A Steve Jobs Lesson for Pharma
It is not surprising that, since he announced that he is stepping down as CEO of Apple, a number of articles have been published which have praised Steve Jobs. It is well justified that he should be compared to Henry Ford and Walt Disney as an industry leader who literally changed the world with his company’s advances in technology. He wasn’t always successful and his early failure with the Apple I computer undoubtedly taught him some important lessons. But his subsequent great successes can provide important lessons for those in other industries.
Of all the things that I have read, one comment particularly resonated with me: Steve Jobs had little use for market research. He felt that the public didn’t often realize what they wanted, that it was hard for people to envision that they would want something that didn’t exist. I believe a similar phenomenon exists in the pharmaceutical world.
If asked about what new medicines are needed, the general public as well as physicians would, of course, respond that they want to cure all of the major diseases: cancer, Alzheimer’s Disease, heart disease, etc. You really don’t need a great deal of market research to figure this out. But history shows that there are a number of conditions where pharmaceutical market research has been way off in the assessment of the value of a new medicine.
An early example occurred in the field of anti-ulcer medication. It’s hard to believe now, but in the 1960s and 1970s, some of the more common surgeries done were gastric resections to repair intestinal ulcers. The basic tenet back then was that a major cause of ulcers was excess stomach acid. While there were medicines to treat ulcers back then, predominantly anti-cholinergics, these drugs either weren’t very effective or they were poorly tolerated. Market analyses done indicated that there wasn’t much of a demand for agents that inhibited stomach acid secretion since there wasn’t much of a demand for the existing treatments. However, the advent of the histamine H-2 antagonists like Tagamet and Zantac blew this perception away when they proved to be blockbusters. The reason for this was simple: these compounds were very effective and had a great safety profile. These drugs were followed by the even more potent proton pump inhibitors, which also proved to be blockbusters.
These drugs showed that there was a need for good acid secretion inhibitors, but physicians and patients didn’t have an appreciation that such agents were possible. Yet, these agents effectively changed the practice of medicine in that previously common gastric surgeries are now rare.
An even more important example of an underappreciated market was in the cholesterol lowering arena. In the late 1980s, it was unclear as to what the “normal” level of cholesterol should be. Even if high cholesterol was deemed to be a safety issue for a patient, the need for a drug to treat it was questioned. I once heard a marketing expert ask: “Why would someone who was otherwise healthy take a pill for the rest of their lives to treat a condition that can be managed with diet, exercise and red wine?” Despite such views, Merck led the way with the research into statins, compounds that lowered LDL also known as the “bad” cholesterol. When Merck conducted its 4S trial with simvastatin showing that lowering LDL cholesterol with this drug reduced heart attacks and strokes, the treatment of heart disease changed forever.
Market research can also backfire. In the late 1990s, Pfizer developed an inhaled version of insulin called Exubera. Insulin is the best treatment for diabetes. However, it must be injected to be effective. Since the majority of people with mild diabetes (early stage Type 2) can be controlled with oral medications, they rarely are prescribed injected insulin. However, over time, the efficacy of oral medications begins to wear off and patients need insulin. However, they are reluctant to use this therapy. Market research showed that people had a phobia of needles and that, even though they needed insulin to help control their disease, they resisted this form of treatment. Furthermore, market research indicated that having an inhaled version of insulin would be a major factor in having these patients moving onto insulin.
After a decade of R&D and hundreds of millions of dollars of investment, Pfizer launched Exubera. It proved to be a major failure. Sales were so low, that Pfizer pulled it from the market. There were a variety of reasons for this failure, but most notably was the fact that, while patients weren’t enamored with using needles, they weren’t particularly fond of carrying a somewhat bulky device that was likened to a bong. Furthermore, the needle delivery technology improved dramatically over the time Pfizer was developing Exubera and the fear of needles was diminished by the time Exubera was launched.
Market research has its place in helping to set R&D priorities. However, it isn’t foolproof. It should be one factor used in making portfolio decisions. But Steve Jobs has it right. Sometimes, a new medicine, which hadn’t been anticipated, helps patients and physicians better control their disease or condition.