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Pharmaceutical New Product Commercialization: Preparing for Market Success

ID: SM-176


11 Info Graphics

33 Data Graphics

59 Metrics

35 Narratives

12 Best Practices

Pages: 85

Published: 2023

Delivery Format: Shipped


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Long and costly product development cycles make it essential for pharmaceutical companies to maximize limited staff and resources to the development of compounds with the greatest potential market value.

From the time a company’s R&D (Research and Development) group begins to develop a new prescription medicine until it receives FDA approval to market the drug in the United States, a drug company typically spends $1 billion over the course of 10 to 15 years.

Leading companies are integrating commercial insights earlier and earlier into the new product process in an effort to identify and target promising compounds, reduce development cycle time, focus resources for greatest impact and increase their potential for launching a blockbuster drug.

Early-Stage Commercialization activities range from therapeutic opportunity and competitive landscape assessments to thought-leader focus groups, initial pricing studies, and pre-efficacy forecasts during pre-clinical and Phases I and II development. Global pharmaceutical companies must find ways to improve early-stage decision making and enhance product design using commercial insights to gain an overall competitive advantage in the marketplace.

Best Practices, LLC conducted research for this report to identify winning strategies, structures, and best practices in early-stage product commercialization and portfolio management. Best Practices also sought to clarify and codify Global Product Strategy’s placement in the corporate organizational chart to determine a best fit for the organization to provide optimal support.

Through this report, executives at leading biopharmaceutical companies shared reasons why the work done through early commercialization groups is invaluable. The participants cited the following areas where Early-Stage Commercialization efforts benefit overall corporate success:

  • Optimizing the value of assets
  • Driving alignment of product development with unmet patient needs
  • Identifying commercial viability of drug candidates and helping to redirect funding from projects with lower potential to those with higher potential for success
  • Focusing all parties on areas expected to have the greatest return on investment
  • Enabling project prioritization
  • Facilitating collaboration between commercial and clinical development staff
  • Informing internal and external investment decisions
  • Continuously monitoring and communicating changes in the market that affect product potential
  • Paving the way for successful product launch

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

Companies Profiled:
Abbott; Allergan; Alexion Pharmaceuticals; Altus Biologics; Amgen; AstraZeneca; Bayer; Eli Lilly and Company; Genentech; GlaxoSmithKline; Human Genome Sciences; Intervet International (part of Schering-Plough); Merck; Neurocrine Biosciences; Novartis; Shire; Teva Pharmaceutical Industries Ltd; Solvay Pharmaceuticals; Vertex Pharmaceuticals

Study Snapshot

Best Practices, LLC examined how other biopharmaceutical companies’ Early-Stage Commercialization functions are structured, how leaders of these groups manage their functions, and for what activities and roles Early-Stage Commercialization leaders have responsibility. The study examines how top companies achieve long-term Early-Stage Commercialization success through thoughtful development of each major program element including:

• Organizational structure and alignment – Optimal fit and utilization within the corporation

• Early-Stage Commercialization activities by phase – Functional involvement at each product development phase and transition of functional responsibilities to in-line groups

    o Relationship of Global Marketing to pre-market commercialization

• Building cross-functional teams around the Early-Stage Commercialization function
    o Leadership/stakeholders
    o Global and regional marketing interactions

• Portfolio management
    o Investment decisions
    o Lifecycle management processes

• Value that Early-Stage Commercialization group contributes to the business

• Leadership skills

Key Findings

The following key findings emerged from this research:

• Although Early-Stage Commercialization staffs work closely with R&D, the Early-Stage Commercialization organization most often reports to a commercial function.
• The commercialization and portfolio management functions are typically centralized and report through marketing or new product planning functions. Centralization helps establish and ensure common process, performance and evaluation standards for projects, programs and product development.
• Matrix organizational structure provides expertise across appropriate functional areas to project teams and/or evaluation committees.

