The companies listed above – Abbott and GSK, on the one hand, and Danone and Nestlé, on the other – represent two distinctly different industries that are beginning to step on each other’s toes.  Consumer packaging goods (CPG) companies are skilled at developing and marketing consumer products, while pharma’s expertise is more science-oriented, in terms of product development and marketing requirements. Both industries have taken notice of a snowballing consumer interest in so-called nutraceuticals and functional foods, or products that don’t necessarily involve active pharmaceutical agents, but have marketable, science-based ingredients.

While Abbott, GSK, Sanofi and other pharmas have shown an interest in building a nutraceuticals or science-tempered nutritionals business around areas like heart disease, Alzheimer’s, diabetes and gastrointestinal disorders, others have shied away from the prospect of low margin consumer products, and the marketing efforts they require. Pfizer, for example, put Wyeth’s baby formula business up for sale in July; Nestlé and Danone are reportedly the leading bidders.

Given the pipeline gap, pharma can’t afford to cede the nutraceuticals market to CPGs like Nestlé, a company that is actively climbing over the fence into pharmaceuticals. Pharma companies are “gun shy” about aggressive consumer marketing, and less willing to take risks, says Leonard Fuld, CEO of Fuld & Company, a competitive intelligence firm, and host to the aforementioned war games. Pharma’s FDA regulatory funambulism is the source of its reticence, whereas CPGs are willing to risk obtrusiveness (and legal grey areas) in the attempt to dominate a market. You won’t see embedded video advertising for a pharma brand placed against pirated television shows hosted offshore, for example.

Fuld says the war game discussions also revealed that pharma companies are nervous about partnerships with CPGs, believing that brand identity or intellectual property could be usurped after handing over a product. While Nestlé in particular could “break the mold” – the company has walled off its high-science division, separating disciplines like genomics, biochemistry and human cell biology, from say, innovations in foam-boosted cappuccinos – Fuld says pharma companies need to make a public health case for nutraceuticals, since they don’t know how to educate consumers the CPG way: by creating and exploiting a broad, populist market need. CPGs like Nestlé and Danone are pushing into new, science-based products that don’t require a prescription. Fuld says pharma should be more willing to collaborate, and recognize the nutraceuticals and “designer foods” market for what it is: an opportunity for new revenue that bypasses a decade-long testing phase and an increasingly hostile payer environment.

Participants representing the four companies in the war game were culled from Dartmouth’s Tuck School, MIT Sloan, Northwestern’s Kellogg School, and the Yale School of Management. Actual company representatives observed and made comments.

The Indian pharmaceutical market is set to grow to $8 billion in 2010—thanks in part to an expanding middle class and the second largest workforce in the world. Generics are dominating the market at a 92 percent share, according to a study conducted by research firm RNCOS. Rather than set up shop and build brands—or even branded generic offerings—from scratch, attempting to squeeze into an already overcrowded space, acquiring an already-established company (like Piramal) is a more cost-efficient step. Abbott anticipates this move will put it at the top of the (very tall) totem pole on the subcontinent.

Piramal doesn’t yet have any proprietary drugs on the market, but it does have several candidates that have either completed or are near completion of Phase II trials. Two oncology targets are being developed with Merck as a partner; Eli Lilly is partner for two in the diabetes/metabolic arena.

It’s been less than three days since new broke of a massive earthquake in Haiti that all but leveled the struggling country. With thousands dead, a devastated infrastructure, and no emergency plan, countries and businesses around the world have joined in the effort to help the Haitian people with food, supplies, and money. Here’s what some pharma companies are doing to send relief to our neighbors.

“The recent earthquake has had a devastating impact on Haiti’s limited health care system, which was already facing significant challenges,” stated Catherine V. Babington, president, the Abbott Fund. “Building on our existing partnerships with humanitarian organizations in Haiti, we are providing funding and product donations to help address the immense and immediate health needs.”

• Teva Pharmaceuticals will be donating more than $7 million in medicine. Teva is working with several of its Non-Governmental Organization partners to ensure these drugs are delivered to Haiti without delay.
• King Pharmaceuticals donated $200,000 to the American Red Cross to help with its Haiti earthquake relief efforts.
• The Genentech Foundation committed $500,000 to support disaster relief. Here’s the break down: A grant of $200,000 to CARE will help provide  food, water and hygiene items to people in need. A grant of $200,000 to Mercy Corps will provide medical supplies  and support medical teams on the ground. A $100,000 grant to the American Red Cross International Fund will  go toward tarps, tents and other emergency housing items to provide shelter for  the millions left homeless.
• Sanofi-aventis has committed 1 million Euros in financial aid to long-term reconstruction initiatives and the rehabilitation of the population of Haiti.
• Pfizer pledged $1 million in product donations and $250,000 cash (to UNICEF and CARE). Additionally, Pfizer Canada is matching all employee donations up to $250.
• GSK donated $1.4 million in medicines to many different relief organizations, as well as $408,000 to the British Red Cross to treat water contamination.
• Bayer is providing medicines to the Red Cross to be distributed to earthquake victims. Additionally, the company is doubling employee donations up to EUR $100,000.
• Abbott announced on Wednesday that it would send $1 million $2.5 million in aid and medical products to Haiti. The first wave of support comes in the form of $100,000 in grants to the American Red Cross, Partners in Health, and Catholic Medical Mission Board.
• Lilly stated that it has pledged $250,000 in cash, half of which is being sent ASAP, and the other half will be staggered over the next year to help rebuild the country. The company will also match employee donations, up to $250,000.
• Amgen said that it would donate $2 million to the Haitian government to help bolster relief efforts. Additionally, the company will use its Disaster Relief Program Web site to help employees donate additional funds. All donations through the site will be matched by Amgen.

