These two products are, in fact, exactly the same drug. Prilosec is the US brand of AstraZeneca's omeprazole; Mopral is its French counterpart. Unlike manufacturers of consumer goods, until recently the pharmaceutical industry has been wary of promoting big, international brands. "The industry is very conservative," explains Mark Goldstone, director of development and COO of EuroRSCG Healthcare. "They don't want to push the boat out too far, for fear of a problem with a drug or something going wrong.

Yet, despite these significant changes in the worldwide pharmaceutical market, the greatest attraction for globalization is its potential for improved financial performance. Global branding and shareholder value go hand in hand.

"Nowadays there is severe pressure to contain costs," explains Goldstone. "Companies need to build brands to overcome these pressures. The mega mergers were a way to contain costs and find pipeline products, yet the big companies still need about five new blockbuster products each year to return the promised growth. Companies need to get their marketing right, and get it right this year rather than next. Global branding cuts marketing costs and allows a much faster and higher profile rollout."

Studies by Datamonitor, however, dispute this prevalent opinion. For all the advantages of global brands, there is little evidence it either increases sales or cuts costs. Datamonitor analyst Oliver Sexton says that local market conditions (such as reimbursement policies) override the benefits of global strategies. Remicade and Beta Interferon, for instance, are both global brands. But the brand has little sway in the UK where neither drug is reimbursed.

Sexton does not deny that branding per se is unimportant, but he argues for local flexibility. "Brand does make a massive difference, but I don't think that a global brand has any greater impact than local ones. Global brands are more for investors – they create the appearance of a large, successful company."

AstraZeneca's branding strategies would seem to support Datamonitor's findings. The company intends to launch all new products on a global scale, but Jon Parton, director of direct marketing, does not believe he will see immediate cost savings. "Global branding is an act of faith," he says. "We believe it's the right way to go and the reason we get away with it is that it doesn't cost us much more. But if it does nothing more than stop new product managers making their mark by changing a brand it could save us a lot of money."

Significant cost savings may indeed follow in due course. At present, even with a centralized, global brand, most companies still tend to use local agencies for their marketing campaigns. As each agency believes it knows its market best, and prefers to create its own marketing materials, work (and costs) are duplicated. But it will not be long before the pharmaceutical manufacturers give bulk contracts to global agency networks.

Indeed the future of pharma's global brands lies with the communications agencies. "What too often happens is a battle to preserve the global nature of a brand against local marketers' desire to alter it. At launch the brand is global but this is often greatly reduced by local agencies," argues Featherstone. "Our own research suggests that there are more similarities than differences in attitudes between countries. Providing you do your market research properly, global advertising – the best way to establish global branding – will finally be possible."    

[17-Jun-2002]