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Pre-clinical marketing: understanding need

Published on 29/10/03 at 10:13am

Since the modern pharmaceutical industry emerged, product development has been largely driven by science, with R&D seen almost exclusively as the solution to profit and revenue growth. The focus has been the science. But to what extent do clinical researchers have an understanding of the needs of the market and the commercial opportunities inherent in what they are developing?

Many pharma companies, by nature of their founding and business evolution, were not set up structurally or with the processes to combine the power and rigour of scientific application to commercial reality and opportunity. Historically, most have discovered products and then sold them into markets with little knowledge of the actual clinical need.

This might have been effective during the period when new therapeutic fields were opening up, and where the increases in clinical performance of new products were somewhat more than marginal. But in todays crowded marketplace, with its financial and structural pressures on the clinicians who are actually prescribing the medicines, the science-driven approach may not be enough to stay ahead.

Traditional approach

Many organisations have traditionally been driven by R&D - who provide the products - and sales who sell them. Inevitably, the questions most often asked by R&D are 'what can this compound do?' and 'where is its chemical activity useful clinically?'. Positive answers will lead to the product being developed. The commercial side of things was only involved very late in the process.

But there is an alternative approach: it is possible to maximise the value of product development by organising internal resources better, and by understanding unmet needs and competitive gaps in the market. Pharma companies need to be involving marketers right from the 'blue sky' stage, so that the R&D is about meeting the needs of clinicians and patients (and the actual customers - PCTs and prescribing committees), rather than simply pushing back the scientific boundaries.

Over the last decade many companies have recognised and implemented various initiatives to improve the effectiveness of both R&D and marketing operations. However, despite these significant moves forward, a major gap still exists in the lack of joined-up thinking and capitalisation of the functional expertise and competence in many companies.

Does this ring a bell?

The following process may very well be familiar, especially for those sitting in medium-sized pharma companies. With pressure to develop and expand the product portfolio - driven by a combination of limited patent life, increased crowding within a therapeutic area, or even within one class of compound  the new product effort is mainly orientated towards development through to phase four: launch ('let's get a new product - any new product - launched into the marketplace').

Unlike almost every other industry, product development originates and reports in the organisational structure under the guise of research. Separate from marketing, and ne'er the twain shall meet. Everything flows from this situation: project leaders originate from this function, mainly medics and/or scientists.

Although these people are ideally suited for seeing through the due diligence processes, ensuring the robustness of the science and examining the clinical evidence, they are less suited to assess the commercial potential and suitability of the project. In essence, they perform the role of molecule project manager rather than the equally vital role of product commercialisation manager. This is often the biggest gap in maximising the effectiveness of new product development.

So how are such projects reviewed? The answer is mostly on their clinical profile and a therapy class-driven view of the commercial potential. Generally there is just one forum for review, which might include people from across various functions, but as often as not this review does not look at how the commercial potential of the product develops as it moves through the various stages of trials and towards launch. Most importantly, the review process can easily omit to ask whether the product still has a viable commercial fit into the company's portfolio.

The shortcomings inherent in such a process - surprisingly common in a sophisticated industry  are many and serious. Projects that have little or no competitive advantage are stuck with until a late stage, when it becomes clear - too late - that the project is doomed to commercial failure. Result: massive wasted R&D resources, which could have been directed towards more profitable and commercially viable projects.

Alternatively, the product may get to market and require disproportionate marketing and sales resources to succeed (if indeed it does at all), thus diluting the necessary focus on other parts of the portfolio.

Plugging the gap

The situation described above is not really an issue of insufficient skills to maximise product development opportunities. Certainly in most pharmaceutical companies there is no lack of assets, skills and resources; rather it is more a case of how the company organises them to access, funnel and capitalise on what is already there. It is fundamentally a structural problem, bridging the gap between the functions of research and marketing.

Organisation is, however, only one part of the solution: a greater need exists for re-orientation of working practice, well-defined processes, and the building of organisational as well as individual competency to fully capitalise on the untapped potential to do things better that exists in many companies.

Encouraging the right level of interaction is a question of putting in place the right working processes. Each discipline has to appreciate what the other brings to the process. The scientists have to look beyond pure science and let in the commercial experts early on in the decision-making/review process, while the marketers have to identify the unmet market need and then value the input that the researchers can make in meeting this need through good science. It is a synergistic relationship.

Unmet market needs

Another fundamental change in the marketplace is driving the need to input more commercial thought into the development process. The definition of market needs is dependent on a rapidly changing definition of both the customer and their priorities.

When prescribing decisions were solely the domain of clinicians, clinical benefit was the over-riding factor in prescribing decisions. In this environment pure scientific advances were easier to sell into the market.

