From global strategy to local execution
When it comes to successful biopharma launches, it highly depends on the local affiliates their ability to successfully execute the global market access strategy. From the perspective of the global corporate organizations, the success of a launch will be defined as the ratio in which the sales that was forecasted in the year prior to launch has been achieved. To meet this goal, companies focus on achieving market access in the 7 key geographies (US & Canada, Japan, EU4 and UK), where almost 90 % of sales and growth of new medicines is coming from. At firsthand this may seem to be a pragmatic approach and a trade-off of having to deal with the complex EU market with limited resources. But, ultimately it boils down to a launching strategy that focusses on easy to penetrate markets with high spending capacity. Whereas from patient access perspective, timely launches to address unmet needs in as much countries as possible should be the principal KPI. Achieving maximal patient access on the other hand, is also hampered by the fact that local affiliates outside of the above mentioned key countries cannot leverage payer requests. This is because they are often restricted by the companies’ earning model that is strongly influenced by international price referencing systematics.
The pitfalls of a narrow focus
Such a narrow focus on the 7 largest markets has its pitfalls because it also concentrates risks. The ongoing debate in Europe, about drug pricing and the expected floodgate of new ATMP’s and personalized treatment options, now already leads to stricter early benefit assessments. Even in Germany, stricter benefit assessments increasingly leads to mandatory discounts. Also, shortening of the free pricing period and other cost containment measures are being introduced. While the UK seems to be setting itself up for a first mover status through its accelerated pathways to market, the HTA procedures in EU4 and other European countries are tightening. Resulting in situations that if companies are not willing to adapt their pricing strategy, medicinal products may not be granted access. Also in the US political pressure and criticism on the pricing policies of drug companies is increasing. Drug pricing provisions, more aggressive drug pricing legislation, discontinuation of patient copayment assistance and releasing the ban on Canadian drug imports are some of the anticipated measures. In fact, US decision makers expect cost effectiveness to become increasingly important between now and 2025. As a result health insurance companies will offer leaner packages and patients may opt out of expensive drug prescriptions to avoid significant co-pays.
What defines a successful launch?
One time market entries are often not a guarantee for commercial success. This is seen in certain disease area’s with very condensed pipelines of highly personalized treatments. The first 6 months seem decisive for the launch performance either well or badly. It has been determined that 80% of the launches do not improve on their first six months performance. The downside is that if just 20% of worldwide launches seem to be able to improve their trajectory in the 2 year period after the first commercial sales, failing the first 6 months in (one of) the major markets can be disastrous. This brings us back to the question what defines a successful launch. Does failure to achieve the forecasted sales represent a poor launch execution or is it a lack of value recognition by payers? Or alternatively, could the sales targets have been based on an over-optimistic assessment of the drug’s added value? It may be debated if it was a case of inappropriate value recognition by the German payer of bleubird bio’s gene therapy, Zynteglo. But ultimately they were forced to withdraw completely from the European market and focus on the US only. The developments such as mentioned above inevitably will lead to a new normal in which companies need to re-focus and re-think what defines commercial success to avoid to have to make the same decision as did bluebird bio.
Power to the payers: a good thing. Or not?
Payers are becoming more and more the gatekeepers of what medicinal product reaches which patients, rather than the prescribing physician. This has been the case in Europe for some years, but also in the US there seems to be increasing interest to apply cost effectiveness criteria into the benefit assessment. The outcome is that pharmaceutical marketing increasingly relies on convincing payers of the added value of a drug as opposed to convincing key opinion leaders (KOLs) and prescribing physicians of the clinical benefits. The latter, by the way are also becoming more and more conscious of the budgetary impact of their treatment choices, which is a good thing by itself. Nevertheless, drug prices should not drive treatment decisions in the clinics. Rather, the healthcare system should invest in designing and regularly updating a clinical decision making process that secures appropriate use.
Conclusion
For biopharma companies to be able to address the increasing challenges, early engagement of market access experts into commercial decision- and strategy-making processes is key. Pricing and value propositions should not be based on a narrative that fits the (often over-optimistic) commercial ambition for the product. Instead, quantifiable data and comparative clinical and economical value assessment should complement proper understanding of patient treatment pathways and clinical decision making. This should then be paired with a deep understanding of payer decision making processes and priorities to underly the value propositions that drives the commercial strategy.
The skills and knowledge that companies need to launch in Europe are becoming equally important to successfully launch in the US. This should be reflected in the composition of launching teams that need to apply different tools and narratives to reach the goal of achieving and maintaining a steep uptake with wider geographical reach. In the end it is the number of patients on drug independent of where they live that should define commercial success. Or at least it should be, but more to come on that topic later.
Background sources (hyperlinked) used for this article:
EFPIA. The Pharmaceutical Industry in Figures. Key Data * 2021. www.efpia.eu
Sidley. Global Drug Pricing and Market Access: What to Expect in 2022. www.sidley.com
