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Life Sciences Practice – Pricing, Market Access & Value Proposition Capabilities Overview
February 2017
2Deloitte Asset Playbook
Deloitte and BI 3
Our Point of View 9
Pricing and Market Access: Capabilities 15
Value Proposition: Capabilities 22
Appendix 35
Table of Contents
3Lilly Strategic Consulting Qualified Vendor Pool Response
It is increasingly important to begin developing price-value-access strategies during a product’s clinical developmentTypical Price-Value-Access Strategy Activities/ Deliverables
In-line pricing/access assessments
Negotiating strategy development
Launch price strategy,including launch sequence
and global price policy
Early Pricing landscape assessment for clinical decisions and portfolio
optimization
Phase III clinical evidence evaluation and planning
Initial Pricing considerationsfor forecasting
Product value, positioning options and patient
segmentation
Cross portfolio/indication/LOEstrategy development
Local implementation planning
Value story andmessage development
Globalvalue
dossier
Value evidencegeneration strategy Cost
effectiveness/ budget impact
modelsEndpoint selection/
study design
Epidemiology / burden of disease assessments
Local contracting options, planning and segmentation
Stakeholder mapping
Additional valueevidence generation
Development ofcommunication tools
Infrastructure andlogistics planning
Local inputs on landscape, value and evidence
PHASE I PHASE II PHASE III POST LAUNCH
Our service offerings can be selected and integrated to address BI’s specific needs
PRODUCT LIFECYCLE
Informs HEOR Strategy Activities/ Deliverables
4Deloitte Asset Playbook
An integrated pricing and reimbursement strategy requires developing consistent, mutually reinforcing pricing, HEOR, and contracting strategies
Pricing Strategy Signals the degree of clinical
differentiation vs. competing products
Reflects potential cost-savings from persistent and compliant use
Varies by indication (where possible)
Establishes the starting point for contract negotiations
HEOR Strategy Supplements clinical trial
results through the analysis of “real world” data
Demonstrates the potential cost-savings from persistent and compliant use
Supports the development of clinical dossier submissions
Minimizes the need for an aggressive contracting strategy
Contracting Strategy Achieves profitable formulary
access
Optimizes the level of investment in targeted accounts
Facilitates achieving desired formulary placement
Supports achieving the forecasted gross-to-net (GTN) amounts
Varies across channels (e.g., Commercial, Medicare Part D)
Facilitates pull-through activities
Minimizes prescribing barriers by eliminating formulary restrictions
Minimizes payer risk
Corrects sub-optimal pricing and HEOR strategies
ContractingStrategy
Components of an IntegratedPricing & Reimbursement (P&R) Strategy
- 5 -
Understand payers’ perception of the therapeutic area and the applicable decision making processes
Target the appropriate organization(s) and individuals within those organizations when proposing innovative pricing strategies
– Most organizations are unwilling and/or unable to enter into non-traditional pricing arrangements
– Entering into non-traditional pricing arrangements necessitates interacting with non-traditional contacts (i.e., individuals who are not members of P&T Committees)
Consider the long-term costs and benefits of developing innovative pricing strategies (e.g., implementing Biogen Idec’s UK patient registry for Avonex has been more complicated than expected)
Recognize the potential goodwill from entering into an innovative pricing agreement with one payer and leverage that goodwill with other payers
Test the upper bound of all pricing recommendations (i.e., ensure the pricing and contracting recommendations do not “leave money on the table”)
Recognize the potential public outcry of overly aggressive pricing strategies (e.g., Genentech capped the cost of its breast cancer product, Avastin, after a significant amount of public debate)
Pursue economic differentiation only if the product is not clinically differentiated vs. competing products
Recognize the varying objectives of different types of organizations (e.g., MCOs, PBMs) and stakeholders within those organizations (e.g., Medical Directors, Pharmacy Directors) and develop tactics to address each stakeholder’s specific objectives
Assess the ongoing performance and continued appropriateness of in-force contracts (i.e., perform frequent retrospective analyses)
CriticalSuccessFactors
SelectDeliverables
US pricing strategies (e.g., WAC ranges)
Global pricing strategies
Rebate ranges by channel
Governance strategies and department redesigns
Market sizing
Revenue forecasts
