Strategies for Coping with the Emerging Changes and Challenges in the Biopharmaceutical/Healthcare Environment

By Verix

The U.S. healthcare industry continues to face an unprecedented period of turbulence and uncertainty that provides significant challenges to each of its public health stakeholder groups, causing them to examine their unique role and operating practices, with the shared goal of becoming more efficient and effective, improving overall patient care and health outcome, while reducing cost.

A recent Centers for Medicare and Medicaid Service report revealed that U.S. healthcare spending growth accelerated only slightly since 2006, but still faster than economic growth and the rate of general inflation. Spending reached $2.1 trillion, or $7,026 per person and 16% of gross domestic product.

Prescription drug spending growth accelerated for the first time in six years-from a low of 5.8% in 2005 to 8.5% in 2006.  Roughly half of this growth was due to increased use of prescription drugs, partly a result of coverage now available under Medicare Part D, as well as new indications for existing drugs, growth in therapeutic classes, and increased use of specialty drugs. However, a higher generic dispensing rate in 2006 helped to restrain prescription drug spending growth, which despite the acceleration still remained well below the average annual growth of 13.4% per year that occurred between the years 1995 and 2004. 

This dynamically evolving healthcare environment with its intensifying pressure on costs and hyper-competitiveness to gain market share and sales growth while undergoing a transformation necessitates that Biopharmaceutical companies become increasingly open to capitalize on the evolution and transformation in order to succeed. Historically, the Biopharmaceutical industry has been slow to change, but with the numerous developments in the market in recent years, these companies, regardless of size and structure, are facing increasing shareholder imprimatur to transform themselves into more nimble, forward-thinking organizations, that take a patient-centric approach to provision of their products, programs and services.

Some of the challenges and opportunities these companies face include: a new administration, tarnished image, increased regulatory scrutiny, data/evidence based science, longer approval timelines with larger programs, powerful associations, advocacy groups, ombudsman groups, the emerging global community, shifting world demographics, mergers and acquisitions, increasing access to care, generic growth, alternate classes of drugs and IT enabled communication channels and changing marketing and sales mix. These challenges have been further exacerbated by the economic downturn which has seen the decline of R&D productivity coupled with dramatic reductions in resources across all parts of the organization. Biopharmaceutical companies are now required to find innovative, cost-effective, manpower-efficient solutions which can aid them in identifying a focused set of opportunities that they can allocate resources toward and focus on for growth while pinpointing emerging threats that they can counteract in order to maintain a competitive edge and survive in this challenging period. All of this with the goal of maximizing their asset base, extending lifecycles, optimal allocation of resources, and creating the ROI that will satisfy shareholders and financial communities.

Most recently an IMS study entitled, "Winning in the Dynamic Market: Novel Approaches for Commercial Planning and Implementation," further highlighted the need to precisely locate areas of threat and opportunity by illustrating that only 15% of all prescriptions are in play at any given time in the market. This fact, coupled with the prediction of 4.5-5.5% global growth and about 1-2% growth in the U.S makes localizing the centers of growth and optimizing them that much more important. With such limited growth available, the market will become more fiercely competitive with leaders defending their share and challengers aggressively seeking to take it. Thus, each Biopharmaceutical company needs to be as agile as possible and find a strong localizer that points them to opportunities in their business, in order to play a competitive role and to maximize the available opportunities. 

This localization and focus can only be achieved through understanding the almost exact volume implications of the 15% of prescriptions that are in play. Having a more exact handle on this bucket  will bring clarity to Biopharmaceutical companies' current performance and will also enable them to position themselves and evolve their organizations for long-term success. This 15% is made up of new patient starts (60%), patient switches (30%), and add-on therapy (10%). With these narrow windows, a tool that brings precision to this dynamic segment of the market is required. However, this recent analysis goes on to explain that the remaining 85 per cent of all prescriptions in the market are considered static, comprised of repeat prescriptions and refills and thus are not influenced by traditional promotional tactics. With this new segmentation, traditional performance metrics and analysis solutions do not differentiate between the "dynamic" and "static" prescriptions and therefore often cloud the real sources of brand growth. Therefore, it is imperative for companies to concentrate their time and allocate their resources most efficiently to identifying and capturing the 15% of dynamic prescriptions where there is opportunity for growth. 

How can Biopharmaceutical companies maximize the 15% of the market which is dynamic?

Firstly, it is imperative to gain a deeper understanding of the dynamic market.  In recent months, there has been much talk about the fact that Biopharmaceutical companies need to establish patient-centric metrics that accurately size and segment therapeutic markets down to the prescriber and plan/payer level.  IMS explains that the dynamic market can be clearly broken down into 3 main areas - New Starts (9%), Product Switches for Patients (4.5%) and Patients who remain on existing Add-on Therapy (1.5%). By accurately identifying these segments and using these insights as a basis for building their marketing strategies and tools, companies can plan their sales and marketing campaigns to laser focus on the dynamic segment and the prescribers and plan/payers who manage these patients .

