Pharmaceutical Commerce - July/August 2011 - (Page 12)

Business Finance Achieving Launch Excellence A Question of Penetrating the Dynamic Market < continued from page 1 Figure 2: Figure 3: 56 Recent Launch Products Trends Dynamic market volume across 17 chronic therapy areas Thus, one of the most crucial components of a successful product launch is to understand the dynamic market. Put simply, why do patients present to a physician’s office? What triggers the initiation of a new therapy or a change in treatment? And more importantly, how does my product satisfy the reason for that change versus my competitors? In addition, how does the dynamic market change over time? And what is the size of the dynamic market? This will, of course, differ for every patient segment, therapy area and country, since no market exactly mirrors that of another. The Relative Consistency of the Dynamic Market: The dynamic market remains relatively consistent over time. The introduction of a new product, for example, does not necessarily grow the dynamic market. Instead, new products generally compete for a share of the existing dynamic market. Consider Fig. 3, which shows the size of the dynamic market in seventeen chronic markets over the past three years in the United States [1]. While the market fluctuates, it has not grown over time. And clearly over the three-year period, several products have entered the market. So why is this? The reality is that patients present to a physician and change treatment for reasons other than the introduction of new products. They do so because of symptoms, a diagnostic test or because of dissatisfaction with current therapy. Rarely does the mere introduction of a new product drive the change, however. It certainly will alter the options available for patients, but to expect a new product to fundamentally change the flow of the market is a tall order. This does not mean, however, that new product launches inherently cannot grow a market. It simply means that companies should not count on them doing so. There are occasions where launches (and marketed products as well, for that matter) can grow the size of the dynamic market. First of all, in the event that the introduction of a product also increases the diagnosis of a particular disease, the patient pool and the dynamic market would certainly increase [2]. Chantix (varenicline; Pfizer), a product for smoking cessation which launched in June of 2006, did precisely this. In the first half of 2006, prior to Chantix’ introduction, the number of prescriptions written in the dynamic market was around 250,000. In the second half of the 2006, however, the number of prescriptions written in the dynamic market grew to 12 July | August 2011 www.PharmaceuticalCommerce.com Figure 4: Impact of Januvia’s introduction on Diabetes market Add-On volume approximately 800,000. While many of these patients may already have been treated by an OTC product, the introduction of Chantix clearly drove an increase in dynamic market prescriptions. Second, a product launch can grow the number of prescriptions in a market place if the product provides an additional benefit when added to existing therapy. This has the greatest impact when a market currently does not have add-ons. Abilify (aripiprazole; Bristol-Myers Squibb) is a good example of this. As the first product to gain an indication as an adjunct therapy in major depressive disorder, it managed to grow the number of dynamic market prescriptions of the market from 280,000 Rx per month to 300,000 Rx per month. If, however, patients in a particular market already receive some type of add-on therapy, then the introduction of a new add-on will in all likelihood simply capture a share of the existing add-on market. Januvia (sitagliptin; Merck), a product for Type II diabetes, is a good example of this. Despite its strong performance and the fact that it was a new class, Januvia did not actually grow the dynamic market. It simply captured a large share of it. Even in the add-on segment, where one may expect to see an increase, the market remained stable. Januvia simply took share from other products currently prescribed as adjunct therapy (Fig. 4). Lastly, a product can increase the relative size of the dynamic market to the total market (though not, in terms of volume, grow the total market overall) by increasing the number of product switches that take place (i.e. churning patients from the static market to the dynamic market). Examples of this are extremely rare, however, and usually do not manifest because of a new product launch. The most common example of change in the dynamic market due to increased switches stem from the introduction of a generic. Because of automatic substitution at the pharmacy, the number of switches increases dramatically once a generic product enters the market. Shortly thereafter, the dynamic market returns to its “normal” state. Growing the dynamic market in any of the ways mentioned above certainly presents a large potential for a new product launch but companies should recognize the challenge and difficulty of doing so. As outlined above, the fact that the dynamic market has remained fairly stable over the past five years despite the entry of numerous products provides evidence that, overall, product launches primarily compete for a share of the dynamic market rather than expand its size. The Small Size of the Dynamic Market In addition to its general consistency over time, the size of the dynamic market is surprisingly small. On average, it makes up only about 10% of prescriptions written in chronic therapy areas [3] (Fig. 5). Of these ten percent, about 60% is for new therapy starts, thirty percent is for patients switching therapies and only about ten percent is for patients receiving additional therapy. This has tremendous implications on a product’s trajectory. In the event, for example, that a product does not get access to new therapy starts, a staggering 60% of the potential market disappears and its trajectory will depend on its ability to penetrate the remaining 40% (switches and add-ons) [4]. And a product with an indication specifying use only in combination with another product competes for a share of only 1% of the overall market place (10% of 10%). That is an extremely small patient base by which to build a trajectory. This does not mean that a product cannot succeed without penetrating new therapy starts, however. The product simply has to do relatively better in the remaining segments. Victoza (liaglutide; Novo Nordisk), a GLP-1 inhibitor for the treatment of Type II Diabetes launched in 2010, is a good example of this. Even though it is not recommended for firstline therapy, it has managed to penetrate the diabetes market well. In fact, six months post launch it has captured almost twice the share of Byetta (exenatide; Amylin, Lilly) (another GLP-1 inhibitor) in switches and add-ons (Fig. 6). That is particularly impressive given that Byetta launched in 2005 and that both Januvia and Onglyza (saxagliptin; BristolMyers Squibb) (two DPP-IV inhibitors) also compete in the same space. So while the exclusion of a given patient segment will limit the maximum trajectory a product can achieve, it does not mean that the product cannot still perform well in the market place. The Currently Treated Patient: The Driver of the Trajectory We just outlined the overall size of the dynamic market and its sub-components (new therapy starts, switches and add-ons). When a product enters the market, however, it does not penetrate the dynamic market by the same proportions. Analysis of the United States market shows that while new therapy starts make up 60% of the dynamic market (as mentioned above) they represent only about 25% of new product launches’ source of business. The biggest patient segment is actually switches, which represents about 50% of new products’ source of business at launch. Lastly, add-ons make up the remaining 25% (Fig. 7). http://www.PharmaceuticalCommerce.com

