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Kellogg on Biotech

The Evolving Role of Marketing in Biotechnology

Dario Benavides KSM '05, Lanier Coles '05, Gary Dulaney '05, Vanessa Rath '05 and Carla Yager '05.

Once a new drug application (NDA) or biologic license application (BLA) is submitted to the U.S. Food and Drug Administration (FDA), the marketing role in biotechnology and pharmaceutical companies becomes more apparent. The traditional roles of product, placement, price and promotion become central to the success of the launch; it typically takes 12-18 months of planning to effectively prepare for a product launch (Garret 2002). However, early collaboration between R&D and marketing, via market planning and development, are crucial and often overlooked by small biotechnology firms. Pharmaceutical companies, conversely, have a better understanding of the importance of this relationship.

By evaluating biotechnology and pharmaceutical firms and their successes and failures in new product launches, we can begin to understand the impact of marketing in the early development of new treatments. In this paper, we first present a series of general observations on the current status of the marketing role in biotechnology, we then evaluate the marketing function for three biotechnology/pharmaceutical products (Viagra, Enbrel, and Natrecor) and how it was incorporated or neglected in the development of the drugs. From these development cycle profiles, we formulate our hypothesis that sophisticated early-stage marketing enhances the value of the products being developed. Furthermore, we postulate that both biotechnology and pharmaceutical firms stand to create more productive alliances if they attain a solid understanding of their market opportunities before entering such partnerships. Finally, from the findings of this paper we will make several recommendations to optimize marketing efforts in the development of biotechnology and pharmaceutical products. These observations and recommendations are based on a series of interviews and analysis of a panel of 30 biotechnology companies.

©2007 Kellogg School of Management, Northwestern University