Host 1:
Welcome to Insight Exchange, presented by L.E.K. Consulting, a global strategy consultancy that helps business leaders seize competitive advantage and amplify growth. Insight Exchange is our forum dedicated to the free, open, and unbiased exchange of the insights and ideas that are driving business into the future. We exchange insights with the brightest minds of the day, the most daring innovators, and the doers who are right now rebuilding the world around us.
Peter Rosenorn:
Welcome to the Insight Exchange podcast. I'm Peter Rosenorn, a partner of our Boston Office, a leader of biopharma organization performance work in the US, focusing on commercialization and organizational development. I'm here today with my colleague Sean Dyson and Jenny Mackey to talk about key factors for biopharma launch success. Sean, Jenny, please introduce yourselves.
Sean Dyson:
Thanks, Peter. I'm Sean Dyson. I'm a partner in our London Life Sciences team. I work primarily with biopharma clients, helping them with corporate strategy, product strategy, and also M&A support. Jenny?
Jenny Mackey:
I'm Jenny. I'm the director of our Healthcare Practices Healthcare Insight Center. We lead high impact R&D projects for our Life Sciences, med tech and healthcare services practices, whether that's implementing on key market developments, building new tools and data sets or otherwise supporting our practices. And prior to this opportunity, I was a principal in our biopharma practice.
Peter Rosenorn:
Thank you both. Now, before we jump into the five factors for launch success, I think we should take a step back and sort of just look at the context of launching in biopharma today. And one of the things we have seen is it's just becoming increasingly difficult to launch successfully. Jenny, could you tell us more about that?
Jenny Mackey:
Sure. Well, there are a variety of reasons why we think it's becoming more challenging to launch successfully today. First and foremost, we're seeing more and more launches of advanced treatment modalities like cell and gene therapy. These are more complicated to manufacture. They require very specialized distribution through authorized treatment centers, and they also require extensive demonstration of their economic value. I think more generally across the industry requirements to demonstrate economic value are increasing as industry pricing is under a lot of scrutiny right now. Beyond that, commercialization models are evolving. So biopharmas are navigating decreased access to physicians and they're forced to elevate their digital communications to be more omnichannel in nature. The competition has been and is becoming more intense, and so the bar for differentiation is rising across a lot of therapeutic areas. And with all these factors, biopharmas are needing to launch globally to maximize their revenues.
So launch performance is obviously no guarantee. And in fact, we looked at all innovative branded drugs that were approved in the US between 2004 and 2018, and more than 60% of them generated less than 250 million in US sales in their third year on the market. And that's even after adjusting some of the earlier launches upwards to standardize for some of the net price growth that we've seen over the last couple of decades. So clearly, even though companies have blockbuster explorations for many of their products, the reality is that this won't be the case for most of them.
Sean Dyson:
No, that's right. And I think one of the most interesting things we found is that it's quite easy to see who will not be a top performer, but it's a lot harder to figure out who will be.
Jenny Mackey:
Absolutely. So we looked at several potential indicators of strong launch performance. Things ranging from company size to the product's differentiating from standard of care, disease severity, preventory, what is the call point density, and also price. And we found five attributes that are associated with higher revenue in the third year after approval for innovative products in our data set from 2004 to 2018. So those are first and foremost, larger company size, 40 billion or higher market cap in the third year after approval differentiation versus standard of care first in class, a broader call point with PCP involvement, and finally more severe disease. And when you look at products with three or fewer of these attributes, only 6% were able to achieve top levels of revenue performance, which we defined as a billion in US sales by year three. And very few products had all five of the attributes. And of those fewer than half were able to achieve that 1 billion threshold in US sales by year three. So this really just shows how important the execution of the launch is, which brings us back to the five factors of launch performance.
Peter Rosenorn:
Hey, thank you, Jenny. That's great context. Now, Sean, do you want to tell us about the first of those factors, early preparation?
Sean Dyson:
Yeah, absolutely. So I think early preparation is really important, and I think we generally would advise companies start thinking about launch seriously about three years before their intended launch dates. So this really varies by the type of launch. You can imagine the first launch for a major brand might be quite different to a label extension or launching in a new geography. And of course, I mean sometimes three years is just not feasible if a company, for example, acquires an asset post phase three, but typically three years is a good guideline to make sure companies are well-prepared for their launch. And we've seen time and time again that companies that don't take the appropriate time to prepare themselves, they either have to push back their launch dates or they end up under delivering on certain deliverables, and therefore seeing as Jenny highlighted, perhaps less substantive uptake of their product than they had planned. So Peter, what's the next step in the process?
