The theme of value has become a normal part of the lexicon in healthcare. Physicians and hospitals are measured and rewarded (or penalized) by their contribution to clinical outcomes, patient satisfaction and cost reduction.
The value spotlight is now turning back to pharma
Pharma is now beginning to feel the heat. To be meaningful, however, pharma value must be about more than drug prices. In a true cost/benefit analysis, value from pharma should also contribute meaningfully to outcomes, satisfaction and cost reduction. This means value must be embedded in every aspect of the patient and provider experience.
Putting the patient and provider experience at the heart of the value delivery process is key.
The value delivery process begins with a deep understanding of the patient journey. Every step in a drug’s life from research and development and drug formulation through how a product is introduced and supported in the market should be informed by the patient journey.
This sounds great but how is it actually implemented, and at scale?
It comes back to the role of customer data through the lifecycle of a drug. Data and insight can influence how products and services are both developed and delivered.
Using data, pharma leadership can enhance value for patients along the entire lifecycle of a drug and its companion services, from drug discovery to commercialization to end of exclusivity.
From the perspective of business strategy, I think of value delivery as falling into three stages:
- Creation (discovery)
- Value Capture (commercialization)
- Value Extraction (end of exclusivity)
We will consider all three stages of a product lifecycle and how digital strategy and a “data culture” can help define and deliver value.
Value Creation is “product innovation” at work. It involves deciding what therapeutic needs you’re going to serve and whether your product is coming from your own R&D pipeline or through licensing or M&A.
However, bringing a molecule through FDA approval and to market will be a value creation opportunity only if it is both relevant and differentiated. It could be just one or the other, but if not both, it will be quickly commoditized (a relevant but me-too drug) or not covered by insurance (differentiated but not relevant to an urgent disease burden).
Informing the discovery process
A commitment to digital transformation will include embedding the voice of the customer throughout the discovery and development process. Pulling insight from HCP, patient and payer interactions (ideally from a structured CRM system) into detailed customer journey maps will help parse product redundancy from a real therapeutic opportunity.
This data analysis involves cross-department integration between medical affairs and the commercial side of the house, a level of cooperation that doesn’t always come easy. However, linking the customer voice and market realities to the Clinical Development Plan (CDP) will ensure that R&D doesn’t get infatuated with the science before there is an established commercial need.
What kind of data are we talking about?
Sales data will identify the current HCP customers, but marketing data will find the unconvinced. Between these two audiences lies the opportunity to identify what is valuable and what is missing in a therapeutic category. Layer in data insight from patient surveys, social media listening, patient advocacy forum discussions and payer interviews and you begin to have a robust perspective of unmet need and the potential positioning that is still available.
Before you compete for share of voice, you must win the battle for share of insights
A consolidated view of the market based on a detailed understanding of individual customers is a game-changer. It can be used both internally to prioritize R&D investments as well as externally as a strategic tool for business development. When senior management is competing to buy or joint venture an early-stage molecule, proprietary market insight provides unique competitive advantage. The company is able to bring to the table not only dollars but the promise of hitting the market quicker and faster with a more solid uptake as a result of their customer insight and differentiated value proposition.
The principal role for data during Value Creation is to capture unique customer insight to inform innovation.
Articulate a value proposition that addresses physician and patient needs and concerns and use that to set the goals of your CDP will earn you a right-to-play.
Earning the right-to-win, however, involves aligning the clinical trial goal posts with the requirements of the payer.
Clinical trial endpoints
Once a project has a strong enough value proposition to earn a green light for development, it’s critical to pull strategic marketing back into the discussion to determine clinical trial endpoints.
Clinical trials often set proxy or surrogate endpoints. For example, a new cancer drug candidate may be evaluated based on target responses from the immune system, and these are judged to be surrogates for improved overall survival rates. Full impact is deferred to a later, larger phase IV trial.
While this has often been adequate in the past for FDA approval, payers are now asking for more. Payers are looking for outcome endpoints, not just surrogate markers. “What is the overall survival rate and have you increased it significantly enough to pay for this drug or are you just deferring mortality by a couple of weeks? If it’s just a couple of weeks, we’re not going to pay hundreds of thousands of dollars for a course of a therapy.”
The Prior Authorization swamp
Products without clinical endpoints that demonstrate superior efficacy may not be covered at all and will be subject to prior authorization at best. According to Dan Rubin, CEO of PARx Solutions and an expert in prior authorization (PA), only 29% of patients ultimately get the PA product that was prescribed, and 40% end up abandoning therapy altogether.
Early discussions with payers and PBMs using patient journey and HCP marketing data will help identify acceptable efficacy targets which can be used to guide phase III endpoints.
Managing the development of a new product aimed at an unmet clinical need with a strong outcome profile will move you to the starting block. But one of the leading causes of launch-failure is the poor handoff between medical and commercial.
The best thing that the medical team can do is partner with commercial during the pre-launch phase around a common understanding of customer data and market insight.
A new product’s commercial performance during the first six months after FDA approval is often considered the bellwether for how the product will do over the course of its patent life. If the product stalls, analyst estimates will be adjusted downward.
How to best prepare a product for launch excellence?
The more we know about our customers – the physicians who can write the product –and what they care about, the more we’re able to build an effective pre-launch awareness campaign around a new product.
Preparing for launch is an 18-24 month process that overlaps the culmination of Value Creation and the beginning of Value Capture. It is orchestrated by a cross-functional team of medical affairs, marketing, business intelligence and manufacturing, among others.
Executed well and the team will be rewarded with the opportunity to capture a fair share of the value they have created during drug development.
Powering Value Creation with data
Using individual customer data to power the discovery process can redefine product innovation for pharma companies. It involves rethinking the meaning of CRM, data analytics, and insight-driven decision making. It requires blurring the border between medical and commercial operations. But the benefit is a value creation process that is aligned with the market need and that can put the entire commercial operation on a footing for launch excellence.
Launch excellence is the goal of the second stage of value delivery, called Value Capture. How to use data to succeed will be the focus of my next blog.