How Do You “Supersize” Market Impact with a Drug?

Market innovation should change the nature of competition.

It starts with a shift in orientation to see and sell with unique economic vision, strategy and positioning that intentionally breaks with the Standard Model. In healthcare, that means understanding how to invent leverage, create power and gravitational pull, and the value of 'continuous health engagement' and primary prevention as the gold miner's dream: A solidified stream of high-grade mineral, ripe for the picking.

"Novo Nordisk chief executive Lars Fruergaard Jørgensen has set his eyes on another “gold mine”: trial data that could offer clues on why some people are more likely to gain weight, and perhaps even lead to the first drugs designed to prevent obesity,” write Hannah Kuchler and Richard Milne in a piece for the Financial Times yesterday “‘Novo Nordisk seeks to use obesity drug findings to prevent weight gain: Pharma group behind blockbuster drug wants to supersize its market impact”).

Jørgensen recently set up a unit focused on “transformational prevention”, using artificial intelligence and advanced analytics to develop a “deep understanding” of obesity as a disease. Its biggest asset is the Select trial, a vast study of more than 17,000 people, designed to look at cardiac outcomes of people taking its weight-loss drug Wegovy, which also collected samples such as DNA and blood over time. Novo Nordisk will combine this with large public sources such as the UK biobank.

But any drug to prevent obesity could be many years away.

Jørgensen viewed deepening its understanding of obesity as a way to see off the increasing competition.

That includes not only ‘cardiometabolic heavyweight’ Eli Lilly and their recently approved Zepbound weight-loss drug, which appears to have better and faster weight loss than Wegovy, but other big pharma companies with deep pockets to invest in sales and marketing and technology and data-making, to spend what’s needed for a seat at the table and get a big bite out of a drug market analysts forecast to be somewhere around $100 billion.

AstraZeneca last month said it made a $2 billion bet on growth from the anti-obesity drug market, licensing an experimental pill from China's Eccogene that it believes could cause fewer side effects than current injectable treatments. Roche is “muscling” its way in on the obesity market, announcing two days ago that it is spending $2.7 billion on a buyout of Carmot, securing its injectable and oral assets. Amgen and Boehringer Ingelheim both have obesity drugs in the pipeline; and given the revenue potential, rest assured Pfizer, Sanofi and Abbott will all be back to mine the vein.

“Moving earlier and earlier, and having a bigger and bigger impact . . . is the best way to mitigate any risk to an established business,” Jørgensen explained to the Financial Times.

Which is, as they say, directionally correct. But it misses if the goal is to be different strategically.

The ‘Health Market Stack’

The map to a sustained edge is to do something a competitor can't.

So if you bound strategic thinking conventionally, positioning your commercial model as competing in the obesity 'drug market' -- say Novo Nordisk vs. Eli Lilly vs. AstraZeneca vs. Roche -- then your roadmap leads to competitive convergence. This is a place of maximum congestion, where price and promotional tonnage and hyper-commoditization become defining features of market development.

In other words, the center-of-gravity for competition, the frame within which to organize and mobilize assets and resources and investments, will still be Standard Model.

The “creative” output is "drug" promotion and communications selling health conventionally, through disease awareness campaigns and celebrity endorsements. Look no further than Pfizer marketing for its Covid franchise last month (“Kansas City Chiefs’ Travis Kelce and mom star in Pfizer commercial promoting COVID, flu vaccines” link) or AbbVie in August trying to create demand for its dermatology franchise (“AbbVie raises awareness around mental health and skin conditions with patients, docs and a celebrity spokesperson” link). The value proposition sells technical merits of product — the feature/benefit story of a drug positioned in the target product profile — which is “pushed” as an input to someone else’s economic system. (Who “pays” and “cares” over the long-term is the real head-scratcher.)

it’s not hard to see where this is all going.

The best case study to predict how the ‘obesity drug market’ will all shake out is the “statin war” waged between Pfizer vs. Merck vs. BMS vs. AstraZeneca more than 25 years ago (for an introduction, check out Statin Wars: The Heavyweight Match — Atorvastatin versus Rosuvastatin for the Treatment of Atherosclerosis, Heart Failure, and Chronic Kidney Disease, here). Which is pretty much how the pharmaceutical industry has been “working” and thinking for the past 100 years.

But if you think of "drug" as having untapped power to bring market fragments together -- having 'positional value' as a keystone to construct and cohere entirely new industry ecosystems -- then you compete radically differently, as a system. So if the objective is making a "supersize" impact with primary prevention as the market to development, the thing that will spark and sustain an entirely new category for growth and earnings, then the roadmap is not about “drug market” alone, but drug market positioned within the context of a ‘health market stack’.

So, for example, Eli Lilly + Nestle + Kroger + WTW collaborating on shared marketspace — innovating and inventing together as a system of markets — will beat Novo Nordisk thinking and operating alone all day long. On the other hand, Novo Nordisk + CVS Health + OracleCerner + Fortrea will beat AstraZeneca sticking with the Standard Model of drug development and promotion. And different still, Roche + DexCom + Boeing + General Mills will beat Amgen in a market for ‘employee health stewardship’ .

Everything is in the remix.

When it comes to “supersizing” market impact, conventional strategy plays the player. Strategy at a system level plays the board.

/ jgs

John G. Singer is Executive Director of Blue Spoon Consulting, the global leader in positioning strategy at a system level. Blue Spoon specializes in constructing new industry ecosystems.