Strategies for Success in an Evolving Commercialization Landscape

In moving an investigational therapy from bench to bedside, drug developers have long operated within the phased development constraints of regulatory agencies such as FDA and EMA. While these constraints are imposed to reduce the risk of harm to individuals participating in clinical trials, they also provide drug developers with critical data and defined inflection points for making go/no-go decisions that allow effective prioritization of resources and investments.

Leslie Orne, President and Chief Executive Officer, Trinity Life Sciences

Despite the benefits of a phased approach during drug development—with respect to both reduction in risk and maximization of benefit—drug commercialization typically follows a “go-big-or-go-home” model. A growing body of evidence, coupled with ongoing innovation in clinical trial design and strategy, strongly argues that a phased and adaptive approach to commercialization can provide significant benefits in the marketplace.

For years, the ingrained conventional wisdom that the overall success of a new drug launch is determined in the six months following approval has shaped stakeholders’ expectations. However, according to a Trinity Life Sciences analysis of actual sales compared with Wall Street expectations, a growing number of pharmaceutical launches—62% of the products that launched between September 2019 and December 2021, including a whopping 24 out of 28 non-rare, non-oncology products—underperformed expectations.While the specific cause of the observed underperformance varies from product to product, several factors clearly play important roles, including failure to adapt payer access/engagement strategies to meet new market realities, the use of unrealistic prelaunch forecasts for rate/peak uptake, and failure to understand the profile of healthcare providers (HCPs) who will prescribe your drug and where those HCPs are located. The consequence of each of these factors is amplified in a go-for-broke strategy for commercialization because this approach provides little to no opportunity for course correction if the actual and predicted launch metrics aren’t aligned.

These factors are now so common and launch failures occur with sufficient frequency that investors are shorting the stocks of biotech companies nearing launch.¹ Clearly, it’s time to innovate and adopt novel, next-generation commercialization approaches that are adapted to an evolving healthcare landscape and ensure that the right patients get the right medications with the right reimbursement.

Fortunately, developing approaches does not necessarily require recreating the wheel. Instead, drug developers can apply their deep expertise in drug development to transform their drug commercialization strategies. Rather than the “go-for-broke” approach that many commercialization models use to reach peak sales in a short period of time, a phased launch approach—which in many ways parallels the phased approach to developing pharmaceutical products—may ultimately be more sustainable and enable maximum market penetration and commercial success, and with less upfront investment.

The benefits of a phased commercialization approach

Phased commercialization approaches offer a variety of benefits because they allow strategies to be refined, expanded, or eliminated based on real-world evidence of success. Additionally, their defined inflection points provide multiple opportunities for manageable course corrections, which are easier and less costly to implement when activities are small scale than when navigating a heavily laden ship moving at full steam.

Phase 1. Given the critical role that reimbursement plays in market uptake, it is perhaps unsurprising that phase 1 of the commercialization approach focuses on achieving access by engaging payers early to lay the foundation for access and expanding access through ongoing processes. Commercial organizations can no longer assume automatic access to innovative products, even those that have high patient and HCP demand. Instead, companies must work closely with payers before and immediately following approval to obtain broad access that aligns with sources of market demand. An early focus on access is essential for long-term success because it can improve competitive positioning in indications with other treatment options. Engaging with payers before drug approval is critical to moving rapidly in the post-approval period and limiting access barriers that dampen uptake.

Phase 2. This second phase focuses on implementing a “fit-for-purpose” field deployment that uses a trial-and-error approach to test novel field roles, unique engagement strategies, and marketing tactics and ultimately determine the right combination of messages and megaphones for success. In contrast to the traditional “go-for-broke” approach, the phased model initiates launch in specific geographic regions or segments of the patient population in which market access has been secured and then expands by targeting early adopters as access is gained in additional regions or segments. This allows the launch to be initiated with a small but experienced sales force before increasing the number of sales reps as market traction is gained, which reduces the financial risks associated with hiring/training a larger sales force right from the start.

Phase 2 is also the time to establish specialized field forces that work directly with hospital or provider systems to provide access and navigate the evolving health economic landscape. Companies with products already on the market can also leverage existing field forces to deliver new product information to HCPs who are already using other products in their portfolio.

During this phase, it is important to align cost with opportunity by utilizing virtual sales teams to target low-potential prescribers. Equally as critical is developing high-quality digital assets that enable effective sales communications even when in-office physician access isn’t an option. Today, this is more important than ever, as 57% of pharma companies believe that their field has permanently lost at least 10% of their HCP access, and virtual HCP visits now make up about 30% of all call volume, according to Trinity Life Science analyses.While this may sound daunting, novel AI tools can help ensure the delivery of the right messaging to the right HCPs at the right time—an absolute imperative for being heard in an increasingly competitive digital marketplace.

