Even as the pharmaceutical industry continues to make significant gains in pharmaceutical research and discovery process of its drugs, only a small percentage of compounds ever make it out of the lab and into the marketplace. Add to that the small portion of those new drugs that actually become successful products for pharmaceutical companies, and it is understandable why life sciences companies focus increasing levels of attention on ensuring that most resources are allocated to compounds with the greatest potential market value – and at the earliest time possible.
“Since only a small percentage of drugs actually make it from the lab to the market, companies that use commercial input early in the development process are able to allocate resources to compounds with the greatest potential market value and avoid wasting development investments,” said Chris Bogan, president and CEO of Best Practices, LLC.
What many companies are discovering is that early-stage commercialization activities, which can range from therapeutic-opportunity and competitive-landscape assessments to thought-leader focus groups, and pre-efficacy forecasts during pre-clinical and Phase I and II development, are vital components in moving drugs into blockbuster status.
The challenge pharmaceutical and biotech executives now face is how to speed up the evolution from ad-hoc early-stage product commercialization to an integrated function that brings ongoing market insights to the new-product development and portfolio management process. The companies that effectively develop such organizational capabilities not only improve their early-stage decision-making, they also enhance product design and insights, thus gaining a competitive edge in the marketplace.
Developing early commercial insight
Many companies concentrate early-stage commercialization activities within an independent product planning function, though some choose global groups that can provide a broad-reaching market perspective and to ensure an overall strategic viewpoint on early-stage commercialization. What often remains unclear for companies is who maintains overall responsibility for early-stage commercialization because it extends over so many functions and groups.
In theory, most companies interviewed by Best Practices, LLC, noted that the R&D organization has ultimate responsibility over early-stage functions, even though a marketing or new-product planning group usually spearheads commercialization. In essence, early-stage commercialization groups excel in influence but wield little authority. The companies that can capitalize on instilling early commercial insight into the long-spanning and cross-functional development process find themselves ahead of the curve in promoting potential blockbusters.
Top pharmaceutical companies also develop and deploy standard processes, formats, meetings, tools, techniques, and templates that improve consistency and commercialization performance. Among the best tactics to use are:
• Engage one person to run the portfolio decision analysis group.
• Develop structured approaches and formats to articulate the commercial attractiveness and unmet medical need evaluations for diverse projects across diverse therapeutic areas.
• Co-locate decision analysis team members at R&D sites.
• Engage front-line R&D project teams in developing the decision inputs and in testing and fine-tuning critical assumptions underpinning decisions.
• Develop standardized approaches and structures to guide generation of data to ensure the quality of data inputs to decisions.
Even as companies hone their processes and techniques to improve commercialization performance, new-product development remains exceedingly complex. It spans many years, involves numerous people and consumes hundreds of millions of dollars in capital resources. With a process so complex, it is understandable that no one person in an organization can know how everything works. Thus, most companies that achieve a top status in early-stage commercialization emphasize the importance of standardizing the new-product development process. With standardization, individuals and teams can better understand where and how to introduce market insights into the long-spanning commercialization process.
Another key component that companies employ is initiating lifecycle management analyses early in the new-product development process to fully evaluate the potential for multiple indications, line extensions, new formulations, alliances and other value-optimization actions. As recent research by Best Practices has shown, companies can add hundreds of millions of dollars to a drug’s revenue with a single successful lifecycle management tactic. Companies that examine multiple avenues for drugs early on can better predict what drugs might be successful, which is why lifecycle management has emerged as a critical skill in the hands of early-stage marketers who want to evaluate the full potential of new and existing molecular entities.
From this perspective lifecycle management isn’t just about entering new market niches and guarding against generic competition. Lifecycle management embraces early and thoughtful evaluations of multiple indications, line extensions, alliances, new formulations and dual product formulations to extend the usefulness and economic value of a molecular entity. Companies now see that lifecycle management can be used in higher-risk and higher-reward situations, and seek to identify all viable indications, extensions, opportunities and alliances early and then stage them sooner for devel-opment or for out licensing.
Jon Easter, R.Ph., heads Healthcare Sector Research and Consulting Services at Best Practices, LLC, leading the firm’s work in quantitative benchmarking for the pharmaceutical and biotechnology industries. Jon has more than 17 years of healthcare experience – including 13 years with pharma industry leaders GlaxoSmithKline and Johnson & Johnson. Visit: www.best-in-class.com.