Thursday, May 13, 2010

New Hunting Grounds

While not new, drug giants' aiming at populous emerging economies is getting scarier. Only the latest coverage I've seen is in today's Big pharma aims for reinvention in the FT.

Particularly with expiring patent monopolies of their best sellers, the tablet touts are counting on the likes of Brazil, China and India to make up the difference. For decades, they had been like the big book publishers in the sense of developing and promoting a small number of mega-hitting drugs, sold largely in the U.S. and Europe. Now former third-world countries look like prime pickings.

This is uncanny and eerie to me, putting me in a marketing time machine to the late 1970s. The drugs were in cigarettes, but the idea was the same.

As chief editor of a grocery magazine, I was perhaps too chummy with tobacco companies. Our offices were in Manhattan, literally across the street from then cig behemoth American Tobacco. We had ads from them as well as the others, for all forms of tobacco and I knew the marketing guys.

By then, Americans knew cigarettes were killers and I had...finally and after repeated tries...beaten my own addiction. I had somehow come out of recovery from a gruesome auto accident and severe concussion smoking. As a team swimmer, I never had smoked and don't know what went on in my damaged brain to get me to start a two-pack-a-day Camel habit.

It surely was the times — the WWII generation smoked as did we, their kids. It surely was the studies, profession and avocation — I was a journalism major and cigarettes, coffee and booze came with it on campus, at the dailies were we interned, and at the student paper. It surely also was the location — in South Carolina, tobacco was a money crop, and cigs were a quarter out of a machine or just over $2 a carton. A cheap, ubiquitous drug delivery system that society endorsed...

A decade later, visiting tobacco guys got a little tougher for a new non-smoker. They smoked. Every one of them smoked all day. The unfiltered Pell Mell was still the stick of choice and still an American Tobacco staple revenue source. Typically, a marketing exec would light one off the smoldering tip of the previous one. Much like newspaper offices, the tobacco sellers' had a light haze of tobacco incense. If your suit didn't smell of your own tobacco going it, it did of theirs as you left.

For my magazine's convenience store and other grocery readers, I liked to do trend pieces on major product lines. As U.S. tobacco sales just began to show per capita declines, I asked about the domestic future and my exec was ready. American had been noticing and reacting. Their somewhat horrifying response was to target emerging economies.

While Americans were thinking of or actually stopping smoking, poorer countries were getting fattened for the hunt. We saw WWII types suffocating from emphysema and losing it to lung cancer. Some of us, including me, were planning on children and thought we might like to hang around to see them mature and raise them without that toxic incense.

Disposable Income



Instead, my tobacco man noted that in China and India, suddenly there was enough money that some of the many millions of adults had disposable income, for the first time ever. They couldn't afford cars or other luxury items. However, an affordable "treat" in the mind of many would be a pack of cigarettes. At least between their fingers and faces, they could look in their own minds like the glamorous sorts in the movies, TV shows and magazines.

While the tobacco and medical drug parallels are many, the big pharmaceutical corporations at least allege that their business is helping people get healthier and live longer. The marketing though is frighteningly similar.

My own prejudices after following pharma's machinations for decades is that this kind of health is pretty sick. For both body and mind, far too many drugs come out of the labs at high prices and the companies create conditions and markets for them, with the eager help of doctors, HMOs and hospitals. We know that it is much easier and vastly quicker for a doctor to treat a symptom with one or more drugs than to diagnose an underlying condition and work with the patient to cure its causes. Doctors allegedly are trapped almost to a one into a terrible cycle of marketing drugs. Moreover, if you listen to them and to the drug companies, this one, that one and the third drug each would add 3 or 5 or 10 years to your life. If any or all of that was true, we'd all be perfectly healthy and live for 213 years.

Yet, we shouldn't be too naive or delusional about this. Like nearly any other business, the huge drug companies don't exist to make the world better. Rather, they want to continue to make billions of dollars of profits. Thank us very much.

Of course, they look to countries with, in several cases, a billion or more customers. Even if they continue to shift their geographic market shares from the U.S. and Europe, boy, can they every make up the difference on volume.

Perhaps the only positive possibilities here for us are from that shift. If the drug sellers are hunting more and more overseas, might they ease off on us a bit? Might they spend less effort in artificially creating needs for their newest products (with monopolistic patents)? Might they fund fewer research projects designed to convince doctors and their employers that every patient absolutely needs to be on one or three or eight prescriptions daily.

It would be very difficult for them to ease off on an insidious system (warning: snarky link) that has been so profitable for the past half century. Of course, unless our nascent health reform begins to reward patient health rather than churn-'em-through office visits, there won't be much balancing pressure. Yet, it took us a long time to get into this drug mess. Just maybe, if the big guys are out hunting emerging markets, we may begin getting out of it.

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