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Blockbuster Launch Evolution: Mapping Market-Entry Changes That Cause New
Products To Stumble or Soar
Presented by Chris Bogan,
Chief Executive Officer
Page | 2
Blockbuster Warm-up Quiz: Which Product Belongs With
This Peak Year Sales Number?
$13.7 billion
A
B
D E
C
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$10.283
Billion
=
Sovaldi $1.56
Billion =
Incivek
$12.41
Billion = Gilead
HCV
Franchise
$2.127 Billion
= Harvoni
Blockbuster Products Are Alive and Well – But Market-Entry Has
Evolved Radically Over the Past Decade Gilead’s Sovaldi + Harvoni franchise produced nearly 800% greater revenues in its first 12-months in market than did the previous blockbuster launch champion – Incivek, also marketed for Hepatitis C.
Source: Gilead 10K Filings and Best Practices, LLC Analysis
Comparing Champions: 1st Year Market Entry Launch Revenue and Power
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What do Darwin’s Finches and Blockbuster Launches Have
In Common?
Image Source: http://www.pbs.org/wgbh/evolution/library/01/6/images/l_016_02_l.gif
Small variations in new product launch can result in
dramatically different launch outcomes?
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Market Insight: Learning To See The
Market In Different Wavelengths &
Perspectives
Evolution of a
Blockbuster:
Page | 6
Eyes Are A Common Evolutionary Mechanism To Survive In
Nature and in The Marketplace
Market Research & Insight Functions Are The Eyes of the Enterprise
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Some Species’ Eyes Have Evolved to See the World From
Different Perspectives and With Deeper Insight
SOURCE: http://lorologiaiomiope-national-geographic.blogautore.espresso.repubblica.it/files/2013/07/peacock-mantis-shrimp.jpg
# of Photoreceptors in
Different Species Eyes
• 16 Color Photo-receptors
– Mantis Shrimp
• 5 Photoreceptors -
Butterflies
• 4 Photoreceptors - Birds
• 3 Photoreceptors -
Humans
• 2 Photoreceptors - Dogs
Mantis Shrimp The Most Sophisticated Eyes on the Planet?
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Market Research Is The Function Through Which To See
Market Opportunities — But Not All Have 20-20 Vision
(6) MARKET SHARE
When all is equal, speed navigating
markets drives share gains.
(7) GROWTH VS. DIVIDEND
Growth models need to grow faster & into
new adjacencies; dividend models can
grow slow and pass cash to shareholders.
MR is most important to growth models.
(4) MARKET
NICHES Growth paths move into market niches,
making understanding the niche critical.
(5) LAUNCH
CURVE
Launch curves are inflected up or down by
market understanding & positioning.
(2) NUMBER OF STUDIES
# of studies drives market understanding
& responsiveness.
(3) COMPETITIVE MARKETS
Rising market competition makes MR more
important & harder to conduct in specialty /
Rare disease markets
(8) MARKET CAP
Growth and profit
disproportionally drive
market capitalization. MR
enables a biosciences
growth company.
(1) MR APPROVAL TIMES
Approval speed affects number of
studies & MR productivity.
Market Research
Speed & Insight
Drives
Competitiveness
in Growth
Companies
Source: Best Practices, LLC 2015 Field Benchmark On Market Insights Process
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Not All Companies Look Into The Market As Fast, As Deep or
As Frequently – Affecting Market Insight & Launch Trajectory
Top performers find
parallel review highly
effective
Parallel
Processing
High performers average
85% fewer exception rates
than SlowCo’s
Exception Rates
0-10% High performers have
set standards for
response times across
all stakeholders
Response
Standards
High performers average
90% faster than SlowCo’s
in getting approvals
Speed of MR Approvals
1-2
days High performers actively
manage & simplify
approval processes
Approval Efficiency
High performers use
automation & digital
tracking extensively
and effectively.
Automation
Higher Vs. Lower Performance Profile
Six Key Indicators On the Dashboard of High Performance Driving Faster Market Insight
14 to 28 days =
avg. approval
times
Lower Performers
have more 31-40%
Exceptions
Low Performers
often lag in these
areas
Lower Performers do
not employ best
practice rules,
checklists & practices
Lower Performers
have no or looser
response stds.
Lower Performers
have no set review
process
Source: Best Practices, LLC 2015 Field Benchmark
Page | 10 Page | 10
Endosymbiosis: Thriving Within Your
Ecosystem
Evolution of a
Blockbuster:
Page | 11
Endosymbiosis Suggests Lessons For Thriving
Inside the Health Care Ecosystem
Endosymbiosis is a type
of symbiosis in which one
organism lives inside the
other, the two typically
behaving as a single
organism.
