Billions of Dollars and More Than a Decade Later, Now What?
The global launch of a new drug requires careful orchestration of sales and marketing support activitiesâ€”a challenge that can have a large financial impact.
SENATOR EVERETT DIRKSEN (R-IL) once said, “A billion here, a billion there. Pretty soon you’re talking about real money,” when discussing the US budget.
The spend surrounding the launch of a prescription drug is not much different. In fact, the Tufts Center for the Study of Drug Development found that the cost of developing a prescription drug that gains market approval is $2.6 billion.
Furthermore, the IMS Institute for Healthcare Informatics recently reported that total spending on prescription drugs could reach $1.4 trillion by 2020. A large part of that investment is spent on research and development, which can total more than $137 billion annually for the industry and it takes between 10 to 15 years to develop a medicine or vaccine.
With that kind of upfront investment, it is imperative that pharmaceutical companies develop and execute a well thought, solid roadmap to successfully launch, roll out, and enable their distribution network on a global scale.
Overcoming Challenges to Create a Roadmap to Success and ROI
In a global rollout, pharma companies will encounter 4 specific challenges:
- Country-specific reimbursement policies
- Patient access and engagement
- Regulations and laws
- Communication barriers
Although it is daunting, pharma companies need to take initial steps to anticipate, proactively address and plan to overcome these challenges to achieve success, positive patient outcomes, and ensure a return on investment (ROI). First, pharmaceutical companies must examine the reimbursement and payer landscape for each region.
Innovative pricing is often critical to gaining market access and securing reimbursement. Because payers have grown more worried about the size of their budgets and direct/indirect costs associated with new medications in recent years, it is more likely that they will approve reimbursement if a therapy can guarantee specific outcomes to insure treatment successes.
Second, pharma companies need to make sure these drugs are affordable and accessible for patients who need them because patient access and engagement plays an important role in ensuring ROI.
Recently, Murray Atkins, executive director of the IMS Institution for Healthcare Informatics, remarked that we are likely to see a surge of innovative medicines emerge from research and development pipelines, as well as technology-enabled advances that will deliver measureable improvements to health outcomes over the next 5 years.
He also noted that there will be greater availability of low-cost drugs and better use of evidence to inform decision making so that consumers and stakeholders get “more bang for their medicine buck” in 2020. Even if doctors continue to write prescriptions for certain drugs, it will not matter if patients do not have access or cannot afford to buy them.
Additionally, pharma companies need to consider innovative, new drug delivery systems. As mentioned, access is important, but improved delivery methods can make it easier for the patients to self-administer medicine, improving the potential for cost savings and patient compliance.
For example, Proteus recently released technology to embed an ingestible sensor into a pill, which emits messages and transmits them to an app on a smartphone. Removing barriers and improving delivery leads to higher patient engagement and increased adherence to a drug regimen.
Third, pharmaceutical companies are constrained by the different laws and regulations they need to consider when launching a global brand. The practice of medicine differs from country to country, and the cost of medication significantly varies.
Pharma’s challenge here is to determine best prices, practices, and costs. With the current state of the industry, and primarily in Europe and Canada, there are many patients traveling cross-border to find less expensive medications.
Another challenge is that some drugs have been approved in the United States, but have not been approved overseas, or vice versa. Additionally, in many countries, direct-to-consumer advertising is illegal.
Therefore, pharma companies need to determine how to communicate to consumers within the bounds of local laws and regulations. All of these issues impact the planning and, ultimately, the results in global strategies becoming flexible and more easily implemented, at a regional level.
Fourth, pharma companies need to realize that communications, at all levels, are critical to their ultimate success or failure. They also need to proactively anticipate and address the challenge of “cost to sell.”
PricewaterhouseCoopers recently came out with a study stating that 53% of all physicians in the United States do not want to speak to a pharma sales representative and, in many cases, block or restrict access.
This poses a challenge in that pharma companies need to find different ways to deliver appropriate and meaningful brand and clinical messages without relying on field-based personnel. As a result, pharma companies may need to look to other forms of communications, digital, and nonpersonal outreach initiatives to support brand marketing and deliver meaningful product messaging.
The challenge, here, is that the mastery of supply chain to manufacturing and distribution of drugs has not carried over into marketing and sales support. Invariably, pharma companies have to work with multiple vendors in order to create and distribute marketing, training, and other collateral materials across geographies.
This approach drives a number of critical issues including:
- The solution becomes expensive as an aggregation of individual cost items increases
- Time to market could be severely impacted as a result of the complexity of coordination
- Inconsistency in the quality of the content, country to country or region to region
It is essential that the communications process be simplified to produce and deliver business-critical communications. Not only does this make communications about medications clear to physicians and consumers, but it also helps build customer relationships.
