Delivering our strategySales <strong>and</strong> MarketingWe focus on br<strong>and</strong>s <strong>and</strong> activitiesthat make a differenceWe will lead the industry incommercial innovation thatbrings value to customerson their terms <strong>and</strong> improvespatient health”Tony ZookExecutive Vice-President, Global Commercial OperationsDouble digitDouble digit sales growth for Crestor, Seroquel XR<strong>and</strong> Symbicort$5.8bnEmerging Markets revenue totalled $5.8 billion,17% of the total revenue$274mRevenue of $274 million from recent launches,pipeline <strong>and</strong> in-licensingOur global sales <strong>and</strong> marketing organisation isactive in over 100 countries <strong>and</strong>, at the end of<strong>20</strong>11, comprised approximately 32,300 employees.As well as building on our leading positions in theUS <strong>and</strong> Other Established Markets, we continueto increase our strength in Emerging Marketsincluding China, Brazil, Mexico <strong>and</strong> Russia. Seethe Market definitions table on page <strong>20</strong>9 for moreinformation on <strong>AstraZeneca</strong>’s market definitions.We work to ensure success in individual markets by having highlyaccountable local leaders who underst<strong>and</strong> their markets <strong>and</strong> have astrong focus on profitable business growth. This extensive network issupported by a single Commercial organisation that develops globalproduct strategies <strong>and</strong> drives commercial excellence, ensuring astrong customer focus <strong>and</strong> commercial direction in the managementof our pipeline <strong>and</strong> marketed products. All our efforts are underpinnedby a commitment to conducting our sales <strong>and</strong> marketing activity inaccordance with our values <strong>and</strong> driving commercial success responsibly.Driving commercial successDelivering commercial success requires us to maximise the value ofour portfolio across the whole life-cycle of a medicine. For an overviewof this process see the Life-cycle of a medicine section on page 10.We do so by connecting our science with our customers’ needs.From an early stage in the medicine discovery process we embedcustomer insights into our R&D strategy based on our interactions withhealthcare providers, patients, regulators <strong>and</strong> payers. We build on thiswith our local market expertise <strong>and</strong> knowledge. This approach helpsus to prioritise resources <strong>and</strong> optimise our portfolio, thereby deliveringmedicines which customers value <strong>and</strong> which meet their needs.Activities in <strong>20</strong>11 focused on ensuring continued commercialexcellence of key products, such as Crestor, Seroquel XR <strong>and</strong>Symbicort, driving growth in new markets <strong>and</strong> accelerating thecommercialisation of recently launched products. Recently launchedproducts include Onglyza, Brilinta/Brilique, Vimovo <strong>and</strong> Caprelsa.Brilinta/Brilique has been approved in 64 countries <strong>and</strong>, whilelaunches have occurred in 37 markets, due to the time needed tosecure reimbursement, formulary approval <strong>and</strong> protocol adoption,full patient access at the end of <strong>20</strong>11 was limited to an estimated 12%of the acute coronary syndromes market.Global strategies tailored to meet local needsWe focus on developing global strategies tailored to meet local needs,<strong>and</strong> recognise that our commercial capability must evolve to meetfuture market requirements. The pace <strong>and</strong> degree of change in globaleconomies, <strong>and</strong> intensifying regulatory <strong>and</strong> access challenges haveled us to look at ways of better <strong>and</strong> more efficiently addressing thechanging needs <strong>and</strong> preferences of payers, prescribers <strong>and</strong> patients.As part of this effort, in November we announced our consolidationinto three regions: (the Americas; EMEA; <strong>and</strong> Asia-Pacific), running theregional sales <strong>and</strong> marketing organisation from three sites: (Wilmington,Delaware, US; London, UK; <strong>and</strong> Shanghai, China), <strong>and</strong> we are changing36 Delivering our strategy Sales <strong>and</strong> Marketing<strong>AstraZeneca</strong> <strong>Annual</strong> <strong>Report</strong> <strong>and</strong> <strong>Form</strong> <strong>20</strong>-F <strong>Information</strong> <strong>20</strong>11
our Established Markets footprint in line with declining sales. Ourapproach to implementing such consolidation is outlined in theManaging change in our organisation section on page 42.All our markets have a role to play in delivering our commercial strategy.We continue to prioritise investment <strong>and</strong> allocate our resources in themost cost effective way. This allows us to identify those markets ofmajor significance to us, those that will become more important driversof our business in the future <strong>and</strong> highlight those Established Marketswhere we need to refocus our approach to deliver sustained success.Creating new commercial sales modelsIn most countries, our sales are made through wholly-owned localmarketing companies. In other countries, we sell through distributorsor local representative offices. Our products are marketed primarily toprimary care <strong>and</strong> specialist doctors. Our efforts are directed towardsexplaining the therapeutic as well as the economic benefits of ourproducts to doctors, governments <strong>and</strong> others who pay for healthcare.Face-to-face contact is our traditional marketing method <strong>and</strong> weare committed to making this channel as effective <strong>and</strong> efficient aspossible. We continue to focus on our customer needs <strong>and</strong> havinglearnt from successful approaches implemented in North America <strong>and</strong>Europe, we are accelerating the adoption of our new commercial salesmodel which is now live in all our regions; including office-based salesteams, dedicated customer service staff <strong>and</strong> digital channels.Our rapid growth in Emerging Markets is driving dem<strong>and</strong> for centralcommercial support, particularly in respect of sales force effectiveness.We have adopted <strong>and</strong> rolled out core sales <strong>and</strong> marketing trainingprogrammes in local environments. The main focus of these programmesis to embed core commercial skills <strong>and</strong> to strengthen sales managers’coaching <strong>and</strong> planning skills while also reflecting local market needs<strong>and</strong> conditions.Pricing our medicinesOur challenge is to deliver innovative medicines that improve healthfor patients, bring benefits