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Genzyme : The Renvela Launch Decision

Success Story of Renagel• Market share of Renagel in its category: 50%

• Strongly recommended by K/DOQI as first-line therapy for patients with advanced CKD

• Covered and supported by virtually all the PBMs in the country in a favorable tier that covered most of the costs

• Sales increased by 23.4% in 2006 (Growth stage)

• During the success of Renagel, no. of sales reps increased from 45 to 110

CHALLENGES• Right now, Renagel is the market leader, and it’s really very well

accepted by nephrologists. • Nephrologists feel very comfortable with it because they like the

degree of efficacy it brings to them in controlling phosphorus and also the fact that it’s non-absorbent, non-accumulating.

• Self destruction of market leader

INNOVATION FRAMEWORK

Cues from the Article: Eager Sellers, Stony Buyers

• New products often require consumers to change their behaviour. As companies know, those behaviour changes entail learning, switching and obsolescence costs.

• People irrationally overvalue benefits they currently possess relative to those they don’t. The bias leads consumers to value the advantages of products they own more than the benefits of new ones.

• People evaluate the attractiveness of an alternative based not on its objective, or actual, value but on its subjective, or perceived, value.

• Consumers evaluate new products or investments relative to a reference point, usually the products they already own or consume.

• Losses have a far greater impact on people than similarly sized gains, a phenomenon that Kahneman and Tversky called “loss aversion.”

• The endowment effect: Loss aversion leads people to value products that they already possess – those that are part of their endowment – more than those they don’t have.

S-Curve for CKD pharmaceutical

Renagel

Renvela

The 9-X Effect

Launch Decision

YES. The product should be launched as it worked

equally well in controlling phosphorus and lowering cholesterol. In addition it maintained the bicarbonate levels in stage 3 and stage 4 CKD patients.

Clinical Trials - Satisfactory

Focus includes stage 3 and stage

4 CKD patients

Development in 2005

Concerns about bicarbonate levels

Renvela is in Stage-5

…..

– Disadvantages of launching Renvela (while keeping Renagel):

• Cannibalization of sales of Renagel which is already the market leader• Chances of Inventory pile-up of Renagel due to the introduction of

Renvela• Genzyme did not have the approval to discuss the benefits of Renvela

for Stage 3 and 4 CKD Patients.• It would not also help with the problem of Patent expiration which was

due in 2014• Potential advantage to competitors if side effects of Renagel are

reminded to Nephrologists

– Advantages of launching Renvela:• Increase in the consumer base – Stage 4 CKD patients 400,000

Stage 3 CKD patients 7500,000

• Better growth prospects in terms of capturing other relevant markets, thereby contributing greatly to revenues

The product will be positioned and marketed such that it will require least change in consumption behavior of the patients.

Though the product is not greatly different from Renagel, it has a significant value to CKD 3,4 and 5 stage patients.

The idea is to sell this product as an improved version of Renagel having better efficacy, and not as a completely new product.

The product Renagel 2.0 will be launched only after it gets approval for marketing its benefits for CKD 3 and 4 stage patients

Supporting Elements and Programs

Product concept & target Market (Positioning)

Matching Product & Tech. Possibilities

Market Segmentation

Situation Size-up

Marketing Obj.

Marketing Communicat

ion & promotion

Sales force and

distribution

Product strategy

servicePricing

Marketing Planning – Creating your Market launch Plan

Marketing Objective :• To Launch a innovative product in line with the company’s strategy• To target wide range of consumers in CKD curing market• To effectively communicate efficacy of product for stage 3 and stage 4 patients.• The product is set to be launch at slightly higher price ; so promotions should be

in line that portrays the benefits perceived to be more than price of the product.

Market Segmentation :• Stage 3 , 4 and 5 CKD patients

Product Concept :• Advanced version of Renagel • Maintains appropriate bi-carbonate level in stage 3 and 4 CKD patients • Positioned as elixir for CKD patients

Pricing Strategy :• Objective : Product quality leadership• Method : Mark up pricing• Strategy : Price Skimming(slightly higher than Renagel)

Product Differentiation:Only product to cater all three CKD’s stages.Can continue with name Renagel with slight modification eg: Renagel 2.0, Renagel Plus

Marketing Communication and Promotion:Direct selling to expertsPromotion will be planned to minimize any apprehension due to increased pricing.Both direct-to-consumer & physician promotion

Sales force & DistributionIncrease Sales forceTrain Sales force about new product

Suggestions :

• Experienced and professional sales organization work with physician to make this transition as smooth as possible.

• Renassist - handles reimbursement assistance for patients.

• Direct-to-pharmacy awareness campaign that’s just getting off the ground and will bring additional awareness to patients.

• Clinical consultant team - Group of individuals that works very closely with renal dietitians across the country.

• Professional education materials as well as patient education materials.

THANK YOU