The Holy Grail of Product Development

Drug discovery is increasingly risky and expensive, with some proposing that it takes approximately $500 million and up to 12 years of research just to get drug candidates into a clinical trial.  In order to emerge successfully from the pharmaceutical product development process, estimates suggest a total capitalized cost of $1.3 billion.  And these huge investments are being made at a time when approval of new drugs is falling; from 1995 to 2007, the number of new chemical entities approved by the FDA dwindled from 45 to 22.

But even regulatory approval is no guarantee of success. The most commonly-cited example of a pre-approved commercial flop is Pfizer’s Exubera, the inhaled insulin therapy. After Exubera failed to meet the expectations of physicians and patients, Pfizer removed it from the market in 2007, resulting in a $2.8 billion loss. Companies need the right clinical development strategy to maximize the commercial prospects of their new products.

What forces have combined to create this situation?  One component is certainly a competitive and constrained healthcare environment wherein translating innovation into medicines that are both approvable and commercially viable is difficult. Fragmented, complicated company structures with misaligned functional groups preclude the efficient integration of marketplace needs into the developing entity. A reorganization to a more streamlined and versatile model would support a market-driven approach to drug development. 

Such a marketplace focus should be clearly highlighted in any guiding document for development, thereby enhancing the numbers of commercially viable products entering the market.  But are the guiding documents as currently defined up to the task?

A Problem of Definition
It’s supposed to be the Holy Grail of pharmaceutical product development: The Target Product Profile (TPP). But does it even exist? And if you can lay your hands on it, will you know what you’ve got? Can you summon the vague memory of a slide from a distant presentation? You’d better. This watershed moment for drug development is an opportune time to revisit the important role that the TPP should play in the drug development process. 

Despite the important role of the TPP in product development and strategic decision-making, there remains a paucity of information regarding the TPP, its definition, and its use. Thus, there is an opportunity to foster dialogue on the TPP with a view to avoiding the strategic missteps that result in suboptimal products entering the marketplace.

In the quest for a document that captures the essence of a drug under development, many companies have created distinct TPPs that may be differentially defined and utilized within different organizations. “Summary TPP,” “Strategic TPP,” “Weighted TPP,” and the simple “Profile” are just a selection from the genre. While some companies have successfully implemented and managed these variants, attempts to alter the Target Product Profile often generate confusion, problems with version control, and inherent conflicts with format, content, and use.

In March 2007, the Center for Drug Evaluation and Research (CDER) issued draft guidance for industry and review staff that defined the content and format of the TPP. It read, in part, “The purpose of a TPP is to provide a format for discussions between a sponsor and the FDA.” The TPP, in the FDA format, performs a vital role in those discussions and in the ensuing tactical decisions for clinical trial design, which is why it is one important component of an overall strategic intent. 

Target Product Profiles – Current Practice
Too often, questions about commercial viability are asked too late in the process to change the direction of development. To help address this, the traditional TPP has moved from being an R&D tool used to guide a clinical program to serving as a business tool for determining asset value and capital commitment. 

FDA has positioned its draft guidance on the TPP as facilitating better communication between sponsor and regulatory body, because it summarizes the drug development program in terms of intended labeling content and claims. But while the framework of the FDA guidance facilitates efficient discussion with regulatory bodies, a given product’s profile usually does not embody the market insights necessary to determine the commercial viability of developmental programs. For example, achieving a statistical primary endpoint in pivotal clinical trials may be sufficient for regulatory approval, but may not provide a compelling addition to the therapeutic armamentarium: the result might yield a marketed product that does not deliver a good return on investment for the company.  The cessation of Roche’s HIV program is a good example of decision-making that took into account the evolving characteristics of actual products in relation to the marketplace needs and anticipated return.

The FDA-defined TPP includes only limited anticipation of market needs in the form of promotional claims, and is devoid of pricing assumptions and other important information necessary to evaluate a drug’s value. Returning to the Exubera example, had Pfizer accurately understood the marketplace needs for insulin products, hundreds of millions of dollars in development and marketing costs could have been re-allocated. 

Because strategic decisions are based upon marketplace needs, not just regulatory needs, the framework for decision-making must include the targeted value provided to each customer. If a company loses sight of the original desired target (as driven by unmet market needs), assessment of the product can be colored by emergent data from the clinical trials, resulting in a product that the market doesn’t adopt. The targets necessary for a product to achieve forecast valuation are subject to change only in the event of dramatic environmental or competitive events such as government-mandated changes in the treatment of a disease or the appearance of unforeseen technology advances, or a major finding in a competitor’s clinical trials. In the absence of such major events, the vision for the brand should remain inviolable.

