Value series, part 2: How to use data to capture value in pharma
In my last post, I discussed the definition of value for pharma, specifically how value is defined differently through the lifecycle of a product. To be meaningful, pharma value must be about more than pricing and must contribute to patient outcomes, patient satisfaction and cost reduction. From the perspective of business strategy, I see value as falling into three phases, each correlating with a phase of the product lifecycle:
- Value creation (discovery)
- Value capture (commercialization)
- Value extraction (loss of exclusivity)
I focused the last post on value creation; let’s now consider value capture.
Value capture encompasses the strategies for bringing a new therapy to the market as effectively and efficiently as possible. If the value creation process was well-informed by the patient journey, the needs of providers and the realities of payer economics, then there is likely a differentiated product that is ready for market. After years of research, planning and dreaming, it’s time to land the plane.
For the shareholders, it’s time to recover the risk investment that has gone into years of development. This is why I call it value capture.
Business strategy and the role of data
The business strategy during value creation was based on product innovation. Now during value capture, the commercialization phase, the business discipline of “customer intimacy” takes precedence. The focus shifts to customer relationship management.
In each phase of the drug lifecycle value and for each overarching business strategy, the role of data is central. As we discussed earlier, the purpose of data during value creation was to capture unique customer insight to support innovation.
Now during the commercialization phase, the purpose of data is to build trust. Trust and respect for the pharma brand are the ultimate benefits of data-enabled personalization and engagement and are the leading qualitative indicators of acceptance and growth at launch.
One shot at the launch. It’s got to be 100 percent right.
A new product’s commercial performance during the first six months after FDA approval is often considered the bellwether for how the product will do over the course of its patent life.
Research suggests that only 15 percent of products meaningfully improve their market share trajectory after the first six months after launch.
This means that if the team fumbles the launch, there is little chance of recovery. If the product stalls, analyst estimates and management expectations will drift south.
Let’s look carefully at the strategies and key success factors that go into a winning launch and how the use of data insight can mean the difference between success and failure.
There are three key ways that data can ensure a successful launch and power a profitable value capture phase.
1) Pre-launch excellence
First, it’s important to recognize that value capture starts not on the date the product is approved but 18 to 24 months beforehand. The level of sophistication of the pre-launch phase will often determine whether the product launch meets expectations or disappoints.
Data are fundamental to building a sophisticated pre-launch strategy.
The two primary drivers of launch success are the perceived disease burden that the product is addressing and the product’s perceived differentiation relative to alternate therapies. Your success in shaping both will largely determine market access, provider endorsement and patient acceptance.
Success here doesn’t come easy. In one study, only 25 percent of upcoming launches could claim differentiation against a high perceived disease burden.
Data-driven market insight will help identify cost burdens that aren’t being alleviated by current protocols and may illuminate gaps in the clinical landscape or in the perceived outcomes of competing therapies.
2) What do you know that your competition doesn’t?
The driving question must be whether you know things about your customer and the market that your competitors don’t. Have you generated insights that could lead to competitive advantage?
It’s those insights that will influence the pre-launch unbranded campaign.
Unbranded disease awareness campaigns are a normal part of a launch strategy. However, building the strategy on a data insight foundation will supercharge the effort.
By offering physicians early online access to new medical content and clinical trial information, early awareness is established. But by basing it on the principles of CRM, a marketing team can identify and differentiate the perceived needs and clinical interests of prescribers before launch. Using this insight and customizing the unbranded content, it’s possible to opt in hundreds and even thousands of physicians months before the launch.
As the product gets closer to the PDUFA (approval) date, marketing can prepare a portfolio of customized approaches for the sales team, giving the reps personalized messaging for each physician, what I call the “best first message.”
3) Best first message
We’ve found that data can help define launch excellence by helping to equip the sales force with individualized launch plans. These plans, at the territory, physician or even patient level in the case of rare diseases, can be created from granular-level insight generated from the unbranded campaign coupled with a fresh approach to the myriad of data sources now available to pharma.
Microsegmentation of physicians may be new for marketing teams experienced in blockbuster-style launches where large sales forces and aggressive market access tactics have historically achieved their goals through brute strength. But those types of products are in the past, and those generic market approaches seldom work anymore.
A successful marketing team will develop and supply their field force with the ability to deliver a best first message at launch.
By learning about your physicians and what matters to them, your sales reps will have the power to personalize their message when they go in on that very first call.
Data and multichannel marketing
Data also powers the digital marketing strategy. Alongside and in cadence with the field force must be a comprehensive CRM-enabled non-personal communications program that listens and delivers value. By implementing a multichannel marketing approach to disease and brand communication, marketers have the best possible chance of delivering relevant messages to the right physicians.
Relevance is one of the most important requirements for engagement. And physician engagement is important because it’s been shown to have a direct correlation with willingness to prescribe.
How do we know what a particular physician considers relevant? By distilling insight from its pre-launch awareness program and its multichannel marketing launch platform, the brand team will be able to determine both messaging relevance and communication channel preference for specific physicians. Engagement scores then confirm or challenge those assumptions, allowing the team to optimize their plan.
Engagement scores among target physicians are also one of the most important leading indicators of overall launch performance and can enable sales and marketing leadership to make course corrections if needed.
Research across 210 new molecule product launches reveals that 66 percent of products did not meet their market share expectations in the first six months in-market, and that disappointment almost always continues for the next three years.
By then, analysts and senior management will have long since heavily discounted their growth goals.
This doesn’t mean that everything has to be perfect out of the launch gate, but there needs to be the structural and cultural commitment to monitoring launch performance on a weekly or fortnightly basis and a willingness to make course corrections as needed to get the product back on track.
The nimbleness to monitor and course-correct in a timely manner is only possible with access to data analytics that are tracking scripts written, qualitative feedback from sales reps and levels of engagement with digital multichannel marketing programs. There has to be a willingness to evaluate real-time trends with a cross-functional team and make quick decisions on messaging, targeting and media investments outside the normal annual or POA planning cycles.
The insight channels that were created during the value creation and the 18 to 24 months before approval become indispensable during the launch as the product comes face to face with the real world.
Lessons for marketing
Successfully bringing a new and efficacious therapy to market is one of the most fulfilling experiences in the life of a pharmaceutical company, from the scientists to the marketers to the field force to the executives who made the big bet. Turning a product launch into a true value capture event requires new skill sets in data insight to shape the product, create the market and deliver the promise.
The implications for marketing are simple: Use data as a tool to listen, learn and understand, leading to activities and messages that build trust among providers, payers and patients.
Getting these fundamentals right offers the best chance for success.
Loss of exclusivity and how data can support mature products will be the focus in my next article.
A version of this article appeared on PharmExec.com in September, 2017.
Value series, part 1: Value creation powered by data
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Value series, part 3: Value extraction – mining for gold in late-stage products
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