In the first of two related blogs exploring some of the impacts of the pandemic on commercial strategy, we reflect on the common challenges facing pharma as it attempts to reignite sustainable growth in the post-pandemic era. In this post, we use our experience as a leading pharma consultancy to explore the decision points many businesses now face as they focus on their R&D efforts.
COVID-19 unleashed many far-reaching consequences on the pharmaceuticals industry.
To maintain the pace of commercialisation, R&D teams are now making strategic decisions against a new backdrop of environmental pressures, whilst simultaneously continuing to drive business growth.
A recent McKinsey poll of pharma companies (February and June 2020) revealed that 45% decided to delay product launches; with regulatory delays affecting another 40% of businesses and external factors such as supply-chain problems affecting a further 15%.
By year-end, many clinical trials had restarted with manufacturing also reinstated, but this disruption had a clear impact on the growth and profitability of many companies.
To make up for lost revenues during early-to-mid 2020, executive leadership teams are asking their product development and commercialisation teams to narrow the focus of their broad pre-pandemic development and launch plans, in favour of more succinct, post-pandemic plans.
To achieve this, product differentiators must be identified, prioritising those adding real value to customers, analysts and investors.
Choosing the right product
At Insocius, we work with a range of pharma companies and leaders, helping them manage both their brand and product portfolio. Let’s look at a typical scenario our customers may face – where a company is choosing between two product options and must take a range of product opportunities and challenges into account:
This “to-market” opportunity is the fastest, and also presents the lowest risk. It capitalises on the firm’s proven technology and demands little/no new R&D efforts, market research or manufacturing investment.
It also targets the company’s established customer base. However, this product candidate offers a quick but limited ROI, few new prospects, and little long-term growth potential.
This product candidate requires longer development, investment in new technology, completion of clinical trials (with the associated challenges of design and data collection options following a pandemic) and new market research.
All of these challenges make it difficult to accurately determine the time to market. However, compared to Product A, the product candidate is distinct from both the company’s current offerings and those of its competitors.
Moreover, this product candidate could attract new prospects and generate greater/long-term profit, compared to Product A.
Many pharma companies are facing similar situations, as they look beyond the effects of the pandemic.
Many businesses may, somewhat understandably, take a “firefighter response” and opt for Product A, while prioritising their company’s immediate growth and wanting to keep pace with the market.
Yet, teams would be well advised to resist this urge to act with the short-term benefits in mind and, instead, build in time for cross-functional reflection and decision-making.
This feels more important than ever, where pharma must start to work across its siloes and take a cross-functional approach to complex decision making. In the scenario above, a cross-functional approach could help the company explore how to:
- enhance the perception of Product A for customers and new prospects, while aiming to improve its ROI and extend the product lifecycle, and
- reduce the risks and level of investment for Product B, while reducing the time-to-market.
Why exploration matters
An in-depth cross-functional exploration of the financial and resource-specific demands of each product option will better equip leadership teams to make the most sustainable decision.
This comprehensive process would, most likely, result in the company deciding to launch Product B because it represents the best long- term interests of its customers, investors, and the wider business.
Making the right commercial decisions in a crisis requires greater – not less – focus on the principles of solid strategic thinking, and an ability to resist the temptation to firefight.
The ability for your teams to effectively collaborate and work across functions and/or geographies is essential to guarantee your commercial strategic success.
In the current economic climate, this is no easy undertaking. But the requirement for pharma companies to adapt and make the best decisions for their long-term growth is now vital for your continued success, helping you realise substantial and long-lasting rewards for your business and patients.
Learn more about our full-range of pharma consultancy services and how we help teams facilitate effective cross-team collaboration and decision-making by speaking to one of our consultants today.