What pharma needs to know about commercial strategy

Dr Simone Seiter
[Credit: Simon-Kucher & Partners].

With over 20 years of experience in commercial strategy consulting, having previously worked at Capgemini and IQVIA and sitting on the board of directors at GenSights Biologics, Dr Simone Seiter, the new lead of the commercial strategy cluster at Simon-Kucher & Partner’s Life Sciences division, has worked with numerous companies to help them achieve their commercial objectives.

Here, she discusses what pharma companies need to know about commercial strategy from her experience in the consultancy industry.

What is strategic marketing consulting and what are its goals?

The idea of strategic marketing consulting is to optimise a company’s marketing, sales and pricing to help them develop the best strategies for business decisions and focus their investments.

What are key challenges of bringing a product to market and how can they be overcome?

When you assess the success of commercialisation for a company, one of the main challenges is the difficulty of achieving an excellent launch. Often, when a company’s pre-launch market forecasts is compared to actual sales in year one or year two, around 60 to 75 percent of companies do not meet the analyst forecast, according to our research.

There are several reasons for this. One is that consumers are increasingly scrutinising the new products. They are looking at launches and demanding proof that novel medicines are better than the current standard of care. The other reason is that as indications become more specific, the target population is much smaller and so the added scrutiny becomes a problem.

It has become increasingly challenging for companies to develop products that meet these expectations because on the one hand you have smaller launches, with smaller indication populations and on the other you have the increased scrutiny and challenge by the consumers.

Therefore, the thinking must be “what is the right strategy?” and “how do you find out how to do the right thing efficiently?”

What does it take to develop a good commercial strategy in pharma and life sciences?

In my experience, you must develop a framework that allows you to organise and prioritise what you need to do for a launch. There are so many things that must be considered, but how early you have to act and how much of your resources need to be put in to each area depends on the type of product and the market you are launching into.

For example, if you consider an orphan drug launch with an indication where there is no treatment, then a lot of the work needs to be done to ensure doctors are aware of the disease, that they know how to diagnose the disease and to make sure patients are also cognisant of the problem. For this, patient awareness is an important focus.

On the other hand, if you consider the melanoma market, where a lot of launches and innovation have recently occurred, you do not have to spend much time creating awareness. However, you do have to spend time ensuring you differentiate your product from other products on the market and articulate how it will improve treatment quality, particularly how your product generates better outcomes.

We have built a new framework that considers how companies define what their key aspects are. The model helps companies understand how their product fits into this logic. From there we help them develop a targeted plan that responds to the critical success factors of the brand and makes sure the right activities are conducted at the right time, with the right focus and the appropriate budgets behind them. Often, we set a budget and companies will ask: “Can I do it with less? Do I really need to do this?” However, our thinking relates to what the key drivers are in order for a company to accomplish their goals and what they could possibly think about a little bit later, or not do to save on budget.

Are there differences in providing strategic consulting to big pharma versus smaller companies?

Working with smaller companies, such as biotech start-ups, is very different to working with larger companies and requires a different skillset from the consultancy perspective. I have helped biotech companies decide which therapeutic areas are best for them to focus on. To do this, we analyse factors such as indication prioritisation and the level of investment in and cost of clinical trials. We tend to suggest areas with the least risk and this requires a scientific expertise in different therapeutic areas. Companies also need to look ahead 10 years to consider pricing and access considerations that may hit the molecule down the line.

Conversely, when you work with big pharma, these are usually functional organisations and so we are not involved in shaping and developing the company. This is a lot less thought functional but requires more experience in the lead market and knowledge about specific countries. We also help with the cross-functional aspect of separate teams working together in big pharma projects.

Is there anything else you think is important to commercial strategy?

In my experience, companies tend to underestimate how little patients and doctors are willing to change their habits, believing they are more mobile in response to launches than they truly are. Breaking patterns creates risks and consumers want proof that the risk is worthwhile; an improvement of two or even 10 percent in survival outcomes can be pretty meaningless to them.

This is true with innovation as well, particularly with biotech companies. Science must be combined with commercialisation in order for companies to have successful launches and for patients to get the best treatments. This is where consultancies can bridge the gap between the scientific or biotech mindset and the commercialised mindset.