New direction

Amid the well-known problems of declining productivity, increasing costs, decreasing pipelines, lower earnings and a host of other challenges, the biopharmaceutical industry needs to change its traditional operating methods to manage risk, increase productivity, overcome complexity and demonstrate value to stakeholders. Critical to this effort is the need to refocus commercialisation resources to suit a particular brand, company, market and region most.

The existing model for a biopharmaceutical product launch, one that helped to drive record returns throughout the 1990s, is outdated. In the US in 1996, for example, the Food and Drug Administration (FDA) approved 41 New Chemical Entities, many of which were targeted at primary care physicians. Product launches typically consisted of a massive deployment of sales representatives to detail the product to physicians. In contrast, last year the number of FDA approvals (Therapeutic Biologic Applications and New Drug Applications) shrank to 19, reducing the need for such large salesforces.

Despite this data, however, most resources (in some cases as much as 80-90 per cent) are still directed at physician detail. More importantly, the conversations around reimbursement have changed entirely. Cost-conscious payers are now demanding proof that a new product not only meets efficacy and safety standards, but that it also shows clear value compared to therapies that are already available.

Despite the global expansion of the pharmaceutical market, recent forecasts from IMS Health suggest only moderate cash growth, of 4-7 per cent, from 2009 to 2013. Furthermore, prescriptions for branded medicines have declined by 13 per cent in the past decade, while prescriptions for generics have grown by nine per cent. On the surface, it would seem logical to correlate the decline in new drug approvals with the decline in branded prescriptions, and the upturn in generic usage, but an equally significant contributor to these data is that the industry has done remarkably well in developing treatments for many chronic conditions.

In essence, since much of the low-hanging fruit has already been picked, biopharmaceutical companies today must focus their development and commercialisation efforts on products that are truly differentiated or which focus on sub-segments of patient populations of specific diseases for which the medical need is currently unmet. Moreover, they need to do so in an environment that now includes sceptical consumers and cost-conscious payers.

The end result is that the biopharmaceutical industry is under enormous pressure to generate returns on new products and maximise the value of every product in a portfolio. The process of unlocking that value, on the global scale required for the necessary return, is a process that should begin in the early phases of product development.

It is common to begin with a development plan and financial forecast for drug candidates prior to the first clinical trial. However, the commercialisation landscape is now so different that a one-off review of medical need and target product profile development is no longer sufficient. Biopharmaceutical companies must continually review the market environment and stakeholder needs during the cycle, adapting the target product profile and product development accordingly. However, though the industry may recognise that expert commercial insight is needed earlier in, and throughout, these processes, most companies are not structured to deliver this themselves.

The legacy silo structure of most large biopharmaceutical companies is not conducive to a lifecycle, or convergent, approach to drug development. Though more companies are restructuring to create smaller, therapeutic-focused development units – akin to an emerging biotech company – many still lack a connection between the clinical development process and real commercial insight. While clinical success is still defined by regulatory approval, commercial success is increasingly diverging from this and driven by specific data sets geared towards market access and payers. The knowledge and expertise of how a new product will be used in the real world, by whom and at what cost, needs to be understood and incorporated into clinical development decisions.

As mentioned, the days of launching a new product in a primary care mass market with large or multiple sales teams are numbered. This is particularly acute in Europe, where market access issues restrict the ability of physicians to prescribe products. Biopharmaceutical companies simply cannot afford to launch a new product with hundreds of sales representatives, as there is no demonstrable payoff. Instead, they must discover how to promote new products in the most cost-effective and flexible way in order to generate the best returns.

In Europe, biopharmaceutical commercialisation is primarily about following the access. First, resources must be directed towards opening up access to the product by providing regional payers with compelling data that clearly differentiates the product to ensure that physicians are able to prescribe it. If market access proves successful, then a company or provider can follow up with information to physicians.