• Successful pharmaceutical product development demands a cross-functional approach, beginning in the earliest, pre-clinical stages. Early-Stage Commercialization staff typically serves on teams with R&D, medical affairs, regulatory, legal, clinical, manufacturing and others.
• Cross-functional product development processes ensure that there are checks and balances in place so that perspectives from across the company are heard. This practice ensures well-informed decision-making.

• Sixty-one percent of the benchmarked companies begin early commercialization activities in at least one functional area during the pre-clinical phase. By Phase I, more than 70 percent of companies are involved in commercialization activities, compared with 94 percent during Phase II B and 89 percent during Phase III.
• The sales forecasting and commercial strategy functions involve all the benchmarked companies during at least one development phase.

• R&D most often leads the early-stage investment (or portfolio management) committee. In all, R&D either leads or co-leads 67 percent of the time within the large pharmaceutical segment, with medical affairs the group that leads next most frequently. Among the full benchmark class, R&D leads or co-leads the investment committee at 56 percent of companies and commercial strategy is the group next most likely to lead.
• R&D is the function most often drives issues presented for development decisions related to major development investments. In the large pharmaceutical segment, R&D drives issues for decisions on major investment at 45 percent of companies.

• Lifecycle management emerges as a critical new skill in the hands of early-stage marketers. Once the domain of brand teams seeking to manage patent expirations in late-stage products, life cycle management is taking on new meaning in the early commercialization process. More than ever, early-stage marketers seek to evaluate the full potential of new and existing molecular entities.

Table of Contents

Executive Summary..... 6
  • Introduction.....6
  • Research Approach.....7
  • Participating Companies.....8
  • Report Structure and Organization.....9
  • Key Findings.....10
    • Create an organizational structure that fosters commercialization excellence and integrates portfolio and project processes......12
    • Alignment of Global Marketing in Early-Stage Commercialization.....13
    • Centralize Early-Stage Commercialization functions to better integrate people, resources, activities and capital-intensive projects......14
    • Maintain open, two-way communication across key stakeholder groups to multi-dimensional perspective with checks and balances......15
    • Develop collaboration, facilitation and negotiation skills that help early-stage marketers integrate both R&D and commercial perspectives into new product development and portfolio management......15
    • Begin portfolio decisions earlier in the process to uncover promising compounds and to flag potential problems with other drugs.....16
    • Initiate lifecycle management analyses early on to fully evaluate the potential for multiple indications, line extensions, new formulations, alliances and other value-optimization actions......17

Structuring Early-Stage Commercialization for Optimal Impact.....21
  • Introduction.....21
  • Alignment of Global Marketing in Early-Stage Commercialization.....26
  • Early-Stage Commercialization Corporate Structural Models.....28

Functions of Early-Stage Commercialization Organizations.....31
  • Introduction.....31
  • Functional Involvement.....32
  • Transitioning of Commercialization Roles.....38
  • Snapshots of Company Transitioning Practices.....41
  • Best Practices for Transitioning Responsibilities.....42
    • At transition time, transfer some early commercialization staff to in-line marketing along with the product......42
    • Manage transition of commercialization responsibilities as a process not an event......43
    • Solicit input on early-stage decisions from the in-line leaders who will eventually have responsibility for the emerging product......44
    • Share information with appropriate in-line and regional leaders on a regular basis, as changes arise, and at the time responsibilities are scheduled for transition......44
    • Schedule transitions at logical points in the product development timeline to minimize disruption of activities......45