Q: Do human gut bacteria regulate happiness in people?
Page | 12
Biopharma & Medical Device Companies Live &
Launch Inside the Global Health Care Ecosystem
Payers
Patients
2014 US Healthcare
Expenditures
$3.8 trillion
Expenditures:
• Hospitals = $1.2 trillion
• Physicians & Clinics = $900
billion
• Prescriptions = $342 billion
Payers
• Public Payers (Medicare, Medicaid,
VA, et. al) = $1.8 trillion
• Private = $912 billion
Sources: Centers for Medicare & Medicaid Services, Office
of the Actuary, National Healthcare Statistics Group,
Source: Best Practices, LLC Analysis
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Q. Dedicated ACO/IDN Service Staff Resources: What stage is your company at in dedicating staff for each of the
following type of health care organizations?
(n=35)
7%
8%
14%
32%
36%
36%
37%
42%
58%
25%
20%
31%
29%
29%
32%
43%
19%
29%
68%
72%
55%
39%
36%
32%
20%
39%
13%
Long-term care IDNs
Nursing home IDNs
Post-acute care IDNs
Specialty care IDNs (Dialysis, Oncology)
Therapeutic area specialty care IDNs(Dermatology, Cardiovascular, etc.)
Academic teaching center IDNs
ACOs
Primary care IDNs
Hospital IDNs
Dedicated Service Group for Customer Segments
Curently Have Plan to Have in 2 years No Plans to Have
% Responses
As Integrated Healthcare Delivery Networks Have Grown in Influence and Size, Manufacturers have Scrambled To Evolve To Serve Them
Growing Specialized Field Resources To Serve New Ecosystem Constituents
Source: Best Practices, LLC 2015 Field Benchmark On IDNs & ACOs
Page | 14
Old Model: Sales Rep to Doctor
Commercial Selling Models Are Rapidly Evolving from Rep-to-Doctor
to Business-to-Business Forms To Be Effective
New Model: Business to Business
Employing sales representatives
Aligning strategy around sales
targets - high-volume writers
Physicians with practices or
power to use their own
strategies and protocols
Negotiating at the executive level
Employing dedicated teams of educators
and KAMs to partner with networks
Providing services aligned to customer
strategy and quality metrics
Doctors following network’s strategies and
protocols for disease management and
pharmacological intervention
Source: Best Practices, LLC 2015 Field Benchmark On IDNs & ACOs
Page | 15
Not All Members of The Market Ecosystem Respond The Same
– Making Market Entry Less Predictable
Public relations
campaigns,
prior
authorization
programs
Influence clinical
guidelines to
support tiering and
stage gates so only
sickest get the
medicines
Shame
Manufactur-
ers
Negotiate with other
competitor drugs
about tiering Sovaldi
if they come out with
less expensive drugs
Demanding
health outcomes
to prove efficacy
Organize
coordinated
protests to
pressure
manufacturer
Wait &
watch
Conduct cost
benefit
analysis
Accept
Sovaldi
Source: http://www.uhcpharmacyinfocus.com/article/hepatitis-c-big-
changes-coming-soon-2 & Best Practices, LLC Analysis
Create Deals To
Offer Plan
Exclusivity in
Exchange for
Discounts
UnitedHealthCare Responses to Sovaldi/Harvoni Pricing
Page | 16 Page | 16
Lifecycles Are Condensing — Spurring
Need for Deft and Earlier LCM Skills
Evolution of a
Blockbuster:
Page | 17
Monarch Butterfly Lifecycle
• Generations Involved in
Migration: 4
• Migration Period: Autumn to Spring
• Lifespan of Each Generation
• Generation 1: 6 weeks
• Generation 2: 6 weeks
• Generation 3: 6 weeks
• Generation 4: 34 weeks
(migrates)
In Nature, Lifecycle Is A Species’ Fate Map. . . In New
Product Launches, Lifecycles Are Accelerating
Source: http://www.cse.msu.edu/~enbody/MexicoTrip.html, and
http://www.nature.org/cs/groups/webcontent/@web/@rhodeisland/documents/media/monarch-butterfly-3.jpg
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Gilead Early Embraced “Planned Obsolescence” of 1st-Gen
Sovaldi To Ensure Its Own Sustained Market Leadership
“It’s interesting that we are seeking to replace the therapy that we are
just launching with the newer version less than a year after the initial
launch.” -- John Milligan, President & COO, Gilead Sciences
SOVALDI
HARVONI
1st generation Sovaldi dosage consisted of combination of Interferon for G1 & all oral regime for G2 and G3
Company foresaw innovation that included combination of Sovaldi with Ledipavir specifically for G1