A Unifying Definition–The Strategic Evaluation Framework
Rather than redefining the TPP. We propose a Strategic Evaluation Framework that encompasses the TPP, brand vision, and market needs. The primary goal for the Strategic Evaluation Framework is to facilitate strategic decision-making for the company regarding the commercial viability of developing therapies. As such, it is a blueprint for understanding the market opportunity in the context maximizing customer-created value. Moreover, the Strategic Evaluation Framework provides a format for communicating the product’s value to investors, portfolio managers, and senior management.

Regulatory approval is a recognized imperative. Thus, the framework encompasses FDA’s view of the TPP, but extends it to include other essential parameters that prioritize patients, doctors, and payers. Here’s how it works:

• The Target Market Profile (TMP) is the foundation for the framework. Without understanding the market, any product profile will be an unsubstantiated guess at the capacity of the product to be successful. While you might fill in the details as you learn more about the market, the key facts contained in the TMP should change only when there is a major market shift.

• The Strategic Target Profile (STP) is the vision for the product, and is based upon unmet needs as defined in the TMP. It is the profile of the desired product to be created, staying within the realistic bounds of the company’s core capability. Because it is important to maintain a consistent strategy, the STP should change only when an update to the TMP makes it absolutely necessary.

• The Target Product Profile (TPP) is the profile of the drug you expect to launch. At first, this profile will be the same as the STP.  However, per the FDA’s guidance, it will be updated as clinical data reflect the latest estimates of the drug you want the FDA to approve.

For the Strategic Evaluation Framework to set the foundation for commercial success, companies must evaluate the fdeveloping entity (the latest version of the TPP) against the STP. This comparison will show how far the clinical trial results deviate from the original vision for the product (the STP), and therefore how well or how poorly the resulting drug will serve the market’s unmet needs. 

Components of the Strategic Evaluation Framework
The Target Market Profile (TMP) captures all the key information about the market, and provides the foundation for the Strategic Evaluation Framework. Creating the TMP is dependent upon developing an understanding of the market’s unmet needs and interacting with individual customers. The TMP answers questions on how products would fit into medical practice by computing the needs of current and future treatment algorithms in relation to cost.

Contemporary viewpoints hold that products should be co-created with the targeted customer in order to provide meaningful experiences. To utilize this philosophy calls for a fundamental redesign of the pharmaceutical business model. That’s not realistic in the short term-but co-creating value for the individual customer certainly is.  With this in mind, information is gathered from potential customer groups to build a market-needs profile that reveals how a product can achieve sustained marketplace differentiation, significant market share, and profitability. 

The Strategic Target Profile (STP) provides a record of the vision for how a product should meet the needs of the market. The STP describes the solution needed by the marketplace, as described in the TMP, and develops a vision for the product benefits needed to meet the marketplace needs. The STP is distinct from the TPP in that it contains pricing, forecast, investment, and pharmacoeconomic assumptions. The STP should also be consistent with company core competency, mission, and strategy.  For example, it is inconsistent for a biotech company whose mission is providing innovative therapies for underserved, high-need patients to then target a broader population with mild disease in need of standard topical emollients. 

The Target Product Profile (TPP), using the FDA’s definition, provides a record of the drug that is most likely to launch, incorporating the latest data from the clinical program and the evolving product pharmacology. We have focused much of the discussion on the TPP per se, because it is a widely recognized element. At the same time, it’s important to appreciate The TPP’s limitations when used in isolation. The TPP provides a record for the clinical development program to guide the number, design, and timing of clinical trials; in addition, it captures clinical findings and product attributes (e.g., purity, stability) as they appear. The TPP is thereby updated to reflect the latest estimate for the product’s profile at launch, exemplifying the FDA notion of a “dynamic summary that changes as knowledge of the drug increases.”

Collectively, the components of the Strategic Evaluation Framework guide the strategic clinical development decisions that set the foundation for commercial success. To implement this, a process is needed for the developing entity to be evaluated against the TMP and STP. While some companies have groups that fulfill aspects of these objectives, they invariably exist in isolation. Therefore, collection of the necessary participants that derive from different functional capacities may require a reorganization of current pharmaceutical business models from groups sequestered by purpose to teams of multi-functional groups that work in concert.  It follows that the synthesis of the Strategic Evaluation Framework be jointly governed by Marketing and R&D groups, thus mandating close interaction between the classical silos from the earliest development stages through to commercialization.  

In conclusion, we propose the Strategic Evaluation Framework as a scaffold that recognizes the need to develop a solution to a problem, and the need to focus on the marketplace and individual customer value rather than on product attributes alone, thereby facilitating discussion and decisions relative to achieving the commercial success. 

Charles Rink contributed to this article.