Peter Rosenorn:
Yes, thank you for asking. So the first thing we ask people to do is to do a launch situation assessment. And it's just a great way to get everybody on the same page as to where the product is and where the organization is. So it's really a structured review where you start looking at the market of the disease, the product and the organization. And some of the questions we typically look at for the market, are patients easy to identify and diagnose? Do you need a biomarker? What are the referral pathways to get to treatments? What about competition, both current and pipeline products, and how aware are patients, prescribers and payers of the available treatment option? So that gives you a solid understanding of where the market is. And then for the product, just things like how differentiated is it? How do we expect pricing and reimbursement to be?
How complex with the regulatory approval be or the novelties and what do we think the label will be? And then for the organization, something that is often overlooked, but very, very important. Some questions will be on the launch team and how much work needs to be done to get ready, how complex will supply chain be? How is that set up? And just in general, how much work is it to scale up the customer facing organization? So a number of questions to level set the organization, not that it's expected that you have all the answers, but at least you have an understanding of where you are. And then you can use that to focus the organization on the biggest challenges and the most important strategic imperatives. And then from there, the call launch team have, they have their priorities, they can get a global launch team together, they can determine what regions affiliates need to be involved, define timelines, and sort of set up the overall launch readiness plan. So with that takes us to the second success factor, Jenny, is that something you could cover?
Jenny Mackey:
Sure, yeah. So our second success factor is all about using a structured and flexible framework to guide the launch planning. And there's a few reasons why we think doing so is really important. First of all, it'll really ensure that no important deliverable will fall through the cracks, and it also just helps keep the launch team organized and on the same page. So in our experience planning tools are often not adopted because they're too complicated or they're not flexible enough and they don't work with the way that the organization works. And so we have a framework that we've designed to be simple and flexible. It follows a three, 15, 60 pyramid framework. So there's three dimensions, market, products and organization similar to what Peter was mentioning previously. And this is aligned with how many companies already think about their launch. And it's really directly linked to the key factors of launch success.
Underneath those three dimensions, we have 15 strategic launch themes. So these include things like segmenting and profiling stakeholders, developing a brand strategy, setting up a supply and distribution network. So they're really a key transitional layer that allows the company to take a strategic approach and identify their priorities. And under those launch themes, we have 60 deliverables. And these are more things that are discreet, measurable things that have to get done. So for example, customer facing model design, your launch budget or supply forecast. And based on the launch situation assessment and success factors that have been identified, the team can then select the relevant deliverables in this framework to their launch, map them to a defined timeline, add owners, and then ultimately track progress against the plan over the course of their launch preparations. Sean, could you tell me a little bit more about the third factor, which is organizational alignment?
Sean Dyson:
Yeah, of course. And you mentioned the word team there a few times, Jenny. So why don't we think a little bit about what the launch team should look like? So I think in our experience, there are two really important things to keep in mind with this. The first is the cross-functional nature of launches and therefore the launch team and also the distinction between the global launch team and local representation. So thinking firstly about the global launch team, in most cases, this team would be led by a product vice president or a branded. The global launch team really owns the launch plan situation assessment. The launch plan, as Jenny has described. They're really in charge of ensuring that all of the deliverables are met on time by the relevant people and intervene where those is activities are not being achieved on time or to the right level of detail or output that's required alongside the global team.
It's also really important to have affiliate launch teams. So these affiliate launch teams take the plans that have been developed at the global level. They help to contextualize those plans for the specificities of the markets in which they're in charge of. And those teams typically are led by a general manager, a business unit head, or maybe a marketing leader at that local level. So going back to the cross-functional point that I mentioned, as mentioned, it's really important that these teams include good cross-functional representation. So in our experience, the absolute key functions to include in these launch teams would be R&D and medical affairs, marketing representation, market insights teams to really provide the kind of in-depth market knowledge that underpins much of the launch planning. Market access and heal is really important. So I think particularly from a European context, given of course the kind of constraints that we see in that region.
