As discussed in part two of the blog, an accurate pricing & reimbursement data foundation is a prerequisite for an effective roll-out of your products’ strategies. However, it’s the initial launch plan that will set the trajectory of revenue throughout the product’s lifecycle and beyond. Despite the fast changing global Market Access environment, most companies still employ substandard methods and technology when optimizing their launch sequence.
At a time when the industry is pivoting toward a trend of manufacturers engaging in multiple launches simultaneously—as evidenced by 79 new products launched by just 54 individual companies over the past two years—relying on outdated methods and preconceived notions inevitably leads to disastrous results. Surprisingly, there are still a vast amount of Market Access professionals who insist that a proper Launch Sequence Optimization (LSO) can be developed by simply identifying and prioritizing the countries paying the highest prices for drugs. Alternatively, companies may outsource the task to a vendor, which after eight weeks typically returns a single LSO that only optimizes the major markets—compiling just 85% of the potential revenue. Historical results and market realities do not support the viability of either of these methods.
Nearly 50% of all global launches when measured in their peak sales range did not meet expected goals, and of those, half missed expectations by at least 50%. Given that an average pharma company dedicates approximately 2.7 full-time employees for 18-21 months prior to launch of the product, and spends 28% of their Market Access budget on launch plan development, the question must be asked: Why are the results so poor?
Accepting undisputable facts and analyzing them in the context of market realties should be the first step in developing a successful launch plan. There are 196 countries in the world including Taiwan, and yet the vast majority of companies only include the top 30-40 developed markets in their LSO. That alone excludes approximately 15% of their potential revenue from being optimized. This is especially curious when considering that more and more of the launched products are targeted to niche populations, which often reside outside of the developed markets.
Furthermore, optimizing even a 20-country launch while using only International Reference Pricing (IRP) will require at least 2.4 x 10^18 permutations. Yet, many insist that they can rely on their prior experience to predict the correct sequence. Finally, and most importantly, the payer environment across the globe changes almost constantly even though LSOs are developed as very rigid documents at a single point in time. Lacking fluidity, these documents don’t stand a chance of being useful as soon as any major changes take place. An extreme example is the most recent consolidation of the Nordic countries’ purchases under AMGROS, which acts as GPO for all of the member countries. A traditional static launch plan, which most likely included Norway as a high-price country in the first wave of launches, may require a second look.
Undoubtedly, many global market variables will change between the time you develop your initial plan and the actual launch. Having a cloud-based system will allow you to continuously incorporate the newest cross-functional inputs, resulting in a much more realistic and executable plan. Model N’s Global Launch Excellence (GLE) module allows for a truly global cross-functional engagement in a reiterative process, based on the most accurate and up-to-date information available. After all, isn’t time you leave behind antiquated methods and leverage modern technology to enable a successful future?
If you have any questions about this blog post or would like to discuss this topic further with the author, feel free to contact Voytech Sudol at vsudol@modeln.com.
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