The discipline to define customers and stakeholders through a patient oriented lens.
The ability to develop a compelling value proposition for these customers, to articulate it, and deliver on it effectively.
The acumen to properly assess, mitigate, and navigate business risk.
These are the core competencies underlining successful efforts to continue commercializing drug products in today’s post-patent expiry world. They will also be the core commercial excellence competencies for any pharma company regardless of a therapy’s patent status in the future.
Commercial excellence for branded drug products is generally rooted in objectives of expanding reach as wide as possible and driving Rx volume as high as possible. Key metrics include trial & usage, awareness, and prescription share.
Post-LOE strategy, on the other hand, is rooted in objectives around patient retention and focusing only on those segments where you know you can derive value long term. Key metrics here include switch rates, patient program engagement, and profitability.
Post-LOE strategy also has added considerations around extending exclusivity through tactics like IP infringement injunctions that can be effective while in place but come with major risks in damage quantification.
The pharma industry is moving toward a future state where subjectivity in therapy selection is low and payers hold pharma companies accountable for outcomes. In this future environment, lessons in customer definition, value, and risk from today’s post-LOE strategies will be critical.
Today, ¼* of all innovator drug companies with operations in Canada have local teams and resources dedicated exclusively to evidence generation, compared to almost none 36 months ago. An evidence-based environment will have significant implications to pharma around value propositions, business risk, and commercial models.
In an evidence based environment, pharma companies will secure market access through contingency-based reimbursement agreements with payers (and sometimes patients). Payers will demand contingencies be based on specific outcomes expressed as end points that deliver what they perceive as value. Expect end points such as ‘number of days off work’, ‘increase in grade point average’, ‘hospital re-admissions’, and others to become common.
In addition to re-defining the customer, to do well, pharma companies will build on strong value proposition competencies around development, communication, and measurement that have their roots in today’s LOE activities.
Contingency-based payer agreements is largely a new area of risk for pharmaceutical companies that differs greatly from the current formulary listing process.
Traditionally risk-averse pharma companies will find it a challenging arena to enter because the magnitude of negative impact and probability of occurrence won’t be fully known at the outset. Staying outside that arena won’t be an option as competition for access to patients in many therapeutic areas will become intense. Just look at how many pharma companies have oncology agents in late stage development and the high level of overlap across tumors that exists.
An important aspect of success will come from having leadership with experience balancing risk within parameters the company needs to accept along with the knowledge of how to accurately assess risk and mitigate it. That type of experience will largely come from LOE activities where decisions that have a high risk component such as NOC injunctions, authorized generics, and price adjustments, are common.
Evidence-based therapy selection and contingency-based access agreements - adjusting to these new realities requires a transformation in commercial models.
These will need to move away from prescriber generated prescription volume and toward winning specific patient segments who are good candidates to achieve desired outcomes and represent long-term value in the process.
This is the natural extension of post-LOE practices that focus efforts on patient segments that pharma companies can profitably retain. The lessons learned from building post-LOE commercial models will provide the foundation of how leading pharma companies commercialize all therapies in the future.
Knowledge, competency, and cultural transference of post-LOE teams to a pharma’s broader organization won’t happen fast enough on its own.
Senior leadership teams in today’s pharma companies need to recognize a post-LOE practice as an opportunity to incubate these competencies. Many pharma companies now have Post-LOE Commercialization as part of their strategic imperatives. Taking the next step now of including competency transference as part of the overall strategy will pay significant dividends in the future.
Instead of asking ‘Did you carry the bag?’, a reference to spending time in the field calling on doctors as a sales rep that’s long been seen as a rite of passage for promotion, the question for new leaders will become ‘Have you done LOE?’
Note: This update is for educational purposes only as well as to give you general information and a general understanding of the pharma industry, not to provide specific financial, investment or other advice. By using this information you understand and agree that there is no client relationship between you and PwC, or any of its member firms. The publication should not be used as a substitute for competent financial, investment or other advice from a professional services firm.
*Based on number of Innovative Medicine Canada members with RWE teams who have commercialized drug products in the Canadian market
Partner, Value Creation, National Pharma & Life Sciences Leader, PwC Canada
Tel: +1 647 669 4555
Managing Director, Pharma & Life Sciences, PwC Canada
Tel: +1 416 815 5310