Lifecycle Management Excellence: High-Performing Strategies Used to Maximize Potential of Mature Brands Report Summary


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Lifecycle Management Excellence: High-Performing Strategies Used to Maximize Potential of Mature Brands Report Summary

  1. 1. Lifecycle Management Excellence: High-Performing Strategies Used to Maximize Potential Of Mature Brands Best Practices, LLC Strategic Benchmarking ResearchCopyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  2. 2. Table of Contents Executive Summary, pp. 3-11 Research Overview, pp. 4 Benchmark Participants, pp. 5 Key Findings & Insights, pp. 6-11 Corporate LCM Goals & Policies, pp. 12-15 Use of Key LCM Strategies, pp. 16-19 Comparative Effectiveness of Key LCM Strategies, pp. 20-22 Relative Costs of Key LCM Strategies, pp. 23-25 Relative Time of Key LCM Strategies, pp. 26-28 ROI of Key LCM Strategies, pp. 29-31 Barriers of Key LCM Strategies, pp. 32-35 Key Strategy Profiles, pp. 36-39 Gains from Using LCM Strategies, pp. 40-46 Strategies Weakened By Regulation or Reform, pp. 47-48 Mature Brand Organizations, pp. 49-61 Success Factors & Lessons Learned, pp. 62-66 Case Example: Pfizer’s Lipitor, pp. 67-70 Appendix: Participant Demographic Data, pp. 71-75Copyright © Best Practices®, LLC 2 BEST PRACTICES, ® LLC
  3. 3. Research Project Objective & Methodology Best Practices, LLC conducted this benchmarking study to examine the relative effectiveness of 20+ strategies for extending the commercial life of mature pharmaceutical products. The study also compares the goals and responsibilities of Mature Brand (MB) organizations. Business Issue: With expiring patents & thin pipelines, pharmaceutical companies are increasingly focused on lifecycle management (LCM) planning to make the most of each brand at every stage of its life, including the somewhat neglected back end. In this context, executives seek to understand what strategies and corporate structures are most effective for extending the commercial life of its mature products. Key Areas of Investigation: Field Research : Result: 1. Success rates & ROI of different Deployed online Provide strategies that leading companies have survey to marketing & used to maximize mature-brand value representative brand leaders group of pharma with directional 2. Relative cost, time, complexity, & brand & data & proven regulatory barriers encountered with marketing practices they using each strategy leaders with can use to gain 3. An overview of the operation, expenses, experience in maximum value responsibilities & business impact of LCM. from late-life dedicated mature brand (MB) groups products Sample Size: 25Copyright © Best Practices®, LLC 3 BEST PRACTICES, ® LLC
  4. 4. Universe of Learning: Benchmark Participants Research participants included 25 executives and managers from 18 different pharmaceutical and biotech companies. Respondents represented more than a dozen therapeutic areas. On average, this seasoned group boasts U.S. leadership experience with eight mature products. Two-thirds of this group currently work at the director level or above. Benchmark Class:Copyright © Best Practices®, LLC 4 BEST PRACTICES, ® LLC
  5. 5. Key Findings: Selected Benchmark Metrics The following key findings emerged from this study. Litigation Has Highest ROI: Overall, litigation strategies achieved the highest ROI for participants, with 40% realizing more than 100% ROI and another 20% realizing over 50%. Fixed dose combination, one of the more expensive strategies, had the second highest ROI rating. With respect to time and costs, branded/authorized generics was the most effective strategy in garnering a high ROI. Most Used LCM Strategies: Almost two-thirds of participants use strategic pricing or publication strategies as a lifecycle management tactic. Efficiency: Strategic pricing is rated by the benchmark class as the most cost- and time-efficient strategy. Time Used: On average, benchmark partners used each LCM strategy for 21 months in support of mature brands, with a maximum time of 96 months for a strategy. Financial Gain: Financial gain from using individual strategies among the benchmark class ranged from $0 to $10 billion, with a median gain of $30 million. The average gain was $254 million.Copyright © Best Practices®, LLC 5 BEST PRACTICES, ® LLC
  6. 6. Benchmarked LCM Strategies for Use with Mature Brands This study benchmarked the use of 19 development, new formulation, commercial, and legal strategies used to extend the commercial life of mature, legacy pharmaceutical brands. • Added safety features Development & New • Extended release formulation Formulation Strategies • Fixed dose combination • New dosage form (e.g., patch) • New dosing regimen Aimed at Aimed at • New Indication enlarging enlarging • Shelf-stable version patient base patient base • Add-on services (e.g., reimbursement assistance) • Brand loyalty programs Commercial & Legal/ • Branded/authorized generics Regulatory Strategies • Contracting with large-volume purchasers • Extending into new, emerging markets (e.g., China) Aimed at • Labeling changes Aimed at • Litigation maximizing maximizing • OTC switching commercial commercial • Packaging innovations (e.g., co-packaging 2 drugs) value & value & • Publication strategy demonstrating clinical superiority extending extending • Repositioning product protected life protected life • Strategic pricingCopyright © Best Practices®, LLC 6 BEST PRACTICES, ® LLC
  7. 7. LCM Strategies Are Widely Used by Benchmark Participants More than two-thirds of benchmark participants have experience with the top four LCM strategies examined in this study. New dosage form is the most-used strategy overall (75%). More than half of companies have experience with extending into emerging markets. Q. Please indicate which of the following strategies you have used in the U.S. during your career. (Check all that apply.) LCM Strategy Usage New dosage form (e.g., patch, liquid) 75% Publication strategy demonstrating superior clinical 67% attributes (safety, efficacy, convenience) New dosing regimen 67% New indication 67% Strategic pricing (adjusting price to maintain sales or 63% growth) Branded/authorized generics 58% Extending into new, emerging markets (e.g., China) 54% Repositioning product 54% Brand loyalty programs 54% Add-on services (e.g., reimbursement 50% assistance/patient support) Contracting with large-volume purchasers 50% % Responses (n=24) * Other: Taste enhancements, Reduce complexity, Contract Sales OrganizationsCopyright © Best Practices®, LLC 7 BEST PRACTICES, ® LLC
