Eli Lilly: Developing Cymbalta:

Marketing Case Analysis

Keenan N Slenker 1/25/2013

AMBA650 Marketing Management and Innovation Dr. Jay Alden Jomarie Bliss

Running Head: ELI LILLY: DEVELOPING CYMBALTA

Eli Lilly, a company that develops antidepressant drugs like the successful Prozac, were faced with a tough decision on how to market there next product named Cymbalta. The product that Eli was working on taking to market had not only the ability to treat depression, but also treat chronic pain. Eli needed to make a decision on how or if they were going to market a drug with these attributes. Ofek, Laufer (2008) writes that John Kaiser the Marketing Director, was part of the New Antidepressant Team (NAT) that were faced with coming up with a successor to Prozac. Cymbalta had the attributes that would make for a good successor to Prozac; no toxicity, as good or better antidepressant properties, and the ability to meet additional patient needs. Cymbalta was to be Prozacs successor and needed to be launched 18 months before Prozacs patent expired. In order to meet the deadlines, Lilly needed to conduct a clinical study. With the high cost and the 15-18 month time frame needed, Lilly could only conduct one clinical trial in order to get the drug to the FDA for approval. There were three main options for clinical tests before going to the FDA. One we to test to see if the drug could be taken once per day in 60 mg dosses for consumer ease. Second option was to run tests in order to find differentiations between Cymbalta and other

Running Head: ELI LILLY: DEVELOPING CYMBALTA

like antidepressants. The last option was to take the time to conduct all of the studies, resulting in the patent expiring and the race to the market would be jeopardized Ofek, Laufer (2008). Studies were conducted and it was found that Cymbalta at 10 to 40 mg twice daily worked well with treating depression and treating chronic pain that seem to coincide with those suffering from depression. This caused some concern amongst the decision makers. One concern was not all depression patience has pain symptoms and antidepressants in the market were single daily doses and not two daily doses like Cymbalta Ofek, Laufer (2008). I take into consideration the research in the paper, pertaining to how chronic pain used to be diagnosed as a phantom symptom due to depression. Now with Cymbalta, there was a treatment for this pain as well as the depression. This would seem to be an emerging marker for this product. To understand Lillys marketing position, I used the information in the case to create the a SWOT analysis, Its a way of monitoring the external and internal marketing environment. Kotler, & Keller. (2012). 1. Strengths 1.1. Large market presence 1.2. Availability of research and development funds

Running Head: ELI LILLY: DEVELOPING CYMBALTA

1.3. Established high tech knowledge workers and facilities 1.4. Produced some of the worlds most recognizable antidepressant drugs 1.5. Cymbalta treats depression and pain caused by neurotransmitter deficiencies 2. Weaknesses 2.1. There are other manufacturers of like drugs 2.2. There is a need to take twice daily in contrast to other antidepressant ease of one dose daily 2.3. The high price of Lillys drugs is detrimental to competitiveness 3. Opportunities 3.1. Ability to create a new market for chronic pain relief 3.2. Emerging market launch for new products 4. Threats 4.1. Other competitors 4.2. Zoloft and Paxil deliver same depression treatment 4.3. Same drug in generic brands costs are 20% of the Prozac brand Kaiser was a member of the New Antidepressant Team (NAT). This was the team assembled to devise the successor strategy for Prozac Ofek, Laufer (2008). Kaiser wanted R&D to be guided the market forces. Sheri Morin who was part of the team agreed with Kaiser. Sheri further explained there were several failures

Running Head: ELI LILLY: DEVELOPING CYMBALTA

with drug launches due to not fully taking into consideration the market segments needs. By doing the market research more thorough upfront, Lilly could determine if further research and or development of a drug would be profitable. The profitability would be determined by the markets demand for such a product. In order for Lilly to understand how the drug would be received, weights were given to specific market attributes that could determine how well the drug would be received. Weight in prescribing was given a weight of 47%, 18% for efficacy in treating depression, 8% for dosing, and 9% for safety Ofek, Laufer (2008). Kotler, & Keller. (2012) states that companies have too many potential consumers to use an index to understand how a product is received in the market, so a system of weights could be attached to each factor called a multiple-factor index (p. 43)

Lilly conducted a patient segmentation study to understand potential for their product. They used physicians in the study; identifying seven patient segments based on their symptoms, demographics and the extent of the treatment. Based on Lillys approach here I would surmise that the Market Test Method was used to understand customers responses in order to determine potential sales to these segments. Kotler, & Keller. (2012). The higher the outcome of the multiplier used, the more favorable it is to the market.

Running Head: ELI LILLY: DEVELOPING CYMBALTA

Lilly has a large task in deciding how they will move forward with Cymbalta. They need to make a clear distinction between Cymbalta and all the other antidepressants. After reading the research done, pertaining to the correlation to chronic pain depression, I feel that this is a big marketing opportunity to differentiate their product to target a new market segment. The new market segment is those individuals that were experiencing chronic pain with no specific diagnosis of the pain. If Lilly were to go this route, they would need to work hard in getting the publics attention, understanding the publics process of screening most of the stimuli what Kotler, & Keller. (2012) calls. selective attention. By using the success of the Prozac brand, Lilly could capitalize the selective distortion , working to Lillys advantage by marketing the product in such a way that the consumer distorts or spins the product information to create a need the consumer needs filled Kotler, & Keller. (2012 p. 73) In order to market the product in this manner, the advertising needs to be repetitive and frequent to drowned out any other competitors information and to keep the product fresh in the minds of the public. Television ads, billboard ads, and magazine ads would be an effective media to get the publics attention. Three options on the marketing direction were established. The first being efficacy for treating major depression disorder (MDD) by dosing ounce daily. The second option is to pursue a separate pain indication and submit for an MDD

Running Head: ELI LILLY: DEVELOPING CYMBALTA

indication using two dosing daily. The third option was to delay the new drug application submission a few years to establish both issues. Ofek, Laufer (2008). After much deliberation, I have concluded that pursuing the pain claim would be the best option for profitability. There are six prescription for the MDD treatment in the market Kotler, & Keller. (2012, Exhibit 5). To add yet another MDD would be viewed as just another antidepressant and be in competition with their other product, Prozac, even though the sales for Prozac would drop due to the patent ending. The message that needs to be sent to the consumer is that there is a solution for your chronic pain and depression; there is now a solution to those that suffer from chronic pain that was thought to be untreatable. It is also important that Cymbalta does not fall into a niche market. Lilly will need to distinguish itself by advertising that they are the authority in scientifically creating innovative solutions to fulfill the needs of their consumers. Lilly will also need to create specificity toward those with chronic pain that used to be thought of as untreatable and is a result of deficient neurotransmitters. This approach will create an association with those that no other treatment has before. As I stated previously that the target market are those that have been dealing with chronic pain that have not been receiving any treatment besides a physicians suggestions to take aspirin, or it is just a psychological by product of depression. By advertising these benefits for this target market in television ads, magazine ads and billboards

Running Head: ELI LILLY: DEVELOPING CYMBALTA

frequently, the information will be fresh in the minds of those that are dealing with the chronic pain induced via chemical imbalance and will create a new market for which Lilly can capitalize.

Running Head: ELI LILLY: DEVELOPING CYMBALTA

References

Kotler, P & Keller, K.L. (2012). A Framework for Marketing Management Upper Saddle River NJ: Pearson.

Ofek E, Laufer R, (2008) Eli Lilly: Developing Cymbalta, Harvard Business School, 9-507-044