New Product Launch Spend Report Summary
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Transcript of New Product Launch Spend Report Summary
BEST PRACTICES,®
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Best Practices, LLC Strategic Benchmarking Research
New Product Launch Spend: What It Takes to Win in the U.S. Market
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Executive Summary
Project Objectives & Methodology
Key Findings & Insights
Companies Participating in Study
Participant/ Product Demographic Data
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Project Objectives & MethodologyBest Practices, LLC developed a customized survey tool to capture industry data and deployed it to a representative sample of 27 brand & marketing leaders at 23 leading biopharmaceutical companies.
Contents:
The objective of this benchmarking study was to help biopharma leaders develop competitive launch and pre- launch activity budgets to ensure successful U.S. market entry for new products.
This data will serve as a reference or comparison point for brand and marketing leaders as they develop budgets and allocate funds for their new brands.
Industry average cost for new
pharmaceutical product launch
Average cost for specialty and
primary product launches
Percentage of budget allocated
to 12 key marketing, education and
market access activities during and
prior to launch
Timing for conducting 50+ activities
Anticipated budget & activity trends
Top 3 success factors
Study Objective:
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Universe of Learning: Companies Participating in Study Benchmark participants included 27 executives and managers at 23 leading biopharmaceutical companies.
Survey OnlyParticipating Companies
Abbott, Amylin, Astellas, Bausch & Lomb, Baxter Healthcare, Bayer HealthCare, Bristol-Myers Squibb, EMD Serono, Genzyme, GlaxoSmithKline, Inspire, Lundbeck, Merck & Co., Noven, Novo Nordisk, Onyx,
ProStrakan, Regeneron, Roche, sanofi-aventis, Shire, Teva, Xanodyne.
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Participants’ Job Titles & Functional AreasDirectors and Vice Presidents make up more than three-quarters of the benchmark class. More than half the respondents work within marketing functions or departments.
(n=27)
Participant Job Titles Participant Departments/Functions
19%
7%
7%
52%
11%
Marketing
Commercial
Managed Markets
* Other
* Other= R&D, Medical Affairs, Regulatory Affairs, Product Launch, Market Analytics, Business
Development
New Products
(n=27)
VP/EVP/ SVP
22%
Director/Senior Director/ Executive Director
60%
Manager/ Sr. Manager
11%
Other (Head, Leader)
7%
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Launch Investment Benchmarks
Research Protocol for Participants
Focus all responses on a single product launched recently into the U.S. market.
Provide total investment for launch activities during four budget years leading up to launch.
Total investment is defined as: The total U.S. investment for pre- launch/launch activities in a given budget year. Includes all resources invested in promotional (marketing), educational and market access activities. Excludes only clinical trial costs.
Launch Year: The budget year in which the product was launched.
Launch Years -1, -2 and -3: The budget years one, two and three years prior to the Launch Year.
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Launch Year Investment Averages $XXX Million
TOTAL BENCHMARK CLASS Launch Year Launch Year
-1Launch Year
-2Launch Year
-3
High $XXX $XXX $XXX $XXX
Top Quartile $XXX $XXX $XXX $XXX
Average (Mean) $XXX $XXX $XXX $XXX
Median $XXX $XXX $XXX $XXX
Bottom Quartile $XXX $XXX $XXX $XXX
Low $XXX $XXX $XXX $XXX
n= 19 16 14 9
Q. Indicate your total U.S. investment for pre-launch activities for your product in the three years prior to the U.S. product launch. Include all resources invested in promotional, educational &
market-access activities. Exclude only clinical trial costs.
Launch year spending wins a lion’s share of investment resources. For the total benchmark class Launch Year spend nearly equals the approximate sum of all previous years commercialization investments on average.
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SPECIALTY SEGMENTATION Launch Year Launch Year
-1Launch Year
-2Launch Year
-3
High $XXX $XXX $XXX $XXX
Top Quartile $XXX $XXX $XXX $XXX
Average (Mean) $XXX $XXX $XXX $XXX
Median $XXX $XXX $XXX $XXX
Bottom Quartile $XXX $XXX $XXX $XXX
Low $XXX $XXX $XXX $XXX
n= 12 8 8 4
Q. Indicate your total U.S. investment for pre-launch activities for your product in the three years prior to the U.S. product launch. Include all resources invested in promotional, educational &
market-access activities. Exclude only clinical trial costs.
Specialty Launch Year Investment Averages $XX MillionSpecialty Care launches mirror the overall investment patterns reflected in the full benchmark class with spend trending upward each year. However, investment levels at launch are lower and more compressed around the median.