P&L statements and gross-to-net calculations
HEOR analyses and budget impact models
There are numerous critical success factors to consider when developing an integrated pricing & reimbursement strategy
Pricing & AccessCapabilities
- 7 -
Payers Physicians Patients
Willingness-to-Pay Willingness-to-Prescribe Willingness-to-Purchase
Objective: Estimate the likelihood of payers providing formulary access and implementing restrictions at varying WAC and rebate levels
Objective: Estimate the likelihood of physicians prescribing a medication at varying co-payment levels and with varying formulary restrictions
Objective: Estimate the likelihood of patients filling a prescription at varying co-payment levels
Participants: P&T decision makers at MCOs, PBMs, and hospitals
Participants: PCPs, specialists, sub-specialists
Participants: Patients and/or caregivers/advocacy groups for a given condition
Illustrative Methodologies:– Van Westendorp analysis– Discrete choice models
Illustrative Methodologies:– Monadic approach– Adaptive conjoint analysis
Illustrative Methodologies– Garbor Granger– In-depth interviews
Deloitte has a wealth of experience developing pricing recommendations that reflect the interrelated decisions of payers, physicians, and patients
An effective pricing strategy requires analyzing the interrelated decisions of payers, physicians, and patients
- 8 -
Increasing competition from generic entrants and increasing cost to bring products to market Increasing portion of pharmacy spend attributed to specialty and
high-cost treatments
Increasing Margin
Pressures
Increasing government focus on price transparency Manufacturers may be asked to certify the accuracy of data used to
calculate rebates; and provide justification of non-price concessions
Increased utilization of e-prescribing technology will make MCOs even more influential over utilization Growing competitive advantage of reimbursement and customer
support
Shifting competitive landscape Difficult access to accurate data Changing global reimbursement legislation
Step-therapy as a utilization management tactic Increased use of pharmacoeconomic criteria in formulary decisions Rise in evidence-based medicine within the provider segment
Increased education and availability of decision-making tools Holistic and integrated approach for employers to manage care Increasing concern over data management and privacy
Market Forces
Contracting is a top-line sales and revenue driver
A robust methodology will increase the transparency of
contracts and data inputs
Contracting with influential payers will help drive
formulary placement and increase product utilization
Strong contracting processes will enable frequent contract
changes and complexity
Optimized discounting is a win-win for manufacturers
and cost-conscious customers
Formulary availability, aided by contracting, will
encourage consumer interest
Optimized Contracting
Source: Deloitte experience
Increasing Regulation and Transparency
Increasing Payer Influence
Increasing Market
Complexity
Increased Cost Containment by
Payers
Increased Consumer
Involvement
Contracting strategies that are able to drive product utilization and maximize profitability are a key component of an integrated pricing & access strategy
- 9 -
I. DESIGN II. TEST III. OPTIMIZE
Perform Market Assessment
TestHypotheses Develop Strategy
GenerateHypotheses
Develop Primary Research Tools
Field PrimaryResearch Tools
Recommend Optimal Price and Rebate
Guidelines
Arrive at a Market View of Price for Each
Hypothesis
Analyze Pricing Impact on Profitability
Perform internal interviews and conduct secondary research
Generate value hypotheses
Develop primary research tools
Field primary research tools (e.g., discrete choice, conjoint analysis, van Westendorp)
Analyze survey results to arrive at potential WAC, rebate and net price levels
Analyze the impact on profitability using a pricing impact model
Test boundary conditions for each strategy to arrive at an optimal price
Develop contracting guidelines for each strategy
*Note: An SMA is a Subject Matter Advisor
Market Assessment and SMA* interviews
Market Research Results and Pricing Impact ModelINPUTS:
Deloitte utilizes a hypothesis-based approach to develop integrated pricing & access strategies
- 10 -
DiscreteChoice Model
Estimates stakeholders’ choices for covering/prescribing a
product based on varying price and performance scenarios
AdaptiveConjoint Analysis
Van WestendorpAnalysis
MonadicApproach
GarborGranger
Deloitte employs a variety of primary research methodologies when developing pricing and access strategies
Incr
easi
ng L
evel
of C
ompl
exity
METHODOLOGY DESCRIPTION ILLUSTRATIVE POPULATIONS
Assesses stakeholders’ preferences based on varying
combinations of product attributes