The issues are similar when launching a new biopharmaceutical product on a global level. As emerging markets mature and offer enormous potential for revenue growth, understanding the market access complexities of each region will be critical for commercial success. In this situation, partnering with an ally experienced in that region to identify, promote and prove the product's worth could be tremendously valuable. Smaller biotech companies that may not wish to tackle market access realities in a different country directly themselves should consider a strategic alliance with a nimble partner that has a global reach to expand their geographic coverage.

Japan, for example, is a centre of biopharmaceutical innovation, but many Japanese companies may not wish to wrestle with the complications of launching a new product globally. In contrast to an outlicensing arrangement with another pharmaceutical company, a strategic alliance predicated on critical success factors allows for control of the asset to remain with the innovator.

Beyond expanded geographic coverage, a strategic partnership should also be considered for biopharma companies of any size looking to optimise a wide portfolio of products while focusing their internal resources on core strategic areas. In this instance, a partner with deep therapeutic expertise may be able to embrace assets that fall outside the company's strategic priorities but which still have additional revenue potential. In either circumstance, a strategic alliance should include a thorough examination of the product, the market, the therapeutic area, the competition and the pipeline to maximise the brand's commercialisation potential fully.

There are many qualities required of a good partnership. Some of these are pre-requisites: the capabilities and expertise must be adequate, there must be alignment on goals and critical success factors, the risk and responsibility must be shared, the governance agreed upon and both parties must possess the willingness to do what is necessary to ensure success. Other, equally important, qualities will develop over time, such as good joint communication, teamwork and mutual trust.

Changed thinking
Many leading specialist biopharma companies are already building partnerships that extend beyond the traditional commercial sales organisation model to manage risk, increase productivity, overcome complexity, access external expertise and demonstrate value to stakeholders. In doing so, they are also realising that commercialisation partnerships may help to support a brand in ways that are more effective and efficient than they can do themselves.

A recent article from McKinsey suggested that the top three priorities for transforming the commercial model are: partnering with payers and providers to demonstrate health economics and outcomes; realigning resources across the stakeholder groups with the most influence and building a flexible, low-cost, personal promotion model.

Firms that want to change should be seeking to work with a biopharmaceutical services company that accepts all of these challenges in order to support customers and partners in the rapidly changing biopharmaceutical environment that our company has termed 'The New Health'. Such a service company must have significant interaction with patients, physicians, government agencies and payers in multiple therapeutic categories across many geographies, and feel the same responsibility as its customer to find a solution for the benefit of patients.

In recognition of the new environment, Quintiles is shifting its focus to provide more comprehensive solutions, and transforming its core business to respond to these changing needs. It has embarked on extensive market analysis and solicited direct customer input to help develop relevant and comprehensive solutions.

As a result of our research, we believe companies must look for a partner that has both a proven track record of developing comprehensive commercial sales efforts for numerous product launches and an understanding of the complexities involved in market access. It should have therapeutic expertise and geographic reach in order to provide the necessary commercial insight in development and support brands through to commercialisation. Core capabilities to support the commercial model include market intelligence, analytics, market access, strategic consulting, multi-channel communications, regulatory strategy, pharmacovigilence, as well as patient-centred solutions and observational studies.

Every partnership must be tailored to the needs of the specific brand, the specific market and the specific partner in order to unlock the value of the product. The relevant functions are then orchestrated to develop a brand solution where a product's true value is identified, defined and effectively communicated in order to demonstrate that value in a way that resonates with stakeholders.

This benefits the pharmaceutical company by giving it the opportunity to manage its business in a more focused and flexible way as its partner takes on responsibility for new geographies or non-strategic brands.

Today, companies need to be flexible and discerning in choosing which products to move forward and how and where to market them. It is a confusing and convoluted landscape, but by sharing responsibilities with capable providers, biopharmaceutical innovators can minimise risk and gain critical flexibility to focus their internal resources on developing innovative medicines.

The Author
Karen Fraser is vice president, product & brand solutions, Europe, at Quintiles

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