This list will be updated as we hear from other pharma companies. Please contact us at gkoroneos@advanstar.com if you know of a pharma company involved in the relief effort.

The deal adds more than $3 billion in annualized sales to its global pharmaceutical business—three-quarters of which are in international markets. Abbott will be adding the ex-US Solvay pharmaceuticals to its existing pharma division, which has been growing in double digits on an operational basis, according Abbott CEO Miles White.

“We are adding from a position of strength,” White said in a conference call. “Our business has performed well in developed countries with branded products, such as Humira.”

Solvay offers Abbott a portfolio of complimentary products in cardiology, neuroscience, and gastroenterology; as well as new compounds, such as pancreatic enzymes and hormonal therapies.

Abbott also gains control of Solvay’s vaccine pipeline—an area Abbott has yet to enter—and a small diagnostics business. Seventy percent of Solvay’s business is branded generics, sold mostly outside of the United States.

Solvay is currently trying to boost its $200 million influenza vaccine business by establishing cell-culture production capabilities to be used for seasonal and pandemic flu vaccines.

The biggest gain for Abbott is Solvay’s existing penetration in emerging markets. Solvay is currently active in 50 countries with products in 150 countries. Solvay has a broad emerging markets infrastructure with a presence and brand loyalty in Russia, Brazil, and India.

White estimates combined sales in emerging markets to be about $4 billion by 2013. Solvay sales in Russia last year exceeded $150 million; twice what Abbott sold in that country.

“Solvay also gives us approximately $500 million in additional incremental research and development capacity that we’ll use to drive future pharmaceutical growth,” White said. “This extra funding power also provides us with additional flexibility to access opportunities through licensing and external partner agreements.”

Abbott expects the transaction to close in the first quarter of 2010.

In its fourth quarter report released today, AstraZeneca stated that it will continue its “new business reshaping activities” by laying off 7,400 employees. Add that to the 7,600 job cuts from 2007, and AZ is looking at a total workforce drop of 15,000 employees by 2013. The plan is expected to net the company $2.5 billion a year

Meanwhile, Sepracor unveiled plans to slash 940 positions – representing about 20 percent of the company’s staff. This move comes in reaction to pending generic competition for its sleep aid Lunesta. More than 500 internal employees will be effected while the rest of the savings will come from contract sales rep cuts.

Finally, according to Bloomberg, Abbott laid off 200 sales reps in reaction to FDA’s non-approval for an extended-release version of Vicodin.

Michael Schaffer, senior district manager, virology, at Abbott admitted a few “I wish we did that the first time around” actions with his company’s integrated, Web-based application for internally tracking KOLs.

Here are a few ways to hit (not miss) when assessing opinion leader utilization and outcomes:

— Decide what a KOL is to your organization. Schaffer says that clearly defining these terms up front will improve your success. Clinical, marketing, and legal/ethics departments should be included in the discussion. “Sales and clinical teams have very different definitions of a KOL,” he said, while reinforcing that KOL data should be completely separated from sales.

— Peer influence mapping, although intricate and expensive, is vital to understanding how peer influence impacts a provider and his/her connections. You always want to make sure this information is current or else “you might as well throw out your KOL database,” says Schaffer.

— Who’s in your sandbox? Recognize the key players or departments involved and ensure that proper training occurs. You wouldn’t want something to be recorded in a way that would “look bad if subpoenaed,” Schaffer said. The Golden Rule at Abbott remains: “How would you feel if our database was exposed on the nightly news?”

With better understanding of KOL outcomes through interactions with their respective industry counterparts, pharmas can avoid underutilizing key information that is vital to their organizations.

Over the next five years, if not much sooner, the evolution of sales, marketing, and medical affairs will dramatically shift. Speaking from a global prospective, Andreas Tsukada, associate director, sales operations, at UCB Pharma, said that a lot more coordination will be necessary. He noted that if leveraging KOL via the Internet works abroad, it might also be extended to the US as well.

Michael Schaffer, senior district manager, virology, at Abbott, believes that there will be fewer, more important KOLs (especially in the specialty marketplace) and less funding. As a result, pharma will be forced to do more with less, engaging MSLs instead of sales reps. However, it will be important to determine necessary roles for each organization, and go with that strategy. “The key is communication internally within an organization,” said Deb Kientop, president of MSL360.

Meanwhile, Dale Hagemeyer, research vice president of Gartner, cautioned that risks still apply with MSLs. “If it walks like a duck, it talks like a duck” was the analogy he used to describe the comparison of sales rep vs. MSL. In order to separate the two, organizations need to understand what is and what is not permissible in terms of on- and off-label discussions. Until then, credibility and value will continue to be the driving forces behind sales.

Last but certainly not least, pharma will need to keep abreast of the MSL’s changing role. Sivakumar Nadarajah, director of global CRM solutions at Cegedim Dendrite, points out the various roles of a MSL. He or she spends most of the time managing KOL relationships, performing research on KOLs, responding to medical inquiries, providing the commercial side of the company with knowledge, and collaborating internally (see above) with sales teams.

“All these activities are done either manually or using multiple applications,” says Nadarajah. “Providing a unified software platform so that all these activities can be tracked and co-coordinated in a reportable manner will not only help MSLs become efficient, but also help them provide management visibility into their activities.”