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New Product Launch Spend Report Summary


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New Product Launch Spend Report Summary

  1. 1. Best Practices, LLC Strategic Benchmarking Research New Product Launch Spend: What It Takes to Win in the U.S. Market
  2. 2. Executive Summary <ul><li>Project Objectives & Methodology </li></ul><ul><li>Key Findings & Insights </li></ul><ul><li>Companies Participating in Study </li></ul><ul><li>Participant/ Product Demographic Data </li></ul>
  3. 3. Project Objectives & Methodology Best 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. <ul><li>Industry average cost for new pharmaceutical product launch </li></ul><ul><li>Average cost for specialty and primary product launches </li></ul><ul><li>Percentage of budget allocated to 12 key marketing, education and market access activities during and prior to launch </li></ul><ul><li>Timing for conducting 50+ activities </li></ul><ul><li>Anticipated budget & activity trends </li></ul><ul><li>Top 3 success factors </li></ul>Study Objective:
  4. 4. Universe of Learning: Companies Participating in Study Benchmark participants included 27 executives and managers at 23 leading biopharmaceutical 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.
  5. 5. P articipants’ Job Titles & Functional Areas Directors 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%
  6. 6. Launch Investment Benchmarks <ul><li>Research Protocol for Participants </li></ul><ul><li>Focus all responses on a single product launched recently into the U.S. market. </li></ul><ul><li>Provide total investment for launch activities during four budget years leading up to launch. </li></ul><ul><li>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. </li></ul><ul><li> </li></ul><ul><li>Launch Year: The budget year in which the product was launched. </li></ul><ul><li>Launch Years -1, -2 and -3: The budget years one, two and three years prior to the Launch Year. </li></ul>
  7. 7. Launch Year Investment Averages $XXX Million 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. 9 14 16 19 n= $XXX $XXX $XXX $XXX Low $XXX $XXX $XXX $XXX Bottom Quartile $XXX $XXX $XXX $XXX Median $XXX $XXX $XXX $XXX Average (Mean) $XXX $XXX $XXX $XXX Top Quartile $XXX $XXX $XXX $XXX High Launch Year -3 Launch Year -2 Launch Year -1 Launch Year TOTAL BENCHMARK CLASS
  8. 8. 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 Million Specialty 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. 4 8 8 12 n= $XXX $XXX $XXX $XXX Low $XXX $XXX $XXX $XXX Bottom Quartile $XXX $XXX $XXX $XXX Median $XXX $XXX $XXX $XXX Average (Mean) $XXX $XXX $XXX $XXX Top Quartile $XXX $XXX $XXX $XXX High Launch Year -3 Launch Year -2 Launch Year -1 Launch Year SPECIALTY SEGMENTATION
  9. 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. Primary Care Launch Year Investment Averages $XXX Million Market 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. 5 6 7 7 n= $XXX $XXX $XXX $XXX Low $XXX $XXX $XXX $XXX Bottom Quartile $XXX $XXX $XXX $XXX Median $XXX $XXX $XXX $XXX Average (Mean) $XXX $XXX $XXX $XXX Top Quartile $XXX $XXX $XXX $XXX High Launch Year -3 Launch Year -2 Launch Year -1 Launch Year PRIMARY CARE SEGMENTATION
  10. 10. Investment Data by Product Segment <ul><li>Data is segmented by : </li></ul><ul><li>Projected Peak Annual Revenue </li></ul><ul><li>Therapeutic Areas – Oncology & Endocrine/Metabolic </li></ul><ul><li>Product Market Entry Position </li></ul>
  11. 11. Peak Annual Revenue Projections Correlate With Resource Allocations (n=27) Q. What was the projected peak annual revenue (in $US) for your product before launch? Projected Peak Annual Revenue <$250M 21% $250M-$500M 25% $750M-$1B 18% $1B-$2B 25% $500M-$750M 11% Benchmarked 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.
  12. 12. Total Launch Investment by Peak Revenue Category: Data for Launch Year $XXX $XXX $XXX 5 $1 B- $2 B $XXX $XXX $XXX 3 $750 M - $1B $XXX $XXX $XXX 2 $500 M - $750 M $XXX $XXX $XXX 5 $250M -$500 M $XXX $XXX $XXX 4 <$250 M Low High Average (Mean) # Responses in Range PROJECTED PEAK ANNUAL REVENUE: LAUNCH YEAR
  13. 13. Average Spend Comparison for Each Market Entry Position 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. $XXX $XXX $XXX Launch Year -3 $XXX $XXX $XXX $XXX Crowded Market Upstart Product $XXX $XXX $XXX $XXX Differentiated Product Entering Established Market $XXX $XXX $XXX $XXX Differentiated Product in Novel Treatment Area TOTAL Launch Year -2 Launch Year -1 Launch Year Market Entry Position
  14. 14. Launch Activities Benchmark 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. <ul><li>Agency Fees (excluding DTC) </li></ul><ul><li>Direct to Consumer & Advertising Expenses </li></ul><ul><li>Health Economics/ Outcomes Research </li></ul><ul><li>Launch Meeting/ Kickoff </li></ul><ul><li>Managed Markets/Market Access </li></ul><ul><li>Market Research/Analytics (excluding DTC) </li></ul><ul><li>Medical Affairs </li></ul><ul><li>Patient Education/ Assistance </li></ul><ul><li>Physician Education </li></ul><ul><li>Sales Force Preparation </li></ul><ul><li>Other </li></ul>
  15. 15. Acti vities Included in Agency Fees Spend 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. Launch Pre-Launch AGENCY FEES (excluding DTC) n = 13 n = 10 n = 6 n = 17 <ul><li>Other (Year -2): </li></ul><ul><li>Positioning, campaign development </li></ul>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 activity per year 10% 40% 40% 60% 80% Year -2 0% 17% 67% 83% 33% Year -3 0% 38% 54% 85% 92% Year -1
  16. 16. 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 Total Increase (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. 12% 16% 32% 32% 32% 36% 36% 60% 80% 84% 96%
  17. 17. Launch Investment Allocation <ul><li>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. </li></ul><ul><li>Budget numbers provided include all resources invested in promotional, educational & market-access activities, excluding only clinical trial costs. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
  18. 18. Investment Allocation by Activity Category (1) Total Benchmark Class: Launch Year & Launch Year -1 * $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. $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Other Marketing activities $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Sales force preparation n = 14 Year -1 n = 18 Launch Yr. Activity Category $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Samples $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Launch meeting (kickoff) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Physician education $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Patient education/ assistance $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Medical affairs $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Market research/ analytics (excluding DTC) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Managed markets/ market access $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Health economics/ outcomes research $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX DTC & Advertising Expenses $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX Agency fees (excluding DTC) Low Average High Low Average High
  19. 19. Success Factors
  20. 20. 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 % 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. (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
  21. 21. Most Important Future Activities
  22. 22. 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.
  23. 23. 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 919-403-0251 [email_address]