LS Executive Exchange: September 2011

Is the industry any closer to solving the issue of the patent cliff? The patent cliff has been a topic of conversation for years, yet the ability to build a pipeline to fill the gap has remained a challenge. Growth has occurred through acquisition and partnerships, as opposed to blockbuster drug development. Drug approvals alone were down in 2010, with only 21 new drugs approved, but the good news is that 21 new drugs have already been approved in 2011. The question remains, will any of these new drugs hit blockbuster status? Achieving annual sales of $1 billion wasn’t easy 10 years ago, and the challenges facing companies today are even greater.

To achieve annual sales worthy of blockbuster status there is an increased need to focus on the customer, but who is the customer? There are several, including patients who need their product, prescribing doctors, and payer organizations. Reaching each of these customers is a key step in achieving desirable annual sales.  So how do you reach of these customers?

• The patient: In the information age and with the growing influence of social media, reaching the patient has taken on even greater importance. However, at the same time this can be a risky regulatory move. For now having a strategy that allows flexibility and the ability to quickly adjust as regulatory guidance is given will be key to successful execution of the strategy.
• The doctor: How the industry collaborates and educates doctors has changed over the course of the last few years.  With more doctors restricting visits from pharmaceutical sales reps in their offices, the industry is looking for new ways to reach doctors. Doctors are looking for less marketing and more data around the various drugs, as was found in a recent Clarkston survey of doctors.
• The Payer: Reaching the payer is the biggest of these challenges. Payers are requiring additional testing and data to prove the new drugs have greater benefits and are more cost effective than current treatments. Only through these proven metrics will these new drugs be included on the formularies.

Ultimately, the need for more data is a common theme across not only the regulatory agencies, but also the drug customers.  So beyond the challenge of innovative development to identify new drugs, the industry will need to address the challenges of meeting their customers’ demands to create the next blockbuster drug.