Leveraging Cross-Functional Relationships to Drive New Product Development.....48
  • Introduction.....48
  • Global Marketing Relationship.....48
  • Regional Marketing Interaction.....50
    • Establish and follow a formal communications program to build vital, dynamic relationships with regional marketing leaders......51
    • Gather early insights from regional marketing leaders on a regular basis to avoid costly development mistakes......52
  • Cross-Functional Teams.....53
  • Selected Cross-Functional Team Snapshots.....55
  • Pros and Cons of Cross-Functional Collaboration.....57
  • Building Relationships Between Commercial and Research Staff.....59
    • Communicate that the role of commercial is accelerating the success of molecules (not limiting research opportunities) to dispel the idea that commercial and science do not share the same goals......59
    • Bring the scientific staff out of the lab for special events and activities to help them understand that commercial work supports science goals......60
    • Apply diverse market insight tools and studies to inform the Early-Stage Commercialization pathway. Applying the right tools at the right times is the key to insightful and cost-effective research......62
  • Desired Skills for Early Commercialization Staff.....64
  • Stakeholder Communication Through Meetings.....65

Portfolio Management.....68
  • Introduction.....68
    • Employ peer reviews throughout the research-development-and-commercialization process to ensure the organization supports the best new-product candidates......69
  • Composition and Leadership of the Investment Decision Committee.....70
  • Functions That Drive Issues Presented for Development Decisions.....75
    • Balance clinical and commercial inputs to investment decision committees to improve the odds of discovering hidden opportunities......79

List of Tables & Figures

Table 1.1: Benchmark Partner Companies
Table 1.2: Benchmark Partner Demographics
Figure 1.1: Relationship with Global Marketing
Figure 1.2: Investment Decision Drivers (Large Pharma)
Figure 1.3: Tailored Therapeutics Encourage Earlier Involvement
Figure 2.1: Commercialization Oversight (Full Class)
Figure 2.2 and Figure 2.3: Commercial Function Structure (Large Pharma) and Commercial Function Structure (Full Class)
Figure 2.4: Job Title of ESC Leader (Large Pharma) Figure 2.5: Job Title of ESC Leader
Figure 2.6: ESC Function Reporting Lines (Full Class)
Figure 2.6: ESC Function Reporting Lines (Large Pharma)
Figure 2.7: Relationship with Global Marketing
Figure 2.8: ESC Duration of Global Marketing Involvement (Large Pharma)
Figure 2.9: ESC Structure – Commercial Model
Figure 2.10: ESC Structure – R&D Model
Figure 2.11: ESC Structure – Corporate Model
Figure 2.12: Functions Included in Early-Stage Commercialization
Figure 2.13: Functions With Most Involvement per Phase
Figure 2.14: Pre-Clinical Commercialization Functions
Figure 2.15: Phase I Commercialization Functions
Figure 2.16: Phase IIB Commercialization Functions
Figure 2.17: Phase III Commercialization Functions
Figure 2.18: Commercialization Functions at Launch
Table 2.1: percent Companies Transitioning Commercialization Roles Per Phase
Figure 2.19: Transition Points (Full Class)
Figure 2.20: Transition Points (Large Pharma)
Figure 3.1: Relationship with Global Marketing
Figure 3.2: Duration of Global Marketing Involvement
Figure 3.3: Transition of Team Leadership
Figure 3.3: Cross-Functional Collaboration Pros & Cons
Figure 3.4: Seeding Market Insights Into Science Teams
Figure 3.5: Developing Broad-reaching Market Perspectives
Figure 3.6: Early-Stage Employee Skills
Figure 3.7: Key Stakeholder Meetings (Large Pharma)
Figure 3.8: Key Stakeholder Meetings (Full Class)
Figure 3.9: Pathways for Commercial Input to Portfolio Committee
Figure 3.10: Peer Review Committees
Figure 3.11: Decision Committee Composition (Large Pharma)
Figure 3.12: Decision Committee Composition (Full Class)
Figure 3.13: The Investment Decision Table
Figure 3.14: Issue Drivers: Major Investment Decisions
Figure 3.15: Issue Drivers: Market Development Funds for Phase III Assets
Figure 3.16: Issue Drivers: Line Extensions
Figure 3.17: Issue Drivers: Launch Monitoring
Figure 3.18: Issue Drivers: Post-Launch Product Issues
Figure 3.19: Issue Drivers: In-Licensing