Is Your Launch Factory Ready?
Launching a drug can be the most exciting time for a pharmaceutical company. So much work has been done to bring the product through the research, clinical trial and FDA approval processes, and now eyes are turning to the commercial team to bring all that science to fruition and help the patient.
According to McKinsey, two-thirds of drug launches fall short of expectations. In fact, those drugs that did not meet forecast in their first year continue to perform poorly in subsequent years. So, it really pays to get the launch right from the start. Clearly, the product plays a big factor. Obviously, a new product that works much more differently than its competitors is ideal. Otherwise, having a product that is moderately differentiated from rivals and playing to those strengths can also make for a successful launch. Developing a product where the market does not know there is an unmet need (and educating the market) can also be a path to success.
Still, product aside, the days of the mega blockbuster are waning and the industry is shifting towards “mini-busters” focused more on targeted populations, oftentimes in the specialty pharmaceutical space. Additionally, with the rise of payer influence and the Affordable Care Act’s emphasis on economic value and outcomes, launch teams must adjust their strategies to meet these new mandates. When thought of in the context of a “launch factory,” where workers are asked to successfully produce a repeatable process, are launch team workers ready for this shift? What does it take for the factory to “manufacture” an effective product launch?
1. Bain studied successful launches and reports that the two most important predictors are: size of the target population and how payers perceive product differentiation. By considering these two factors when launching the drug, the factory can develop a unique strategy that takes each predictor into account in order to develop an archetype. For example, those lucky products with large target populations and high product differentiation can utilize a traditional launch approach, albeit with an eye on obtaining payer access. For those with small markets but high differentiation, they should emphasize maximizing the price based upon demonstrated value. Meanwhile, those drugs with low differentiators will need to shift their launch to focus more on pricing strategies, such as discounting the price or even outsourcing the drug if the target population is too small.
2. Once the new drug is plotted against these two criteria and the archetype is determined, it’s time to operationalize the plan. This plan needs to be developed across a variety of factors: value, product profile, services, mobilization and launch factory. Each component’s activities will differ depending upon the target population size and level of product differentiation. For example, the tactics around demonstrating value to payer may depend upon competitive landscape (if any) and perceived differentiation. Services may differ based upon patient needs or value added services to the payer. Mobilization could range from an all-out traditional, large sales team to a smaller contract sales force or even e-detailing. Again, it all depends on the drug and the factory to continually adjust the organization’s response to the pipeline, using the framework detailed above. One size no longer fits all.
3. As such, like any good project management team, the launch factory may need to reset the way the organization manages their launches. By establishing a Chief Launch Officer and a dedicated team, companies will be enabled to nimbly launch products multiple times – just like in a factory. Project management concepts like decision making, governance and incentives should be considered. Other elements, like forecasting and P&L responsibility should also be factored in. By having one team that knows the launch process – inside and out – institutional learning can be built in. Meanwhile, the process becomes reliable, repeatable and continually improving.
Do you have a launch factory? . . . . . .