  8. 8. All Strategies Used by at Least 25% of Participants; Other by 21% * Benchmark partners listed eight additional strategies, indicated in the “Other” bars below. Other Commercial strategies include: Building alternative promotional channels, CSOs, reducing complexity, post-patent contracting, and taste enhancements. Other Development strategies include: drug/device combination and packaging. Q. Please indicate which of the following strategies you have used in the U.S. during your career. (Check all that apply.) LCM Strategy Usage, Continued Packaging innovations (e.g., co-packaging 50% complementary drugs) Extended release formulation 50% Labeling changes 46% Added safety features (e.g., abuse resistant product) 38% Fixed dose combination (e.g., combining two 38% complimentary products) Litigation strategies 29% Benchmark OTC switching 25% participants * Other commercial strategies 21% used an Shelf-stable version (e.g., no longer requires average of four 17% Other refrigeration) different LCM 8% strategies for * Other development strategies * mature brands. Other new formulations 4% (n=24) % ResponsesCopyright © Best Practices®, LLC 8 BEST PRACTICES, ® LLC
  9. 9. Strategy Profiles: Overview of Mature Brand LCM Tactics The next three slides summarize findings regarding the most commonly used strategies in this study. NOTE: Green arrows indicate New Formulations strategies; Light blue = Commercial strategies; Dark blue = Development strategies. Values in red type represent the % of respondents rating each strategy “Highly Effective.” Only barriers with a response greater than 50% are shown. Strategy: Overview: Considerations: • 75% used • Average ROI: 58% New Dosage Form • 88% users rated Effective (38%) • Barrier(s): Technical Feasibility (57%) (e.g., patch, liquid) • Time: 76% Rated > 3 years • Weakened by Regulation: High • Cost: 44% Rated > $10 million • 67% used • Average ROI: 64% Publication strategy • 86% users rated Effective (7%) • Barrier(s): Length of Time (57%) demonstrating superior • Time: 80% Rated < 2 years • Weakened by Regulation: High clinical attribute • Cost: 54% Rated $1-5 Million • 67% used • Average ROI: 51% New Dosing Regimen • 71% users rated Effective (14%) • Barrier(s): Length of Time (61%), • Time: 77% Rated > 3 years Regulatory Feasibility (57%) • Cost: 42% Rated $1-5 Million • Weakened by Regulation: Medium • 67% used • Average ROI: 69% • 86% users rated Effective (40%) • Barrier(s): High Cost (83%), Length of New Indication • Time: 80% Rated > 3 years Time (74%), Reg. Feasibility (70%) • Cost: 57% Rated > $10 million • Weakened by Regulation: Medium • 63% used • Average ROI: 34% • 72% users rated Effective (29%) • Barrier(s): None Strategic Pricing • Time: 93% Rated < 1 year • Weakened by Regulation: High • Cost: 66% Rated < $1 millionCopyright © Best Practices®, LLC 9 BEST PRACTICES, ® LLC
  10. 10. Regulation & Reform Are Weakening Current Strategies More than a quarter of benchmark partners expect strategies used successfully in the past to be less effective in the future, due to regulatory issues in the current healthcare environment. Publication strategies and brand loyalty programs are viewed as the most vulnerable. Other strategies that will be affected include new dosage form, branded/authorized generics, and strategic pricing. Q. Given the current health care reform environment, politics, mature drug shortages and other regulatory issues, do you expect any strategies that you have used successfully in the past to become ineffective or unusable within the next 12-24 months? (Check all that apply.) Strategies Weakened by Regulation/Reform: Publication strategy demonstrating superior clinical 28% attributes (safety, efficacy, convenience) Other Strategies Selected Other Strategies Selected More Than Once: More Than Once: Brand loyalty programs 28% • Add-on services (e.g., • Add-on services (e.g., reimbursement assistance/ reimbursement assistance/ patient support) patient support) Strategic pricing (adjusting price to maintain sales 22% or growth) • Extended release • Extended release formulation formulation Branded/authorized generics 22% • New indication • New indication • New dosing regimen • New dosing regimen New dosage form (e.g., patch, liquid) 22% • Repositioning product • Repositioning product Fixed dose combination (e.g., combining two • Packaging innovations (e.g., • Packaging innovations (e.g., 17% complimentary products) co-packaging co-packaging complementary drugs) complementary drugs) % Responses (n=18)Copyright © Best Practices®, LLC 10 BEST PRACTICES, ® LLC
  11. 11. More Than Half Have a Dedicated Mature Brands Organization Dedicated mature brand (MB) organizations are in place at 52% of the companies in this study. For those with no dedicated MB group, brand teams are most often responsible for maximizing the commercial success of mature products. Q. Does your company have a group or function dedicated to managing and supporting mature/legacy products in the U.S. market? (Choose one.) If no, who is responsible for maximizing mature products in the U.S.? Dedicated Function Managing Responsible Party if No Mature Brands in the U.S. Market: Dedicated MB: Mature Products Commercial Team Brand 9% Lead/Marketing Director 9% Yes No Global 52% 48% Marketing 9% Brand Teams 73% (n=25) (n = 11)Copyright © Best Practices®, LLC 11 BEST PRACTICES, ® LLC
  12. 12. 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, LLC 6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517 Telephone: 919-403-0251 best@best-in-class.comCopyright © Best Practices®, LLC 12 BEST PRACTICES, ® LLC