Secondly, given that these areas for growth are extremely narrow, Biopharmaceutical companies need tools which are guaranteed to guide them to precise, granular insights and enable them to identify extraordinary events not seen at other junctions of the business.  Companies need to know that they can rely on their analytics to identify these insights without necessarily knowing what or where to look for them. They need to know that their analytics tool can provide a focus on real market emerging threats and opportunities and allow them to focus resources on a narrow number of initiatives that will bring the greatest ROI.

Finally, Biopharmaceutical companies require the ability to quickly identify sales and marketing performance issues to provide greater lead time for proactive corrective action.  Thus, the metrics and insights need to fulfill the role of providing reliable predictions of the total future prescription volume (TRx) performance and to guide the monitoring of progress and evergreen planning and measurement.

The Verix Opportunity Management Solution- Precision Focus

There are various ways to approach this but at Verix, we believe that our Opportunity Management System has the ability to be the localizer of emerging threats and opportunities that are  key in positioning companies to capitalize on the dynamic 15% of the market. By marrying innovative and unparalleled technology with business metrics, strategy and tactics, our solution provides Biopharmaceutical companies with the tools to successfully compete for the 15% of available prescriptions at all levels and within segments of the healthcare continuum.

Verix has already helped some of the worlds' largest Biopharmaceutical companies to transform the way they consume information and compete for market share by providing them with precise localization of opportunities and threats. The Opportunity Management solution delivers insights and perspectives into key business opportunities and threats, enabling business managers to proactively maximize revenue opportunities, maximize assets, manage lifecycles and to consistently achieve and sustain a competitive advantage.

The Verix solution automatically detects emerging, hidden performance changes by exhaustively analyzing business dynamics at the most granular level and provides alerts, earlier than traditional reporting solutions, at the most tactical level to Territory Managers and at a strategic level to VP Sales/Sales Management. These granular insights are those that would likely not be found or recognized by even the most astute analyst. Because analysts must manage such a large number of data inputs and points, they may not see the weak, yet, emerging trend, or could certainly not explore every aspect of the data set to include or exclude the finding of significant business phenomena. 

Automatic Detection of Opportunities & Threats

The Verix solution enables automatic identification of trends earlier than other solutions allowing sales and marketing executives to make more accurate decisions and respond dynamically to changes and emerging trends as early as possible while they can still be replicated or changed accordingly.  Our proprietary Dynamic HotSpots^TM alert business users to changes or emerging trends with no definition required.  Given the narrow area of growth available and the highly competitive nature of the Biopharmaceutical business, Verix dramatically reduces the time and resources invested into searching and identifying potential areas of opportunity. By automatically guiding users to areas of exceptional behavior in business performance, Biopharmaceutical companies are better equipped than ever to focus their efforts on qualified opportunities which would have otherwise remained hidden.

Blunt Competition and Gain Market Share

Identifying opportunities is only half the battle and in order to truly gain market share in this hyper-competitive environment, companies need visibility to the broader context of their business including detailed information on the gains and losses of their market share to competitors.  Having brought companies closer to potential opportunities, the Verix Opportunity Management solution then goes on  to provide a deeper understanding of changes in business performance. By starting at the most granular level (Physicians data), Verix automatically analyzes the TRx gains and losses for each of your competitors which are then automatically aggregated to higher levels (territories, regions, areas and nation).  Your team receives insights into each competitor and physician, where your brand is experiencing losses or gains, enabling you to build an accurate and effective strategy and to manage it both at the macro and micro level with appropriate resources.

Focus Sales & Marketing Efforts

Once the business team has been made aware of the threats and areas for potential growth, including detailed information about their competitors and who is winning or gaining market share, the sales and marketing teams are much better equipped to build relevant, targeted campaigns and to guide their resourcing to the most efficient deployment and maximal ROI. Using the granular segmentation provided by Verix during the automatic, exhaustive search of all the available data, marketing teams can plan segment-specific campaigns and promotions.  Sales teams can similarly focus their efforts and resources on the specific areas that require more attention, whether it is a group of individual Physicians or a Plan/Payer.  Not only does this dramatically reduce the time and resources needed to make an impact in the small available market, but it also ensures that the marketing investment will be focused only on potential areas of growth instead of spilling into the 85 per cent of the market which is static and not relevant for targeting with costly marketing campaigns.

By providing these vital capabilities to Biopharmaceutical companies, Verix equips them to better position themselves to thrive and survive in this hypercompetitive market while giving them the peace of mind that when there is an opportunity to be found in the 15% of the dynamic market, their team is guaranteed to find it in time to maximize it.  Similarly, business teams can be sure that they will be guided to any hidden threats lurking in their business and provided with enough detailed information about these threats to take immediate, relevant corrective action.

Verix is already helping some of the worlds' top Biopharmaceutical companies to proactively target the available market and sustain their competitive position.  To find out more how Verix can help your business please visit our website www.verix.com or email ediz.ertekin@verix.com or carl.derenfeld@verix.com.