4.2.2. Market Segmentation for Generics

Promoting a generic drug is not comparable to marketing and sales activities for other drugs. Generics are perceived differently around the globe. That means, that a “one fits all” sales and marketing approach cannot be applied in all markets. This is also attributed to the fact, that the knowledge, perception and image of generic drugs is different in different markets across the world. In order to meet market specific requirements, it was necessary to divide the generic market into different segments. The different segments are as follows:

1. Mature Generic Markets
   Mature generic markets are countries, where generic drugs are well known and account for a large share of the pharmaceutical market. “Mature markets are those where generics substitution by pharmacists is common, physicians look favorably upon generics, and/or policy exists supporting a generics trade.”⁴⁷In these markets, the overall knowledge on generics is excellent and generics are seen as equivalent drugs. This is true for people working in the health care sector (physicians, pharmacists, nurses, purchasers etc.) as well as for the end user, who is the patient. The reasons for this awareness of generic drugs are different and vary from country to country, e. g. image campaigns to inform patients, favorable generics policy through increasing reimbursements for generics, policy measures to encourage physicians to prescribe generics.⁴⁸ Therefore promotion on generic drugs is not so important, as the product itself is already wellknown. It is believed, that price is the main driving factor for sales. In mature markets Fresenius Kabi sells generics by using the INN (International Nonproprietary Name) plus company name. The INN identifies substances or active pharmaceutical ingredients. Each INN is a unique name that is globally recognized and is public property. The INN provides a standard name for each substance and is unique and distinct in order to avoid confusion in prescribing. Another important feature of the INN system is that the names of pharmacologically-related substances show their relationship by using a common "stem". By the use of common stems the medical practitioner, the pharmacist, or anyone dealing with pharmaceutical products can recognize that the substance belongs to a group of substances having similar characteristics and pharmacological activity. Thus it facilitates the communication within the healthcare sector.⁴⁹
2. Branded Generic Markets
   These countries are developing or emerging markets, with special challenges to pharmaceutical players. These difficulties are based on different or nonexistent reimbursement systems, limited access to healthcare and unique pricing and distribution aspects.Another major difference between a mature generic market and a branded market is the perceived image of a generic by customers. Whereas in mature generic markets everybody knows, that a generic drug is the exact copy of an originator drug, patients in developing generic markets often have a negative image in mind. They see a generic as low quality drug not knowing, that generics are far away from being cheap with low quality. Perception in the public head is still negative even though government is aware of the advantages of generic drugs and tries to push the healthcare sector towards the budget saving alternative of using generic drugs. Branded generics allow companies to enter an emerging market using the same marketing techniques and distribution channels as for an originator drug. By giving the generic an own brand name the consumer remains reassured of a trusted name and it eliminates the fear of counterfeits of low quality. “Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again.”⁵⁰

In branded generics markets, real brand names are created and registered as trademarks as well as logos and different packaging are used.

Table 3: Examples for Fresenius Kabi Oncology Drugs

Examples for different packaging design:

Figure 10: Packaging of the drug Gemcitabine for mature generic markets

Figure 11: Packaging of the drug Gemcitabine for branded generic markets

3. Less Mature Generic Markets These markets present a hybrid between mature generic markets and branded generic markets. In some of these markets we are using the generic approach for the brand name, which is INN+ Kabi but in addition, we use the logo created for our branded products on our promotion materials.

⁴⁷ http://www.gabionline.net/Reports/Recommendations-for-mature-generic-medicines-markets [16 May 2013]
⁴⁸ http://www.gabionline.net/Reports/Strengths-and-weaknesses-of-developing-generic-medicinesmarkets [16 May 2013]
⁴⁹ http://www.who.int/medicines/services/inn/innguidance/en/index.html [16 May 2013]
⁵⁰ Tulin Erdem cited in Kotler, P. et al. (2007), p. 136