And then regulatory is of course a key function from any kind of launch perspective. One thing to add there is that based on the nature of the product and the nature of the launch itself, there may be other functions that are important to add to those teams in certain situations. So for example, thinking about more complex cell therapies or gene therapies, it may be the case that supply chain and manufacturing would need a kind of key seat at the table for those types of product, given the complexities of supply chain for those more advanced modalities.
I think the last thing to maybe make clear with this is that obviously a very clear dialogue between the global team and those local teams is really important to make sure things run smoothly. And I think typically that's best achieved by having a very clear, easy to use planning and tracking tool that really makes sure that everybody's on the same page and that people can be held accountable for the timing and the quality of their work in the launch efforts. So Peter, how would you suggest that core teams can help countries prepare themselves for launch and really facilitate that collaboration with the global representation?
Peter Rosenorn:
Thank you, Sean. That's really important. So you can have the right setup in terms of your launch team, you can have the right tool, but the collaboration process is very, very important as anyone who's been involved in a launch will know. And we believe that having a continuous readiness assessment process is critical, and that means at regular intervals typically tied to various milestones related to the launch readiness, global and region local affiliates will meet and review progress. This should really be a collaboration. It's not a tick the box exercise that we have done something because at the end of the day, everybody is responsible for and have a mutual interest in a successful launch. So this is a very important but sometimes overlook part. I think it also links to the fifth and the last success factor. Sean, do you want to cover that?
Sean Dyson:
Yeah, of course. I think really the fifth factor is having the right people in place. So not just the kind of design of those teams we've described, but really having the right individuals taking those positions on both the global team and the affiliate teams. So it can often be really important, particularly for companies that don't have a very high cadence of launches, to make sure they allow themselves the time to either hire or train the right team members to take those positions on those launch teams. And I think really having the right team in place, both at the global level and the affiliate level, it has a number of key benefits that really do help to optimize the outcomes of the launch so the right teams can identify problems more quickly and begin to rectify those. They are effective at building cross-functional and organizational consensus.
I think we've probably all seen that it's not always the case that people are on the same page with some of these key decisions. They can help build motivation and morale launch can be challenging. So I think that's a really important aspect to keep the teams really engaged in the work that they're doing. And I think finally the right team can really reinforce the importance of the launch to executive leadership and make sure that the people at the top of the organization really have this launch in mind when thinking about things at a more kind of high level.
Peter Rosenorn:
No, you bring up some really important points, Sean, and I want to just start by stressing what you said about executive leadership, right? Making sure that the launch team has the experience in the cloud to both have executive leadership interested in investing in the launch, but also provide sound guidance to leadership on what is realistic regarding the launch. So having that governance is critical. And then you also made a really good point about the investing in people launch is challenging even for the largest companies. But what we have seen from the work that Jenny mentioned earlier, the large cap farmers. So anyone with a market cap over 40 billion, they're five times more likely to achieve a billion dollar revenues at year three compared to any other size of company. And that means for those in particular launching for the first time that they don't have the organizational history of launching, they may not have all the right people in place with the experience. They need to think part about how early to get the right people in place, whether it's in-house or outsourced, so they can start launch readiness in inappropriate time.
Sean Dyson:
That's right Peter. And I think with the small companies as well, one thing to really keep in mind is that they can have a very tough time thinking about the investments into launch. So going back to our point about timing a bit earlier, we've said that really beginning to prepare yourself three years before launch is the time that we think is required to make sure things are done correctly. But of course, that often in almost all cases means investment before you see the outcome of your pivotal study. So effectively companies are investing both their time and their money on launch preparation before they can be sure that this drug will be successful in phase three and actually get to market. So for the small companies that are typically more cash constraints, that can really bring up a difficult question, which is how much investments can we put at risk in those early years of launch preparation before we're actually convinced and have the data to know that the products will end up being successful, getting approved and getting to markets.
So I think what's really important for those companies to think through is to really understand what are the key areas that we need to prepare for launch and which of those can be done early in the process without having to commit too much time and cash ultimately in those preparation activities. So I mean, we have worked quite a lot with biotech organizations that are launching for the first time, and those companies typically face this problem of cash and time investments in a real... It can be a real problem for them given that timeline point that we've mentioned. So we've helped those companies really think to themselves looking ahead to launch, if we are successful with this product, what can we start doing now in a way that doesn't require huge amounts of time, huge amounts of money to optimize the ultimate outcomes.