Asks stakeholders open-ended questions about their price expectations/ thresholds
Assesses equal sized groups of stakeholders’ usage of a product
at a single price point
Quantifies stakeholder demand under alternative pricing and
market access scenarios
In-depthInterviews
Uncovers how stakeholders’ behavior will affect an
organization’s ability to commercialize a product
Payers Physicians Patients
Aggregate product utility and market share
OUTPUT
Utilities of individualproduct attributes
and a price response curve
Price curves that show a range: Floor, Ceiling
and Optimal price
Prescription percentage (physician) and
utilization percentage (patient)
Price response curve
Summary responses to the discussion guide
questions and verbatim comments
- 11 -
Assumptions
Model
Output
Deloitte has developed a dynamic, user-friendly pricing model to compare the revenue & profitability of alternative pricing & contracting strategies
Expected Tier Spread Based on
Survey Data
PeakShare
Calculation
MarketForecast
by Channel
WAC x(1- Rebate) Uptake
CurveMarket
Forecast(by Channel)
Peak Share
Forecasted Revenue
Market-SpecificUptakeCurve*
*In addition to a market-specific uptake curve, the user also has the ability to select an uptake curve from a library of options
Set WACand
Rebate Amounts
Input Launch Parameters Date of launch
Time to peak
- 12 -
Illustrative Deliverables
MARKET ASSESSMENT
FINANCIAL MODEL MANAGED CARE STRATEGY
QUANTITATIVE SURVEYSSummarizes current and emerging marketplace trends,
healthcare policies and access/reimbursement approachesSolicits input from payers, provider, physicians, and patients
regarding alternative pricing and contracting strategies
Quantifies the financial impact of alternativepricing, contracting and access strategies
Outlines therapeutic area specific strategies and tactics across multiple payer channels (US only)
Value PropositionCapabilities
- 14 -
Deloitte developed the Value Story approach to help its clients defend their products’ value
Quantifies impact of product vs. competitors on healthcare resource utilization and payers’ budget
Conveys a story articulated around simple yet compelling messages, communicating value and savings that matter to payers
Provides a structured menu that enables country teams to select the messages best adapted to each of their local target stakeholders
Leverages client’s Health Economics models to demonstratehow, from local healthcare perspective, product’s value justifies its price in target patient populations
Leverages available real-life data to demonstrate product’sdifferentiated value in routineclinical practice
Logically translates drug’s attributes into value beyond the sole clinical standpoint: operational efficiencies, economic and public health value
A Value Story is a Value Selling tool tailored to one product, that:
- 15 -
The Value Story approach identifies and communicates all the relevant sources of differential value offered by a specific product
Competitor /Traditional
Therapy Value Va
lue
of C
ompa
ny P
rodu
ct
Efficacy
Service Package
Safety
Operational Efficiencies
Relationship
Disease Burden
Disease burdenpresents an unmet
need that needs to be addressed
We use a systematic approach, breaking down the differentiated value vs. competitors
Product Value Company Value
Differential value of a company’s products can come from a number of different sources
The goal is to communicate value and savings that resonate and make the difference to payers, providers and physicians for optimal
access and uptake of the product
- 16 -
The approach systematically “ladders up” clinical benefits into explicit economic, and public health value that matter to payers and customers
Public Health / Political
Value
Economic Value
Clinical Benefits
Measurable clinical benefits of the product or its mode of administration
Quantifiable economic value generated for payers and their healthcare budgets
Tangible public health value for payers, more difficult to quantify in economic terms, but also differentiating the product
Value Ladder Illustrative Example Product
Clinical study results demonstrating significant reduction in number of chemotherapy-induced “events” vs. competitors
Reduction in in- and out-patient costs associated with the “events” avoided
Protection for cancer patients from debilitating “events”
Ability to provide innovative healthcare without burdening healthcare budgets
- 17 -
Each story is structured by key content elements, helping deliver compelling messages, supported by underlying evidence
VALUE STORY ONE-PAGER
One-page summary of overarching value messages, including disease, brand and economic value elements
DATA COMPENDIUM
Supporting data for each value message (detailed clinical evidence and HE data, references to publications, etc.)
