Evolving the product launch paradigm in pharma
Successfully managing a product launch to maximise returns
These days, pharma companies want to sell as much as they did a decade ago with new drugs but seem to struggle achieving this due to a rather tightened briefcase and uncertainties basically around every corner. Is it even possible to get back to the good old days with less cash and increased risk? Or is the pharmaceutical industry entering the brave, new world of customer centricity?
In the old days, significant development and commercialisation investments in phase, 2b and 3 were paired with an expensive field force based go-to-market strategy that mainly targeted physicians.
Nowadays, the decline has been driven by an increased average cost to bring an asset to market, from $1.2bn in 2010 to $2.0bn in 2017, and a declining average peak sales per asset in the same period from $820m to $470m.
What is the deal: The budget has tightened due to increased risk in pre-launch and go-to-market phase. Developing and bringing an asset to market has become more risky and returns are by no means guaranteed, as a consequence, the available budget to develop and commercialise a drug is expected to shrink, requiring higher efficiency and effectiveness.
So, how should pharma companies allocate their reduced development and commercialisation budget to more effectively and efficiently drive a fast trajectory to higher peak sales?
Instead of financing an inefficient go-to-market model post-launch, pharma companies should consider investing resources during the pre-launch phase with a customer centric approach.
C-suite takeaway: How to start the engine under the new pharma launch paradigm
Free up resources to finance the pre-launch activities of the next blockbuster drug
Prioritise the key in-line products for investment and adopt a more agile, customer centric and digitally enabled go-to-market model. Anticipating the investments and investing more in pre-launch activities prevents reactive actions post-launch that are typically very costly and have a limited impact.
Invest in understanding the product ecosystem
Map the key stakeholders (patients, physicians, payers and healthcare providers) to identify what their major needs are, and how to address them in a differentiating way. In the current context this would require early deep analysis and research to identify the three to four swing factors to shape the market.
Create a company launch excellence mind-set
Create a common way of thinking to improve the quality and decision-making speed, and its execution. Establish cross-functional collaboration, with an early engagement between R&D and Commercial.
Build the capabilities early
Consider the relevant capabilities to execute launch excellence, including where and how to apply data insight, and how to align with the cultural change agenda.
Challenge the current go-to-market model
Adopt a “zero-base budget” mind set and configure your organisation, and the capabilities within it, to follow a disciplined and consistent process that will reliably find for each launch the three to five levers directly linked to your profitability.
Invest more in commercial functions teams
Train multi-disciplinary skills, establish clear career development paths and institutionalise a code to be successful within the organisation. Set clear accountability and empower talents.
A revision of the current investment lifecycle under the new paradigm focusing on innovation and de-risking pharma is needed because:
- The available budget for commercialisation is limited (including pre-launch and go-to-market);
- The window for success is becoming smaller;
- Expectations from different stakeholders in the ecosystem have increased.