PM360 December 2009

TRAIN WRECKS: Avoiding Common Mistakes That Derail a Product’s Commercial Success

Today’s pharmaceutical environment allows little room for error. In a world of stringent regulations, aggressive competition, and reduced periods of exclusivity, marketers can’t afford the months or, even worse, years of recovery time that result from missing the mark on any aspect of commercialization. Over the next few months, experts from Campbell Alliance will examine the common mistakes brand managers make that can derail a product’s commercial success and outline ways to avoid them.

What Went Wrong?
By Tom Luginbill

The following story is true; however, key details have been changed to protect anonymity.

Background
Ben had been appointed Director of Marketing for one of his company's key brands, a small molecule for the treatment of rheumatoid arthritis and osteoarthritis. Product X had performed beyond expectations in clinical trials, and the company viewed it as an important piece of its future. Ben played a key role in pre-launch strategy and planning for Product X and was well respected within the company, so it was no surprise when he was given the key director's role for launch.

The launch 18 months ago had been an exciting time. Because of the importance of Product X, from which everyone expected peak U.S. sales of more than $1B, Ben had been given the resources he needed for launch—market research, promotional spend, sales investment, samples, and DTC funds. Ben got what he asked for because the company wanted Product X to be a success.

SITUATION
Things were difficult from day one of launch. All indicators showed Product X was on a growth trajectory, yet it began to miss monthly sales targets almost immediately. Ben scoured his tracking reports weekly —sometimes daily—to discern the reasons: market indicators (TRx and NRx volume), product indicators (prescription share and patient penetration), and access indicators (formulary position and discounts) were all below expectations almost from the very beginning. For the first several months after launch, phone calls from senior managers came like clockwork each week after Ben’s launch tracking reports hit the executive floor. He began to dread the weekly calls and the thought of having to explain performance. He thought the situation was bad until recently when the calls stopped.

Ben's sense of relief gave way to a realization that expectations had been fundamentally altered. He began to recognize other indicators that were not good: calls from the sales force were down, and “fire drills” prompted by questions from senior managers had almost completely stopped. When budgets had to be cut, Product X took a disproportionate “hit,” including a key comparative trial Ben had hoped would turn things around. Once a prominent feature in the CEO’s quarterly analyst calls, Product X now rated little more than a sentence or two. It was supposed to “pull through” much of the company portfolio, but now needed help itself in the contract setting. Ben questioned if the situation could be reversed.

ACTION
One night, Ben began to think about his brand’s performance. He had his numbers virtually memorized but thought more deeply about the root causes. Was the product profile all that they had hoped, or were the anecdotal reports of less-than-expected efficacy true? Where was the share he thought they were purchasing with performance discounts in managed care? Had they received enough for those discounts? Were those contract opportunities pulled through at the prescriber level? Had the sales force lost interest when the incentive comp payouts weren't big enough? Were they delivering clear consistent messages, with the right frequency, to the right people? Was the sales forecast appropriate given what they knew 18 months into the launch? Most important, Ben thought about where to go from here. Was it realistic to think his company could change its diminished expectations for Product X, or would the more reasonable path be to recommend out-licensure or co-promotion to another company with fresh expectations? The very questions scared Ben.

RESULT
Ben quietly assembled his staff to address his questions. At their first meeting, the list of questions grew considerably, and the team mapped out a plan to get answers. To Ben’s dismay, it would take at least six months to get the answers and even longer to implement solutions. He knew the situation would only get worse. He tried to push, but there wasn't enough capacity within the team to get everything done quickly. Some team members believed they were doing the best they could and didn't see the need to set aside other work for Product X. For the first time, Ben began to question if Product X would ever be perceived as a success.

LESSONS LEARNED
Virtually all product launch forecasts are wrong—to some extent—and it's far too common for a company to lose faith in an “underperforming” brand rather than ask and answer the difficult questions. Some pharmaceutical marketers believe that managing perceptions of brand performance is their single most important job. The best marketers dig deeply to understand performance at the level of root causes to help with that job. Ben’s experience is illustrative.

1) Act Quickly. The fact that Ben didn't act until 18 months post launch is a major problem. He was the most familiar with brand performance, and he should have dug deeper at the first sign of trouble. When faced with the prospect of no real impact on the problem for as much as one year, Ben accepted the delay as unavoidable. This was a big mistake. In this situation, a marketer cannot accept no for an answer. He must reallocate resources, call in favors, raise flags, and do whatever is necessary to address the situation.

2) Stay Ahead of Perceptions. Managing expectations of performance is crucial. Product X was on a trajectory toward peak sales of $750M—a big product by almost any measure—yet remarkably the launch was perceived within the company as a disappointment. The lesson is that a good pharmaceutical marketer must be aware of both the performance of his or her brand and the internal perceptions of that performance. Managing those perceptions is a major part of being the brand champion. The resources necessary to turn things around may not be available once expectations have been reduced.

3) Ask the Right Questions. Ben did the right thing by asking about root causes of performance, but a little additional work could have uncovered other areas for investigation. Most notably, Ben assembled his list with no input from outside his organization. This is a problem because brand teams often fall into patterns of group think, where they consider certain issues "settled" and fail to question their own assumptions. Ben should have sought input from trusted business partners to expand his list of issues and to enlist help to figure them out.

4) Think Outside the Box. When Ben employed only his internal staff to analyze the situation, he risked getting more of the same wrong answers that helped create the problem. Too frequently, a team asked to analyze its own brand underperformance will exclude its own actions as contributing factors. The team needs an honest broker who can, with input and assistance, analyze the situation with a fresh perspective.

5) Have a Realistic Measure of Success. Success and failure were perceived within the organization using a single metric—sales performance against the target. At no point did Ben seriously question if the forecast target was correct. This is alarming given his uncertainty around clinical performance in the real world. Very often, pre-launch share estimates are derived from market research based on an expected product profile, which was developed using estimates of clinical performance drawn from controlled clinical trials. While that process is an industry standard, it’s also less than perfect. Products often perform differently in the real world than they do in a controlled clinical trial. Expectations should be reset when signs point to such a possibility. Finally, it's important to note that not all erroneous forecasts are too high—some are too low. To maximize an asset’s value, it's important to consider both possibilities.

6) Have Courage. Recommending
out-licensure of your brand requires managerial courage, but may be the right thing to do once perceptions are irreparably low. Likewise, asking the hard questions when a brand is perceived to be overperforming requires courage because it could mean raising expectations with no guarantee of hitting the new expectations. However, if the standard is to “maximize every opportunity,” there may be no choice but to display genuine managerial courage.

Tom Luginbill is Vice President of the Brand Management Practice at Campbell Alliance (www.CampbellAlliance.com). Based in Chicago, IL, he welcomes comments at 888-297-2001, x. 7220.