SUPPORTING TOOLS & GUIDANCE
Objection Handler
Account Calculator
Pricing Guidance & Calculations
VALUE LADDERS
For each value element: – Clinical benefits – Economic value – Public health, political and
emotional value
+
- 18 -
The Value Story One-Pager summarizes all differentiating value elements offered by the product and its company in addressing a disease…
Events are serious and can be life-threatening
Events incidence is high in specific patient populations
Events history predisposes patients to additional events
Higher efficacy in primary endpoint – x additional months without events
Reduced risk of subsequent events by x% vs. main competitor
Higher efficacy in secondary endpoints
Reduced total costs vs. main competitor –$/€xK in country Y per patient per year
Main competitor has been associated with reports of serious AEs
Dosing with main competitor can be complex and administration time-consuming
Half patients continue to experience events despite main competitor use
Half patients discontinue main competitor use in year 1
Burden of Disease
“Events” are serious and
common
Events impact QoL and are expensive
1 2
Higher Efficacy and Reduction of AEs vs.
Main Competitor
Simplified Admin & Dosing
Favorable Risk-Benefit
Higher efficacy than main competitor
Reduces Adverse Events
(AEs)
5Efficient
administration and simple
dosing
7Use across
broadpopulation with favorable risk-benefit balance
Patients with eventsexperience decreased HRQoL
Events associated with greater risk ofpain progression
Patients with events consumesignificant healthcare resources –$/€xK in country Y per single event
Events are associated with significant loss of productivity for the society
Utilization in a broader patient population due to favorable risk-benefit profile E.g. Lower incidence of serious AE 1 vs. main competitor, allowing use in broader population
Favorable risk-benefit profile vs. main competitor
Majority of physicians and patients would choose Product vs. main competitor
Product is efficient to administer
Less burden on nursing staff due to simple admin and reduced need for patient monitoring
Less burden on patient administration and improved adherence
Product reduces administration and management costs – $/€xK in country Y per patient per year
Delayed onset of AE vs. main competitor by x months
Delays time to AE interfering with daily activities vs. main competitor
Reduces need for costly AE treatment vs. main competitor
HRQoLimprovement inhigher proportion ofpatients than main competitor
Main competitor shows
limitations
3 4
Overall Budget Impact Value of Product
Strong commitment to serving patients
8
World leader in Therapeutic Area
Invested in providing adapted services to patients and payers
Invested in research in diseases withhigh unmet needs
Company Reputation
Value of Company
6
- 19 -
… allowing selection and combination of value messages to best adapt to local stakeholders
Tender Decision-Making Body
Individual stakeholders
President CliniciansRegional Guidelines
REG
ION
HO
SPIT
AL
GM
Pharmacist 2
Administrator
Local Technical Committee: Tenders
Clinicians
Pharmacist 1
Head Specialist
Local Formulary : Usage Recommendations
Decision through– Both pharmacists – Head Specialist (strong
advocate for our product)
Key decision maker(s)
Key influencer(s)
Decision through– One pharmacist– Administrator
Clinicians have some influence, but are not formally included in technical committee
Higher efficacy than main competitor
Delays onset of pain
Efficient administration
and simple dosing
Strong commitment to serving patients
Main competitor shows
limitations
Use across broad pop. with favorable risk-benefit balance
Higher efficacy than main competitor
Higher efficacy than main competitor
Main competitor shows
limitations
4
4
4
3
8
3
5 6
4
Key Stakeholders Tailoring of Messages
- 20 -
The Value Story approach has proven powerful in both external communication and internal alignment process
KEY BENEFITS OF VALUE STORY APPROACH
Identifies disease-, product- and company benefits that are truly differentiatedfrom competitors
Logically translates these benefits into clinical, economic and public health value relevant for different stakeholders
Readily adaptable to stakeholder and country specifics
Created through a process that fosters close alignment across functions on how to sell the product’s value
Efficient communication and capability building through aligned format across brands, well known to the organization
- 21 -
We have established an efficient cross-functional approach to developing and rolling out the value stories
Draft Updated
Value Story
Update value story documents (i.e., one-pager, value ladders and supporting data)
Legal ReviewFinal Updates
and Referencing
Refine and finalize materials
Flag potential gaps which would need to be further tested (internally and / or externally)
Review New Information
Identify new data and market developments
Suggest areas of the story and messages to update
Produce Final Version
Finalize VS documentation
Create a presentation document for training and communication (optional)
Workshop to align on updates
Workshop to validate updates
Internal Roll-out
Train-the-Trainer
E-learning
Functional Orientations
Local Training
Manage legal review process
Explain updates to the value stories
Support value selling capabilities
Cro
ss-fu
nctio
n di
scus
sion
s &
m
ilest
ones
Key
Wor
k S
teps
Exam
ple
R
oll-o
ut O
ptio
ns
- 22 -
Value Story
We see two ways to further develop the Value Stories
How to better use the Value Storiesin Customers Negotiations?