AI can be used to improve HCP engagement in several ways, including identifying, segmenting, and targeting HCPs based on their propensity to adopt, switch, increase, or decrease prescribing a product or therapeutic class; optimizing message content based on past interactions; and developing new HCP-targeted content and messaging based on prior responses and using systems trained to develop content that is compliant with regulatory requirements. Similarly, live analytics and performance-tracking tools can be used to assess return on field force/marketing investment and adjust strategies while still at a small scale if metrics aren’t being met. These tools provide real-time and real-world insights into field activity, customer-level sales, market access, and claims data, allowing you to see which HCPs are prescribing and which patients are filling prescriptions.

As with phase II clinical trials, expect some failures at the stage of the phased commercialization model. Continue to develop and test novel strategies; expand those that work and drop those that don’t. This is like the “basket trial” approach that is gaining traction in the clinical development of oncology therapies. Such trials have multiple arms to enable simultaneous evaluation of an investigational therapy in multiple oncology indications, or multiple combination regimens in a single indication. Arms that show preliminary indications of efficacy are expanded to enroll additional patients while those with limited efficacy or unacceptable toxicity are not. This approach enables data-driven prioritization of indications and regimens for phase III trials, increasing the likelihood of trial success and maximization of market opportunity. With data to explain why a particular strategy didn’t work, a missed goal transforms from a failure to a learning opportunity that can position you for success in phase 3. As with drug development, failure at phase 2 is less costly than at phase 3 and can help limit or halt continued investment in a program that ultimately has little or no chance of success.

Phase 3. Following the clinical development playbook, phase 3 of commercialization is the time to expand by scaling up infrastructure for full-scale field deployment with marketing messages, tactics, and targets pressure-tested in the real world in phase 2. Just as successful phase III trials are based on clear evidence of safety, efficacy, dosing, and target patient population gained in earlier clinical trial stages, go big in phase 3 of commercialization only after you have identified the messages, targets, and tactics that will lead to success and after you’ve secured market access (usually more than six months post-launch). With the right infrastructure in place, a larger field force can more rapidly generate a return on investment while expanding and accelerating product uptake. Yet even phase 3 isn’t really the end of this next-generation commercial model. Continually improve your commercial strategy by creating an intensely data-driven feedback mechanism.

Phased commercialization and the uncertainty around pricing and manufacturing

Following FDA’s broad approval of Biogen’s Aduhelm (aducanumab) for the treatment of Alzheimer’s disease in June 2021, it was estimated that the drug would generate $5.5 billion in global revenue by 2027.² The anticipated use of the drug—which was launched with an average price of $56,000 per year—led the Centers for Medicare & Medicaid Services (CMS) to increase 2022 premiums for Medicare Part by 14.5% over the prior year.³ However, CMS’ initiation of a National Coverage Determination (NCD) for Aduhelm in July 2021, coupled with the decision by multiple major US health insurers not to cover the drug without additional proof regarding its safety and efficacy,⁴ radically altered the launch landscape. Despite analyst estimates that Aduhelm sales in the third quarter of 2021 would be $14 million, Biogen reported only $300,000 in Aduhelm sales for the period.⁵ In December 2021, the company cut the average price of Aduhelm in half⁶ before finally deciding to give up on marketing the drug in May 2022⁷ following CMS’ decision to cover the drug only in the context of clinical trials.⁸

While CMS’ decision not to cover Aduhelm outside of clinical trials came as a surprise, the growing demand by US policymakers and consumers to contain the cost of biopharmaceutical therapies cannot be ignored and may result in additional actions that add uncertainty to drug pricing. Consistent with its NCD for antibodies targeting amyloid for the treatment of Alzheimer’s disease, CMS announced that Leqembi (lecanemab), commercialized by Biogen and Eisai, would only be covered for patients whose physicians are participating in a qualifying registry.⁹ Several private insurers are refusing to cover Leqembi because they remain unconvinced of its safety and efficacy.¹⁰ Furthermore, two recent articles in JAMA—both of which refer to the Leqembi FDA approval and CMS coverage decision—call on CMS to flex its statutory authority to limit taxpayers’ coverage of FDA-approved drugs.^11,12

Provisions within the Inflation Reduction Act of 2022 are also likely to increase uncertainty around the pricing of prescription drugs. These include requiring the federal government to negotiate prices for some drugs covered by Medicare, requiring rebates to Medicare if drug prices increase faster than the rate of inflation, and capping out-of-pocket expenses for Medicare Part D. The prospect of small-molecule drugs facing steep discounts nine years after approval substantially impacts traditional approaches to implementing bridge programs that underwrite free drugs to build volume and increase formulary access.

During its earnings call in February 2023, executives from Bristol Myers Squibb acknowledged the challenges that this situation could create. It is estimated that its new oral treatment of plaque psoriasis, Sotyktu (deucravacitinib), which is also being evaluated in other inflammatory immune diseases, could reach annual sales of $4 billion by 2029,¹³ leaving only two additional years of sales before facing negotiated pricing. Chief commercialization officer, Chris Boerner, noted that increases the importance of robust execution of commercial strategy.¹³

A phased approach to commercialization would enable more limited initial investment in launch activities, with ramp-up commencing once greater clarity on pricing and coverage is available. It could also address manufacturing investments and potential supply chain issues by aligning increasing demand with increased manufacturing capacity. Despite breakthrough clinical data showing that its obesity drug, Wegovy (semaglutide) could reduce cardiovascular risk by 20%, Novo Nordisk is limiting the initiation of new prescriptions in the face of demand that is outpacing supply and a desire to ensure that patients who initiate therapy will be able to remain on their treatment regimen without interruption due to supply issues.¹⁴ Phased commercialization strategies may also allow the use of contract manufacturing for early launch activities, with increased capacity coming online as activities and markets expand.