Table of Contents for the Digital Edition of Pharmaceutical Commerce - July/August 2011

Pharmaceutical Commerce - July/August 2011
Contents
Op-Ed
Top News
Business/Finance
Brand Communications
Supply Chain/Logistics
Manufacturing & Packaging
Legal/Regulatory
Information Technology
PDMA Exhibitors
Meetings and Editorial Index

Pharmaceutical Commerce - July/August 2011

Pharmaceutical Commerce - July/August 2011 - Pharmaceutical Commerce - July/August 2011 (Page Cover1)
Pharmaceutical Commerce - July/August 2011 - Pharmaceutical Commerce - July/August 2011 (Page Cover2)
Pharmaceutical Commerce - July/August 2011 - Pharmaceutical Commerce - July/August 2011 (Page 3)
Pharmaceutical Commerce - July/August 2011 - Contents (Page 4)
Pharmaceutical Commerce - July/August 2011 - Contents (Page 5)
Pharmaceutical Commerce - July/August 2011 - Contents (Page 6)
Pharmaceutical Commerce - July/August 2011 - Op-Ed (Page 7)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 8)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 9)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 10)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 11)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 12)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 13)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 14)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 15)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 16)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 17)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 18)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 19)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 20)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 21)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 22)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 23)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 24)
Pharmaceutical Commerce - July/August 2011 - Manufacturing & Packaging (Page 25)
Pharmaceutical Commerce - July/August 2011 - Manufacturing & Packaging (Page 26)
Pharmaceutical Commerce - July/August 2011 - Manufacturing & Packaging (Page 27)
Pharmaceutical Commerce - July/August 2011 - Legal/Regulatory (Page 28)
Pharmaceutical Commerce - July/August 2011 - Legal/Regulatory (Page 29)
Pharmaceutical Commerce - July/August 2011 - Information Technology (Page 30)
Pharmaceutical Commerce - July/August 2011 - Information Technology (Page 31)
Pharmaceutical Commerce - July/August 2011 - PDMA Exhibitors (Page 32)
Pharmaceutical Commerce - July/August 2011 - PDMA Exhibitors (Page 33)
Pharmaceutical Commerce - July/August 2011 - PDMA Exhibitors (Page 34)
Pharmaceutical Commerce - July/August 2011 - Meetings and Editorial Index (Page 35)
Pharmaceutical Commerce - July/August 2011 - Meetings and Editorial Index (Page Cover4)
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