drawing a graph to respresent a portfolio

How to differentiate new products within your portfolio…and from your competitors’

A rush to reignite growth should not remove the need for reflective consideration.

In our second blog post about adapting to the post-pandemic landscape, we reflect on some of the investment and strategic choices facing pharma. As a leading pharma business consulting company, we explore a scenario many of our clients might face within portfolio positioning and in the face of a new competitor threat.

From March to June 2020, US practices offering elective procedures suffered losses of more than $50 billion each month and are not expected to fully recover until the second half of 2021.1

As companies serving practice-based elective procedures rush to launch pandemic-delayed products, it’s easy to forget many pre-pandemic principles – especially when confronted with an unexpected competitor. 

How to manage new market entrants

As renowned pharma business consulting experts here at Insocius, we help pharma companies and leaders tackle a broad range of business challenges, helping them plan and execute successful market growth strategies, no matter what the market throws at them.

Let’s examine a typical scenario: a current market leader promotes a variety of treatments and/or devices commonly available in a physician’s office.

The market is challenged by a new competitor with a combination product, which includes elements from their own portfolio. Physicians often used the innovator’s two separate products together. So, the competitor’s new combination product makes sense.

The current market leader needs to quickly determine how to respond to this challenge in the “new normal.”

But the current market leader also needs to respond in the right way, balancing the pressure of pace while maintaining its focus on the bigger commercial picture and the long-term implications of its next move.

So, should the market leader also develop a combination product? If so, how might it differentiate from the new entrant’s combination?  Here are some key considerations:

  • Differentiation may require investment in a novel delivery system, followed by clinical validation – and this takes time. In the short-term, the competitor continues to sell against the individual products in the incumbent’s current portfolio.

  • A possible response is to simply formulate a competitive combination from its existing portfolio, since the category poses no regulatory issues for either the market-leader or the competitor.

  • Unlike the challenger, the market-leader has an established business and can effectively market the individual ingredient drugs that are used in the competitor’s combination. If the market-leader decides to create its own combination, this could also reduce sales of its individual ingredient drugs.

Why competitive analysis matters

Competitive analysis can help uncover the relative advantages and disadvantages of pursuing a novel formulation versus a combination. There are a wide range of considerations to explore, using the principles of sound strategic thinking. These may include:

 

Previous relationships

The trusted relationship between the market leader and practitioners who have selected products from its portfolio for years. As a result, the market leader can trust these practitioners to choose the best solution – whether that’s its currently marketed individual products or the new combination.

 

Product range

The broader product range of the market leader opens the potential for portfolio sells. The challenger has a limited product range and cannot match the market leader’s offering.

 

Clinical trials

Rather than the market leader delaying its combination until the market research and prospective clinical trials may (or may not) demonstrate the superiority of a new formulation, there is another option.

The market leader could collect “real world experiences” of prescribers to identify which patients are most appropriately treated with the combination vs. individual ingredients. This is another capability that the challenger cannot offer.

 

Potential outcomes

Even if the market leader’s new combination cannibalises their current single-agent products, this presents a better outcome than cannibalisation by the challenger’s combination.

 

While this scenario is simplistic, it articulates the need for sound strategic analysis and portfolio positioning for companies with established portfolio presences.

Faced with new ‘post-pandemic’ environmental pressures or established ones such as new market entrants, pharma must still take the time to properly assess the various market opportunities available.

Product teams within the same disease area need to collaborate rather than work in silo and equip customers with the right information and choices to make the best clinical judgements.

Established players in any particular field often have the product choice, trust and reputation to achieve this – but only if they have the right strategies in place.

Our pharma business consulting experts are here to help. To find out more about how Insocius helps teams navigate complexity, and facilitates effective cross-team collaboration and decision-making, contact us today.

 

1 https://www.businesswire.com/news/home/20201110005947/en/New-Study-Forecasts-How-COVID-19-Concerns-May-Affect-Elective-Procedures-Budgets-and-Hospital-Access 

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