A report published by Deloitte at the end of last year must have made for some sobering reading for pharma executives as they prepared to head off on their Christmas holidays.
According to the consultancy, R&D returns for the world’s 12 largest pharmaceutical companies took a sharp dive, hitting their lowest level in nearly a decade – from just over a 10% return in 2010 to less than 2% in 2018. The report also revealed that peak sales forecasts for new medicines dropped a whopping 100% to just over $400 million. At the same time the cost of bringing a drug to market nearly doubled to more than $2 billion.
The authors said “the need to generate evidence to support diverse global regulatory and reimbursement requirements” was one reason for the costs, adding that industry should look for new ways to team up with stakeholders. The findings of this report add to a growing body of evidence over the last few years on commercial challenges. One of the most notable was a Bain & Company report that found that 50% of all drug launches fail to meet company expectations. 50%! The reason, according to the authors: companies are unable to communicate effectively with the growing number of stakeholders who influence funding decisions.
The numbers are clear – and so is the takeaway message: drugmakers have to change the way they do business in order to stay in business. That means adopting fully integrated access strategies that involve all functions of a company working toward one clear goal: maximizing patient access. But most of pharma doesn’t seem to be acting on this recommendation. Nearly 70% of companies still do not involve the pricing and market access teams in business development opportunity assessments, according to the 2017 Global Life Sciences Study by
“We still see many companies that focus on regulatory requirements and do not give adequate consideration to the needs and willingness to pay of patients and payers,” the authors wrote after surveying 65 industry experts from small biotechs and larger pharmaceutical companies.
“Getting a drug registered is difficult but relatively straightforward. Getting a good price and securing broad access is a key challenge and companies rarely consider this challenge early or comprehensively enough,” they said.
Clearly, it doesn’t have to be this way.
A Step-by-Step Process
Last month in our blog post, Growing the Choir: More Voices Joining the Healthcare Value Conversation – we discussed how thought leaders at pharma conferences were advocating for pharma to engage more than just the “usual suspects” in the decision-making process on the value of medicines. There are practical and effective ways for companies to take a more coordinated and holistic approach to developing access strategies that deliver the evidence for which stakeholders are looking.
At 3D Communications, we have developed a proprietary five-step process to help clients develop a credible and relevant value story that addresses what is important within our competitive healthcare environment – and deliver it to a growing group of influential stakeholders.
Step #1: Analysis
The first step is analyzing the environment. And that starts with the internal functions. Before pharma teams involve external stakeholders, they must make sure they are all talking to each other – and that they are aligned on a clear goal. That may seem obvious. But when we work with clients, we often find that functions think they are aligned until we put them through a “goal-alignment” exercise. It doesn’t take long to see where the differences are – and they are usually important strategic ones. It’s hard to hit a moving target – so the key is to come to agreement early.
Once the internal environment is clear, it’s time to identify and prioritize the most important external stakeholders and gauge how they influence each other. The world doesn’t work in neat silos. Understanding the web of influence and the complexities that arise from that are essential to understanding what key stakeholders care about and how to address those needs.
Step #2: Prelaunch Content
Based on this internal and external analysis we then develop draft content that clearly articulates the benefits of a medicine. But this isn’t an exercise of talking to each other in a windowless, airless room. Instead, the goal is to develop content that is relevant to the stakeholders who will influence the value proposition of the product. And there is only one way to know what is relevant to key audiences: ask them.
Step #3: Global Testing and Step #4: Local Market Testing
Steps 3 and 4 are devoted to rigorous testing. Testing should be conducted on both a global level – to ensure strategic alignment with a company’s global goals – and in key local markets. The key local market testing is critical since, like politics, market access is ultimately local. Each country’s issues and payment models are different, so one size doesn’t fit all. But it’s a balancing act. While the messaging must be tailored to markets, it still needs to be consistent with the company’s global goals.
Step #5: Speaker Training
The best value story is useless if you can’t clearly articulate it. And the reality is that you will usually need to deliver it in the face of objections and in the context of evolving science and often fierce competition. That’s why we prepare teams for these challenging stakeholder meetings – helping them deliver their messages and answer the most challenging questions from payers, key opinion leaders, patients, policymakers, and others.
Ultimately, pharmaceutical companies and stakeholders have the same goal: to get these important scientific breakthroughs to the patients who need them. Changing the way pharma does business and having a truly integrated market access strategy that addresses all stakeholders’ needs will result in healthier people, healthier healthcare systems and a healthier pharma industry.