With a phased approach to drug commercialization, you can win the marathon by keeping a measured pace as you assess the competition, terrain, and race conditions and then breaking from the pack once you’re fully warmed up and know the best path forward.

References

1. Sheid, B., “Biotech Companies Now Most-shorted US Stocks as Tougher Federal Scrutiny Looms,” S&P Global Market Intelligence, April 19, 2021. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/biotech-companies-now-most-shorted-us-stocks-as-tougher-federal-scrutiny-looms-63747008
2. Armstrong, A., “Biogen's Aduhelm Win Opened Up Market Frenzy for Alzheimer's-focused Companies,” Fierce Biotech, July 15, 2021. https://www.fiercebiotech.com/biotech/biogen-s-aduhelm-win-opened-up-market-frenzy-for-alzheimer-s-focused-companies
3. Muoio, D., “Aduhelm Price Cut, Limited Coverage Leads CMS to Lower Medicare Premiums in 2023”, Fierce Healthcare, May 27, 2022. https://www.fiercehealthcare.com/payers/aduhelm-price-cut-limited-coverage-leads-cms-lower-medicare-premiums-2023
4. Tozzy, J., Peebles A., and Dave, A., “Insurers Balk at Paying for Biogen’s $56,000-a-Year Alzheimer’s Treatment,” Bloomberg, Nov. 18, 2021. https://www.bloomberg.com/news/articles/2021-11-18/insurers-balk-at-paying-for-biogen-alzheimer-s-treatment?in_source=embedded-checkout-banner
5. King, R., “Major Insurers Won’t Pay for Biogen’s Alzheimer’s Drug Until They Get More Proof That it Works: Bloomberg Survey,” Fierce Healthcare, Nov. 22, 2021. https://www.fiercehealthcare.com/payer/bloomberg-survey-major-insurers-question-if-controversial-alzheimer-s-drug-medically
6. Liu, A., “Biogen Halves Aduhelm’s Prices Plots Cost Cuts as Medicare Decision on Controversial Alzheimer’s Drug Nears,” Fierce Pharma, Dec. 20, 2021. https://www.fiercepharma.com/pharma/biogen-halves-aduhelm-price-layoffs-ahead-medicare-decision-controversial-alzheimer-s-drug
7. Robbins, R., “Biogen’s C.E.O. Will Step Down After Disastrous Launch of Alzheimer’s Drug,” New York Times, May 3, 2022. https://www.nytimes.com/2022/05/03/business/biogen-aduhelm-michel-vounatsos.html
8. CMS Finalizes Medicare Coverage Policy for Monoclonal Antibodies Directed Against Amyloid for the Treatment of Alzheimer’s Disease. CMS Press Release, April 7, 2022. https://www.cms.gov/newsroom/press-releases/cms-finalizes-medicare-coverage-policy-monoclonal-antibodies-directed-against-amyloid-treatment
9. Statement: Broader Medicare Coverage of Leqembi Available Following FDA Traditional Approval. CMS Press Release, July 6, 2023.
10. Murphy, T., “Insurers Won’t Cover New Alzheimer’s Treatment for Some Customers,” Associated Press, Aug. 11, 2023. https://apnews.com/article/leqembi-insurance-coverage-alzheimer-ec7fcdf99ceaaa60ad1cee737c0b7ecb
11. Daval, CJR, and Kesselheim, AS, “Authority of Medicare to Limit Coverage of FDA-Approved Products: Legal and Policy Considerations,” JAMA Intern Med. July 28, 2023. DOI:10.1001/jamainternmed.2023.3961
12. Crosson, FX and Redberg, RF, “Statutory Authority for Medicare Coverage Decisions—CMS Is an Independent Federal Agency,” JAMA Intern Med. July 28, 2023. DOI:10.1001/jamainternmed.2023.4082
13. Kelly, C., “Bridge Too Far? BMS Launch Plan for Sotyktu Pressured by Prospect Of Medicare Price Controls,” Pink Sheet, Feb. 5, 2023. https://pink.pharmaintelligence.informa.com/PS147682/Bridge-Too-Far-BMS-Launch-Plan-For-Sotyktu-Pressured-By-Prospect-Of-Medicare-Price-Controls
14. Joseph, A., “Novo Nordisk Celebrates Landmark Wegovy Study, Even as Supply Issues Persist,” STAT, Aug. 10, 2023. https://www.statnews.com/2023/08/10/novo-wegovy-select-supply/

Leslie Orne is the president and chief executive officer of Trinity Life Sciences.