New Product Launch Spend Report Summary

538 views

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
538
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
18
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

New Product Launch Spend Report Summary

  1. 1. New Product Launch Spend:What It Takes to Win in the U.S. Market Best Practices, LLC Strategic Benchmarking Research 1 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  2. 2. Executive Summary Project Objectives & Methodology Key Findings & Insights Companies Participating in Study Participant/ Product Demographic Data 2 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  3. 3. Project Objectives & MethodologyBest Practices, LLC developed a customized survey tool to capture industry data anddeployed it to a representative sample of 27 brand & marketing leaders at 23 leadingbiopharmaceutical companies. Study Objective: Contents: The objective of this  Industry average cost for new benchmarking study was to pharmaceutical product launch help biopharma leaders develop competitive launch and pre-  Average cost for specialty and launch activity budgets to primary product launches ensure successful U.S. market  Percentage of budget allocated entry for new products. to 12 key marketing, education and market access activities during and This data will serve as a reference or comparison point prior to launch for brand and marketing leaders  Timing for conducting 50+ activities as they develop budgets and  Anticipated budget & activity trends allocate funds for their new  Top 3 success factors brands. BEST PRACTICES, 3 ® Copyright © Best Practices, LLC LLC
  4. 4. Universe of Learning: Companies Participating in StudyBenchmark participants included 27 executives and managers at 23 leadingbiopharmaceutical companies. Survey Only Participating 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. BEST PRACTICES, 4 ® Copyright © Best Practices, LLC LLC
  5. 5. Participants’ Job Titles & Functional AreasDirectors and Vice Presidents make up more than three-quarters of the benchmarkclass. More than half the respondents work within marketing functions or departments. Participant Job Titles Participant Departments/Functions Other (Head, Leader) Marketing 52% Manager/ VP/EVP/ 7% SVPSr. Manager 11% 22% Commercial 11% New Products 7% Managed 7% Markets 60% * Other 19% Director/Senior Director/ * Other= R&D, Medical Affairs, Regulatory Affairs, Executive Director Product Launch, Market Analytics, Business Development(n=27) (n=27) BEST PRACTICES, 5 ® Copyright © Best Practices, LLC LLC
  6. 6. 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. 6 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  7. 7. Launch Year Investment Averages $XXX MillionLaunch year spending wins a lion’s share of investment resources. For the totalbenchmark class Launch Year spend nearly equals the approximate sum of allprevious years commercialization investments on average. 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. TOTAL BENCHMARK Launch Year Launch Year Launch Year Launch Year CLASS -1 -2 -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 BEST PRACTICES, 7 ® Copyright © Best Practices, LLC LLC
  8. 8. Specialty Launch Year Investment Averages $XX MillionSpecialty Care launches mirror the overall investment patterns reflected in the fullbenchmark class with spend trending upward each year. However, investment levelsat launch are lower and more compressed around the median. 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 Launch Year Launch Year Launch Year SEGMENTATION -1 -2 -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 BEST PRACTICES, 8 ® Copyright © Best Practices, LLC LLC
  9. 9. Primary Care Launch Year Investment Averages $XXX MillionMarket entry for primary care product launches consumes far greater resources thanspecialty launches. Correspondingly they receive two to three times greater budgetresources at Launch Year to reach the much larger population of primary carephysicians. 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 Launch Year Launch Year Launch Year SEGMENTATION -1 -2 -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 BEST PRACTICES, 9 ® Copyright © Best Practices, LLC LLC
  10. 10. Investment Data by Product SegmentData is segmented by: Projected Peak Annual Revenue Therapeutic Areas – Oncology & Endocrine/Metabolic Product Market Entry Position 10 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  11. 11. Peak Annual Revenue Projections Correlate With Resource AllocationsBenchmarked products covered a wide range of market opportunities – each reflecting different projectedpeak annual revenues. At the high end, one-fourth hope to earn more than $1 billion peak year revenues; atthe low end, 21% projected peak earnings of less than $250 million. Peak-year revenue is the metric that mostclearly reflects the market opportunity assessment and corresponding market entry budgets. Q. What was the projected peak annual revenue (in $US) for your product before launch? Projected Peak Annual Revenue $1B-$2B 25% 21% <$250M $750M-$1B 18% 25% $250M-$500M 11% (n=27) $500M-$750M BEST PRACTICES, 11 ® Copyright © Best Practices, LLC LLC
  12. 12. Total Launch Investment by Peak Revenue Category: Data for Launch YearPROJECTED PEAK # Responses AverageANNUAL REVENUE: High Low in Range (Mean) LAUNCH YEAR <$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 BEST PRACTICES, 12 ® Copyright © Best Practices, LLC LLC
  13. 13. Average Spend Comparison for Each Market Entry PositionCrowded market products spend less than one-third overall than do differentiatedproducts in either novel or established areas, however, they close a large portion ofthat gap in the final year, when their spending increases nearly eight-fold over Year -1. Average Total Spend by Market Entry Position Launch Launch Launch Market Entry Position Launch Year TOTAL Year -1 Year -2 Year -3 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 Differentiated products entering established markets have the highest total spend, with the greatest difference occurring in Year-1.(Total n=27) BEST PRACTICES, 13 ® Copyright © Best Practices, LLC LLC
  14. 14. Launch ActivitiesBenchmark partners were asked to indicate which launch activitiesthey fund within each of the following categories during the lastfour 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 14 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  15. 15. Activities Included in Agency Fees SpendKey activities funded by participants within the Agency Fees budget category werepromotion/advertising and communications/publications. Promotion was the activityfunded 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.Q. Please check all of the listed activities that were included in your products Year -3, Year -2, Year -1 and Launch Year budgets. AGENCY FEES (excluding DTC) Pre-Launch Launch Year -3 Year -2 Year -1 Promotional/ 33% 80% 92% 100% Advertising Communications/ 83% 60% 85% 76% Publications 67% 40% 54% Public Relations 76% 17% 40% 38% Retainers 41% =most frequent activity per year 0% 10% 0% Other (specify): 0% Other (Year -2): n=6 n = 10 n = 13 n = 17 • Positioning, campaign development BEST PRACTICES, 15 ® Copyright © Best Practices, LLC LLC