At the same time, the choice of genuine alternatives has burgeoned. Thirty years ago, choice of treatments was small and so it was easier to introduce a new drug into the marketplace and meet a need. Nowadays, with a much greater choice, both within therapeutic areas and even within compounds, the additional clinical benefit is becoming more marginal. So understanding where the remaining gaps are becomes critical  and that is a very commercial discipline.

It is no longer enough to prove a clinical benefit to drive sales; the sometimes unscientific discipline of health economics comes into play. Researchers concentrating on clinical benefit may not appreciate that new medicines invariably involve significant extra cost for what might be a marginal clinical performance advantage.

So the challenge for pharma companies is to determine prior to development whether marginal - say 5 per cent - therapeutic advantage is going to be enough to realise commercial success. A deep understanding of the customers' mindset is very important.

The other new challenge is keeping track of the customer. It is no longer just the clinician who makes the prescribing decision. NHS policy, NICE, local pharma advisors and PCTs all have a say - and all have differing priorities. The only way to develop a product portfolio successfully in this environment is to develop first a deep understanding of what drives each of these groups.

Another way

More visionary pharma companies are starting to realise that better use of the resources available to them can increase the chances of pursuing a research programme that will ultimately lead to commercial success. Let's examine one example of how one pharmaceutical company approached the problem.

This large pharmaceutical company decided to develop a new organisation structure to build a more customer need focused product development programme. This involved both international and local businesses, their structures and their processes.

The key to success has proved to be the overlap and interaction of the R&D and commercial functions within the organisation.

Pre-clinical development, while being the primary responsibility of R&D, is provided with assessments of the target market, competitors, the most suitable indications and their treatment requirements - current and future - by commercial teams.

In parallel with Phase I studies, again led by R&D, the commercial team develop the TPP (target product profile) after the go/no go research decision. This is sent to core subsidiaries for assessment against their local markets. The local treatment patterns and needs are then relayed back to international marketing. As a consequence the amended TPP is agreed with R&D before the end of Phase I.

Phase II and IIIa sees the most significant overlap, with commercial concerns starting to take the lead. An internal multi-functional steering group leads the customer focus, addressing areas such as customer needs, customer/market segmentation, outline positioning, strategy and forecast. Local subsidiaries provide a top-line commercial assessment based on the information provided by international marketing prior to the Phase II/IIIa boundary. This is fed into the commercial go/no go decision at the end of Phase II.

The views on strategy and positioning then guide clinical trial in Phase III to provide not only the information required for product licence approval and label claims, but also the evidence to support the core product positioning.

Finally, the product is passed to an international 'commercialisation' team some two to three years pre-launch to build the necessary pre-marketing base for the local countries. Some local countries with the necessary resource have a parallel team taking the international strategy and developing the appropriate local strategy and implementation.

The key to success has been recognising the structural changes needed to bring together the two disciplines, but also developing working practices that encourage the appropriate level of interaction between the R&D and commercial teams.

A new way of working

The successful strategy to expand product portfolios successfully will be to bridge the gap between the science-driven R&D specialism and the commercially-minded market-facing specialism. It is no longer enough to produce world-class products that breach the scientific boundaries: to succeed they will increasingly need to answer specific market needs - needs that are currently unmet and that may not be purely clinical or treatment based.

This requires a new way of working. It needs early intervention and involvement in the development process by commercial as well as scientific specialists. And it necessitates a thorough knowledge and understanding of the market in order to be able to do this.

Those pharma companies who adopt this joined-up thinking approach are destined to bring to market products that will succeed and prosper without wasting valuable sales and marketing resources in trying to promote a product which, however scientifically advanced, does not meet the needs of the new NHS.

Changing the structure: ten questions pharma companies should be asking themselves before embarking on product development:

1. Do truly commercial functions provide R&D with assessments of the target market, competitors and the most suitable indications and their treatment requirements - current and future - at the pre-clinical stage?

2. Is there commercial input into the initial Target Product Profile (TTP) in

Phase I?

3. Is the regulatory and clinical trial focus purely on obtaining a product licence or is the aim to develop the indication and label to provide maximum commercial advantage?

4. Are the right comparators being included in the clinical trials, not just to obtain registration but also to develop commercial advantage?

5. Is there a multi-functional approach to determining the TPP and the clinical trial programme end points during Phase II?

6. Is your company structured to develop customer need-based segmentation before the clinical trial programmes are fixed?

7. Can you clearly identify the bases for segmentation required to develop competitive advantage in the future market environment (thinking about the target customers and the likely competitive products post launch)?

8. Do you have processes to identify levers for health economic or outcomes advantages that then feed into product development trial structures?

9. Are the clinical trials designed to support a customer needs-based segmentation and positioning?

10. Is there a core country input into the process of determining the ideal strategy and positioning?

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