Vaccine Marketing - Innovation and Marketing in the Pharmaceutical Industry - page 391

size and growth, actual and perceived burden of disease, per capita income and its
growth, immunization programs (against what diseases? for which consumers? how
funded?), and relevant characteristics of the health care delivery system (e.g., physi-
cian and nurse density, and cold chain characteristics).

13.4.2 Creating Competitive Advantage

To achieve a competitive advantage in the segments in which a fi rm competes, it
must drive a wider wedge between willingness to pay and costs than its competitors
(Ghemawat 2010 ). Differentiation, low-cost, and dual advantage are the three
generic strategies through which fi rms attempt to achieve a competitive advantage
(Porter 1980 ; Ghemawat 2010 ).
Multinational vaccine manufacturers tend to pursue differentiation strategies.
Product-based differentiation seeks to increase vaccine effi cacy, safety for consumers
and vaccinators, convenience of administration (e.g., one instead of multiple doses,
combination vaccines to reduce the number of visits and injections per person,
and administration devices such as intradermal syringes for Sanofi Pasteur's Intanza
fl u vaccine), tolerability (e.g., no or less painful injection), and reduce logistics
requirements (e.g., less stringent cool chain requirements and longer duration of
conservation).
Among the non-product-based differentiation tools reliability of supply is par-
ticularly important. There is a history of vaccine shortages, rationing, and black
markets, due both to production failures associated with the complexity of vaccine
manufacturing and the small number of suppliers for many vaccines (Scherer
2007 ). 37 In some countries, governments expect that multinational companies invest
in local facilities (e.g., formulation, fi ll, and pack plants) and/or technology trans-
fers. Responding to these expectations may provide a differentiation advantage.
Services provided to physicians and distributors are other avenues to achieving
differentiation.
Differentiation fails if the costs associated with differentiation are high relative
to the incremental willingness-to-pay. Investments in local facilities and other ser-
vices may generate incremental costs, which may be higher than the incremental
willingness-to-pay. Product improvement efforts may be similarly misguided. For
example, believing that its nasal spray infl uenza vaccine FluMist (direct cost $15
per dose) would be valued highly in comparison with traditional fl u injections
(direct cost $3.50 per dose), MedImmune priced FluMist at $46 per dose, triple the
price of a traditional fl u shot, invested $43 million in measured media for the launch

37 The H1N1 pandemic raised fears that it might spread to the fl ocks that produce the eggs required
for fl u vaccine production and thereby strangle vaccine supply. This stimulated the development of
new process technologies such as cell-based production systems which are expected to increase the
speed and volume of fl u vaccine supply (Extance 2011 ).