was Eli Lilly’s largest innovation. It was discovered in 1970 and publicly released in 1987. Prozac was a large moneymaker for Eli Lilly, as well as the most successful anti depressant ever, and they saw steep profit decline when the drug went off patent in 2001. (EliLilly.com) U.S. Drug Industry Scan The global drug industry is characterized by strong competition. Countries such as Germany, Switzerland, and the UK all have strong competition for the U.S. The national drug industry spends billions of dollars on developing the next blockbuster drug. A drug company with a revolutionary medication can become a Wall Street darling and propel the company to the national spotlight overnight. Drug companies have developed a negative image in the U.S. due to the high cost of prescription drugs. While there are certainly elements in these companies that develop drugs to help people, they are still in business to design profits, and the companies are rush this way. The U.S. drug industry is the largest in the world, and there are billions of dollars up for grabs. The current U.S. culture is after a quick fix, if they want weight loss, or lower cholesterol it is easier to take a pill than to exercise or change your diet. In recent years there has been a shift of power in the drug industry. Companies such as Eli Lilly, Merck, and Pfizer who have been dominating for hundreds of years are loosing ground to newer companies such as Amgen and Genetech (Forbes.com). While Pfizer and Eli Lilly still make two of the best selling drugs around, these companies have developed upstart drugs that have eroded market share. U.S. drug companies have also had to contend with lower FDA approval rates. In 1996 there were fifty-three new drugs approved, by 2005 that number was down to only twenty. With such low approval rates drug companies are under more competition that ever. We chose to focus our paper on Neuroscience drugs. This is currently a large and growing market. Prozac the best selling drug of all time, and an Eli Lilly product, was an anti-depressant. Both Prozac and Lilly’s new entrant Cymbalta are SSRI, or selective serotonin reuptake inhibitors. The SSRI type drugs represents over half of all prescribes anti depressants. Some other SSRI competition includes; Celexa and Lexapro from Lundbeck, Paxil from GlaxoSmithKline, and Zoloft and Xanax from Pfizer. (webmd.com) Eli Lilly formerly dominated this market with Prozac and continues to do so with Cymbalta. In a porters five forces analysis of the US drug industry the Power of Customers is extremely high. They are the ones who ask their doctors about drugs, if they have negative side effects then they will change brands. Drug users are also less price sensitive because in many cases the drugs are covered under insurance. Therefore they are less price sensitive and care more about results. The Power of Suppliers is lower in the drug industry. The companies that make the drugs screen the marketing. The pharmacies and mail order prescription drug companies have very small power. Doctors prescribe the drugs and patients expect to pick up what the doctor tells them to. The threat of new entrants into the drug industry is low. With the massive amount of capital needed to take a drug through FDA approval, and the lower success rate many companies lack the funding needed to perform drugs. This added with the short time of patent protection keeps many companies from entering the drug industry. The threats of substitute products in non-existent while drugs are composed on patent. However once the patent expires the drug is launch to competition from generic medication, and drug companies watch a steep decline in profits. The intensity of rivalry is strong in the drug industry. Once a company develops a class of drugs other companies are quick to make similar drugs. This leads to strong rivalry, and makes the importance of being first to market high. Eli Lilly Environment Lilly does not post their mission and vision statement on the website in plain English. However they do have a set of core values that the company was founded on, and they seem to follow these. Its statement says, “Lilly, a leading innovation-driven corporation is developing a growing portfolio of first-in-class and best-in-class pharmaceutical products by applying the latest research from its believe worldwide laboratories and from collaborations with eminent scientific organizations.” Lilly is dedicated to using the latest technology to innovate the best drugs in the industry. It does not want to be seen as a me-too company, it wants to be on the cutting edge of all new drug developments. Lilly has been extremely good at sticking with this philosophy, drugs such as Prozac, Cymbalta, Celexa, Keflex, and Ciclor have all been blockbusters. Lilly’s core competency is seen as their strength of R&D, and management team. It has had multiple scientists win the Nobel Prize; they have also had many notables on their board of directors such as George H.W. Bush, former presidents and CIA director, as well as Kenneth Lay the former Enron CEO. Natural Environment The natural environment of Eli Lilly is characterized as being a global company. It has major research and development centers in nine countries, and conduct studies in over 60 Countries. The company is headquartered in Indianapolis, Indiana. Its research and development facilities are located in Australia, Belgium, Canada, England, Germany, Japan, Singapore, Spain and the United States. It conducts clinical research in more than 50 