Communications are at the core of solid customer partnerships, so it is imperative that the right message gets to the right person at the right time, while simplifying the processes to produce and deliver communications. It is also helpful when pharma companies create alliances with third-party sources to communicate their messages.
The third-party endorsement provides credibility since many consumers — especially in the United States – do not trust or are suspicious of pharma companies because the perception is that money is more important than patient outcomes. For example, several years ago a schizophrenia drug was launched with an indication for treatment-resistant patients.
The challenge was two-fold: how does the company effectively promote a brand with a black-box warning while helping to dispel the stigma often times associated with mental illness.
To help build trust with patient and caregiver communities, the company decided to align itself with the National Association for Rare Disorders, along with the national and local chapters of the National Alliance on Mental Illness.
These alliances helped the pharma company establish strong relationships with local communities, health care providers, and payers. This ultimately improved the customer experience, consumer messaging, and compliance, which resulted in better patient outcomes while positively impacting the pharma company’s bottom line.
The Right Partnership Paves the Road to Success
As you can see, the challenges of planning and launching a drug globally are extensive, but not impossible. With the right partnership in place, pharma companies can be successful and secure the ROI they expect, while improving patient outcomes.
Many of the challenges noted above are only heightened by the need to contract with multiple vendors to bring a drug to market across the globe. For example, when considering regulatory issues, it is unlikely that all participating vendors, in a fragmented setup, will be familiar with the regulatory needs in every country in which the drug will be marketed.
This may result in challenges around the type of clinical and brand content appropriate within a specific region, as well as defining the right promotional and channel mix. Communications can also get muddled when multiple service providers are involved.
Customer service is key, especially as products and services become commoditized. Therefore, clear and consistent communication from a single provider having a global reach with services and resources helps mitigate issues brought about by inconsistent service from multiple providers or partners.
Even though pharmaceutical companies may be communicating on a massive scale, all customers expect a personalized, consistent experience regardless of who they are doing business with.
So if the vendor or supplier enabling the customer communications is not clear and consistent in its messaging, direction, and focus across all channels, the customer experience will fail to deliver on the brand promise.
An optimum solution is to work with a global provider with assets and services around the globe with the commensurate experience. Such partnerships will intrinsically overcome logistical challenges while bringing to bear regulatory insights that will mitigate risks associated with this type of content and distribution.
The notion of partnership will also drive an outcome-based compensation structure that will further dilute the risk in favor of the pharmaceutical company.
The Benefits of Bundling Multi-Channel Outsourcing Contracts into One, Large Mega Deal
One recent trend in the pharmaceutical industry is that companies are beginning to bundle multi-channel outsourcing contracts into a large mega-deal. Companies like Amgen, Merck, and Bayer all have established global business services units with the primary objective of consolidating suppliers and developing global capabilities to achieve better results.
Most customers partner with myriad suppliers to provide services in support of marketing campaigns.
While it’s important to contract with agencies that specialize in certain areas, such as marketing strategy, content, cadence, and channel strategy, it is best to contract with a large global partner who can manage all of these vendors under 1 contract to ensure consistency across all messaging.
This is proving to be of more value than working with several different vendors. This value can be defined in 2 ways: tangible and intangible.
Tangible benefits of supplier consolidation include:
- Expense reduction
- Increased productivity
- Economies of scale
- Leveraged technology
- Improved span of control
- Working capital improvements
- Leveraged purchasing from consolidated vendors
Intangible benefits of supplier consolidation include:
- Enhanced customer services
- Standardized processes and pooled resources
- One-company approach
- Improved accuracy and consistency of information
- Better leverage of a learning curve
- More rapid transition by focusing on “added value”
In conclusion, Sen. Dirksen’s point about spending money when speaking about the US economy is also relevant to the pharmaceutical industry. This business deals with real money, and when companies are spending a large amount of dollars, like pharma does on research and development to bring drugs to market, it is important to make sure they are also seeing an appropriate ROI.
This is not a place where pharma can lose so pharmaceutical companies need to partner with a large vendor that has a global presence and deep skills in a variety of areas—like communications and regulations–to ensure a smooth global rollout and successful ROI. SPT
ANTHONY BIANCHINI is the vice president and Pharmaceutical Practice Leader for Xerox Services. Anthony is an accomplished pharmaceutical industry executive with more than 25 years of experience in leading projects and high performing teams. He has a strong track record of delivering solid approaches to capture innovative opportunities that maximize revenue, margin and profitability by ensuring project output aligns directly to strategic objectives and company/business unit vision. Anthony began his career with a top-five pharmaceutical company and, for the next 24 years, developed clinical and commercial solutions for dozens of brands in a variety of disease state categories across each state of the product lifecycle. These solutions delivered positive patient outcomes, exceptional customer experiences and attractive ROIs for each brand/business unit.