How Can Pharmaceutical Companies Meet Drug Launch Expectations

September 25, 2023 - Earlier this month, Deloitte published a report evaluating why so many drug launches failed to meet their expectations. According to data analyzed by the Deloitte Center for Health Solutions through the Life Sciences and Healthcare Department, only two-thirds of all drug launches in the United States, including biologics and small molecule drugs, are meeting launch expectations.

The report looked at 284 new drugs launched in the US between 2012 and 2021, of which 98 had a poor performance at launch. The report compares forecasts by analysts at the time of launch and the sales of novel drugs approved by the US Food and Drug Administration (FDA) Center for Drug Evaluation and Research (CDER).

PharmaNewsIntelligence sat down with Jeff Ford, principal at Deloitte Consulting, to discuss the most recent report and how biopharmaceutical leaders can use this report to inform and guide future drug launches.

According to the report, drugs that meet analyst forecasts in their first year are more likely to do so in the subsequent product life cycle, marking more favorable economic outcomes for the companies that launch them and a potentially more significant healthcare impact.

“Deloitte saw pretty consistent data where approximately one-third of drugs that pharmaceutical manufacturers launched failed to meet external analysts' expectations in the marketplace,” noted Ford.

Throughout the report, Deloitte analysts evaluated why so many of these new products are missing their launch goals, recognizing that the explanation is multifactorial.

Drug Launches

“A drug launch is an orchestration of many different parts. There are all kinds of components that come together to launch a drug successfully,” explained Ford. “There's the strategy piece of really understanding the customer and the markets — the competitive environment, the unmet needs that are out there, and the external side of it, which is accomplished at a pharmaceutical manufacturer across a range of different functions that help support that type of analysis.”

Beyond those factors, drug- or asset-specific factors must be considered during the launch, including the mechanism of action, dosing, tolerability, safety issues, and efficacy.

“A successful launch is about understanding the needs and wants of a market, including those who pay for it and what they value.”

Companies must consider what they have to offer and how they can meet or support the needs of their consumers.

Reasons for Drug Launch Failures

The report identifies six primary areas where drug launches fail to meet expectations.

Among all the factors, Ford identified two as the most important: market access issues and inadequate understanding of customer needs. For example, Ford explained that some pharma companies did not launch with a strategy for payments, which inhibited patient uptake of the product once it went to market.

“The third reason was slightly smaller — a low prioritization or resource allocation, which means the company launched its product in a way that didn't fit what the market needed,” he added. “Either they didn't provide enough support, or it got tied up in distribution when they needed more help.”

Ford estimates these three reasons account for nearly half of biopharma launch failures.

Other reasons for missing expectations included the following.

• Poor product differentiation: Poor product differentiation refers to the customer’s perception that the drug or therapy is no different from what is already on the market. While some products may not be significantly different from others, a company may also fail to depict the differences accurately. Pharmaceutical and biotech sales teams must identify and develop a marketing strategy that differentiates the drug from others.
• Unfavorable clinical outcomes: If the clinical trials show negative clinical results, including severe adverse events or other unexpecting conditions, healthcare professionals (HCPs) and patients may avoid prescribing or recommending it. While these outcomes are not necessarily controllable, they will impact a product launch.
• Unexpected event: Unexpected events that cannot be predicted by a launch team, like patent litigation, manufacturing delays, or supply chain issues, will inevitably affect the drug launch.

Market Access

Ford provided a more detailed look into market access failures and how they arise. “[Market access] is primarily focused on how payers — insurance companies — place these drugs on formulary or not,” he said.

Essentially, this is where a drug gets put in, which is a function of the discounts an insurer is willing to offer and the drug efficacy — its effect in relation to its safety profile.

Ford identified a few reasons for market access-related failures.

“Number one is that depending on the company, market access teams are separate from brands' commercial sales force, marketing teams, and the medical teams that support them. While there is a trend toward a more integrated nature of market access with those teams, they still are discreet and, at times, don't coordinate as effectively as they probably could or should.”

Effective coordination would ensure that the manufacturers know what evidence, efficacy information, and safety data are required for a payer to cover a drug. Additionally, the companies need to consider how the drug's clinical profile compares to competitors, as that will affect whether it is placed on the formulary or not.

“There's insufficient work being done on that. It's not integrated early enough in the development cycle and all the way through the process to effectively craft an amenable commercial strategy and access strategy.”

Additionally, Ford explained that sometimes pharmaceutical companies miscalculate what payers value, indicating that more insights are needed into the payer perspective.

Ford also explained that commercial companies can be slow to react to feedback on the drug’s best uses after it has launched, which can present an additional challenge.

Mid-Size V. Large Company Drug Launches

Although Deloitte did not find statistical significance, Ford noted that midsize companies consistently outperform larger companies regarding launch successes.

“One of the first hypotheses was that mid-size companies focus more on a given therapeutic area. By focus, we mean that all of their capabilities, from medical, commercial operations, sales, marketing, and research and development (R&D) perspectives, can be focused on a given disease or customer need and aren't pulled across multiple areas.”

This theory suggests that midsize companies get better insights and can develop an improved launch plan without spreading resources across multiple therapeutic areas.

“The second thing is that mid-size companies do not have all the necessary capabilities. They tend to source a best-in-class model and are open to external validation and  challenges, , of their strategies. They may get better insights into their market and product and be more open to challenges just because they're not simply looking internally for the large stack of their capabilities.”

Finally, large companies have a lot of launches and tend to follow a template or archetype for their launches.

“In many cases, that leads to a false sense of confidence around the launch and ultimately may obscure some unique or nuanced point that's critical about the launch in front of them. Multiple market failures directly resulted from not fully understanding the nuance of market access and the affordability issues around patients that would be present by applying old archetypes to the new launches.”

Finally, Ford hypothesized that smaller companies kill less effective studies earlier on because they do not have the resources to launch multiple assets at once.

Pillars of a Successful Drug Launch Strategy

PharmaNewsIntelligence asked Jeff to provide three key pillars for a successful drug launch.

Ford explained that the most significant contributor to a successful drug launch is making it market-focused. Pharmaceutical industry leaders must adequately understand the target patient population and the prescribers that treat them.

“Companies often look at the product before them and try to find a market fit. I call that a hammer looking for a nail. They have to understand the space they are operating in, true customer needs, unmet needs, and the value of those unmet needs, clinically, economically, et cetera, to be successful,” he said.

Another factor that can improve the probability of a successful launch is utilizing and leveraging data in the market. Data can be used to conduct market research to understand providers, stakeholders, and patients’ interests or case studies on similar drug launches that have been successful.

Finally, Ford notes, “In the pharmaceutical space, it's about finding true unmet needs and wants, and then being able to understand that information and bring that back, both early into clinical development and even post-launch into the launch itself.”

End-to-end communication between all launch team members is critical for improved outcomes.

“[Companies] are incredibly siloed based on how they report in, ultimately, to senior leaders. While those walls may be important from an HR perspective at a launch perspective, those teams need to work together in true agile pods that are not tied to other functional realities but are solving for the launch at hand. Increasingly, we see the industry moving in that direction, but there's still quite a way to go to achieve that,” concluded Ford.