  16. 16. Activities Expected to Gain Funding in Near FutureHealth Outcomes and Health Economics Research are expected to grow significantly inimportance in the next three years, with 97% projecting spending increases there. Amajority of participants also expect increases for managed markets, medical affairs andpatient education spend. 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? Total Significant increase Some increase Increase Health economics/outcomes research 40% 56% 96% Managed markets/market access 24% 60% 84% Medical affairs 8% 72% 80% Patient education/ assistance 8% 52% 60% Physician education 36% 36% DTC 8% 28% 36% Samples 4% 28% 32% Sales force preparation 4% 28% 32% Market research/analytics (excluding DTC) 8% 24% 32% Launch meeting (kickoff) 16% 16% Agency fees (excluding DTC) 12% 12% (n=29) % Responses BEST PRACTICES, 16 ® Copyright © Best Practices, LLC LLC
  17. 17. 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. 17 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  18. 18. Investment Allocation by Activity Category (1) Total Benchmark Class: Yellow highlights indicate highest three spend areas for each year. Red circles indicate activities for which Launch Year & Launch Year -1 Year -1 spend exceeds Launch Year investment. Activity Category Launch Yr. n = 18 Year -1 n = 14 High Average Low High Average LowAgency fees (excluding DTC) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXDTC & Advertising Expenses $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXHealth economics/ outcomes $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXresearchManaged markets/ market $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXaccessMarket research/ analytics $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX(excluding DTC)Medical affairs $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXPatient education/ assistance $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXPhysician education $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXSales force preparation $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXOther Marketing activities $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXLaunch meeting (kickoff) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXXSamples $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX * $70 mil response not included in calculations. * $50 mil and $13.8 mil responses not included in calculations. BEST PRACTICES 18 ® Copyright © Best Practices, LLC , LLC
  19. 19. Success Factors 19 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  20. 20. Top Areas to Consider in Setting Launch BudgetsSurvey participants identified Managed Care access and reimbursement, physicianawareness, KOL relationships, and solid market research as the most important areas toconsider in establishing successful new product 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? Success Factor Categories Verbatim Responses: Managed Care Access/ Reimbursement 50% “Good definition of the key influencers & decision makers.” Physician/KOL Awareness/ Education 38% “Getting medical information/education to physicians without use of sales reps.” Market Research/Market Analytics Data 38% “Competitive differentiation for HE/OR benefit.” Data - Clinical, Health Economics/ 33% Outcomes, Comparative Effectiveness “Use new/digital vehicles with field force, physician, payer, Patient Education/Awareness 25% patient.” 21% “Investment in physician education (CME & Promotional).” Product Differentiation “Expertise/presence in market today vs. being new entrant.” Physician Access 21% “Ensure managed marketing is adequately funded.” Sales Force Preparation 17% “Differentiating the brand via strategic marketing.” Launch Trajectory 13% “Using alternative marketing sources/direct to physician.” Favorable Co-pay 13% “Creativity and collaboration from the team.” (n=25) Sufficient Investment 13% “Focus on fundamentals.” % Responses “Touch - the number of thought leaders that touch the drugOther: Experience in new market, patient assistance, either in preclinical or clinical settings pre-launch.”understanding competition, understanding how productwill be paid for, team collaboration, advocacy. “Research/phase III.” BEST PRACTICES, 20 ® Copyright © Best Practices, LLC LLC
  21. 21. Most ImportantFuture Activities 21 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC
  22. 22. Activities for Successful Future Specialty Product LaunchNearly half the participants expect managed care access and reimbursement activities tobe 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, salesforce prep and market data & analytics. 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? Top Activity Categories Verbatim Responses: Managed Care Access/Reimbursement 44% “Targeted research activities that alter the standard of care Market Data & Analytics in settings where the drug is or will be used most frequently.” 28% (e.g., segmenting, forecasting, pricing) “Elucidating clinically significant differentiation vs. standard Sales Force Preparation 28% of care.” 28% Physician Education “Use of novel channels to more frequently reach and 28% connect with end users (Internet).”Health Outcomes/Economics Research 16% “Clear patient (and payer) value proposition.” New Channels (e.g., social media) 16% “Consumer marketing via internet and social media.” Product Differentiation/Positioning 12% “Non-personal education and promotion to physicians.” KOL Relationships “Reimbursement support/Pharmacoeconomics.” Value Proposition 12% “Outcomes Research and Studies - Comparative Outcomes. Patient Education 12% 12% “Claims data analysis.” (n=25) Physician Access % Responses “Interactive educational tools.” “Evidence based guidelines for product use.”Other: CI, reimbursement landscape research & prep, test promotionalcampaign, interactive educational tools, post-marketing outcomes data, “Clinical outcomes data/post marketing.”attend ad boards, use evidence-based guidelines, strong value proposition BEST PRACTICES, 22 ® Copyright © Best Practices, LLC LLC
  23. 23. About Best Practices, LLCBest Practices, LLC is a research and consulting firm that conductswork based on the simple yet profound principle that organizationscan chart a course to superior economic performance by studyingthe best business practices, operating tactics and winning strategies of world-class companies. Best Practices, LLC 6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517 919-403-0251 bestpractices@best-in-class.com www.best-in-class.com 23 Copyright © Best Practices, LLC BEST PRACTICES, ® LLC

×