countries around the world. Manufacturing facilities are located in Brazil, China, Egypt, France, Germany, Ireland, Italy, Japan, Korea, Mexico, Pakistan, Puerto Rico, Spain, the United Kingdom and the United States. Being such a global company and having products that impact everyday life has led to Lilly becoming a fixture in global culture. With Prozac being the best selling drug of all time of course it is going to be the center of debate and controversy. Prozac Nation by Elizabeth Wurtzel, is a best selling book about the effects of Prozac on society. Prozac has been touted as the Wonder drug that makes everyone fell better, but it also has been linked to suicide in adolescents, and well as erratic behavior. Lilly has also made drugs in the past that fit into pop culture. Secobarbital a barbiturate manufactured by Eli Lilly was involved in the deaths of Jimi Hendrix, Judy Garland, and Maryland Monroe. Political Legal Environment Being a large drug company in such a regulated environment means you have to be active in law and politics to survive. People are constantly trying to attack you for trying to recover costs involved in drug development. They also want to sue you if your drug does not work as promised. Government health care is also trying to squeeze for lower prices when negotiating drug compensation. All of these things mean Lilly needs to be active in political lobbying. Lilly has been linked to giving soft money to both the republican and democratic parties, with a 75/25 split respectively. Lilly also lobbied effectively to maintain anti-depressants under chunky reimbursement under Medicare / Medicade. It was very active in trying to change drug patent laws, when Prozac was about to come off patent in 2001, and they were not successful. Lilly has been linked to Tom DeLay, the former member of the U.S. house to resigned due to funding controversy. Some of the Vaccines manufactured by Eli Lilly had been linked to causing Autism in children. In 2002 Lilly tried to add a clause to the Homeland Security Act that would have shielded Lilly and other drug companies from billions of dollars in anticipated lawsuits, this has become known as the “Eli Lilly Protection Act”. All of this political and legal lobbying has given Lilly a poor reputation for being an ethical company. There are entire websites dedicated to Lilly being the most unethical drug company in the world. Case after case has seen Eli Lilly reacting to problems with unethical behavior, from trying to corrupt the judicial process, the hiding evidence of studies. All of this has made it tough for Lilly to live up the their vision. It also presents many marketing challenges for the company. Technological Environment Lilly is dedicated to being on the cutting edge of technology. They have R&D centers all over the world. They only expend the top scientists and management team. They have a science and technology committee, whose purpose is to, “The science and technology committee shall advise the board on scientific matters involving the company’s discovery and development programs, including major internal projects, interaction with academic and other outside research organizations and the acquisition of technologies.” (Lilly.com) Being such a large and successful drug company means the Lilly certainly has many strengths. These include a large and experienced workforce. With so much history developing and marketing drugs Lilly can tap into this when coming up with marketing plans for new Drugs. Lilly also has very strong R&D facilities. This is proven by the number of blockbuster drugs that have been produced as well as the recognition from the Nobel Prize judges. Such a colossal company is certainly not without its weaknesses. With such a questionable set of Medical Ethics Lilly has a very negative image. They are seen as the typical giant drug company only out to make billions of dollar. They are not seen as a company trying to attend people, only trying to profit from their misfortunes. Another weakness is the exposure to lawsuits. It only takes one defectively designed drug to slip through the FDA approval process and the company could be exposed to Billions of dollars in lawsuits. With the FDA taking no expose for approving the drug. Lilly has also been the subject to social critics, with so many people taking Prozac they will certainly be the target of academics trying to show the drugs affects of society. There is certainly unlimited potential in the drug industry. Cymbalta is the second best selling drug in the U.S. and has seen 600% percent growth last year, and over $600 million in sales. It only takes on drug to make a company many billions of dollars. The market for anti-depressants is larger than ever. With more people seeking help for depression, and the acceptance that it is a disease, diagnosis is on the rise. All of this opportunity is not without the threats. There is very strong industry competition. Companies also have very low success rates with the FDA drug approval process. Target Market The target market for Eli Lilly’s neuroscience class of drugs includes anyone who may suffer from the following disorders: Major Depressive Disorders (MDD), Diabetic Peripheral Neuropathy Pain, Anxiety, Obsessive Compulsive Disorder (OCD), Bulimia, Panic Disorder, Attention-Deficit/ Hyperactivity Disorder (ADHD), Bipolar, Schizophrenia, Agitation, and Inattention/ Hyperactivity-Impulsivity. These patients who are celebrated to take the required medications for their disorders may be male and female ranging