Get the best from your R&D team
pharmafile | December 6, 2006 | Feature | Business Services, Research and Development |Â Â R&D, recruitmentÂ
One of the key drivers of much of the recent merger and acquisition activity within the pharmaceutical industry is the need to build a pipeline of new products that can be rapidly brought to market. Further to this, to obtain the level of ROI now required by shareholders, each pipeline candidate must have the potential to deliver a sustainable competitive advantage over existing and future competition. Finally, each one must come to market with sufficient promise and supporting data to gain the support of non-prescribing stakeholders.
It is surprising, then, that new product development (NPD) is not always the top priority for senior marketing or commercial management, until you recognise the immediate priority of marketing is satisfying customer demand. It's also a fact, though, that defending; maintaining and strengthening existing brands might be a higher priority commercially. Certainly, where the responsibility for NPD sits with teams, which also have the task of supporting existing brands, the potential for a lack of focus on NPD is obvious.
A sound early strategy
During early NPD activities, a lack of commercial focus, manpower, financial resources, and even recognition can make it difficult to identify the key thought leaders in the field, negotiate access to supportive technologies/intellectual property or even follow-on compounds at sensible prices.
If this is allowed to continue, then by phase III, the development strategy will follow the easy path to just meet anticipated regulatory hurdles, with the result that marketing is left to build a brand that meets the customer's needs with less than ideal materials. Furthermore, weak relationships with the key thought leaders in the field can make it even more difficult to recover from this position. The opportunity to obtain real insight into the needs of the market or potential new customers and to shape the market before launch will be lost.
The involvement of the marketing or commercial department in NPD may well be through an appropriate franchise/department director, who will find a commercial home for the new product within their existing business. However, many companies today find themselves in the position of breaking new ground or entering unfamiliar market territory, and it is here we find the highest risk of new product failure.
Without early commercial input and clear commercial objectives, NPD is often left purely in the hands of the research scientists. Scientists clearly play a huge and vital role in NPD but it is a role that sometimes threatens to overshadow the commercial imperatives of what is, at the end of the day, a business. Inevitably, the priorities of research scientists and marketers can sometimes diverge, and when this happens, the whole NPD process can stall or be driven by the needs of in-house scientists, which no pharmaco can afford to let happen.
Getting the right team
The founding member of the NPD team for a new chemical entity is inevitably likely to be the research scientist who made the original discovery. Their first commercial contact is then the legal specialist who protects their patents and identifies their freedom to operate. If, as is likely, the research scientist will need access to the IP or assets of other scientists in the field, they will call on the services of the business development department, by which time the product is in pre-clinical development.
So, how do we ensure that everyone, scientists and commercial marketers, are strategically driven from the start, with the right level of commercial focus? It's an intractable question, and one, which has troubled senior managers in the industry for decades. But in this time of unprecedented commercial, regulatory and market squeeze, it's a problem that needs to be nailed once and for all.
It is the responsibility of senior management to ensure that the right team structures are in place; but more than that, they need to engender a culture in which the inputs of all disciplines are valued and, most of all, channelled into achieving the company's corporate aims. In other words, this is something which needs to be tackled at a macro-management level.
The early appointment of a commercially responsible and focused NPD director to set the course for NPD is the obvious solution. The NPD director will then oversee the formation of a number of high performing teams to drive the NPD process. Team members will consist of research scientists, legal experts and business development specialists, as mentioned above. These will be joined by manufacturing, quality control, clinical and regulatory, specialists as part of the core team chaired by the appropriate commercial manager.
However, such roles can be very frustrating when they are under-resourced and do not have the support of senior management. Even the most diligent planning, negotiating, and project management can be undermined by the short-term business demands on NPD team members.
Just where NPD sits in a company will have a great bearing on its success and its ability to compete for focus, attention and resources. In larger companies, the situation is usually a little more clear-cut, where dedicated project teams will be concentrating on NPD alone.
However, in smaller companies, where an individual involved in the NPD process will probably also have a more pressing responsibility for one or more existing brands – brands which are already out there in the marketplace, driven by real, measurable sales targets – the focus can be lost.
Why not, therefore, simply take the project-based route, in smaller organisations with additional NPD responsibility allocated to representatives of each functional department? The main barriers here are conflicts with the directors of individual departments concerning manpower resources.
A matrix approach takes the best bits of both models. However, it will only be successful with the support of departmental directors who are willing with corporate support to write into their departmental objectives the need to achieve agreed NPD milestones.
Cost-effective research
With clear strategic objectives in place and the organisation structure to deliver the optimum resource for NPD, the individual expertise of the core team can be focused on maximising the commercial potential of the pipeline candidates.