to society <strong>and</strong> provide an appropriate returnon our investment. Our global pricing policy provides the frameworkto ensure appropriate patient access while optimising the profitabilityof all our products in a sustainable way. When setting the price of amedicine, we take into consideration its full value to patients, to thosewho pay for healthcare <strong>and</strong> to society in general. We also pursue aflexible approach to the pricing of our medicines. For example, wesupport the concept of differential pricing, provided that appropriatesafeguards are in place to ensure that differentially priced productsare not diverted from patients who need them to be sold <strong>and</strong> usedin more affluent markets.Delivering value for payersOur medicines play an important role in treating unmet medical need.In doing so, they bring economic as well as therapeutic benefits.Effective treatments can help to lower healthcare costs by reducingthe need for more expensive care, such as hospital stays or surgery,or through preventing patients from developing more serious ordebilitating diseases that are costly to treat. They also contribute toincreased productivity by reducing or preventing the incidence ofdiseases that keep people away from work.As outlined in the Pricing pressure section on page 18, there iscontinued downward pressure on drug pricing <strong>and</strong>, in the currentdifficult economic environment, payers expect us to be able todefine the value our medicines create. We are acutely aware of thechallenges facing those who pay for healthcare <strong>and</strong> are committedto delivering value which will allow us to bring our valuable medicinesto the patients that need them. We therefore work with payers <strong>and</strong>healthcare providers to underst<strong>and</strong> their priorities <strong>and</strong> requirements,<strong>and</strong> generate evidence regarding how our products offer value <strong>and</strong>support cost effective healthcare delivery.Broadening affordabilitySales of medicines in our Established Markets enable us to generatethe revenue we need to provide our shareholders with a return, investin continued innovation <strong>and</strong> pursue other opportunities to exp<strong>and</strong>the availability of our medicines. At the same time, we recognise thatEmerging Markets will contribute around 70% of pharmaceuticalindustry growth in the five years to <strong>20</strong>14. Our programme of investmentin these markets continues, both in the large faster growing marketssuch as China, Mexico, Brazil <strong>and</strong> Russia, as well as in high-growth,medium-sized <strong>and</strong> smaller markets.As we exp<strong>and</strong> our business in these markets, we are exploring broadmarket strategies to reach new patients, in particular the emergingmiddle income populations who are increasingly able to accesshealthcare systems <strong>and</strong> for whom our medicines are becomingaffordable. In some cases, where it is appropriate, we are lookingat ways of making our medicines more affordable. For example,our ‘Broad Market Strategy’ in China means we are exp<strong>and</strong>ing ourmarketing activity <strong>and</strong> broadening affordability of our medicinesto reach an increasing number of physicians <strong>and</strong> hospitals incommunities outside the most affluent cities who do not currentlyhave regular access to healthcare <strong>and</strong> high quality medicines.In Brazil, our ‘Faz Bem’ (Wellbeing) programme provides discountsto the cost of our medicines to patients across all socio-economicgroups. The programme also provides additional incentives forthose patients who adhere to their treatment regimens which helpsimprove health outcomes <strong>and</strong> benefit our business. Like the Faz Bemprogramme, initiatives in Romania <strong>and</strong> other Central <strong>and</strong> EasternEuropean countries attempt to provide similar incentive schemesto patients that are unable to complete treatment regimens as a resultof affordability constraints.These approaches are part of our overall Access to healthcare strategywhich can be found in the Responsible Business section from page 47.A broader portfolioTo support our growth in Emerging Markets, we are broadening ourportfolio through the launch of br<strong>and</strong>ed genericised medicines. Thisrange will comprise a portfolio of products which are complementaryto our patented original medicines in markets where we already havea developed commercial infrastructure, existing relationships withhealthcare professionals <strong>and</strong> a strong reputation.In the second half of <strong>20</strong>11, we continued our programme of genericlaunches, with three br<strong>and</strong>ed generic products being launchedin the Philippines. We also launched a generic anti-infective medicinein Thail<strong>and</strong> in December. Against the backdrop of a challengingcompetitive environment, we have re-evaluated our portfolio <strong>and</strong> arenow focusing on approximately 70 generic products aligned to ourwider portfolio which allows us to adopt an integrated selling model.We plan to market these generic products under the <strong>AstraZeneca</strong>br<strong>and</strong> in <strong>20</strong> targeted Emerging Markets.In December, we announced we had entered into an agreement toacquire Guangdong BeiKang Pharmaceutical Company Limited, agenerics manufacturing company, based in Guangdong province,China. This agreement, which remains subject to regulatory approvalin China, expected in the first quarter of <strong>20</strong>12, will give us access to aportfolio of injectable medicines used to treat infections. It underscoresour intention to serve the health needs of Chinese patients through ourinnovative medicines <strong>and</strong>, increasingly, high quality br<strong>and</strong>ed generictreatments that are locally produced to global st<strong>and</strong>ards.Sales <strong>and</strong> marketing ethicsThe pharmaceutical sector is subject to increased oversight byregulatory <strong>and</strong> governmental authorities. As we drive the growth of ourbusiness <strong>and</strong> reshape our geographic footprint, we remain committedto the responsible delivery of commercial success. You can read moreabout our st<strong>and</strong>ards of ethical practice <strong>and</strong> <strong>20</strong>11 performance in theResponsible Business section from page 47.Business Review<strong>AstraZeneca</strong> <strong>Annual</strong> <strong>Report</strong> <strong>and</strong> <strong>Form</strong> <strong>20</strong>-F <strong>Information</strong> <strong>20</strong>11Delivering our strategy Sales <strong>and</strong> Marketing 37
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