Your Phase III Clinical Protocol Is Your Initial Product Launch
Key Takeaways
- Regulatory approval does not guarantee market adoption; differentiation and compelling evidence are crucial for success.
- Misalignment between clinical development and commercial strategy often leads to products that lack market differentiation.
How demand-driven development will help new products be more successful.
Here's a reality check that surprises many first-time biopharma CEOs: roughly half of newly approved products miss their first-year revenue forecasts.1 For those with scientific backgrounds, this can be especially jarring. If the FDA approves your product and the data demonstrates superior clinical benefit, why wouldn’t physicians prescribe it?
Because approval does not always equal adoption.
Companies often conclude that stakeholders (payers, physicians, patients) are behaving irrationally when uptake lags or that the team is failing to execute the launch plan properly. In reality, the stakeholders are rational, but manufacturers define that rationality too narrowly, through a product-centric lens rather than the broader context of real-world decision-making.
"I've watched company after company celebrate FDA approval, only to struggle with uptake six months later," says Diane Parks, a former chief commercial officer who has led multiple product launches across oncology and a variety of other diseases. "The problem isn't the marketing team, their go-to-market strategies and tactics, or the level of SG&A spend; it's whether the new product is sufficiently differentiated to drive unrestricted access by payers, prescribing from physicians, and patients excited to learn more about the new product.”
Too frequently, manufacturers blame payers for their commercial underperformance. But unless the new product demonstrates compelling clinical or economic advantage over lower-cost alternatives, payers are simply doing their job.2 At the same time, nearly 80% of physicians are now employed by health systems, hospitals, or private equity3 and two-thirds are paid performance bonuses tied to their productivity.4 Productivity-linked incentives shape their daily decisions. Every minute spent learning about a new drug competes with patient care, documentation, and throughput.
As a practicing allergist and pediatrician Nicole Chase, MD, puts it, “A new product had better be worth my time if you want me to pause patient care to see an industry rep or read some literature about it. In short, the juice needs to be worth the squeeze.”
The disconnect between regulatory success and market success is rarely accidental. It is structural and often begins years before launch.
The mega-millions blind spot
A Phase III program is typically the most expensive investment in drug development, ranging from $20 million to over $200 million depending on the indication, trial duration, patient numbers, endpoints, and operational complexity.5 Committing that capital to a study that cannot support commercial differentiation isn't a strategy misstep; it's a governance failure.
In many organizations, clinical development and commercial strategy operate in parallel but disconnected tracks. Development’s role is to deliver an approved product; commercial’s role is to figure out how to sell it and maximize its revenue. Although the objectives should be complementary and mutually supportive, they are often sequential rather than integrated. The result is a handoff model that assumes approval will carry the product across the finish line.
That assumption no longer holds.
Regulatory approval remains necessary, but from a commercial perspective, it is now table stakes. FDA or European Medicines Agency approval doesn’t guarantee favorable formulary placement, broad access, or physician willingness to switch. It does not guarantee differentiation.
The structural issue runs deeper: Chief commercial officers typically have little or no formal authority over the clinical decisions that determine commercial fate. By the time commercial leadership sees a Phase III protocol, endpoints are locked, comparators set, patient populations defined, and sites chosen.
According to Shawn Patrick O’Brien, now CEO of Mayne Pharma, “When I was a chief commercial officer years ago, and my team was brought in to commercialize a new oncology product, we inherited a non-inferiority trial against an outdated comparator. The FDA would approve it, sure. But we all knew oncologists would ask, 'Why should I switch?' My team was now accountable for peak sales targets based on a trial we never signed off on.”
Why the FDA's 'yes' doesn't mean the market's 'yes'
Biopharma leaders routinely conflate approval with commercial potential. The confusion is understandable but costly. The FDA sets a scientific bar; the market sets a competitive one. The agency establishes evidentiary standards for approval; the market establishes the framework for adoption and access.
Approval pathways allow for placebo-controlled trials, non-inferiority designs, surrogate endpoints, and conditional evidence depending on disease context. These pathways are essential for patient access. But they also mean an approved product may not provide the level or type of evidence physicians and payers need to justify adoption over established alternatives.
The FDA rewards sufficiency. The market rewards differentiation.
Physicians and patients evaluate therapies through a more complex lens: magnitude of benefit, relevance to daily functioning, safety and tolerability, operational burden, and affordability. Payers layer on budget impact and value relative to available options. A product can clear the regulatory bar and still fail to meet these thresholds.
Consider what each stakeholder actually rewards
The FDA rewards sufficient evidence: biological mechanism, statistical significance in controlled trials, and acceptable safety profile. The agency asks, “Does it work and is it safe?”
Physicians' and patients' adoption criteria are more complex.
The market rewards compelling evidence: meaningful patient-relevant improvements, operational simplicity, clear superiority versus entrenched competitors, and economic value for payers.
KOL signals: Informative but potentially commercially limiting
Key opinion leaders (KOLs) are indispensable partners in drug development. They help validate mechanisms of action, shape eligibility criteria, and interpret emerging data. But their perspective is not representative of mainstream prescribing behavior.
KOLs tend to see fewer but more complex patients, operate in academic settings with dedicated support staff, and tolerate clinical and administrative complexity. Their enthusiasm for innovation and nuanced endpoints does not necessarily translate into adoption by community physicians managing time-constrained, productivity-driven practices.
Many prescribers are pragmatists who adopt new therapies only when the benefit is unambiguous and the operational burden is minimal. It's Geoffrey Moore's classic Crossing the Chasm problem: early-adopter enthusiasm doesn't predict mainstream behavior.
