5 Compete At Multiple Levels
HECs practice of "Multi-Level Competition," the strategy of seeking to win not only with individual brands but also at the
franchise, portfolio, and corporate levels. Roche wants to win with its HER2 breast cancer agent Herceptin, a $5 billion brand;
its emerging HER2 franchise which includes recently launched agents Perjeta and Kadcyla; its overall oncology portfolio which
includes blockbusters Avastin and Rituxan as well as biomarkers and diagnostics; and to further enhance its industry-leading
Similarly, Novo's diabetes portfolio offers multiple brands and franchises including basal, rapid-acting, and premix insulins;
GLP-1 agents including Victoza and soon other GLP-1 combinations; and a myriad of devices. For over two decades, Biogen has
concentrated on Multiple Sclerosis, resulting in the industry's most robust MS franchise (Tysabri, Avonex, Fampyra, and Tecfidera)
to help manage this debilitating disease across its continuum. Competing at multiple levels provides many advantages, including
better stakeholder relationships, more product combination opportunities, and improved operating efficiencies. Not surprisingly,
Novo and Roche held the top two spots in the PE Industry Audit of sales-to-assets, a measure of corporate efficiency.
6 Mitigate the Impact of Payers and Generics
In the industry's Competitive Lifecycle Stage, both payers and generics represent significant threats. HECs realize that payers
are not only customers but also potential "budget competitors," often fighting for the same funds as biopharmaceutical companies.
These payers use numerous tactics to control the access, pricing, reimbursement, utilization, and perception of innovative
drugs, including leveraging generic competition. Roche has relied on innovation to address payers and generics. The company
recently launched 2nd generation follow-on products Gazyva and Kadcyla for its aging blockbusters Rituxan and Herceptin, respectively.
Kadcyla, which links Herceptin's antibody with ImmunoGen chemotherapy agent DM1, is one of 25 antibody-drug conjugates in
the company's pipeline.
Celgene has also emphasized new product development with a three-pronged strategy: expand Revlimid, its core $5 billion hematology-oncology
agent, into new indications; develop new blockbusters such as apremilast for psoriasis and other indications; and build its
early-stage pipeline through active deal-making. These efforts have provided Celgene with a 90% pricing margin, the highest
in the PE Industry Audit.
7 Seek to Dominate Their Market
While many companies focus on specialty areas of unmet and growing therapeutic need, the most successful competitors seek
to dominate and own their respective therapeutic areas. With an impressive portfolio of insulin and non-insulin products,
Novo is the leading player in the burgeoning global diabetes market with a 27% global market share according to EvaluatePharma
Research. Roche dominates oncology — the world's largest pharma market — where it owns nearly one-third of all cancer product
sales worldwide totaling $22 billion. Roche markets the industry's three best-selling cancer brands and is poised to have
five of the six best cancer sellers by 2018. Gilead is expected to capture 43% of all anti-viral sales by 2018 by owning the
HIV area while challenging the HCV arena. Catapulted by its recently launched Tecfidera, Biogen will cast an increasingly
dominant shadow over the MS market. The company is expected to grow from a 34% to a 50% share of the projected $20 billion
MS market by 2018.
In summary, highly effective competitors demonstrate three fundamental ways to win. They prepare to win by committing to a
specialty market mission with the right people and products. They plan to win by shaping their market and competing at multiple
levels. They play to win by mastering the Pre-Launch, countering payers and generics, and seeking to dominate their competitors.
Stan Bernard, MD, MBA is President of Bernard Associates, LLC, a global pharmaceutical industry competition consulting firm. He can be reached