Big Pharma's impending showdown in specialty markets

The big trends in pharma are all conspiring to make drug marketing a specialized proposition. Blockbuster mass-market drugs are going off patent. Within 10 years, at least 90 percent of prescription pills and capsules will be generic, Reuters reports. And new drugs aren't likely to address mass-market populations.

"There are some mass markets that are so well-served now it is hard to be better," Biogen Idec CEO George Scangos (photo) said at Reuters' recent Health Summit. In other words, pharma did such a good job of developing these mass-market remedies--such as the statin drugs for cholesterol--that beating themselves at their own game is well nigh impossible.

So, the focus is all on specialty pharma. "The mass market if really starting to disappear," Sanofi CEO Christopher Viehbacher (photo) said at the summit. He has invested in a big way in highly specialized drugs through Sanofi's purchase of Genzyme. And Shire chief Angus Russell took that sentiment a step further. "The mass marketing model was designed around certain principles which worked really well for probably 30 years and they're not working so well today," he said.

So, drugmakers have slashed their sales forces, because they need fewer reps to target specialists than to blanket the primary-care market. A Bain expert put it into numbers: 6,000 oncologists, for instance, versus 250,000 primary care docs.

But as Reuters asks, what happens as everyone in the drug business piles into these specialty markets? "If everybody gets into specialty care it will become like primary care, which is to say very high competitive intensity," Bain's Tim van Biesen said. "From an industry standpoint that's a long-term challenge."

- read the Reuters story