And really for companies at that kind of smaller end of the scale, that can be a really important thought process to avoid either spending too much on a launch that doesn't come to fruition given phase three failure, or conversely sitting on their hands, not investing in a product given that risk profile and then finding themselves 12 months before launch and really being under-prepared to make the most of the product that they've ended up with.
Peter Rosenorn:
So those all-great points. Sean, could you tell us a little bit more about the importance of developing a launch budget?
Sean Dyson:
Yep, absolutely. So I think the launch budget obviously includes the activities at and beyond the time of launch, but it's really important that organizations correctly budget for the launch preparation activities themselves. So for the activities in that three-year period, we mentioned earlier. So I think very often in that preparation period, companies will be working with a range of external vendors on key activities to prepare themselves for launch. So that could be things like details, competitive intelligence, it could be segmentation and targeting plans. It could be working with branding agencies on the brand name and the marketing campaign for the product. So one of the benefits of early launch planning and mapping out those activities is it means that organizations can correctly account those activities in their budgeting discussions. That then means that they then have at the functional level, the budgets that they need to get that work done to a high level of quality. And ultimately the more that can be correctly spent on those activities, the better outcomes can be achieved. And ultimately those things really then contribute to a successful launch of the product.
Jenny Mackey:
Thanks, Sean. That makes a lot of sense. So Peter and Sean, would you mind sharing an example or two of cases where L.E.K. has helped a biopharma prepare for launch?
Peter Rosenorn:
Sure, happy to. I mean, we have worked with clients in a lot of different situations on launch planning, and I mean anything from sort of a first global launch in a first in class cell therapy. So very exciting novel modality to just like a follow-on indication for monoclonal antibody or geographic expansion, local launch development for things launched or already in some key markets. We help clients sort of just review when they're close to launch applying the framework. And we've also used it in other settings like med tech, an example was a cardiology launch. We have used it for oncology biomarker launches.
So it really is very, very flexible and that's what we have tried to do from the beginning. And every project we do is unique. We apply the framework to the situation. And I'll just give you one example where we help the client sort of think about how to disrupt a very established standard of care with an advanced treatment modality. And we started out with the launch situation assessment, which was very helpful for them, and then just spent a lot of time looking at interdependencies cross-functionally because their starting point was sort of more traditional marketing oriented. So that's just one example of applying the tool. Sean, I'm sure you have other examples.
Sean Dyson:
Yeah, I mean from a European perspective, we often work with companies to help them either plan or launch that's European focused. Or actually quite often we work with European affiliate teams to help contextualize those global launch plans that may have, for example, been produced by a team in the US. So I think really from a European standpoint, each market has its own challenges, its own requirements. And then from a functional perspective, there are certain areas, I think pricing, reimbursement being a really important one where you are facing particular requirements and challenges that are not really factored in at the same kind of level of detail or in quite the same way at that global level. So I think in Europe we actually are quite active in helping with that affiliate and regional level contextualization of global launch plans. And to add to what you said, Peter, I think recently that's not just included small molecules and biologics, but actually thinking through much more complex therapies and advanced modalities, which of course, not just in Europe but globally, bring their own challenges.
Peter Rosenorn:
Great. Thank you, Sean. And I know we could talk about launch and launch experiences for a long time, but we probably need to wrap. So if I was to summarize, I mean key points are that it's becoming increasingly challenging to launch and therefore it really is just important to start early, be structured and flexible, make sure the organization is aligned, that it's truly cross-functional, the continuous readiness assessments, and having the right people. And if you do all that, then we believe that biopharma companies are in a really good place to execute on their launches so that their products can get out to the patients who really need them. So with that, Sean and Jenny. Thank you for joining me in this discussion today.
Sean Dyson:
Sure.
Jenny Mackey:
Thank you, Peter.
Sean Dyson:
Thanks, Peter.
Host 1:
Thank you, our listeners for joining us today at the Insight Exchange presented by L.E.K. Consulting. Links to resources mentioned in this podcast can be found in the show notes. Please subscribe or follow for future episodes wherever you listen to your podcasts. Also, we encourage you to submit your suggestions for future insights online at lek.com.
