A recent analysis revealed that among drug launches in the United States between 2012 and 2017, a total of 36% failed to meet revenue targets. The most common factors for underperforming were limited market access (50%), inadequate understanding of customer needs (46%) and poor product differentiation (44%). This underscores that in today’s environment, a new product’s success depends on a comprehensive value proposition.
A product’s health economic value and associated dossier evolve as more product-related data becomes available. Therefore, improved evidence generation and increased understanding of a product’s key value drivers will be achieved by engaging in a comprehensive and collaborative strategy that encompasses health economic (HE) modelling and real-world evidence (RWE) to inform market access (MA) strategy. At Lumen Value & Access, a Healthcare Consultancy Group Company, we work with clients to implement such strategies early in a product’s life cycle.
Building the foundation for your product value
A primary obstacle when formulating the value proposition for a pharmaceutical product (or medical device) in phase 1 or 2 development is that the product doesn’t yet exist in a commercialised setting. Therefore, a key challenge in formulating a not-yet-commercialised product’s value proposition is ensuring that it will fit into the expected diagnostic or treatment paradigm at the time of regulatory approval.
But how is a value proposition constructed when the product may be years away from a commercialised setting? Start with the end in mind. First ask, ‘What needs to be communicated?’. The answer should focus on identification of differential and advantageous factors compared with the standard of care. Upon determining the ‘What’, value proposition development can move to ‘When’, ‘To whom’ and ‘How’ these differential product traits will be communicated.
Proactively leverage HE models and RWE
Early HE models can be extremely advantageous as an initial activity to inform construction of a product’s value story. By evaluating alternatives for disease area prioritisation and estimating the impact of the product in the clinical pathway, early HE models will deliver insights on where the product adds the most value and where efforts should be targeted. For instance, early in the product life cycle, headroom analyses can estimate the effectiveness gap and, with that, the potential added value of the product. An early HE model is also advantageous for identifying key value drivers, which can inform evidence that needs to be captured during later evidence- generation activities, such as subsequent trials and/or real-world data (RWD) analyses.
RWD can also have a variety of uses in the early phases of product development. Establishing burden of disease, identifying unmet needs, detecting existing treatment gaps and determining how a new product can fill these gaps are several examples. This data can also help us better understand the patient journey. Answering appropriate research questions with fit-for-purpose data, plus appropriate and rigorous methods, will yield RWE regarding why the product is important and where it will meaningfully impact the disease process.
The improved understanding derived from early HE modelling and RWD-driven RWE can be the initial building blocks of the product’s value story by providing early answers to the first key question, ‘What needs to be communicated?’
Early activities increase later efficiencies
Construction of an early, flexible and evolving HE model updated with newly available evidence will increase efficiencies of subsequent and robust HE evaluations. Later-phase HE models can be updated for a variety of dynamic factors. Geographic region is a common example; however, newly available RWE and market disruptions (eg, a competitor’s entry to the market) are additional examples of potential HE model modifications.
Similarly, lessons learned from RWE developed in the early phases of product development will carry over to later-phase RWD analyses. For example, understanding the current epidemiology related to your product in development can support later-phase, regulatory agency-recognised uses of RWD (eg, clinical trial optimisation, external control identification). Likewise, many previously developed RWD algorithms will carry over to established, post-market RWD uses (eg, adverse event surveillance, drug adherence and persistence studies, monitoring of off-label use and real-world comparative effectiveness).
The strong HE and RWE foundation built in the early phases will result in efficiencies in understanding and communicating value as your product moves toward commercialisation.
Final thoughts
The process of building the value story, as well as the value proposition itself, will vary from product to product. However, embarking on the value proposition process early in product development will result in more fit-for-purpose information at earlier stages of development as compared with the historic norm. This in turn will increase the likelihood of a successful commercial launch.
Gary Schneider is VP RWE Innovation, Koen Degeling is Scientific Director, Economic Modeling & Innovation Lead and Kathy Belk is VP HEOR, all at Lumen Value & Access, a Healthcare Consultancy Group Company
