Since the passage of the Waxman-Hatch Act in 1984, marketers have viewed generic competition as a death knell for brand-name products. That attitude discounts the impact of marketing; specifically, the power of a brand's position that consumers hold in their minds. Brand marketers who face generic competition have more marketing strategies available than they currently use.

Advances in the computing power of PCs and the ability to micro-position and micro-market to physicians, consumers, and pharmacists have opened up new marketing avenues. When used correctly, the tools can slow the rapid erosion of a brand's market share after patent expiration.

Pillars of Modern Marketing

First and Foremost Almost everyone can recall their first kiss, but few can remember the second. And nearly all Westerners know that Charles Lindbergh was the first person to fly solo across the Atlantic. No one can name the second person to do so. That is the critical characteristic of the human mind Trout and Ries identified and applied to advertising.

The power of being first is incredibly strong. In today's over-communicated society, the human mind has just so much it can remember. To make sense of all the incoming messages, the brain creates a product ladder, and each ladder has only a few rungs on it. For instance, if asked to name mid-sized automobile brands, most people could come up with five or six at most.

Although Avis' brilliant advertising campaign, "We're Number Two, We Try Harder" glorified being second, number one is still the coveted position. If asked to name the first successful antidepressant, most consumers would answer Prozac (fluoxetine)-even though other antidepressants have been on the market for decades.

Lilly's aggressive DTC campaign propelled Prozac to the top rung of the product ladder in the minds of most consumers. But that position can change over time; it is not cast in concrete like the first kiss. Without a new marketing strategy, the name Prozac will slowly fade in consumers' minds.

One pharma company that has successfully used a positioning strategy to build corporate image is Bristol-Myers Squibb. BMS is investing heavily in a DTC campaign that promotes the company as "the cancer specialists." Built around the remarkable success of pitchman Lance Armstrong, the three-time Tour de France winner, BMS has succeeded in filling the number one slot in most consumers minds as the company most devoted to finding cancer cures. When the company's cancer drugs eventually lose their patent protections, the image of Lance Armstrong with his hands held high after a victory will still be a powerful influence in the minds of cancer patients.

Walk-Away Syndrome When pharma marketing executives hear the word generic-their eyes glaze and their hearts palpitate. Understandably so. Innovator companies invest $500 million in bringing new products to market, and after eight to ten years of clinical trials, they can secure only ten to twelve years of exclusivity before they face generic competition.

The reaction to that competition is usually the same, pharma executives "walk away" from the product. They slash promotional budgets and reassign marketing executives-some who had spent 12-hour days developing and implementing brand strategies-to the next big launch. Companies facing generic competition often simply raise the price of the brand to take advantage of the loyalty that still exists.

Current Generic Strategies

In their first few years on the market, many blockbuster drugs have advertising budgets in excess of $100 million. Yet, when a generic competitor enters the market with the same molecule, the branded drug no longer receives funding for DTC advertising. That strategy ignores the lessons learned from both the unique selling proposition and the image approach. Although the brand-name therapy facing competition is no longer a unique product, the money invested has created a unique image in consumers' minds.