In the current constrained environment, provide: Guidance on the desired market position and fall-back options Analytics and other support for decision-making between options Customer facing materials
How to improve the Value Story itself?
Continuously enhance the value messages and associated data by leveraging, e.g.,– Local data, notably health-economic data
(customers increasing focus on cost)– Cost comparison vs. competitors, notably
generics / biosimilars
A
B
Data Compendium: Clinical & Economic
Value Laddersfor Each Value Element
Value Story One-Pager
0
- 23 -
How to improve the Value Story itself
MORE DATA FURTHER TAILORING SERVICES & CONTRACTING
Health-economic Data
Product experience; e.g., – Usage
Comparative vs. Generics / Biosimilars
Local-specific data; e.g. – vs. standard of care– Treatment pathway
and guidelines
Real-life & Post-launch
Data
Product experience; e.g., – Efficacy– Safety
Local-specific data; e.g. – Population– Treatment
guidelines
Post-launch studies
Testing with Payers
National / regional payer research
Ad boards Local account focus
groups
Competitive Intelligence
Value Story vs. cheaper competitors (i.e., generics / biosimilars)
Competitor’s value stories– Refinement of value
messages– Optimal delivery of
story
Research & Modeling
Customer and payer needs
Value driver assessment
Contracting
Services
Local / account-specific services– Respond to
customer needs
Respond to customers’ needs; e.g. – Increase budget
predictability – Reduce
uncertainties tied to product usage
– Increase budget affordability
– Reduce outcome uncertainties
A
- 24 -
How to better use the Value Story in Customer Negotiations?
NEGOTIATION GUIDANCE CUSTOMER FACING TOOLS ROLL-OUT & PRACTICE
Value Story & Desired Position
HC policy Guidelines Competition…
+
Fallback Options Trade-offs assessment Analytics Decision-making support
Market Environment and Context
Product Value
Price
Access Covenants
TimePatients
Materials & Tools
iPad materials
Leave-behinds
RML slide pack
“Back-of-the-envelope calculation” tools
– Simple and transparent excel tool to be used with customers)
Training
Effectively tailoring value messages to each customer
Negotiations mock-ups / workshops
B
Appendix—Case Studies
- 26 -
Case Study 1: Pricing & Reimbursement Strategy The client was planning a branded
product launch into a highly genericized, undifferentiated product class
The objective was to develop a pricing and reimbursement strategy that would elicit a favorable response from payers, while simultaneously maximizing revenue and profitability
The Deloitte team achieved the project goals by: 1 2 3
1 2
3
Performing a comprehensive assessment of the market and payer landscape
Developing a pricing impact model to test the P&L impact of alternative strategies
Evaluating each strategy for attractiveness across multiple dimensions using a predetermined set of criteria
Developing contracting guidelines, channel strategies, and implementation roadmaps for the recommended strategy
Payer Trendsand Needs
Market Dynamics
Within Product
Class
ProductAttributes
Key insights& hypotheses
• 500 mergers among health insurers between 1998-2010
• In 24 states, the respective top 2 players control 70% of the market
• The average co-pay increased 80% in the preferred drug category and 59% in the non-preferred drugs category from 2000-2009
• The generic prescription rate has increased to ~70% in 2010
• The share of TRx for branded drugs dropped to 28% in 2008 3
• Nearly 33% of all drugs had utilization restrictions in 2008 vs 20% in 2006
The U.S. reimbursement environment is becoming more restrictive
Payer consolidation 1
Increasing cost-sharing by patients
Increasing use of generics 2 Increasing formulary restrictions 4
1018
929
880900920940960980
100010201040
2007 2011
No. o
f firm
s in
indu
stry
43% 40% 36% 32% 28%
57% 60% 64% 68% 72%
