How to reduce uncertainty around product launches?
According to McKinsey & Company’s report ‘Beyond the storm: Launch excellence in the new normal’ more than 1000 pharmaceutical product launches are planned within the next three years.
For each one, brand marketers face uncertainty including:
- What kind of patient adoption can we expect?
- What kind of physician acceptance can we expect?
- How will our competitors react, and how will their reactions impact sales?
Much of this uncertainty can be removed if marketers simply ask the right questions, and leverage analytics wherever they can to make the qualitative, quantitative.
Consider a launch team for Brand A in the months leading up to D-Day. The team is faced with a number of uncertainties, including market access, patient behavior and physician adoption. In this case, let’s assume that Brand A will go head-to-head with Brand B in this particular market, and there is little or no clinical differentiation among products. In this case, Cost and Access are large factors.
The graphic below depicts the likely thought process for Brand A:
Pre-launch research involving interviews with key payers and studies of analogous situations provides an optic into what the probabilities will look like for each outcome:
Here, let’s take Brand A as the launch brand and Brand B as the competitor brand. P1 and P2 represent the probabilities of occurrence of the events.
Assuming the worse of the two, what are the available options?
The decision whether to act or not depends on both internal factors (Brand Strategy, Budgetary constraints, etc.) and external factors (Probability of success, magnitude of gain, etc.). The external factors can be evaluated based on how the downstream events unfold. Considering these three possible counter-measures as an example:
With the events mapped out, the next steps are to determine the questions that need to be answered at each juncture of this tree, identifying the analytical technique that works best for these questions and then set out to answer them. It should be noted that this is where the challenge lies – more often than not, it is tricky to hone in on the technique and finalize on the assumptions and rules for the calculations to be made. Knowledge of analytical techniques and familiarity with the business are both critical to get this right.
There are two clear advantages in undertaking this exercise:
- 1+1 = 3 Most launch teams do sufficient research and in reality would have done all the above separately. The value here is in putting them together along with certain rules and based on these, plotting the most beneficial course of action.
- Do I know all the answers?Going through this exercise forces teams to think of all possibilities and plan for contingencies for rough situations, if they arise. It is not uncommon for teams to develop blind spots when working very closely with their brands – this approach helps avoid them.
Multiple functions need to get involved and provide inputs for this process to work. The situation becomes even trickier in the case of partnerships – the most beneficial course of action for one partner may not be the same for the other. Relative pay-offs for each outcome need to be quantified separately.
To conclude, primary market research and surveys often provide answers that, while useful, are not entirely actionable. Combining analytics with these and plotting the entire situation end-to-end provides usable, quantified answers to questions that might otherwise remain unanswered until it is too late.