80% of Success Is Just Showing Up

THE MARKET

Continuing on with the 10 SMART questions, pharma companies need to ask, after defining an overall market opportunity, a pharmaceutical company needs to understand the prescribers, the competition and the regulatory environment in which it will be operating.

V. Who Are The Prescribers And What Do They Think?

With a defined patient pool, it is much easier to get a handle on the prescribers and the settings in which they operate. As product development focuses on more targeted indications, understanding the prescribers in terms of who they treat and how they treat is critical to the development of a compound. KOLs are called Key Opinion Leaders for a reason; they help shape and design evolving treatment guidelines. And practicing physicians do what they do best: they practice. Through both qualitative discussions and quantitative surveys, being able to get at those professional medical practitioner insights underlie the successful development and ultimate adoption of a given product.

VI. Competitive intensity

According to Andrew Grove, former CEO of Intel, only the paranoid survive. This is as true in pharmaceuticals as it is in computer chip-making. Clean slates are set up to keep score. Clean rooms are the battle grounds of competition. And clean hands are needed for fair fights. In an industry driven by innovation, mass production and evolving needs, the competitive intensity of existing and future markets will either unleash or damper the potential of a given product. What looks good in the current market may look less attractive in the future given competitive activities.

Like macromolecular crowding, indication opportunities appear and then narrow depending on competitive products emerging in a therapeutic space at any given point in time. This crowding results in opportunities changing in radical ways, and not always to the good. Identification of those emerging market entrants make an impact analysis necessary for defining the evolving opportunity and assessing how the commercial opportunity could possibly be reduced.
The product landscape of the future needs to be defined in terms of both direct and indirect competition. While it is important to quantify the potential impact and order of entry of competitive pipelines, it is just as important to value the impact of indirect competition, particularly in the treatment algorithm.

For example, what impact could a novel treatment for pre-diabetic patients have on the reduction of patients progressing to diabetes or what happens to second line cancer treatment therapies when a new first line treatment becomes available? Or how do you think about the diagnosis and treatment of a disease when a new test or a new bio-marker shows high degrees of correlation?

The continuing emergence of bio-markers and companion diagnostics will also revolutionize the use and the application of assets in development. As more and more companies focus on personalized medicine, they will be seeking and using biomarkers to diagnose disease risk in individual patients and appropriate companion diagnostics to assess the safety and efficacy of drugs in specific patient sub-populations. In effect, adopting the Wayne Gretsky hockey quote of skating to where the puck is going to be not where it is.

VII. What Is The Optimal Clinical Development Path and Associated Regulatory Hurdles?

As the market is being defined in terms of patients, prescribers and competitors, just getting the product on the market requires an additional level of analysis. The clinical development path in terms of defining the market differentiation based on meaningful endpoints affects acceptance by prescribers, payers as well as regulators. The analysis shapes the delta in end points that make or break a product in terms of intent to use as well as intent to prove.

Woody Allen said that 80% of success is just showing up. The regulatory pathway becomes a hurdle to just showing in the medical market space. Increased demands on safety and improved efficacy, as regulators become more conservative and shy away from risk, is significantly reducing the number of drug approvals annually. What is the thought process and guidelines will regulators use? How will the gauntlet of advisory boards be addressed? Defining that shining path through becomes an important light at the end of the development tunnel.

But Woody Allen, while a clinician of universal angst, was never a clinician who had to make life or death treatment decisions. He also said, “I don’t want to achieve immortality through my work. I want to achieve it by not dying.” Just getting regulatory approval is not enough. It is important, starting all the way back in the clinical development process, to target the endpoints that will demonstrate clinically meaningful differentiation.

And what happens if the light grows dim? Clinical development needs to also include contingency options. The various decision paths a drug can follow depends on the outcomes realized at different milestones. It is important for companies to think through and plan the various options as early as possible in clinical development to contain intrinsic value and to mitigate risk.

VIII. How Do Payers, Market Access, Pricing and Reimbursement Affect The Opportunity?

Defining the impact of market access parameters on the target patient pool and the willingness of payers to pay is not always neat nor is it nice. Whether it is the National Institute for Health and Clinical Excellence (NICE) in the UK or the various US private and public payers, the payer algorithm needs to be tightly defined and aligned with the treatment algorithm to understand product coverage, acceptance and pricing. How do these payers think? What analogs will provide a guide to that thinking? How do they value the differentiation of the science behind the product and the needs the product is seeking to address?

As if answering these questions weren’t tough enough, pricing goes into a whole new level of complexity. What should the reference price be? What is the relationship between price, formulary status, access and eventually market share? What is the optimal pharmacoeconomic value of a drug? These elements of value affect the ability to price in the market and the access available to that target patient pool depending on reimbursement.

Whether the health system is private insurance as in the US or Government as with the NHS in the UK or different governments in the EU or self-pay in emerging markets, the ability for patients to bear the cost burden is directly and crucially related to the amount of money they have available for treatment.

This issue becomes particularly complex in emerging markets where there are large patient populations that are rapidly shrunk when self-pay is taken into account. In contrast to other kinds of questions where differentiated relationships can be fairly straightforward, payers, access and reimbursement has its own unique set of complexities.