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Launching Competitive Pharma Products: SPM Best Practices

The global pharma market is expected to reach $1.12 trillion in 2022. Hands down, pharma is the world’s largest industry – and one of its most profitable. It makes sense to imagine that new medicines would be hitting the shelves and relieving personal and possibly public health crises at record speed. Not so. In recent years, regulatory agencies have developed increasingly strict rules regarding product safety and efficacy, lengthening the journey to marketing approval and adding to its expense.

The process takes around 12 years and costs $2.6 billion for new pharma products. Combine these statistics with the challenges posed by generic drug manufacturers, and it’s easy to see why pharma product launches in general have become more expensive, less frequent (especially in the case of first-in-class drugs), and intensely high-pressure. It’s also no surprise that companies are fiercely committed to the success of each and every one of these launches.

But success doesn’t come easily. Launches are complex affairs. Each venture triggers an entire range of processes. To name a few: keeping your sales force aligned with business objectives and on track to achieve individual and team goals; establishing territories; setting targets; forecasting results. Considering the amount of time and money companies invest in a product prior to its launch, a failed marketing campaign would mean a dramatic crash and burn. Consequently, more and more pharma companies are seeking ways to reduce the risks of unsuccessful launches: those that can doom products even before they reach the shelves.

Competitive pharma products vs. first-in-class drugs

The stakes are particularly high when it comes to launching competitive as opposed to “first-in-class” pharma products. First-in-class drugs distinguish themselves by lessening the symptoms of a medical condition through a biochemical process that’s both new and unique. These drugs face no market competition. Competitive pharma products, on the other hand, are variations of drugs already on the market. They’ve got to stand out in the crowd. And despite the hurdles, they’re on the rise. According to McKinsey, only roughly one in four launches involves drugs that are strongly differentiated from competing products, while more than half of upcoming launches are for moderately differentiated products. This trend of investing in and launching mainly competitive pharma products comes with its own specific set of challenges.

Common pitfalls

Many pharmaceutical companies sabotage their own competitive product launches by requiring their people to track down information that lives anywhere and everywhere, information that’s never been shared by cross-functional stakeholders. By failing to invest in tools that provide access to relevant data and analytics, and relying on poorly trained, unequipped sales teams that lack visibility into the territories they manage, pharma companies head unsteadily toward a shaky future. Missteps such as these can seriously impact the end results of a product launch.

Instituting innovative processes, however, can eliminate these pitfalls. Enter sales performance management (SPM). An SPM solution has the power to standardize data that exists in different formats, and to store it in a central repository for easy access and use. The repository functions as a single source of truth for sales performance information.

SPM plays a particularly important role in the pre-launch stages, when pharma companies need to gather accurate information about the complex competitive product landscape that awaits them. Ascertaining their product’s benefits – particularly when taking into account payer cost and patient access – ends up helping key stakeholders design and tailor accurate, realistic launch projections.

For example, an expensive drug may not go over well if patients can’t pay for treatment out of pocket and/or their insurance company won’t cover the cost. So, if you’re launching a product doctors will hesitate to prescribe, or that the majority (if not all) health insurance companies will disclude from their formulary, don’t neglect to temper the forecasted sales expectation accordingly. Accessibility – aka managed care access through provider networks – also must be taken into consideration when compiling a valid product landscape. If a patient’s medical condition demands the use of drugs that haven’t yet gained approval from the Pharmacy and Therapeutics Committee associated with that patient’s health plan, both the patient and doctor may be motivated to pursue alternative treatment.

Launching competitive pharma products, too, demands that the above and other elements be considered. It’s just as essential to conduct research in the pre-launch stages. How many comparable products are out there? How long have they been on the market? How did they perform at launch? You can tap into your SPM solution for answers to these critical questions and others about the competition, formulary access, the target patient population, and territory expectations. Modeling territory sales expectations with analogous competitive products helps sales leaders set goals. And using SPM to determine how modeled expectations differ across territories helps leaders define, gauge, and predict future sales opportunities. Additionally, understanding the relationships between drug indication, patient lives, and patient distribution will support the strategy adopted by sales and marketing leaders, and help define and predict territory sales expectations.

Setting up an effective incentive compensation plan is another crucial step in prepping for a pharma product launch. Here’s where processes such as determining and designing territory alignments come into play. Pharma companies design territories with currently promoted product(s) in mind and divide those areas as equitably as possible. This can work well for a while. But, over time, shifts in products and population, along with prescriber movement, come into play, and may result in imbalances. The probability that these changes will take place should raise cautionary flags when introducing new products to preexisting teams and territories. Using a solid SPM solution, however, simplifies the process of aligning territories with the new product in mind. This can be done by using sophisticated analytics to keep the various (and, most of the time, inevitable) changes to incentive compensation plan in check.

These are just a few of the complex processes that SPM can facilitate to support a successful pharma product launch. With all the effort and money put into researching, developing and gaining approval for new pharma products in an economy that’s already tight, it’s only natural to want to do everything you can to ensure that your planning and design efforts translate into appropriate revenue and that your product has the best chance of reaching as many patients as possible who could benefit from its effects.

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Justin Lucas

Consultant

Justin has over 5 years of experience working with clients in the pharmaceutical industry, improving business outcomes related to sales performance and sales force effectiveness.

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