Gilead plans to combine the molecule with other broader molecules that could handle all genotypes and be first in class therapy that has benefits of both fixed-dose combination and all oral regime across all genotypes
Page | 19
The Next Generation Of HCV Competition Will Be FDC’s that
Align Along The Battlefields Of Treatment, Duration & Dose
Source: http://hepatitiscnewdrugs.blogspot.in/2014/03/hepatitis-c-virus-here-comes-all-oral.html
48 Wks 24 Wks 12 Wks 8 Wks 4 Wks 0
Ea
se
Of
Us
e
Interferon +
Ribavarin + Teleprevir
(Vertex & J&J)
Sofosbuvir +
Ribavarin + interferon
(Genotype 1&4; Gilead)
Sofosbuvir +
Ribavarin (Genotype3;
Gilead)
Sofosbuvir +
Ribavarin(Genotype 2;
Gilead)
Daclatasvir +
Asunaprevir (BMS) Peritaprevir /
Ritonavir/Ombitasvir+
Dasabivir
Asunaprevir (AbbVie)
Daclatasvir
/Beclabuvir/Asunaprevir+
Sofosbuvir (BMS)
Sofosbuvir/
Ledipasvir
(Gilead)
Interferon +
Ribavarin
Page | 20
Source: Cristin Lis, Vice President, Government Affairs for Gilead
Sciences and Best Practices, LLC Analysis
Gilead Compressed Product Lifecycle – Launching Sovaldi
Harvoni and Generic Licensees in the First 12 Months 2014 Launch Year
Sovaldi
Launch
Harvoni (FDC) Generics
Page | 21 Page | 21
Pricing Strategies Require Fast
Response and Global Agility
Evolution of a
Blockbuster:
Page | 22
The Dragonfly Epitomizes Agility and “Strategic
Insight” – Exactly What Launch Leaders Aspire To
www.photomacrography.net :: View topic - Surface of dragonfly eye
www.photomacrography.net
Dragonfly eye lenses are neuronally
“hard-wired” to its brain for fast
response & computing the course of its
prey to allow interception in flight.
Page | 23
Sovaldi Claimed A Significant Price Premium to Competitors &
Earlier Generations of HCV Treatment
Incivek, $49,200
Vitrellis, $53,000
Olysio, $66,000
Sovaldi, $84,000
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
1st Generation Treatment
Even though Sovaldi was not a first in class drug, Gilead
Priced Sovaldi much higher as compared to competitors. In fact, it is around 300% higher than 1st generation treatment
and 30% higher than immediate predeccessor J&J’s Olysio. Harvoni then
entered at $94,500.
“I used to have an easy argument that treating
hepatitis C was cheaper than paying for a liver
transplant or liver cancer. . . but it’s getting a
little closer.”
-- Jonathan Fenkel, Director of Jefferson University Hospitals’
Hepatitis C Center in Philadelphia
Source: Best Practices, LLC Analysis of Sovaldi / Harvoni Launch
Page | 24
Gilead Crafted A 3-Tier Global Pricing Strategy – That Created
New Political Questions Due to Cross-border Transparency
USA: $84,000 UK: $57,000
France: $76,000
Germany: $66,000
India: $900
‘‘Gilead’s global pricing model is based on a country’s ability to pay,”
-- Gregg Alton, Executive Vice President of Corporate and Medical Affairs for Gilead
“The federal government is going to have to step in and say there’s a concern about the public welfare, and we can’t allow companies to take advantage like this,”…. “Is what they’re charging really appropriate?”
J. Mario Molina, CEO, Molina Healthcare Inc. (MOH)
Source: http://www.bloomberg.com/news/2014-03-05/hepatitis-c-drug-price-limiting-state-medicaid-approvals.html
Egypt: $900
Highest Cost
High-Medium Cost
Lowest Cost
Lowest Cost
Page | 25
In A Novel Defensive Tactic, The Nation’s Largest Pharmacy
Benefits Manager Sought To “Shame” Gilead To Drop Price
Government Agencies
“Gilead could have a great year this
year and lose all its market share a
year from now. The FDA has fast-
tracked several other medications and
we believe early 2015 is when there
will be competitors in the marketplace.
The companies that will be second and
third to the market here will have to
play catch up. We could shift the
market share as soon as a competitor
comes out. We need to start a national
debate on fairness in drug pricing.”
-- Steven Miller, CMO, Express Scripts
http://www.bloomberg.com/news/2014-04-08/express-scripts-raises-pressure-on-gilead-for-drug-price.html
Page | 26 Page | 26
The Tide Is Turning In The Market Entry
Brawn Vs. Brain Tug Of War
Evolution of a
Blockbuster:
Page | 27
Primary Care Brand Images Specialty Care Brand Images
vs.