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PRIMARY CARE SEGMENTATION Launch Year Launch Year
-1Launch Year
-2Launch Year
-3
High $XXX $XXX $XXX $XXX
Top Quartile $XXX $XXX $XXX $XXX
Average (Mean) $XXX $XXX $XXX $XXX
Median $XXX $XXX $XXX $XXX
Bottom Quartile $XXX $XXX $XXX $XXX
Low $XXX $XXX $XXX $XXX
n= 7 7 6 5
Q. Indicate your total U.S. investment for pre-launch activities for your product in the three years prior to the U.S. product launch. Include all resources invested in promotional, educational &
market-access activities. Exclude only clinical trial costs.
Primary Care Launch Year Investment Averages $XXX MillionMarket entry for primary care product launches consumes far greater resources than specialty launches. Correspondingly they receive two to three times greater budget resources at Launch Year to reach the much larger population of primary care physicians.
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Investment Data by Product Segment
Data is segmented by:
Projected Peak Annual Revenue
Therapeutic Areas – Oncology & Endocrine/Metabolic
Product Market Entry Position
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(n=27)
Q. What was the projected peak annual revenue (in $US) for your product before launch?
Projected Peak Annual Revenue
<$250M21%
$250M-$500M25%$750M-$1B 18%
$1B-$2B 25%
$500M-$750M
11%
Peak Annual Revenue Projections Correlate With Resource AllocationsBenchmarked products covered a wide range of market opportunities – each reflecting different projected peak annual revenues. At the high end, one-fourth hope to earn more than $1 billion peak year revenues; at the low end, 21% projected peak earnings of less than $250 million. Peak-year revenue is the metric that most clearly reflects the market opportunity assessment and corresponding market entry budgets.
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Total Launch Investment by Peak Revenue Category:
Data for Launch Year
PROJECTED PEAK ANNUAL REVENUE:
LAUNCH YEAR
# Responses in Range
Average (Mean) High Low
<$250 M 4 $XXX $XXX $XXX$250M -$500 M 5 $XXX $XXX $XXX
$500 M - $750 M 2 $XXX $XXX $XXX$750 M - $1B 3 $XXX $XXX $XXX
$1 B- $2 B 5 $XXX $XXX $XXX
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Average Spend Comparison for Each Market Entry Position
Market Entry Position Launch Year Launch Year -1
Launch Year -2
Launch Year -3 TOTAL
Differentiated Product in Novel Treatment Area $XXX $XXX $XXX $XXX $XXX
Differentiated Product Entering Established Market $XXX $XXX $XXX $XXX $XXX
Crowded Market Upstart Product $XXX $XXX $XXX $XXX $XXX
Crowded market products spend less than one-third overall than do differentiated products in either novel or established areas, however, they close a large portion of that gap in the final year, when their spending increases nearly eight-fold over Year -1.
(Total n=27)
Average Total Spend by Market Entry Position
Differentiated products entering established markets have the highest total spend, with the greatest difference occurring in Year-1.
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Launch ActivitiesBenchmark partners were asked to indicate which launch activities they fund within each of the following categories during the last four budget years leading up to launch.
Agency Fees (excluding DTC)
Direct to Consumer & Advertising Expenses
Health Economics/ Outcomes Research
Launch Meeting/ Kickoff
Managed Markets/Market Access
Market Research/Analytics (excluding DTC)
Medical Affairs
Patient Education/ Assistance
Physician Education
Sales Force Preparation
Other
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Activities Included in Agency Fees Spend
0%
41%
76%
76%
100%
Other (specify):
Retainers
Public Relations
Communications/Publications
Promotional/Advertising
Key activities funded by participants within the Agency Fees budget category were promotion/advertising and communications/publications. Promotion was the activity funded by the most companies in the Launch Year, Year -1 and Year -2. In the Year -3, the greatest number of companies funded communications/publications activities.
LaunchYear -3 Year -2 Year -1
33% 80% 92%
83% 60% 85%
67% 40% 54%
17% 40% 38%
0% 10% 0%
Pre-Launch
AGENCY FEES (excluding DTC)
n = 13n = 10n = 6 n = 17Other (Year -2):• Positioning, campaign development
Q. Please check all of the listed activities that were included in your product's Year -3, Year -2, Year -1 and Launch Year budgets.
=most frequent =most frequent activity per yearactivity per year
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Activities Expected to Gain Funding in Near Future
Q. In your opinion, how will recent and anticipated market changes impact funding levels for the following types of launch activities over the next 24-36 months?
Agency fees (excluding DTC)
Launch meeting (kickoff)
Market research/analytics (excluding DTC)
Sales force preparation
Samples
DTC
Physician education
Patient education/ assistance
Medical affairs
Managed markets/market access
Health economics/outcomes research
Significant increase Some increase
96%
84%
80%
60%
36%
36%
32%
32%
32%
16%
12%
Total Increase
(n=29)(n=29)12%
16%
24%
28%
28%
28%
36%
52%
72%
60%
56%
% Responses
8%
4%
4%
8%
8%
8%
24%
40%
Health Outcomes and Health Economics Research are expected to grow significantly in importance in the next three years, with 97% projecting spending increases there. A majority of participants also expect increases for managed markets, medical affairs and patient education spend.
