THE GIST of Editorial for UPSC Exams : 08 August 2019 (New ideas for the rejuvenation of old pharma brands (Live Mint))

New ideas for the rejuvenation of old pharma brands (Live Mint)

Mains Paper 3: Economy
Prelims level : Pharma Sector
Mains level : Rejuvenation of old pharma brands

Context

•  The Indian pharmaceutical industry is currently passing through a tough phase. In these challenging times, companies are resorting to multiple measures to keep their financial books strong.
•  Among other things, they are selling off non-core businesses, opting for general restructuring exercises, rationalizing their workforce and research and development budgets, and improving their product mix.

Key challenges in pharma sector

•  The main challenge is market growth. An industry that is used to growing at 14-16% annually is showing only single-digit growth.
•  In such a situation, one of the wiser things for the industry to do is focus on revitalizing mature brands, rather than launching new ones.
•  Mature brands are several decades old, still selling but not growing much—which drags industry growth and profitability down.
•  With a revival strategy, a mature brand could turn into a high-selling product once again, generating handsome returns with negligible marketing expenses.
•  In contrast, ensuring the success of a newly launched product or brand is a tougher task.
•  It requires huge marketing expenditure for several years, and even then the outcome is uncertain.

Need of revitalization old brands

•  The revitalization of old brands involves their remodelling by changing the product composition, undertaking new clinical trials, adopting revised marketing strategies and reworking brand communication (with doctors as the primary audience).
•  Mature brands have a starting advantage in the brand heritage associated with them, which means they already have a strong image in the minds of consumers.
•  Some of them are considered not just effective, but also the gold standard in a particular therapeutic area, with their tried-and-trusted safety profile acting as a bonus.
•  Examples of mature pharmaceutical brands include Crocin, Betadine, Betenovate, Hepatoglobin, Dexorange, Benadryl and Novamox.
•  For rejuvenation, various models can be adopted. Internationally, many brands have been revitalized.
•  In non-pharmaceutical markets, the stories of Colgate, Coca-Cola, Mercedes-Benz and Nescafe stand out, to name a few.
•  These brands are no longer what they once were and have transformed themselves to expand their appeal over the decades.

Process of revitalization of old brands

•  Product innovation is one way out. This could involve reformulation, a shift in product composition to deliver added benefits, or a new drug delivery mechanism. New markets could also be identified.
•  Many brands have gained from a rural push.
•  The generation of new data from recent clinical trials, accompanied by scientific papers, meta-analysis and repurposing molecule could also grant a brand a fresh lease of life.
•  Improving communication with doctors can also make a big difference to sales.
•  In some cases, it helps to identify a younger and trendier audience for the brand’s message. Realigning the product proposition to suit today’s digital era could be part of the marketing thrust.
•  A company may also try playing up a legendary brand story by using its heritage to its advantage.
•  Some medicine manufacturers prefer to outsource the sales and marketing of a brand to an external agency, which may have fresh ideas on how it can be repositioned to regain its relevance.

Conclusion

•  Mature brands are part of a company’s heritage. Revitalizing them can raise its capacity to invest in development by offering cash flow support, while also strengthening the bottom line.
•  Some brands do get outmoded and fade away, but good brands have the capacity to last and last.

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Prelims Questions:

Q.1) Which of the following country has formally withdrawn from Intermediate-Range Nuclear Forces Treaty (INF) with Russia?
A. France
B. USA
C. China
D. Iran

Answer: B
Mains Questions:
Q.1) What are the key challenges behind to revitalize old Pharma Brands?