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`The secret of successful drug launches | McKinsey
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` P
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`harmaceuticals & Medical Products
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`The secret of successful drug launches
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`P harmaceutical companies have long relied on successfully launching new drugs to drive growth. This
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`pressure is only likely to increase. Patents are expiring and product pipelines are shrinking. Austerity
`measures in many countries are increasing local and national hurdles for market access. And, at the same time,
`launches are becoming more numerous, smaller, and more competitive. We estimate that pharmaceutical companies
`will launch some 400 new products in the next three years, up 146 percent from 2005. Given this changing external
`landscape, awash with more products of ever greater diversity, it’s never been more important for pharmaceutical
`companies to crack the new-product launch code.
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`Yet their recent track record is sobering at best. About two-thirds of new drugs fail to meet prelaunch consensus
`[ 1 ]
`sales expectations for their first year on the market,
` and those that fall short typically continue to underdeliver for
`the next two years (exhibit). There’s no question that every launch has its own set of success factors. Yet by analyzing
`a sample of 60 launches in late-stage development along the dimensions of clinical differentiation and the perceived
`burden of the disease area in which the drug is to be launched, we identified four drug archetypes:
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`https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/the-secret-of-successful-drug-launches
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`About two-thirds of drug launches don’t meet expectations. Improving that record requires
`pharmaceutical companies to recognize the world has changed and adjust their marketing
`accordingly.
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`March 2014 | Article
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`By Hemant Ahlawat, Giulia Chierchia , and Paul van Arkel
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`Biogen Exhibit 2194
`Mylan v. Biogen
`IPR 2018-01403
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`Page 1 of 3
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`Exhibit
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`The secret of successful dmg launches | McKinsey
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`Two-thirds of a sample group of drug launches failed to meet
`prelaunch sales expectations for their first year on the market.
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`Actual sales during first year of launch as % of forecast sales 1 year prior to launch‘
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`Q % of launches
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`>200%
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`. % of launches on
`or near forecasts
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`e % of launches
`above forecasts
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`161—200%
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`121-16096
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` below forecasts
`81—120%V
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`a
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`0-4096
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`41-80%
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`Of launches that exceeded forecasts
`in year 1, 85% continued to do so in
`year 2, and 53% of those exceeded
`forecasts in year 3.
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`Of launches that lagged forecasts in
`year 1, 78% continued to do so in year
`2, and 70% of those lagged forecasts
`in year 3.
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`‘Sample comprises 210 new molecular entities launched between 2003 and 2009 for which consensus
`forecasts were available from Evaluate 1 year prior to launch.
`Source: EvaluatePharma; McKinsey analysis
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`0 Go for gold. Roughly one in four launches involves drugs that are strongly differentiated from competing
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`products and treat diseases with a high perceived burden. Examples include Zytiga, Johnson & Johnson's
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`prostate—cancer treatment, and Januvia, Merck’s drug to lower blood—sugar levels in people with type 2
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`diabetes. Such launches run a substanfial risk of companies believing that the product’s high quality
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`guarantees high sales volume. Capturing their full potential still requires shifting substantial resources from in—
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`line brands to finance the launch. Companies must avoid the “good data trap” by seeking out possible barriers
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`to prescription and focus on capturing the potential as quickly as possible by creating maximum early exposure
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`to the product, closely monitoring launch uptake, and correcting course if necessary.
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`Stand out from the crowd. At the other extreme, more than half of upcoming launches are of moderately
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`differentiated products in well—established disease areas, and the priority is to find a way to stand out from the
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`crowd. These launches must find or create an edge that will allow the drug to be positioned effectively for
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`particular patient segments and create clear differentiation from existing competitors. This requires innovative
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`approaches to unveil insights into stakeholder needs and behaviors that competitors do not have. Finally,
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`product pricing is another means for creating differentiation.
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`Category creator. For roughly 15 percent of launches, the priority will be to establish unmet needs effectively
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`to ensure access to a well—differentiated treatment for a targeted population. We call these launches “category
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`creators.” Gardasil, launched in the unestablished human papillomavirus market, is an example. Companies
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`must ensure they quickly understand the market's unmet needs, make sure they don't unden'nvest, and be
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`prepared to react and course correct.
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`The secret of successful drug launches | McKinsey
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`Market shaper. The remaining 8 percent of launches will face the substantial challenge of launching an
`undifferentiated product in an unestablished disease area. Once the decision to market such a product has
`been made, the priority for these market-shaping launches will lie in securing access for the product and
`effectively establishing unmet needs.
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`While companies must take the fundamental step of identifying what decisions should be made for a specific launch
`—ensuring a road map, quality standards, resource benchmarks, and a readiness process is in place—they must also
`shape and execute those decisions effectively. Each launch has its own set of success factors, and we believe
`companies should ensure they are exceptional at a handful of them—at a minimum—rather than merely good at
`everything. We also advocate selecting, training, and motivating the extended launch team and fostering a culture
`and management style that delivers great launches. Today’s environment requires such a systematic approach:
`pharma companies must establish unmet needs in a disease area, develop deep customer insight as a basis for a
`truly differentiated positioning, land the products safely in the market, maximize launch uptake, and use early
`experiences in the market to fine-tune ongoing launch activities. It’s not easy, but the reward is worth the effort.
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`This article is drawn from Beyond the storm: Launch excellence in the new normal (PDF2.8 MB), a compendium
`from McKinsey’s pharmaceuticals and medical products practice that provides details on how to tackle each of these
`tasks and further insight on how to approach them effectively.
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`1. We examined 210 new molecular entities launched between 2003 and 2009 for which Evaluate consensus forecasts were
`available one year prior to launch. Forecasts get increasingly accurate the closer they are to the actual launch date, and they
`become even more accurate once the drug is launched.
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`About the author(s)
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`Hemant Ahlawat is a principal in McKinsey’s Brussels office, Giulia Chierchia is a principal in the Madrid office, and
`Paul van Arkel is an alumnus of the Zurich office.
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`https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/the-secret-of-successful-drug-launches
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