2004 2005 2006 2007 2008
Shar
e of T
Rx (%
)
Generic
Branded
0%5%
10%15%20%25%30%35%
Prior Auth Step Therapy
Qty limits Any UM restriction
Shar
e of d
rugs
with
UM re
stric
tion
(%)
2006 2007 2008
$-$20 $40 $60 $80
$100
Generic Preferred Non-preferred 4th Tier
Aver
age c
o-pa
y ($) 2000 2009
44%
+5.3%
-2.3%
+2.5%+6.7%
+4.1%
Other key factors such as aging population, the ‘patent cliff’, and rising healthcare provision costs have also contributed to some of these trends
• Average commercial pharmacy deductibles increased almost 500% in 2 years between 2006 and 20084
$89
$333 $434
$-$100 $200 $300 $400 $500
2006 2007 2008
Aver
age c
omm
ercia
lph
arm
acy d
educ
tible
s ($)
Rising co-pays 5 Increasing deductibles
+274%
+30%
Channels: A dominates in terms ofvolume, while B leads dollar sales
800,000
1,400,000
1,600,000
1,800,0002,000,000
5,800,000
200,000400,000
600,000
1,000,000
08.3x
4.3x1,200,000
Federal FacilitiesClinicsMail OrderRetail
5.8x
5.9x
A
DCB 180
80
20
10
0
8.4x
30
Federal FacilitiesClinicsMail OrderRetail
7.9x
4.8x
90
40
60
70
50
5.4x
DCBA
INS Sales by Channel ($M, Q4 2010) INS Sales by Channel (Units, Q4 2010)
Key Observations
• C in particular does not seem to have a major focus on mail order as a channel (ratio of retail to mail order sales in volume terms is 8.3x)• Compared to peers, generic X and C have a disproportionally larger amount of sales being generated from the retail channel in dollar terms• Compared to peers, B appears to have a mail order focused strategy• Mail order may be an important channel for XX and needs to be explored further in primary research
*Retail includes chain stores, independent and food stores
Product X has been steadily losing market share in spite of high Tier 2 access
X TRx 2010: Distribution by channel, and MOP Market TRx 2010: X share trend by MOP
Commercial70%
Medicaid15%
Medicare Part D11%
Cash2%
Managed Medicaid
2%
100% = 10.1M scripts
• Retail channel provides 74% of X scripts – of these, commercial 3rd party payers provide 70%, resulting in ~25% market share within that segment (annual share)• In contrast, Medicaid and Cash scripts are 15% and 2% respectively of retail X TRx, but provide a 38% share and 18% share respectively within those segments (annual share)• X’s high share in Medicaid could possibly be due to a gap in overall pricing strategy, resulting in providing the drug at very low margin levels
Retail *74%
Mail Order17%
Other**9%
0%10%20%30%40%50%60%
Feb'0
9M
ar'09
Apr'0
9M
ay'09
Jun'0
9Ju
l'09
Aug'0
9Se
p'09
Oct'0
9No
v'09
Dec'0
9Ja
n'10
Feb'1
0M
ar'10
Apr'1
0M
ay'10
Jun'1
0Ju
l'10
Aug'1
0Se
p'10
Oct'1
0No
v'10
Dec'1
0Ja
n'11
Cash Commercial 3rd Party Managed MedicaidMedicaid Medicare Part D
Market TRx 2010: X Share X Tier Placement
0%10%20%30%40%
Q205
Q305
Q405
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
X market share has dropped from 33% in Q12007 to 23% in Q4 2010, and appears to be trending further downwards
33%
23%
8%
78%
6%8%
OtherTier 3Tier 2Tier 1
X enjoys very high access on Tier 2, along with some Tier 1 presence
% o
f cov
ered
live
s
X RestrictionsX enjoys relatively low levels of restrictions, particularly Prior Authorizations
% o
f cov
ered
live
s
11%5%
31%
0%
20%
40%
Prior Auth. Step Therapy Qty. Limits
% o
f TRx
Conducting a payer survey using the van Westendorp methodology to obtain plausible gross and net price ranges
- 27 -
Case Study 2: Market Share Assessment and Resource Allocation for Product Launch The client was one of 2 companies co-
launching Drug X, for the treatment of hospital-acquired infections; the client was facing challenges with obtaining an accurate and reliable forecast of peak market share
The objective was to develop a launch strategy, including a robust forecasting model, for peak market share and revenues
The Deloitte team achieved the project goals by: 1 2 3
1
2 3
