IMS offers insight to new commercial model and launch excellence initiatives.
IMS says pharma's coming challenges will change the way products are commercialized. What are you seeing here?
Pharma executives have a complex agenda for 2011. At the top of the list is a common objective to develop New Commercial Models (NCM) that offer greater effectiveness, as well as increased efficiency in promotional spend and strategies. Many are also balancing sometimes competitive strategic objectives, the most common of which are: Achieving Launch Excellence: ensuring that what is in the pipeline is optimally launched in new market realties and managed to commercial return; Securing the Right Exposure to the Pharmerging Markets: aligning the organization's current and future strategy across new markets while addressing major markets that are flat to declining in opportunity; and Identifying Solid Sources of Growth: positioning the organization so that, as the market returns to growth after the patent cliff, commercial, R&D and investment decisions today are properly aligned to future needs.
What are the key challenges?
For companies addressing both NCM needs and launch requirements for their portfolio, a key challenge is that organizations are generally not considering both initiatives simultaneously. This can result in one of the initiatives overshadowing the other, or for both to be dilutive to the company's overall success. Common implications of this disconnect include launches that are constrained and less effective, as the commercial model is in flux or can no longer support the brand strategy; misappropriated launch investments, requiring the company to build or buy essential services that internal resources can no longer support, driving up overall expenses; and an NCM effort that is delayed or derailed within a company due to a short-sighted focus on critical launches.
What are IMS's best practices for NCM development?
Five key building blocks are:
Landscape assessments: Understand the market realities of the future. Companies that have not yet fully determined their future direction should develop a common point of view on how the healthcare environment will change over the short- and long-term. Essential to this is recognizing how power will shift among the stakeholders for a given therapeutic class in a given geography.
Strategic planning: Articulate the implications for the business. Companies that have already established the commercial context in which they will operate need to assess the timing and importance of various trends and events. The ideal method of devising a commercial strategy is to hold a series of organized and integrated planning sessions with representatives from all disciplines across the commercial organization.
Capability assessment: Support the new strategy. Depending on the types of changes implemented, companies may need to build or amend their marketing, technical, motivational, knowledge repository, reporting, and analytical capabilities, among others. A well-structured commercial blueprint with logical priorities, coupled with a roadmap to the future and proper key performance indicators (KPIs), is at the core of successful initiatives.
Organizational design and development: Organize to support the strategy. In order to support the implementation of the new strategy, companies must consider the structural implications (the organization, roles, and responsibilities) as well as non-structural implications (processes, tools, skills, and knowledge). IMS sees companies make the most progress planning their new organization and supporting processes when they bring together people from geographical management, brand leadership (sometimes with emerging P&L responsibilities), and those in charge of new service strategies.
Execution and performance management: Make changes and track progress. IMS recommends that companies implement and support a thoughtful, change-management program not only for the macro transformation, but for the smaller components as well; rely on change agents at the regional and local level; follow the overarching plan (but do not be afraid to move slowly when needed); assess progress often, as managing expectations is critical while pilots and other implementation aspects take place; and realize that there is no such thing as 'over communicating', as communication is a primary tool for ensuring alignment and inspiring acceptance throughout the organization.
What are IMS's best practices for Launch Excellence?
IMS research has identified three recurring themes that are common to every excellent launch and which the company believes will be the key to future launch success:
An aligned and prepared organization. Misalignment can occur at the functional as well as the geographic levels and can turn a potential winner into an also-ran. Common goals, shared incentives, and earlier launch preparation are essential. The importance of organizational alignment has been central to the findings of IMS launch excellence studies, underscoring its pivotal role as a driver of success. At its simplest level, alignment means that the various functional and geographic elements of a company are working together in harmony, with common goals, on the launch. This may seem obvious and straightforward. Yet, both our quantitative analysis and our qualitative research suggest that lack of real alignment for launches is very common and achieving it is very difficult.
A powerful and pertinent value proposition. Successful launches are powered by compelling demonstrations of value, drawn from evidence generated that addresses disparate stakeholder needs. Gaining advocacy, approval and market access requires a powerful and pertinent value proposition that appeals to both regulators and payers. This increasingly means meeting disparate - and possibly contradictory - needs. Our research suggests that companies are facing the growing dilemma of finding the right balance between regulatory requirements for trials versus payer expectations from trials, as well as trial investment (for the same label) pre- and post-launch.
Effective and efficient stakeholder engagement. Stakeholder power shifts are acknowledged and earlier engagement is growing, but new models must address the ability to influence widespread product usage. Among companies with major launches during the period 2005-2008, earlier stakeholder engagement has become increasingly common. In some cases, successful organizations have driven earlier country-level stakeholder engagement and examples exist where this has been vital to launch performance in that country.
What are the five drivers of uptake?
The five drivers of uptake that critically build market share are: one, achieving brand advocacy among regulators, payers, key opinion leaders, prescribers, patients and other stakeholders, with an early focus on creating the right value proposition. Two, gaining brand approval at a regulatory level with optimal positioning and label for the right patients to maximize brand success; three, securing market access on the right terms with national and local payers; four, attaining brand adoption for the optimal patient segments with a focus on working with prescribers and providers to achieve early strong positioning in the dynamic market (new, switch, and, if relevant, add-on patients); and five, ensuring brand adherence by retaining patients as loyal repeaters for as long as is clinically appropriate.
How can companies harmonize their NCM and Launch Excellence initiatives?
Internal harmonization efforts across NCM and Launch Excellence initiatives are the key to long-term success. Aligning the organization includes collaboratively setting objectives and timelines of both NCM and key launch; communicating launch strategies early and then often (milestones) to those in charge of NCM activities to ensure both efforts are complimentary and not competitive; taking steps to ensure that running both initiatives, simultaneously, does not cause confusion to stakeholders outside, and inside, the company; considering geographical priorities across both initiatives as to not overload local affiliates; ensuring commercial models, both in their current and future state, effectively engage and support communication of value to various stakeholders, and can be supported by transitional infrastructures; ensuring proper focus of people involved in both initiatives, as not to lose focus on one of the initiatives, or both.
Companies with sometimes competing internal efforts across new commercial models and launches will set their own destiny. Those that do not address the space between the two initiatives will ultimately dull the success of the new launch or hamper movement to new commercial models. However, those that create synergies between the two initiatives will create competitive advantage in the marketplace, and quite possibly even discover new commercialization strategies as an output of their harmonization efforts.
Chris Nikum, VP and Global Practice Leader of Commercial Effectiveness for IMS Management Consulting, has 20 years consulting to the pharma industry with eight of those being with IMS. Nikum also has prior experience in all aspects of commercial strategy and execution, including geographic, promotion and product launch expertise and consultation.