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Drug launches are undergoing change as patent cliffs, regulatory oversight and a tough investment environment put pressure on commercial strategies.
Amid headwinds, the pharmaceutical industry is moving into a recognizable cycle, Jim LangThe CEO of commercial services company Eversana says companies are scaling back their research and development efforts and putting budget-minded people into leadership roles.
“We’re really excited to see a move by big pharma to focus the attention of their CFOs and procurement for the entire commercialization period,” he said.
Jim Lang, CEO of Eversana
Used with permission from Eversana
These changes are being driven by increased competition in the personalized and precision medicine market and a shift toward patient-centric care, he said. An examination of some of the challenges facing drugs coming to market in emerging therapeutic areas sheds light on how company strategies may be shaped for the rest of this year and into 2025.
Here, we sat down with Lang to discuss the challenges of pharmaceutical commercialization, drug launch failures, and why your launch strategy needs to start years before you hit the market.
This interview has been edited for clarity and style.
PHARMAVOICE: What changes have you seen in the commercialization market recently?
Jim Lang: 2021 and early 2022, and even going back to 2019, have been uniquely good for our industry. The rate of loss of exclusivity, i.e. revenue lost due to patent expiration, has been very low. Also, the biotech market has been very well-capitalized, some would argue over-capitalized in retrospect. Naturally, these boom periods tend to be quickly followed by bust periods.
Funding in biotech was very low for about 18 months, but is now recovering. And the industry as a whole dealt with the impact of rising expiration losses, which have risen to about 4% to 6% of annual revenues, compared with around 1% to 2% in previous years.
Hundreds of companies have been forced to cut staff or close entirely over the last few years. Pfizer and BMS recently announced job cuts. We will watch the final group make decisions on portfolio allocation and cost cutting through the remainder of the year, and I believe we will see a return to normalcy in 2025.
What challenges do you see in launching new medicines?
The industry is grappling with rare diseases, which is very interesting, but by definition, rare diseases have a small number of patients. That means you’re attacking a smaller number of patients and you have to be much more agile. You have to be more frugal, more agile to reinvent the commercial model. And, you know, it’s a lot harder to be successful financially when you’re at $300 million in peak sales versus $5 billion in peak sales.
Have there been any spectacular commercialization failures in the past few years that represent important learning opportunities for the industry?
Commercializing a drug is no easy task. In fact, roughly two-thirds of launched drugs fail to live up to expectations. But two stories well known to our team illustrate just how challenging it can be.
The first was a blockbuster drug launched about five years ago to treat macular degeneration, an eye disease. The drug showed great potential in the market, but safety risks hampered its launch. Analysts expressed concerns and the American Association of Retina Specialists issued a warning against the treatment six months after its launch, posing major challenges to growth. The drug never lived up to expectations.
The second drug that comes to mind was developed to prevent hallucinations in Parkinson’s disease patients. This drug also had safety concerns, and the company invested in an education campaign to support its growth. This backfired in the form of a federal lawsuit, creating further challenges.
Many factors go into a successful launch, but it’s important to ensure your product is ready to meet patient needs and is supported throughout the launch process, from educating healthcare professionals, patient communities, payers and more.
Digital therapeutics, as a field, has had a really hard time demonstrating its value to payers. It’s been an investor darling for the last eight years or so, but it hasn’t been in the last year and a half. But I think that’s because they haven’t paid as much attention to the payer side as they have to the health economics discussion.
What do you think about pre-launch expectations from Wall Street? the study It shows that around 40% of drugs are below sales forecasts.
The conclusion is that more experienced launch companies are often more successful than less experienced launch companies. If you’re a first-time start-up biotech company and you’re going at it on your own, your odds are stacked against more experienced launch companies.
Research shows that companies that start research 2.5 years before launch have dramatically different commercial success rates than companies that start research one year before launch. Big Pharma knows this, which is why they start the process three years before launch. The challenge for emerging biotech companies is that most of them rely on financial investment. In the last two years, the situation has only gotten worse. Naturally, the chances of success are lower.
These studies are inherently biased because expectations are just a collective forecast of analysts, including the companies involved in the drug. And there are lots of reasons why people would be biased upwards early on. To date, their stories have all been about attracting talent and raising funding. Of course you’re going to paint a high-water mark scenario.
What is your advice to emerging biopharmaceutical companies that may be relying on investment lines?
Don’t wait. Even if you don’t have a lot of money, start with the most important path that everyone knows about, which is getting medical practices and key opinion leaders to activate the market, talk to payers, and ensure reimbursement for these specific products. These are often things that don’t cost a lot, but they’re important paths that keep people waiting too long.
What other commercialization trends are you seeing?
There’s a lot of talk right now about the direct-to-patient model. In the old days, medical professional-centric design was the order of the day, and the physician was at the center of commercialization thinking. There were certainly other factors that had to influence the engines: payers, regulators, the patients themselves, and the integrated delivery system that surrounds the physician. But it took a big shift to become patient-centric. And when you talk to the big players that want to do this now, they’re realizing that if they put the patient at the center and make the patient experience great, it’s going to produce better results and they’re going to have solid sales of their products at a lower cost.
