What companies need is a LCM plan for the long haul that's strategic, funded, and includes a pipeline realignment process for every stage along the way. And they need it now
Choose one: You're leading a big brand team with deep pockets and thousands of reps in the field. Or maybe you're at a mid-tier drugmaker with unique experience in a specific drug class and therapeutic area. Or you have a terrific new biologic that's working wonders for your patients. Question: What do you all have in common? Answer: drugs and a ticking clock.
Brands have a finite amount of shelf life before something comes along to upset the apple cart. If you haven't made the most of your particular asset when the next-generation drug launches —or generics suddenly appear, or the reimbursement paradigm changes—options disappear as quickly as market share.
Everyone loves the shortterm. In Phase III, at launch, in the rush to grab market share, and later as brands duke it out with emerging competitors, teams rightfully focus on near-term results. The challenge is keeping a firm grasp of the long-term picture. As next quarter turns into next week, it's easy to lose sight of strategies meant to carry a brand through its entire life. Plans fall by the wayside—or never get made at all—and teams face the prospect of managing a crisis with no clear strategy and few useful tools. This situation happens all the time for older drugs whose original brand leaders, long gone, didn't forge plans to extend product life when a few extra months could mean hundreds of millions of dollars.
Lifecycle management is not new. Companies have been involved in LCM activities for decades. Lacking, however, was any formal resource allocation or pipeline realignment associated with the function. Now that companies are no longer launching blockbuster after blockbuster, they must put in place a LCM plan for the long haul to concentrate on maximizing the value of every brand in their portfolio.
LCM isn't a magic bullet for late-life issues. It is, however, a toolbox for executives trying to foresee all the challenges their brands will invariably face. As pipelines get dryer, that toolbox is getting more and more formal. In a survey of large drug companies, half had taken steps to build formal LCM groups. Those companies are working to integrate lifecycle planning into every step of project development and brand management.
For most drugs, the time to start hatching long-term plans is yesterday—or the day before. Formal lifecycle planning reaches all the way back to preclinical development. Patent- filing strategies, clinical program planning, and formulation decisions will have direct impact on brands 15 to 20 years down the road. It requires dedication, discipline, and a willingness to look beyond tomorrow. No matter what situations they face now, marketing groups need to be thinking ahead—and doing it as soon as possible
As a drug moves through various lifecycle stages, LCM executives must constantly change their priorities. At each milestone, LCM teams need to focus on different tactics to pursue. Although a new stage in a product's life requires LCM teams to execute the task at hand, executives must always remember how each LCM activity fits into the big picture.
LCM priorities during early-stage development can change with each development phase. Once the drug launches, each new year brings patent expiration that much closer and, therefore, brand teams will need to focus on preparing for that milestone. Even after patents expire, companies still have options to maximize their drug's value.
For the most part, funding for LCM activities is tied to individual brands. In a survey, 86 percent of companies tied LCM budgets to individual brands while the remaining 14 percent funded LCM from other sources. It makes logical sense for LCM activities to be funded via brand budgets because the activities that are performed are intended to have a positive impact on a specific brand.
The remaining 14 percent of study participants, who do not tie LCM funds to brand budgets, provide LCM funding through marketing or R&D. While these companies are a minority, they nonetheless all have a system in place that provides funding for LCM-focused activities.
Regardless of where the funding comes from, the challenge is to attain sufficient resources to provide adequate LCM support for a brand. An interviewee in the survey gave a prime example of this all-too-common struggle for resources: The LCM team member had to fight to get funding for a $35,000 white paper, which ultimately saved the company upwards of $35 million from a competitor's drug. As the interviewee noted, it would not have mattered if he/she was asking for $2 million to write the white paper—either way it was going to be an uphill battle to secure the necessary funding carry out the LCM tactic.