Blockbusters Have Evolved From “Brute Force” Primary Care
Launches to Highly Targeted & Leveraged Specialty Launches
vs.
Page | 28
Sales
Total FTEs 102
Global Director 1
Sr. Director 2
Regional Director 10
Executive Therapeutic Specialist
14
Sr. Therapeutic Specialist 15
Therapeutic Specialist 62
The Launch Team Focused Market Entry Field Resources On
Access & Deep Clinical Education With HCV-Experienced Staff
Clinical Education & Information
Total FTEs 34
Sr. Director 3
Field/Associate Director
13
Clinical educator (MSL)
18
Managed Market Access
Total FTEs 14
Sr. Director 1
Director 3
Manager 10
Sales thru Therapeutic Specialists
69%
Clinical Education & Information
22%
Managed Markets Access
9%
Sovaldi / Harvoni HVC Staffing Allocation Profile (Yr 1 Estimates)
Source Best Practices, LLC Field Analysis & Estimates
Page | 29
The Productivity Rates of Brain vs. Brawn Pharma Models Have
Evolved Just As Dramatically
Primary Care
Sales Per Rep
(Blockbuster)
$1 $5
million
Specialty Care Sales
Per Rep
(Blockbuster)
$10 $40
million
Specialty Care Sales
Per Clinical Specialists
(Sovaldi / Harvoni)
$100 $120
million
Sales Productivity Per Rep in U.S. Marketplace
Page | 30 Page | 30
Produce Deeper, More Compelling
Outcomes Sooner in the Launch Cycle
Evolution of a
Blockbuster:
Page | 31
Here is A Health Outcome That Everyone Understands . . . Compliments of the Global Weight Loss Industry. . .
Image Sources: http://www.slideteam.net/healthy-food-diet-powerpoint-templates-ppt-
themes-and-graphics-0213.html
Image Source: http://www.slideteam.net/girl-loss-weight-health-powerpoint-templates-and-
powerpoint-backgrounds-0711.html
Page | 32
Source: http://www.broadinstitute.org/videos/students-ask-broadies-answer-targeted-cancer-therapy
Targeted Therapeutics Are Reversing the Tide in Battling
Some Forms of Cancer . . . Here is A Powerful Outcome
Page | 33
The Market Wants Better, Deeper Outcomes Studies Sooner –
And Different Stakeholders Value Different Types of Outcomes
N=18
Use of Health Outcomes Data to Inform Different Stakeholders
Patients Payers & HC
Providers Increasing Use
Incr
easi
ng
Use
Workplace
productivity
Analysis of safety
Resource use
Cost Analysis
Analysis of efficacy
Economic analysis
Quality of life
Burden of illness
Type of HO Data
Mostly Used with
Payers and
Patients
Type of HO Data
Mostly Used with
Payers and
Providers
Type of HO
Data Mostly
Used with HC
Providers
Payers
Source: Best Practices, LLC 2015 Field Benchmark on Outcomes
Page | 34
Image Source: The Scripps Research Institute http://www.scripps.edu/news/press/images/group_images/law_wilson_ward_kong/e2_image.jpg
HEPATITIS C’S E2
PROTEIN
Key Insights From Blockbuster Launch Evolution Analysis
The DNA of Past, Present & Future
Blockbusters Is Evolving: Small
Changes Can Produce Large and
Dramatic Effects
1
Sovaldi Rewrote Launch History –
And May Be A Tipping Point
Triggering Virulent Responses From
Other Inhabitants Of The Market
Ecosystem
2
3
View The Market Through Different
Wavelengths & Perspectives To
Inform Launch Positioning
Product Lifecycles Are
Compressing and Require Deft
Lifecycle Management Skills 5
The Tide Is Turning In The Market
Entry Brawn Vs. Brain Tug Of War –
Favoring More Consultative,
Leveraged Commercial Models
7
Enter Market As A “Symbiont” – Or
Be Treated Like A Hostile Virus – In
The Healthcare Ecosystem
4
Global Pricing Strategies Require
Increased Agility & Fast Response 6
The Market Is Demanding Deeper,
More Compelling Outcomes Sooner
in the Market Entry Cycle
8
8 INSIGHTS
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About The Speaker Chris Bogan is founder & CEO of Best Practices, LLC, a global thought leader in the field
of best practice performance improvement for companies in the bio-pharmaceutical. medical device and healthcare sector.
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E-mail: [email protected]
(Phone) 919-767-9228
Page | 36
Page | 36
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