One illustrative example emerged during an advisory board for a multinational pharmaceutical company developing a schizophrenia therapy dosed three times daily. While KOLs focused on the novelty of the mechanism, the practical reality was obvious: a three-times-daily regimen in schizophrenia was commercially untenable. After the issue was raised, the program shifted to twice-daily dosing. The result was a blockbuster product exceeding $5 billion in sales.
Scientific enthusiasm matters, but practicality drives adoption.
How your Phase III trial design locks in your commercial fate
The real “commercial launch” happens years before launch preparation officially begins. Once Phase III begins, your evidence package is locked. No marketing strategy can overcome weak differentiation embedded in the trial design. No budget can fully compensate for an uninspiring label.
As former Shire marketing executive David Baker summarizes: “Endpoints drive the label. The label drives the message. The message drives uptake. If you don't get the endpoints right, everything downstream is compromised."
Three recurring failure patterns illustrate this dynamic:
Pattern 1: Scientifically valid, commercially irrelevant endpoints
A therapy demonstrates a statistically significant improvement on a technical clinical measure, such as reading one additional line on an eye chart. Clinicians may appreciate the signal, but payers and patients ask functional questions—e.g., can the patient work, drive, or maintain independence? When those outcomes are not measured, differentiation is lost.
Pattern 2: Trials powered for approval, not adoption
In rare diseases, especially, approval may be granted based on niche or poorly understood endpoints. Payers later question relevance, leading to access restrictions that blunt uptake. Approval succeeds; adoption stalls.
In oncology, for example, non-inferiority may get you approved, but in isolation, does not address other assessments important to adoption and access, such as tolerance and safety, health-related quality-of-life, convenience and adherence, and aspects of healthcare utilization. Emphasizing the relevance of these observations through the use of real-world data, and the evaluation of product attributes within key subgroups, acknowledges the oft-quoted expression, “Although researchers may live at the mean, clinicians live in the standard deviations.”
Pattern 3: Labels that cannot support claims
Programs advance without simulating what the eventual label will allow companies to say. Post-approval, commercial teams discover they cannot make claims that matter to prescribers.
"We had leadership telling the Street we'd take 30% market share," recalls David Esposito, today the CEO of ONL Therapeutics. "Then we got the label. We couldn't claim superiority on any dimension physicians cared about. The commercial team was held accountable for revenue targets based on a product whose differentiation was decided, and limited, years earlier by people who never considered or worried about the commercial implications."
Superiority trials carry greater risk, but in crowded markets, they are often the only path to meaningful differentiation. Where superiority is not feasible, broader assessments (tolerability, quality of life, adherence, healthcare utilization, and subgroup analyses) can still provide compelling evidence if designed intentionally.
Time for a new governance model
Solving these issues requires more than better trial design; it requires new accountability. Commercial leadership must have a clearly recognized role and accountability at the point where commercial potential is determined: Phase III protocol design.
This doesn't mean commercial teams design trials. It means cross-functional governance that forces three critical questions before any Phase III investment:
- Does this protocol generate evidence that will change prescriber behavior?
- Can this protocol support clear differentiation versus standard of care?
- Will the resulting label support the claims necessary to achieve revenue targets?
If the answer to any question is uncertain, the protocol requires revision before a single dollar is invested.
For CEOs and board members, this means requiring joint sign-off from medical and commercial leadership on Phase III protocols.
For chief medical officers, it means expanding success criteria beyond approval to include “market approvability.”
For chief commercial officers, it means refusing to take accountability for products where differentiation was decided without their input, and ensuring they are in the room early enough to influence outcomes.As biotech executive Paul Daruwala advises, “I tell my CCO peers: Be in the room and active when endpoints are selected so you can be accountable for the outcomes you influenced. Better yet, take accountability for ensuring you’re in the room long before that.”
For investors and board members,it means pressing management to defend how Phase III design choices will translate into access, adoption, and differentiation— not just approval.
Phase III is where strategy becomes destiny
The biopharma industry has become extraordinarily efficient at securing regulatory approval amid unprecedented scientific innovation. What it has not solved is how to ensure those approved products succeed commercially.
The root cause isn't marketing execution; it's that differentiation gets locked in years before marketing begins.
“The market doesn’t reward your company with a high valuation because you spent wisely on R&D or successfully designed a clinical program to gain FDA approval,” says Chris Garabedian, CEO of Xontogeny and venture portfolio manager at Perceptive Advisors. “It only cares whether your product is clearly differentiated and has proven benefits beyond the current standardofcare, or compared to late-stage competitive products. If you can’t successfully differentiate, approval is just the beginning of your problems."
The Phase III protocol is the product launch. Everything that follows is execution. A demand-driven development approach that integrates development and commercial strategy leading to product approval ensures that revenue expectations are met and that the market has embraced what regulators have validated.
Harris Kaplan is Managing Partner, Litmys, and Michael Murphy, MD, PhD, is Chief Medical and Scientific Officer, Worldwide Clinical Trials
References
1. Biopharma Launch Trends — Lessons Learned From L.E.K.’s Launch Monitor. L.E.K. Consulting. 2020.
2. Kaplan, H. Into the Mind of the Payer. PM360. April 26, 2021.
3. Updated Report: Hospital and Corporate Acquisition of Physician Practices and Physician Employment 2019-2023. Physicians Advocacy Institute. April 2024.
4. 2025 Review of Physician and Advanced Practitioner Recruiting Incentives. AMN Healthcare. 2025.
5. Moore, T.J.; Heyward, J.; Anderson,
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