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Launch Investment Allocation
Participants indicated their total U.S. investment for pre- launch activities for their respective product in four different budget years: Launch Year, Year -1, Year -2, and Year -3.
Budget numbers provided include all resources invested in promotional, educational & market-access activities, excluding only clinical trial costs.
Slides in this section exhibit average, high and low spend allocated for activities in 12 categories for the Launch Year and the three years preceding launch.
Data is provided for the full benchmark class. In addition, data is provided for the following benchmark class segments: Primary care products, specialty products and Oncology products.
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Investment Allocation by Activity Category (1) Total Benchmark Class: Launch Year & Launch Year -1
Activity Category Launch Yr. n = 18 Year -1 n = 14
High Average Low High Average Low
Agency fees (excluding DTC) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
DTC & Advertising Expenses $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Health economics/ outcomes research
$XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Managed markets/ market access
$XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Market research/ analytics (excluding DTC)
$XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Medical affairs $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Patient education/ assistance $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Physician education $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Sales force preparation $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Other Marketing activities $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Launch meeting (kickoff) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Samples $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX* $70 mil response not included in calculations. * $50 mil and $13.8 mil responses not included in calculations.
Yellow highlights indicate highest three spend areas for each year. Red circles indicate activities for which Year -1 spend exceeds Launch Year investment.
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Success Factors
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Top Areas to Consider in Setting Launch Budgets
Q. What are the three most important success factors to consider in establishing and allocating new product launch budgets in today’s market?
Verbatim Responses:
“Good definition of the key influencers & decision makers.”
“Getting medical information/education to physicians without use of sales reps.”
“Competitive differentiation for HE/OR benefit.”
“Use new/digital vehicles with field force, physician, payer, patient.”
“Investment in physician education (CME & Promotional).”
“Expertise/presence in market today vs. being new entrant.”
“Ensure managed marketing is adequately funded.”
“Differentiating the brand via strategic marketing.”
“Using alternative marketing sources/direct to physician.”
“Creativity and collaboration from the team.”
“Focus on fundamentals.”
“Touch - the number of thought leaders that touch the drug either in preclinical or clinical settings pre-launch.”
“Research/phase III.”
Success Factor Categories
(n=25) 13%
13%
13%
17%
21%
21%
25%
33%
38%
38%
50%
Sufficient Investment
Favorable Co-pay
Launch Trajectory
Sales Force Preparation
Physician Access
Product Differentiation
Patient Education/Awareness
Data - Clinical, Health Economics/ Outcomes, Comparative Effectiveness
Market Research/Market Analytics Data
Physician/KOL Awareness/ Education
Managed Care Access/ Reimbursement
% Responses
Other: Experience in new market, patient assistance, understanding competition, understanding how product will be paid for, team collaboration, advocacy.
Survey participants identified Managed Care access and reimbursement, physician awareness, KOL relationships, and solid market research as the most important areas to consider in establishing successful new product launch budgets.
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Most Important Future Activities
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Activities for Successful Future Specialty Product Launch
Q. Within the next 24-36 months, what launch activities (traditional or emerging) do you think will be the Top Three most important to achieving a successful launch for a specialty product?
(n=25)
Top Activity Categories Verbatim Responses:
“Targeted research activities that alter the standard of care in settings where the drug is or will be used most frequently.”
“Elucidating clinically significant differentiation vs. standard of care.”
“Use of novel channels to more frequently reach and connect with end users (Internet).”
“Clear patient (and payer) value proposition.”
“Consumer marketing via internet and social media.”
“Non-personal education and promotion to physicians.”
“Reimbursement support/Pharmacoeconomics.”
“Outcomes Research and Studies - Comparative Outcomes.
“Claims data analysis.”
“Interactive educational tools.”
“Evidence based guidelines for product use.”
“Clinical outcomes data/post marketing.”
Physician Access
Patient Education
Value Proposition
KOL Relationships
Product Differentiation/Positioning
New Channels (e.g., social media)
Health Outcomes/Economics Research
Physician Education
Sales Force Preparation
Market Data & Analytics (e.g., segmenting, forecasting, pricing)
Managed Care Access/Reimbursement 44%
28%
16%
28%
28%
28%
16%
12%
12%
12%
12%
% Responses
Other: CI, reimbursement landscape research & prep, test promotional campaign, interactive educational tools, post-marketing outcomes data, attend ad boards, use evidence-based guidelines, strong value proposition
Nearly half the participants expect managed care access and reimbursement activities to be among the Top 3 most important product launch activities over the next few years. Also key to launch success will be physician education, health outcomes research, sales force prep and market data & analytics.
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About Best Practices, LLC
Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning
strategies of world-class companies.
Best Practices, LLC6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517
www.best-in-class.com