Success in tomorrow's market will depend on turning today's pipeline candidates into tomorrow's unique pharmaceutical brands that offer customers strong brand values and are perceived as being key to the performance of their role.
The vital tool available to marketers that provides the platform for building future brands is the validated target product profile (TPP). Getting the structure and decision-making process in place and building high performing NPD teams is only part of the answer. Equally important is developing a robust target product profile (TPP) tailored to the needs of your target market segments – and again, close co-operation between the clinical and the commercial departments is vital.
Inevitably, scientific researchers will want to work on what is scientifically interesting, often taking an understandable but unhelpful ownership of a product as 'my baby'. This can lead to the product being developed purely along the lines of what is scientifically possible, rather than what is commercially valuable.
Carrying on down a scientifically interesting, but commercially low-value, road won't just lead to a low return, it will rob other potentially more useful developments – both scientific and commercial – of resources and focus.
Intelligence gathering
Return on investment (ROI) will be influenced at the earliest stages of new product development (NPD) by the level of knowledge, customer understanding and business intelligence the NPD team can gather. Major investment decisions taken at each stage of development will impact the cost and progress of clinical development.
During phase I, effective stakeholder mapping undertaken by the NPD team provides the company with the ideal opportunity to look beyond the innovators in the field, who are unlikely to be the source of long-term brand loyalty. Building early relationships with up-and-coming thought leaders that have real influence on their peers will provide the opportunity to shorten the phase I/II development time lines and reduce the costs by early negotiation with key non-prescribing stakeholders on study endpoints and patient selection.
Such an approach has already been successfully undertaken by a number of research organisations operating in the field of oncology. Following negotiation with the FDA, rapid market entry can be gained through special protocol assessments (SPA). The company can obtain a licence through a rolling phase III study as soon as the FDA is satisfied agreed endpoints have been achieved and before the formal end of the study.
Moving into phase III, the role of the NPD team becomes focused on blending the regulatory activities required to obtain product approval with the need to ensure a cost-effective, medical solution that meets a real, currently poorly satisfied customer need. When pivotal phase III studies are undertaken by future customers, who can support the reimbursement, formulary approval and adoption of your brand, and not just fast recruiters known to CROs, rapid uptake becomes a realistic proposition.
And, of course, all of the above requires the kind of corporate support, early investment and drive from fully empowered high-performing teams.
Identify your target
The key is for everyone in the team to understand the market and to have a deep competitive insight. One of the main areas where education is needed is for researchers to understand the opportunity cost of the scientific work they are carrying out, not just against other potential developments within their own therapy areas, but against other therapy areas in which the company could be investing resources for a greater return.
The TPP will provide the benchmark against which the organisation must measure the potential value of pipeline candidates. Too often, the technical benchmarks and the commercial benchmarks become mixed up in developing the TPP, which can lead to a lack of focus and ultimately mediocrity. A further common error is to allow the TPP to be unduly influenced by a strong product candidate. In this situation, the document becomes simply a list of the attributes delivered by the current product candidate.
To avoid this situation, the TPP development process must be undertaken before and independently from any potential product candidate assesment. Once the key market attributes have been identified and their priority agreed, each attribute is allocated an acceptable, unacceptable or best performance level with reference to the competitive environment and/or customer expectations at launch. Ideally, the completed document should be formally approved by the team and signed off by senior management. If it is considered desirable, external validation may also be obtained.
The best of both
A well worked-out TPP, validated by customers, provides the organisation with a clear competitive advantage. Provided that the chosen attributes are focused on meeting real customer needs in the target segment, this will provide the platform on which to build strong brands.
This identifies, perhaps, the central dilemma facing those attempting to combine clinical and commercial expertise into a NPD project team: pushing the boundaries of science is what comes naturally to scientists; satisfying customer needs is what comes naturally to marketers. If you can combine the best of both, you will have a winner but satisfying the needs of your future customers must come first.
Starting at the top, clear corporate objectives must be set for the NPD process aimed at maximising the commercial value of the product pipeline. Early appointment of a commercial project manager, who is responsible for building around them high-performing teams, is an absolute requirement. Functional directors must be supportive of NPD activities and ensure that achieving NPD milestones is a focused management objective for each of their reports that participates in the NPD process.
With a robust organisation in place, the NPD team must build a set of validated TPPs focused on the needs of the segments they choose to operate in. These TPPs will then be used to benchmark potential acquisitions and existing pipeline candidates at all stages of development on at least an annual basis.
This will then allow the organisation to build a pipeline capable of providing the high value brands that will provide the kind of financial returns demanded by the investors in the pharmaceutical industry today.
John Lyttle is a consultant with The MSI Consultancy. He can be contacted at jlyttle@msi.co.uk; or visit www.msi.co.uk
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