Everyone I speak to complains about how hypercompetitive their therapeutic market has become. Antihypertension has been hypercompetitive for a very long now – no pun intended. Now other markets are going this way too, particularly Diabetes and Oncology.
In Diabetes there are already many drugs on the market. However, there are also over 100 compounds currently in clinical trials that will all eventually aim to launch.
Let’s face it; there are a lot of competing products with little to really tell them apart. It seems as if everyone is using the same data to make the same decisions, which is making life more challenging for all players.
Key Question
This raises the question of what’s more important for long-term commercial success – being first to market or being best clinically.
Historically, being clinically superior has tended to define commercial success. Take Lipitor as an example. It was 5th to market and launched 9 years after the first in its class (Mevacor).
Nevertheless, it went on to capture double the peak annual sales of others in its category. For Lipitor, therapeutic advantage led to strong commercial success. Is this always the casae though?
It’s a big question for Pharma execs to decide between funding, with a limited budget and many compounds. You may have great promising compounds in Diabetes, Oncology and many more markets, but what if you can’t afford to commercialize them all?
What are the key factors that really influence the success of a compound?
A study conducted by BCG and reported in Nature (June 2013) examined this in detail. They analyzed drugs in the same therapeutic class, looking at the relationship between when they entered the market, their therapeutic advantages and their resulting commercial success.
The result?
It’s slightly better to be first. Even if a drug was therapeutically better, if it launched second, it resulted in a 12% decrease in financial performance on average compared to those which came first.
On the other hand, the drug could be therapeutically average, but if it launched first it only suffered an 8% decrease in financial performance. Drugs launched second, and average therapeutically, outperformed being third and best by 50-58%.
So, being first to market is definitely good, though it’s not enough if that drug has a low therapeutic value.
Even if launched first, a drug with an average therapeutic value only achieved 40% of best case results. The value drops to 10% if the drug was launched after one or more were marketed.
Conclusion
So, if you can be first, do it. If not first, then you had better seriously outperform therapeutically. However, even then you’ll still be likely to lose 12% of achievable value.
For more on this topic, read our article ‘Best or First: Who Will Win?’
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To learn more about how Eularis can help you find the best solutions to the challenges faced by healthcare teams, please drop us a note or email the author at abates@eularis.com.