in ages from young children to elderly adults. The current market for these drugs appeal to the global population. Although our market caters to both male and female statistics show that in most of these instances women are twice as likely to be diagnosed with a disorder as men. Provided below are some statistics of a few of the following disorders in the United States: Major Depression- Affects 17.1 million people which is 8% of the population 18- older Anxiety Disorders- Is the most approved mental illness affecting 40 million people which Obsessive Compulsive Disorder- Affects 2.2 million people, 1% of the population, more Bulimia- More current in women (10-1), adolescents, and young adults affecting 1-2 % Bipolar- Affects 2-3 million people of 1.2% of the population ages 18- older. Schizophrenia- In the United States 2.2% of the population will have an episode in their Price There are several factors that affect pricing on the various drugs in the neuroscience class. The price of the drug will depend on the type of drug, the milligrams per unit of the drug, the quantity purchased, and the origin of purchase. These medications may or may not be purchased with the help of supplemental forms of medical assistance such as; insurance, Medicaid, etc… Below is a list of prices form a low price comparison source. Cymbalta: 20mg. 30mg. 60mg. Prozac: 10mg. 20mg. 60mg. Low $1.90 $1.29 $3.64 per unit Strattera: 10mg. 18mg. 25mg. 40mg. 60mg. 80mg. 100mg. Obscene $3.93 $3.93 $3.93 $3.93 $3.93 $4.59 $4.81 p.u. Symbyax: 6mg./25mg. Shameful $8.88 per unit Zyprexa: 2.5mg. 5mg. 7.5mg. 10mg. 15mg. 20mg. Low $1.86 $3.64 $5.16 $6.70 $10.59 $17.07 per unit Promotion Eli Lilly employs a push and a pull marketing strategy to attract potential customers. Lilly uses various techniques to encourage promote and advertise their product among the market. The sources used include mass media, print ads in magazines and newspapers, web advertising, billboards, and personal promotion using pharmaceutical representatives who play the largest role in promotion. Pharmaceutical representatives meet face to face with primary care doctors, endocrinologist, psychiatrist, oncologist, heart specialist, and other physicians to communicate the benefits of their innovative pharmaceutical products. Other teams work with managed care, healthcare, and other service organizations. These include: hospitals, PBM’s, drug wholesalers, drug stores, expansive employers, and government entities to name a few. By using these various forms of advertising has helped Eli Lilly to become the well-known pharmaceutical giant they are today, and will execute awareness among the target market of the importance of using these products. Direct-to-Consumer (DTC) Marketing Listed below are guidelines launched in 2001 to protect consumers with the promotion and use of their drugs. In the guidelines Eli Lilly understood that they had a duty to provide advice that is truthful, accurate, and balanced to protect patients who seek out information about diseases due to the increasing complex healthcare system. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Distribution Eli Lilly has several brand competitors including: GlaxoSmithKline, Bristol-Myers Squibb, Hoffmann La Roche, Pfizer, and AstraZeneca, in which they compete on products with similar features, and benefits and target the same market with similar prices. Aside from these brand competitors, Lilly also competes with other pharmaceutical companies on many other products. Their company provides these drugs as a remedy to assist patients with disorders to cope with their issues. This tangible product that Lilly offers to consumers is passed to them through indirect channels. Their channel of distribution includes: manufacturer, wholesaler, retailers, and then the final consumer. Lilly has manufacturing plants in 15 different countries, and their products are marketed in 143 different countries. These tangible products for the neuroscience class of drugs come in capsule form. These capsules range in milligrams (mg.) depending on the various types of drug. For example Zyprexa ranges from 2.5 mg. per capsule to 20 mg. per capsule and the more common Prozac ranges from 20 mg. per capsule to 90 mg. per capsule. In addition to capsule develop Prozac also offers an alternative liquid form for lower doses. (drugstore.com) Conclusion Eli Lilly is one of the major industry players in the global drug industry. They have created some of the best selling drugs of all time. With so much success comes much controversy. Lilly has been linked to many negative events in the World. They are seen as a drug company that is large and distant from people, a company that cares more about profit than social welfare. Their marketing activities can mirror this. They try and present a message of care but even the Prozac.com website comes off as large and distant. The company is indeed limited in their marketing efforts by the FDA and the FTC however they still need to choose another look at their message. Luckily with the landscape of the drug industry developing a great drug and patenting it will bring in billions of dollars in sales without the marketing efforts needed in other consumer industries. As long as the doctors are aware of new drugs, and most in industry keep up on this sort of thing, then Lilly with be successful developing and patenting new blockbuster drugs. Works Cited Eli Lilly Stock Profile Forbes.com NYTimes Drugstore.com WebMD.com |
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