To overcome the challenge of winning necessary funding for LCM, a Company F executive suggested that LCM team members go to high as they can within the organization to make sure that upper management not only understands LCM and its benefits, but also tries to sell the process of LCM as much as possible. Achieving buy-in from upper management is critical in gaining financial support for LCM, as well as cultural support for developing an LCM-conscious organization.
Although there are always other market factors at play, companies that take the time to analyze the benefits of investing in specific LCM tactics have a better idea of what type of return the tactics might produce. As LCM teams and functions begin developing LCM strategies and objectives for a brand, it is typical for them to explore strategies that will offer the best payout for a brand. It figures that LCM teams that are able to provide evidence-based research on the resource implications of investing in a specific LCM tactic are in better position to request and receive adequate funding for the LCM initiative.
For branded pharmaceutical companies, the greatest advantage they have is the market exclusivity afforded by their patents. In their race against the clock, teams consider all the tools available and assemble them into a viable LCM plan that considers different scenarios and contingencies at different points in their drugs' lifecycles.
Although advanced groups start formal planning in Phase II or III, it's not too late at launch or shortly thereafter. LCM tactics commonly employed during a brand's peak sales period show that drugs enjoy a long stretch of patent protection and, ideally, sales that continually climb or, at the least, gently plateau.
Survey data compared tactics' average ROI, implementation time, and investment (the size of the bubbles). At this point in time, the ability to reposition a marketed product delivers a cost-effective shot at delivering increased revenue. Options such as new formulations and indications are more expensive and time consuming, and they get mixed reviews in terms of ROI. Less expensive options such as patient programs are relatively cheap and effective. These tools are available to nearly all brands. The trick lies in integrating them into a cohesive plan.
Repositioning, for example, is not a new concept; it's a brand's response to market realities. Based on doctor and patient views, clinical data, and competitor activity, teams alter promotions to make the most of their products. In concert with other long-term plans, a well-conceived strategy can shift a brand's fortunes and lay the groundwork for years of success.
On this front, King Pharmaceuticals carved out a niche in the sleep-aid market by repositioning Sonata. Compared with Ambien, the drug delivered fewer hours of sleep—a perceived deficiency in this class. King, however, turned the situation to its advantage by proclaiming that "It's not too late for Sonata," and encouraging Sonata use when it was too late for a full eight hours of sleep. In a more dramatic move, GlaxoSmithKline bought OTC rights to Roche's orlistat and turned an underwhelming prescription drug into OTC blockbuster Alli.
As time goes on and a drug ages, the brand faces a different set of challenges along with different later-life options. As patent protection nears its end, R&D-based options tend to offer companies the best chance to retain revenue, but they also require significant investments of time and money.
Effective transitions to next-generation drugs are the holy grail for companies seeking to replace an older brand with a new one. AstraZeneca's switch from Prilosec to Nexium is a longstanding benchmark for success on this front. More recently, Shire launched Vyvanse to build on its Adderall franchise. Although Adderall XR's patent was set to expire in 2009, Shire launched its new brand in 2007. The time cushion provides enough time to ensure patients make the transition before generics appear.
It is never too early to start implementing a life cycle management strategy, particularly with the long lead-times for the development of a pharmaceutical product.
Brands across the industry pursue these options every day. The difference lies in planning for late-life success and following a cohesive plan— not resorting to a jumble of desperate tactics as damage control.
That kind of strategic planning requires time. Efforts to improve formulations and drug delivery, for example, start in clinical testing. Next-generation products take years to either develop or acquire. Even small tweaks to promotion strategies require mastery of market, clinical, and competitive data collected over time—and that's not including complete overhauls that reposition drugs in their markets. Even then, there's no guarantee that any particular strategy will work. There's at least a chance that it will, however, with advance planning.
With some planning, companies can advance their LCM processes, strategies and structures. Teams that take the time to map out their brands' options—both for today and tomorrow—will be thankful in the long run.
Eric Bolesh, Research Manager at Cutting Edge Information, can be reached at Eric_Bolesh@cuttingedgeinfo.com