Assessing the key drivers of market share (in the US and Japan markets), using both top-down and bottom-up perspectives
Forecasting market share by defining multiple potential scenarios and the interplay with key drivers and variables. Tools used included modeling patient flows and conducting market surveys
Developing a launch strategy for the US market, taking into account the scenario-based forecasts for peak market potential
Top-Down Approach
Bottom-Up Approach
Supply-driven approach based off of actual competitor
sales data
Demand-driven approach based off of hospital admissions and
incidence ratesSegment Based on
Number of Beds
cSSSI
HAP
Other
Therapy Patient
Days TherapyX XPatients
Facilities
Incidence by Segment
Daily Dosage÷Supply
Patient Days
0
20
40
60
80
100
120
Patient Days
Addressable Market
VIBATIV Share
Top-Down Forecast
Bottom-Up Forecast
First Line
Out-patient
Contra-Indications
Market Growth
REMSOral
‘Most Likely’ scenario
- 28 -
Drug Y, used to treat eczema, was experiencing a significant sales impact due to an FDA black box warning
The objective was to identify methods by which the pharmaceutical manufacturer can optimize revenues and bottom-line contribution from their expiring drug
The Deloitte team achieved the project goals by:
Treatment Phase Maintenance Phase
PharmacyPrimary care physician
SpecialistSymptomatic Patients who need 2nd line AD treatment
MCO
PCP
Specialist
Pharmacy
Mail-order pharmacy
Pharmaceutical Manufacturer
Wholesaler / Distributor
AOnly a f raction of all patients are
prescribed Drug X
BOnly a f raction of all prescriptions for
Drug X are actually f illed
COnly a f raction of all users continue to
ref ill their prescriptions
Points of loss in potential Rx
2 1
3
23
1
3
3
L1 L5L2
L8
L6L3 L4 L7
L9
Strategic Lever
Key Recommendations
Peak market potential
Opportunity(% of 08 revenues)
Lever Cost impact APUS Prioritization
Rationalize SKUs
Do away with the 30g SKU for both 0.1% and 0.03% concentration and retain only 60g and 100g SKU
12% 7% - 12.0%
One-time: NA
On-going:$130,000
Interested and will require further analysis
Further analysis will need to cover - Legal impact- Ethical impact- MCO resistance and contracts- Using coupons to counter co-pay increase
TargetPharmacists
Focus on educating pharmacists about Drug X through sales rep ef forts
Educate pharmacies and use them as a channel for Drug X’s patient assistance programs
4% 0.5% - 3%
One-time: $90,500
On-going:$150,000
Opportunity size at face-value seems limited
Proposed means of reaching pharmacists through sales rep calls may be dif f icult to achieve
Sales force re-allocation
Redistribute excess existing sales bandwidth among new PCPs/Pedstargets
2% <1%
One-time: $300,000
On-going:NA
Risky proposition and will require further analysis
Further analysis will need to consider- Persistence of sales call (reducing call
f requency to less than once a month)- Risk of losing existing Rx- Excess sales bandwidth may be diverted
LowMediumHigh
Physician: Sales force optimization, education, drug credentialing etc.
1
2
3
Patient: Assistance , DTC, SKU rationalization, efficient targeting etc.
Channel: Contract assessment, Formulary access etc.
Points of influence
L1 : Sales force re-allocationL2 : Streamline prior-authL3: Use samples effectively
L4 : Target patients L5 : Target pharmacistsL6: Use coupons effectively
L7 : Rationalize SKUsL8 : Increase Drug X priceL9: Address high product return
Levers
1
2 3
Defining the patient flow and the relevant associated stakeholders for Drug Y.
Identifying the key points of influence and the strategic levers -23 strategic levers were identified at various points in the patient flow, of which 9 were shortlisted for further evaluation
Analyzing the levers in detail to produce actionable recommendations, which would enable the client to achieve its goals for Drug X
1 2 3
Case Study 3: Revenue Optimization