Drug launches are undergoing a shift with patent cliffs, regulatory oversight and a tight investment environment nipping at the heels of commercial strategies.
Amid the headwinds, pharma is transitioning into a recognizable cycle, said Jim Lang, CEO of commercial services company Eversana, where companies are slimming R&D efforts and putting budget-focused thinkers in leadership roles.
"We are actually excited by a move we're seeing in large pharma, which is they're putting attention at the CFO and procurement level on their whole commercialization spans,” he said.
Rising competition in the market for personalized and precision medicine and a shift toward patient-centered care are driving those changes, he said. Examining some of the ongoing challenges for drugs coming to market in emerging therapeutic areas highlights how company strategies could take shape for the rest of the year and into 2025.
Here, we caught up with Lang to discuss challenges in pharma commercialization, drug launch failures and why launch strategies need to start years before hitting the market.
This interview has been edited for brevity and style.
PHARMAVOICE: What’s changed in the commercialization market recently?
JIM LANG: The years 2021 and early 2022, as far back as 2019, were uniquely positive for our industry. We had very low loss of exclusivity, meaning the percentage of revenue [lost] to patent life expiration. We also had an exceedingly well-funded — and people would argue now in hindsight over-funded — biotech market. Naturally when you have these highs, you tend to then flip to some low cycles immediately after.
We've now had about 18 months of very low biotech funding, [which] is now coming back. And then we had our whole industry process the impact of increased loss of expirations. Those [LOEs] are going up to about 4% to 6% of the revenue annually, where it was like 1% to 2% in those prior years.
[There’s] been hundreds of companies over these past few years that have had layoffs or even outright shutdowns. Pfizer [and] BMS [recently] announced some cuts. I think we’ll see through the rest of the year the final group of folks making decisions about allocations of portfolio and cost cutting, and then 2025 will be a return to normal.
What are some of the challenges you’re seeing in drug launches?
The industry is tackling rare disease. That's exciting, but by definition, those are all smaller populations. And that inherently means you have a much smaller portion of the population you're attacking, and you need to be much more nimble. In reinventing your commercial models, you need to be more thrifty, you need to be more agile. And you know, it's a lot more difficult to be economically successful when your peak sales are $300 million versus when your peak sales are $5 billion.
Are there any spectacular commercialization failures in the last few years that you see as a key learning opportunity for the industry?
Commercializing a drug is not an easy task. In fact, nearly two-thirds of launches fail to meet expectations. Yet, two come to mind that our team is familiar with that reinforce just how challenging it is.
The first was for a blockbuster drug about five years ago to treat macular degeneration, an eye condition. It brought great potential to the market, but safety risks hampered its launch. Analysts expressed concern, and six months after launch the American Society of Retina Specialists issued a warning against the therapy, creating major challenges for growth. The drug never met expectations.
A second drug that comes to mind was developed to prevent hallucinations in patients with Parkinson’s. The drug also had safety concerns, and the company invested in an educational campaign to support its growth. This backfired in the form of a federal lawsuit, creating even more challenges.
Many factors go into a successful launch, but ensuring the product is ready to meet the needs of patients and is supported throughout the launch process from educating healthcare professionals, patient communities, payers and more is critical.
As a category, digital therapeutics have had a really hard time demonstrating their value to payers. [It] was the darling of investors for the last maybe eight years, but hasn't been for the last year and a half. But it's, I would argue, because they didn't pay attention to the payer side nearly as much as the health economic argument.
How do you think about pre-launch expectations from Wall Street? There are some studies that show about 40% of drugs underperform their sales forecasts.
The conclusions are often that the experienced launchers do better than inexperienced launchers. If you're a first time emerging biotech company, and you're tackling this on your own, your odds are against you relative to experienced launchers.
The studies concluded that those who started their work two and a half years before launch, versus more like one year before, were radically different in their commercialization success. Big Pharma knows that, and that's why their processes kick off three years before launch. The challenge in emerging biotechs is almost all of them are on lifelines for financial investment. It even got worse these last two years. By definition, they're gonna have lower odds of success.
There's always what I call the bias inherent in those studies because expectations are nothing more than the collective forecasts of analysts, including the company around that drug. And there's a lot of reasons why people are biased upward early on. Their whole story to this day has been [about] attracting talent and raising money. Of course, you're gonna paint the high scenario.
What's your advice to those emerging biopharma companies that may be reliant on an investment line?
Don't wait. Even if you can't afford much, start with what we all know is the most critical path, which is the medical affairs or key opinion leaders to warm the market, talk to payers and make sure you're going to get reimbursed for these particular products. Those don't often have to cost that much, but they're the critical path work that often people wait too long on.
What else is trending in commercialization?
You hear a lot of noise right now about the direct-to-patient model. The old days were about healthcare professional-centered design, where the doctor was the center of how you thought about commercialization. There were certainly other constituents you had to influence the payers, regulators, the patient's themselves and the engines around doctors like their integrated delivery systems. But it's required a big change to [center] around the patient. And if you talk to leading companies who are wanting to do this now, they realize if they center their thinking around the patient and make patient experience spectacular, they'll drive better outcomes and deliver solid sales for the product at a lower cost.
