Back in the early aughts, record companies stood at a crossroads. Because of technology and customer needs, the way consumers purchased music was changing. They faced a decision: lead the change and maintain their position, or react to it and create a vacuum of opportunity for outsiders (such as Apple with iTunes) to fill. The record companies, stuck in an old mindset, chose convention. Ultimately, they chose wrong.
Currently, oncology drug manufacturers face a similar decision. Because of an increasingly competitive market, the once tried-and-true disease leadership model (more commonly associated as scientific leadership driven by a best-in-class product) no longer allows oncology drug manufacturers to stay ahead of the pack. In order to differentiate themselves, companies should consider ecosystem leadership—a form of customer centricity that takes a more holistic view of the whole healthcare system and its various stakeholders, and creates value that includes but also goes beyond the product to improve healthcare outcomes.
In the early oncology landscape, oncology drug manufacturers were searching for viable treatments. Since so few existed, it was enough to have a good product. Therefore, disease leadership dominated the first wave of targeted therapies where following the science promised to deliver a competitive advantage. It’s a strategy that has traditionally paid off, such as with Novartis dominating Chronic Myeloid Leukemia (CML), Celgene transforming Myeloma, and Roche similarly owning HER2-positive breast cancer (HER2+ BC) and Non-Hodgkin Lymphoma (NHL).
Disease leadership enabled these companies to radically transform standards of care during the scientific era. They went beyond the specific molecules/interventions and significantly innovated the way we treat cancers. Companies like Celgene and Roche influenced the current treat-to-progression paradigms and chronic disease approaches that are now commonplace in many tumors.
However, the industry has entered a new era of increased competition and decreased product differentiation. Although best-in-class molecules will continue to succeed, they don’t have the same advantage. According to ZS’s research, the duration and intensity of the best-in-class period, where one company enjoys exclusivity, has shrunk significantly. In a market where success as “category leader” was most easily measured by market share, this metric no longer assesses whether a company or brand is truly a disease leader. It’s time to redefine what a disease leader is and look to new categories within that will provide a competitive advantage in the future market.
The big question is, where should oncology drug manufacturers position themselves in this new landscape? How do they add value beyond what’s traditionally been about the product?
- Apply a customer-centric lens. Although it used to be acceptable for pharma companies to come in at the end of the customer journey, when the patient was already receiving advanced cancer care, ecosystem leadership demands a reevaluation of pharma’s role. This requires a deep understanding of both the customer journey and existing customer needs that are currently unmet. Companies should broaden their view to include how customers interact with, shape and work within the wider ecosystem, and how these interactions create the aforementioned unmet needs, and thus, opportunities for oncology drug manufacturers to step in. Observing and deriving insights about what really matters to customers—instead of basing your understanding around your company’s own priorities—is key to taking a larger role than just the traditional intervention at the metastatic stage.
- Focus on specific opportunities. Once companies understand the greater system at play, they can (and should) choose what need(s) they can best meet. Although tempting, it would be a mistake to try to address every need, only to fall short. Companies should ask themselves: How are we going to tackle the needs we identified and are we even the right entity to do so? What partnerships do we need to accomplish our new goals? How can we engage with our customers differently? If companies find points of mutually beneficial value where they can differentiate themselves from the rest of the market, they’re more likely to succeed in the ecosystem.
- Consider partnerships. It used to be that pharma companies had the monopoly on treatment-related patient data. Now, groups outside of pharma, such as tech companies and healthcare startups, are gathering and aggregating patient data. Instead of maintaining the old mindset of working alone, oncology companies should shift to partnering both with their customers and with new industry disruptors. For instance, a pharma organization with oncology-specific treatments could partner with a patient monitoring company, differentiating themselves as the company that’s intimate with patients and caregivers. This could, in turn, lead to creating beyond-the-pill solutions that carry patients throughout the continuum of care. In the future, successful oncology leaders will have to be highly effective at identifying the right partnering opportunities to capture, transform and derive meaningful data and insights to create better customer value.
In the end, most record companies survived the change in the music industry. But their refusal to lead said change created a vacuum of opportunity for outsiders like Apple to fill. Similarly, there are various outsiders to the pharma industry eager to step in and fill that leadership vacuum. Oncology drug manufacturers also have an opportunity to become (or remain) leaders in the space—if they recognize that disease leadership no longer works and embrace ecosystem leadership going forward. The question then, is this: Do oncology drug manufacturers want to react to how the market transforms, or do they want to drive the change?