Drug Truths

A site devoted to teaching about drug discovery and development.

A Steve Jobs Lesson for Pharma

with 8 comments

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.

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Written by johnlamattina

September 11, 2011 at 6:49 pm

8 Responses

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  1. Good post, interesting examples. Sounds like the driver of the success of the products mentioned is that they demonstrate significant value and solve important problems. Given that, the markets will follow.

    James Taylor (@JTBiotech)

    September 11, 2011 at 7:31 pm

  2. Cyclosporine was apparently almost killed as a project at Sandoz (it was apparently kept on as a good works project) — the marketing folks argued there just didn’t exist a market for transplant rejection drugs, because there were so few transplants. Of course, the drugs made the surgery effective, which created the market.

    Keith Robison

    September 12, 2011 at 6:39 pm

  3. John – I do not know how your blog is set up, but some spam in comments may be starting to appear. Email me for an offline POV (if you like) on my experience with that. – Terry

    Terry McCormick

    September 12, 2011 at 8:45 pm

    • Terry, Thanks for the alert. I inadvertently let a spam message through. I will take it out. Thanks for your note. – John

      johnlamattina

      September 12, 2011 at 10:58 pm

  4. Interesting post, but I believe the examples you post point out the fact that so many in the pharma industry (and many others for that matter) don’t understand how to do market research. The point is generally to uncover an unmet need whether it is known by the consumer/patient or not. This is the really hard part.

    For example, there was clearly an unmet need to solve ulcers without invasive surgery – it just wasn’t expressed that it should be with PPIs for example.

    Taking an example from another industry, one of the reasons liquid Tide was developed was because of an unmet need that was seen when watching consumers in their homes. It was designed to overcome an unknown need, never mind an expressed one. However, it has gone on to be a big win with consumers and P&G alike.

    Andrew Lim

    September 23, 2011 at 11:07 pm

    • Andrew,
      Sorry, but I don’t agree. The H2-antagonists were predicted to be minor drugs. Few thought that compounds that decreased gastric acid would have such a profound effect on overall GI distress. The PPI predictions were even worse initially. Then, people said that the H2 antagonsits were so safe that the concept of a PPI was flawed that having such profound inhibition of acid secretion was overkill. Wrong again!
      Steve Jobs’ point is that oftentimes you cannot anticipate what will make a new market based on past trends an beliefs. I fully agree.
      – John

      johnlamattina

      September 23, 2011 at 11:24 pm

  5. We could not agree more, John…

    http://www.ideapharma.com/announcements/why-most-market-research-is-a-waste-of-money-and-what-you-can-do-about-it and an interview with Philip Graves, whose book targets exactly this: http://www.ideapharma.com/ideacollider

    Mike Rea

    October 19, 2011 at 3:10 pm


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