In response to increased competition, a dynamic policy landscape and changing needs across patients, payers, providers and regulators, pharmaceutical companies must take a data-driven approach to evaluating their drug pipelines to better understand the factors that drive successful planning and commercial execution.
To explore the factors behind commercial success, ZS analyzed 96 drug launches from 2010 to 2020 across 10 indications spanning oncology, immunology and primary care. In our analysis, we sought to quantify the factors that drive commercial performance against established standards of care (SOC). Specifically, we measured how the following eight key performance drivers affect launch performance: level of unmet need in the disease, order of entry, efficacy, safety, convenience, product novelty, marketing spend across channels and payer influence.
The pharmaceutical industry has long sought a crystal ball that can accurately predict launch success. With R&D complexity and costs continuing to rise, this imperative has only grown—hence our motivation to analyze past launches for clues to what drives success. By analyzing performance of a large number of drugs over time, we can isolate individual drivers of commercial performance and observe how their relative importance changes as markets evolve. One of our first insights is that, regardless of therapy area, the degree of unmet need follows a consistent arc, as seen in Figure 2. This reflects an intuitive evolution of markets, as science and clinical practice evolve and as more drugs become available to address patient needs. Across this continuum, drivers of commercial success shift in measurable ways that point to where and how pharmaceutical firms should focus when bringing new products to market.
Based on our analysis, we recommend that pharmaceutical firms work to actively develop and incorporate “future back” thinking into commercial planning. This means projecting the future state of unmet need in markets they may be launching into and then developing realistic assessments of how—and if—they can attain market leadership. Companies can accomplish this in three steps:
- Develop a holistic view of commercial success drivers, one that recognizes speed to market as just one factor among many.
- Generate hypotheses about which drivers will gain or lose relevance as markets evolve.
- Select products and platforms that will create value for patients and shareholders based on these insights.
In our analysis, we uncovered several examples of products that launched into markets at points on the unmet need continuum where the product’s most differentiating benefits—including efficacy—were not valued enough for the product to outperform a weaker SOC. Companies that learn to anticipate where their markets will be, and what those markets will value by the time their products launch, will have significant advantages over their competitors. This article will equip executives with insights, backed by data, that they can use to anticipate how their products can win in the markets where they will compete in the future.
Barring curative therapies where first-mover advantage is well established, the last decade has seen many drugs that have outperformed their SOCs despite being later entrants. Here are two examples:
- Tagrisso, a late-generation epidermal growth factor receptor (EGFR) agent launching into non-small cell lung cancer (NSCLC), a market with high-moderate unmet need when it launched
- Ocrevus, a CD20-targeted agent launching into multiple sclerosis, a market with low-moderate unmet need when it launched
Both drugs entered their markets late but proved commercially successful due to their unique positioning. Tagrisso set high efficacy benchmarks via overall survival and progression-free survival, while Ocrevus offered a clinical profile comparable to SOC but with significantly higher convenience via infusion every six months. Both of these examples show pharmaceutical firms need to think beyond order of market entry and consider which drivers are likely to exert the strongest influence in the market they will be launching into, given the degree and nature of unmet need at the time of launch.
In high-moderate unmet need markets, where limited understanding of disease pathogenesis and aggressive symptom management are common, our analysis shows 80% of brand performance is explained by level of unmet need, efficacy and novelty. Convenience and promotion (personal, non-personal and consumer) account for 15%, and safety and order of entry explain just 5%.
In low-moderate unmet need markets, which are characterized by improved understanding of disease pathogenesis and availability of disease-modifying treatments, 80% of performance is explained by a broader array of features, including efficacy, safety, convenience, and consumer and non-personal promotion. Volume of personal promotion and order of entry explain 15%, while novelty and relative levels of unmet need have little effect on performance.
By understanding how these performance drivers are likely to shift over a five- or ten-year planning horizon, research, development and commercial teams can reassess their decisions about what to bring to market and how.
In early-stage R&D and business development, this knowledge can inform investment decisions by answering questions such as:
- How critical is order of entry in the indications we are pursuing? Is it worth reallocating resources from other priorities to enable an earlier launch? Can we be comfortable with a later launch that would accommodate additional investments to obtain more compelling clinical data?
- Within a chosen set of indications, which drug classes or mechanisms of action will have the highest potential? Will novelty matter by the time we reach the market—and if so, how much?
- What is the minimum viable data package for a given product, and what will be most optimal? How can we optimize across investments in product development and product marketing?
- When it comes to planning an asset profile for launch, what are the ancillary features beyond current efficacy endpoints that define the unmet need within the market?
- Based on the nature of the market’s unmet need, how should we emphasize these ancillary features to shape the market for a successful launch?
For products in launch and growth phases, commercial teams can make more informed decisions by answering questions such as:
- To launch effectively or grow in an indication, how important is clinical differentiation versus differentiation on nonclinical benefits?
- Based on the level of unmet need in the target market, which features beyond efficacy are most important for successful product strategy and positioning?
Many pharma teams hit snags in asset commercialization due to the common misconception that a given market will remain static. However, the last decade offers numerous examples of markets in which the importance of novelty, safety or convenience evolved significantly over time:
- In NSCLC, the impact of novelty on product success has declined due to increased efficacy expectations thanks to the entry of a large number of novel classes of biomarker-directed therapies.
- In diabetes, efficacy measures have evolved to include post-launch data on reduced incidence of cardiovascular events, while the relative importance of HbA1C measures has declined.
