While the COVID-19 pandemic has taught us that we cannot predict everything, we can and should anticipate most potential future events. As we look to longer timelines for decision-making as part of our lifecycle management (LCM) planning, we must aim to manage these unknowns as effectively as we can.
Identifying Uncertainty: Why it Matters
One such example that demonstrates this need to manage uncertainty is loss of exclusivity. While a team may be confident in the strength of patent protection for its brand globally, be that compound patents or even formulation patents, by no means are these an impenetrable obstacle to the entry of generics. In fact, a generic can take several routes to enter the market “early” and with varying degrees of visibility and therefore certainty for the brand company.
Generics companies can often develop non-infringing polymorphs of the API and formulations with different inactive ingredients. We also often see variance in how individual countries may interpret the validity of a claim within a patent. Being prepared for a variety of scenarios and agile enough to implement proactive and reactive strategies are essential to maximize competitiveness of a brand, and cannot be done without identifying uncertainties over its lifecycle.
While it is clear that we cannot ignore uncertainty, it is also impractical for us to try plan for every possible eventuality and future market evolution. Establishing an aligned base case view of the most likely market evolution is critical, but this must be informed based on analysis of the uncertainty that exists. Integrating a risk analysis element within a lifecycle management process is a highly valuable step that can enable more effective upfront planning and often address management challenges to LCM plans further down the line.
How to Integrate Risk
The best approach to integrating risk will be driven by the extent of uncertainty to address. A first step is usually to collate future events/trends that could impact the market in three core buckets:
- Internal, which could entail existing brand development plans and patent timings.
- Market and stakeholder related, including changes to guidelines, evolution of the policy environment, and shifts in stakeholder decision-making processes.
- Competitor focused, for instance when we anticipate new launches or data, patent expiries, and generic strategies.
Identifying the different potential outcomes of these uncertainties and then rating the probability of each occurring leads to the development of detailed base market scenarios that can form the basis for market modelling. Alternative outcomes can then be rated based on probability and impact on the brand/market (compared with the base case assumption), and mitigation approaches identified for priority risks.
While this standardized approach is good for markets with moderate degrees of uncertainty, if such a process generates a view that the market could evolve in very different ways, then a more detailed scenario planning process is likely to be a critical extra step. Through this approach, divergent scenarios can be created based on clusters of alternative uncertainty outcomes to pressure test the base case LCM strategy with a “what if” approach. As such, an LCM strategy can be tailored to either optimize success under multiple future scenarios, or early trigger points can be identified that could shift plans from one core LCM plan to a contingency approach.
If appropriately integrated and effectively considered then uncertainty should not be ignored; instead, it should be acknowledged and monitored so that it can be used to support future tailoring of the overarching strategic vision for the brand or portfolio. After all, strategy should always be at the heart of LCM planning.