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Products & Services Product Launch Resource Allocation

Report Summary: New Product Launch Spend: What It Takes To Win In The U.S. Market

ID: PSM-262A


17 Info Graphics

27 Data Graphics

700+ Metrics

2 Narratives

Pages: 12

Published: Pre-2014

Delivery Format: Online


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In today’s pharmaceutical industry–where the recent product launch landscape is marked by as many failures as successes—it is critical for launch teams to understand the right level of resources required to give each new product its best chance for gaining a market foothold.

The report provides current data on funding levels necessary bring a new product into the U.S. market, during the launch year and for each of the three years preceding product introduction. Brand and marketing leaders will be able to use the results of this study to identify shifts in spending priorities across the industry and to compare spending levels for their own launch preparation programs against industry averages.

Based upon a recent Best Practices, LLC benchmarking study, the report also provides qualitative insights and quantitative metrics that will help companies chart effective budget strategies and allocate funds for new brands. Specifically, the study encompasses the following topics:

Average Cost: Industry average cost for new pharmaceutical product launch in the launch year and each of the three preceding years
Primary/Specialty Comparison: Cost comparison for specialty vs. primary product launch
Budget Allocation: Percentage of budget allocated to 12 key marketing, education and market access activities during and prior to launch
Activities Timing: Timing for conducting 50+ promotional and educational launch activities
Future Allocation Trends: Launch activities expected to gain a greater share of the budget in the coming 24-36 months, and activities expected to receive reduced share
Success Factors: Top 3 success factors in new U.S. product launchOn average, launch year spend nearly equals the approximate sum of all previous years’ commercialization investments. Hence, it has become increasingly challenging for pharmaceutical companies to understand the adequate investment levels required for successful product launch in current U.S market.

Industries Profiled:
Health Care; Pharmaceutical; Diagnostic; Consumer Products; Medical Device; Biotech

Companies Profiled:
Abbott; ProStrakan; Sanofi-aventis; Regeneron; Bayer Healthcare; Merck; Roche; Bristol-Myers Squibb; EMD Serono; Novo Nordisk; Inspire Pharmaceuticals; Shire; Amylin; GlaxoSmithKline; Bausch & Lomb; Onyx Pharmaceuticals; Noven Therapeuticals; Xanodyne Pharmaceuticals; Genzyme; Baxter International; Astellas; Lundbeck

Study Snapshot

The report was based on the results of a benchmarking study that included 27 executives and managers with current or recent launch experience at 23 leading biopharmaceutical companies.

About three-quarters of the participants are Directors or Vice Presidents and more than half work within marketing functions or departments. The group represented products in nine different therapeutic areas including Endocrine/Metabolic, Oncology, Respiratory/Pulmonary, Cardiovascular, Psychiatry, Pain, Ophthalmology, Obstetrics/ Gynecology, and Neurology.

Of the products represented in this report, about two-thirds are marketed primarily to specialty care physicians, and the majority was launched (or expected to launch) between 2008 and 2013. About a quarter of the products were projected to have peak annual revenue above $1 billion, while 44 percent expected the annual revenue to peak at under $500 million. Products reflected a variety of different market-entry conditions from new products in a novel treatment area to products entering a crowded market that includes generics to reformulations.

Key Findings

Rise of Specialty Care Markets & Specialists: Specialists are the primary marketing target for 63% of products in the study. The remainder target both specialty and primary care doctors. None of the products in this study is marketed only to primary care physicians. This seems to reflect the rise of specialty care markets plus the ongoing importance of reaching specialists in successful market entry

  • Investment Trends: Launch year spending wins a lion’s share of investment resources. For the total benchmark class, Launch Year spend nearly equals the approximate sum of all previous years commercialization investments on average. This seems to reflect two parallel historical trends. First is a rise in launching specialty care products, which require fewer resources and still can return rich rewards. Second is a trend to reduced blockbuster budgets during Launch Years
  • High Performer Insights: High performers spotlighted comparative outcomes, reimbursement strategies, thought leader relationships and use of novel tools and channels as critical success factors to win in the specialty marketplace
  • Ramp-up Patterns: There are predictable investments and ramp-up patterns that tend to allocate nearly half of total (aggregated, four-year) spend during the three years prior to the Launch Year and half during the Launch Year. On average, specialty products invested 58% of funds in the first three years and 42% in the Launch Year. This contrasts with the ramp-up for primary care products, where 44% of the total was spent before launch and 56% in the Launch Year.
Table of Contents

Executive summary
  • Launch investment benchmarks
  • Investment data by product segment
  • Launch activities
  • Launch investment allocation
  • Success factors
  • Most important future activities
  • Definitions used in study

List of Tables & Figures

Executive Summary

Project Objectives & Methodology 4

Key Insights & Findings 5

Companies Participating in Study 9

Summary Description of Participating Products 10

Participants’ Demographics 11

Launch Investment Benchmarks Advantage 15

Benchmark Average Launch/Pre-Launch Investment 16

Launch Year Investment (Total, Specialty and Primary, Landscape in Quartiles, Etc.) 17

Spend at Year -2, -3 23

Investment Data by Product Segment 25

Peak Annual Revenue Projections 26

Total Launch Investment by Peak Revenue Category (Launch, -1) 27

Therapeutic Area Distribution and Avg. Spend 29

Market Entry Condition for New Products in Study and Avg. Spend for Each 31

Spend for Differentiated Products in Each Market Condition (Novel, Established, Etc.) 33

Launch Activities 36

Agency Fees (excluding DTC) 37

Direct to Consumer & Advertising Expenses 38

Health Economics/ Outcomes Research 39

Launch Meeting/ Kickoff 40

Managed Markets/Market Access 41

Market Research/Analytics (excluding DTC) 42

Medical Affairs 43

Patient Education/ Assistance 44

Physician Education 45

Sales Force Preparation 46

Other 47

Activities Expected to Gain Funding 48

Activities Expected to See Funds Decrease 49

Launch Investment Allocation 50

Investment Allocation by Activity Category 51

Success Factors 58

Most Important Future Activities 61

Definitions Used in Study 64