- Most recently, COVID-19 has elevated the relevance of convenience in oncology and immunology, with manufacturers prioritizing (and payers covering) home infusions.
These examples illustrate why understanding driver evolution must be central to long-term planning, especially in markets experiencing accelerating waves of innovation.
Based on our analysis, in high-moderate unmet need markets over the last decade, the value of efficacy and novelty have actually declined. As the value of these product attributes has declined, there has also been a shift in the value of simply addressing the remaining unmet need.
In low-moderate unmet need markets, non-personal and consumer-focused promotion stand out as essential for success, followed by convenience and safety. Success in these markets is typically not driven by novelty or differential efficacy, where the relative benefits of improved clinical outcomes and novel science do not meaningfully change the lives of most patients.
The behavior we see in markets with low-moderate unmet need plays out in the evolution of high-moderate unmet need markets. As more drugs with better efficacy enter the market and meet the prevailing unmet need, marginal efficacy improvements and overreliance on novelty become increasingly unlikely to drive performance. Executive decision makers can leverage this insight during early development to anticipate opportunities to redefine efficacy standards or pursue alternate paths to differentiation.
Alternative paths to pursue could include:
- Moving from response rates to remission rates to demonstrate improved patient outcomes in psoriasis
- Advancing the use of objective response rate and duration of response in oncology, especially in targeted tumor therapies where larger trial cohorts are not always possible and may limit feasibility of obtaining measures such as overall survival
In low-moderate unmet need markets, novelty has limited importance, and value accrues more to products that offer convenience and safety benefits. In these markets, capitalizing on convenience by launching with the right formulation from the start, rather than planning to reformulate later, can make a significant difference. Additionally, understanding which safety benefits the market will value and planning development accordingly can drive valuable differentiation in these markets.
When prioritizing therapy areas or products for development, pharma companies should strive to identify which levers affecting success in the future market are under their control so they can act on them, while scenario planning for those that are not. Pharma can, for example, choose which indications to prioritize based on anticipated future levels of unmet need. And at the drug level, discovery, development and marketing teams can choose to prioritize novelty, convenience and levels of marketing investment.
On the other hand, companies cannot always control drug features like efficacy and safety outcomes—or market dynamics such as level of future competition or degree of payer management. However, with disciplined planning across these choices, companies can prioritize the right products and optimize their research, development and commercial investments.
Our analysis rigorously confirms what most in the industry have seen: launching a drug with superior efficacy in a high unmet need market delivers the highest returns. On average, these products attain more than four times the share of the standard of care they launch against. Unfortunately, many products will not deliver such revolutionary benefits. For these cases, our analysis reveals three alternative strategies to drive commercial success:
- Challenge the status quo. When entering a market projected to become highly competitive with differentiated products, challenging the status quo by redefining existing standards is the winning strategy. Several disrupter drugs in oncology have redefined the attractiveness of their markets in competitive tumor areas by targeting specific subpopulations. In NSCLC, Alecensa, a third-generation ALK-targeted agent, introduced a new primary outcome—objective response rate—and delivered a better clinical profile to outperform its SOC, Xalkori. This helped establish Alecensa as the most prescribed first-line treatment. Deliberately prioritizing assets and development plans that maximize differentiation potential can deliver two to four times the value of the established SOC.
- Don’t count on novelty to substitute for efficacy. Superior efficacy always trumps novelty, and the value of novelty is nearly nonexistent in markets with low unmet need. In the diabetes market, for example, we have seen more than a half-dozen novel classes across orals and injectables that offered only marginal efficacy improvements and have experienced limited success. On the other hand, GLP-1s offered both novelty and efficacy benefits, and they have collectively driven meaningful market adoption.
- Marketing does win markets…assuming your product has attributes the market values. Marketing and promotional investments do contribute to commercial success, and the effect is most pronounced in crowded markets where unmet need is low. In these markets, investing heavily in marketing and promotion, and specifically on direct-to-consumer programs, is the path to success. In these markets, companies succeed when they develop products with safety or convenience-related advantages and also have invested to market these features effectively. By optimizing development to enable regulatory approval with features related to safety, convenience and patient-reported outcomes, and supporting these products with robust marketing on these dimensions, pharma leaders can drive success even in highly competitive markets.
In crowded immunology indications, the most successful entrants have built competitive advantages by developing for convenience, safety or other nonclinical benefits valued by the markets and then making substantial investments to ensure markets maintain full awareness of the benefits. Backed by the second-highest consumer promotion spend in psoriatic arthritis, Cosentyx doubled down on its convenience advantage (via less frequent administration than TNF-class drugs) and has been able to drive meaningful success in an otherwise established market.
Figure 4 shows which product attributes and investment levers are most powerful in combination. Companies can use this information to prioritize therapy areas, product development and marketing investments into the future.
Given the high cost and risk of bringing a new drug to market, product teams should think hard about what their markets will value over the product life cycle and tailor their investments accordingly. Racing to be first to market, thereby forcing R&D to advance suboptimal programs and then make late, costly investments in life cycle management, runs counter to the true drivers of commercial success as revealed by our analysis. Pharmaceutical executives and other decision makers can leverage the insights presented here to ensure they are investing to strengthen product potential. By holistically assessing what their markets will value and which paths they can pursue to drive commercial success, pharmaceutical companies can capitalize on the tremendous range of opportunities to deliver shareholder value by delivering high impact for patients.
The authors would like to thank and acknowledge colleagues whose contributions were critical to bringing this piece to life: Priyanka Halder, Siddharth Gupta, Sherin Alex and their respective teams.