Biotech Product Management

I, as well as most of my readers, are in high tech: audio/video, networking, personal computing, etc. I don’t know any Product Managers in the biotech industry (yet). I would be very interested in meeting one, and find out how PM is different in biotech vs. high tech. For one it’s just damn interesting – how the heck do you get to “we’re going to infect this egg with a virus that will cultivate a bacteria which we’ll half kill and then inject into people as a vaccine!” That blows my mind, and qualifies them as Products Beautiful.

Second, I was recently diagnosed with Type 1 Diabetes (hence, the lack of posts recently). In Type 1, your body has an autoimmune condition that kills off your pancreas’s ability to create insulin, which your body uses to break down sugar from the foods you eat (especially carbs). Without insulin, all that sugar starts floating around in your bloodstream, which creates major problems down the road (like amputation and death). So since I’m not making any of my own, I require insulin shots to continue living. After being on the shots for a little under a month, I’m starting to get a sense for the cost of my medical supplies, and even on insurance – it’s shocking.

As a PM/PMM in high tech, we often fall back on the 4 P’s of Marketing: Product, Place, Price and Promotion. Everyone has added their own P, Pragmatic Marketing adds Problem, which as a PM I find very useful. In Biotech, it seems, 4 of these 5 would be very easy:

  • Product/Problem: People buy drugs for at least 2 reasons – to feel better, or to live. If a drug doesn’t do that, it doesn’t solve a problem.
  • Place: Retail, OTC, or Pharma
  • Promotion: Maybe a little more complex on the retail side and I’m sure there are things I don’t understand here on the Rx side, but what I’ve seen personally consists of running an army of reps into the field throwing free samples at doctors like candy

The one I have trouble with is Price. In high tech, pricing is voodoo-ish but you can apply market based pricing to it by attempting to quantify the value to the customer of the problem you are solving and set your price against that such that the customer achieves a ROI in some sort of logical timeframe. Or you can be lame and do cost-plus pricing.

In biotech, how the hell do you get to a price? My problem statement is: I want to remain alive. They could charge me almost any price and I’d be forced to pay. Thankfully insulin is a commodity (partially, there are special mixes that only certain companies produce), so the market can keep prices in check. What if I had some other disease that someone had a patent on the drug to treat? I’ve never paid much attention to this debate before because it didn’t affect me personally, but now this is going to be an issue I keep a close eye on.

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3 Comments

  • Reply Petros January 28, 2007 at 4:18 pm

    Hi,
    Just a quick reply to shed some light on your last query regarding how pricing is determined in biotech. It’s all pretty much regulated by each country’s healthcare system and basically depends on how much the patient can be reimbursed for each application.

    Drop me a line if you need any more info,

    Take care,

    Petros

  • Reply bob corrigan February 24, 2007 at 7:40 pm

    I *was* a PM in software, and *now* am a PM in healthcare. Not biotech, but our product is sold to healthcare providers and care management/payors.

    bob

  • Reply Guillaume August 17, 2007 at 3:07 am

    Hi,

    I was a PM in software as well and I am now doing my MBA internship as a PM consultant in biotech. What is interesting is that those industries have some similarities:
    – You both sell based on product attributes (!)
    – the sales force is very technical

    Some differences in biotech though:
    – regulation in each region is a powerful player which influences everything you do
    – lifecycles of product are ten times longer (on average)
    – the end customer is not the user of your product
    – investments are much higher and riskier
    – you do not determine the final price, but you can influence the price based on the current competition and the benefits to the patient

    Hope this helps,

    Cheers,

    Guillaume

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