Mistakes to avoid in a drug or medical device launch
So, you not only come up with a great medical device or drug that will improve or save lives, you spend years getting your product through clinical trials. And, finally, it’s approved by the U.S. Food and Drug Administration. Now, your product is ready to launch.
But one major issue highlighted at a panel discussion at Biotech 2011 was the multitude of things that can go wrong when medical device and drug companies launch a product. Here are just a few of them. The lifespan of a drug or device can be decided in the first few months of its launch, several panelists noted.
Understand your customers. Particularly with smaller companies that do not have the resources of Big Pharma, it is essential to know who your customers are. How will your product be distributed to hospitals? Doctors? Clinics?
Not planning effectively. When Big Pharma launches new products, it tends to be an integrated process. Smaller companies, not so much. They may not know the doctors who will be most likely to use the product or where they work. They may not know how concentrated the physician base is. Or they may wait until the drug is approved before planning their marketing and sales distribution strategy.
Duplicating strategy. What’s successful for one drug launch is not necessarily true for another. When AstraZeneca (NYSE:AZN) was poised to launch Crestor, it was still riding the success of its drug, Nexium, according to Shawn O’Brien, Altherx CEO and formerly of AstraZeneca. “We were going after the king of the hill — the makers of Lipitor.” Although Crestor is now doing well, said O’Brien, he conceded that it should not have used the same strategy. “It took a long time to fix that.”
How will payers treat it? As Kevin Buchi of Teva Pharmaceutical Industries (NASDAQ: TEVA) pointed out during his keynote speech at Biotech 2011, one challenge drug companies face is that health insurers have several tiers of drugs for certain illnesses and are inclined to use the most economical ones, limiting the use of more specialized, costlier drugs. Specialty tiers, associated with the introduction of Medicare Part D, are used by payer providers to pass the cost of more expensive drugs onto patients.
Poor timing. You’ve done your clinical trials, deployed the sales team and the marketing may be brilliant, but the timing may still be bad, even if it’s beyond your control. Take the news cycle. Right around the time Stryker Orthobiologics (NYSE: SYK) was readying the launch of its medical device for compression fractures for the spine, articles ran in The New England Journal of Medicine critical of the treatment from different companies, citing a pair of studies. Antony Koblish of Stryker said that at the time the article was published in 2009, it cut the company’s valuation in half on the same day the company revealed record sales. The mistake, said Koblish, was believing that this was temporary. The news led the company to lose its focus on its base business, though it was ultimately regained.