As COVID-19 cases continue to spread across the globe, the repercussions in healthcare extend across the value chain from patients and families to clinicians and pharmaceutical companies.
The industry faces a dual challenge. As well as helping to tackle COVID-19 spread by developing and distributing new vaccines and tests, it must continue to deliver innovative therapies and diagnostics to clinicians, patients, and healthcare systems—even as R&D, manufacturing, and supply chains are struggling to maintain business as usual.
An earlier McKinsey article considered how pharma companies can reorient their commercial model to respond to the new environment. Below, we focus on launch activities and identify five success factors to consider for commercial launches in the next normal.
Familiar challenges and new complications
Even before the COVID-19 outbreak, launching a new drug was far from straightforward. Forty percent of worldwide drug launches between 2009 and 2017 failed to meet their two-year sales forecasts.1 A successful launch must overcome a series of barriers, including intensifying competition, increasing pricing pressure, growing access challenges, and rising expectations among caregivers and patients. The pandemic and its economic consequences have added further complications to what was already a risky launch environment.
We analyzed 86 launches scheduled for 2018 onward with expected sales in excess of $300 million. We found that between February and August 2020, all of these launches were disrupted through delays, lost revenues, or both. Companies chose to delay launches in 45 percent of cases, regulatory delays affected another 40 percent, and other external factors such as supply-chain problems accounted for the remaining 15 percent of delays.2 In the United States, for instance, the median interval between approval and first scripts had increased more than threefold by May 2020, from 17 to 58 days, although it shrunk back to 21 days by September.3
The pandemic also had a marked impact on the financial performance of the launches we analyzed. In 50 out of the 86 disrupted launches, companies lowered their expectations by more than 25 percent. Overall, we estimate that the changes in analyst consensus expectations between March and August 2020 represent a 9 percent decline in the net present value of the 86 drugs—the equivalent of a total loss of some $10 billion globally.4
Why the traditional launch model is losing effectiveness
It is too soon to evaluate the full impact of the COVID-19 pandemic on drug launches. However, it is clear that major shifts in the way that healthcare professionals (HCPs) interact with pharma companies will present a challenge for the traditional launch model, with its reliance on face-to-face meetings with physicians and its “one size fits all” approach to engagement.
One immediate consequence of the pandemic has been a drastic reduction in pharma companies’ visits to HCPs. A survey conducted by McKinsey in Europe shows that the average number of in-person contacts between HCPs and pharma sales reps was 70 percent lower in September 2020 than before the pandemic.5 In parallel, HCPs’ adoption of digital channels and telemedicine has accelerated for interactions with patients and pharma reps alike. In the same survey, the HCPs who are highly open to remote engagement with sales reps report conducting almost half of their patient consultations remotely as well.
However, this broad overview masks considerable differences in HCPs’ preferences and expectations. A McKinsey survey conducted in May and September 2020 to assess sentiment among more than 900 physicians in five European countries yielded a patchwork of responses (Exhibit 1).
Only 18 percent of the physicians surveyed in May were willing to accept reps’ visits, but by September, that percentage had risen to 31 percent, suggesting that preferences shift over time as infection rates change and HCPs adjust to new circumstances.6 Preferences also vary by country. In the September survey, more than 50 percent of HCPs in France, Germany, and Italy expressed a willingness to accept regular face-to-face visits from reps, but only 11 percent of their UK peers felt the same way.
These findings suggest that the traditional pharma commercial model will likely struggle to adapt to a different world. When reps venture back into the field, they will need to address the plurality and access challenges of the new interaction landscape. To do that, they will need to consider a new approach to launches: one that is digital, local, and personalized.
What next? Five success factors to consider for a launch strategy
For a pharma company looking to reinvent its commercial model, the launch of new products is a golden opportunity to try out new techniques and gauge their impact before rolling them out more widely. Given the uncertainties triggered by the pandemic and the radical changes in physicians’ preferences and behaviors, replicating successful launch strategies from the past is no longer a safe option. Our work with pharma companies indicates that leaders designing a new strategy should consider paying close attention to five success factors: rapidly personalized content, analytics-enabled engagement, innovative patient channels and services, nimble frontline operations, and closed-loop execution (Exhibit 2). We outline each of these five factors in greater detail below.
Rapidly personalized content
With HCPs’ preferences so variable and changeable, pharma companies need clear, up-to-date perspectives on each physician’s interests and wishes so they can gear messages to individual needs and concerns. Basing communications on an undifferentiated aggregate view of physicians or segments will no longer suffice. For each new product launch, best-practice companies compile a set of marketing and medical modules to cover the full spectrum of HCP needs and then ask reps to use their insight into individual physicians to select the modules that best meet their needs.
While this approach has been true for many years, the difference is that today those new modules need to be created quickly to be relevant. A better way to stay relevant is to engage HCPs on the current hot topics in their field—for example, what best practices are emerging in telemedicine? How are HCPs managing COVID-19 infection risk for patients? What do key opinion leaders think about the potential for drug-to-drug interactions with COVID-19 vaccines?
Familiar product-oriented and company-centered approaches to content may also need rethinking. To reduce development cycles, content creation and review processes need to be streamlined and simplified. With agile approaches, companies can book a meeting with an HCP, gather feedback, and capture it immediately in the next iteration of content development. In that way, content can be approved and refined within approval cycles of no more than two to four weeks.
For a pharma company looking to reinvent its commercial model, the launch of new products is a golden opportunity to try out new techniques and gauge their impact before rolling them out more widely.
If a universal approach is no longer an option for content, the same is true of engagement. The days of casual appointments and conversations in hallways are over. Whether an interaction is face to face or remote, it needs to be scheduled and an agenda shared in advance. A rep needs to have something new and compelling to discuss or risks that the meeting might never happen.
To understand individual physicians’ preferences for interaction frequency and channels, innovative companies are creating data lakes, building predictive models, and drawing on unfamiliar data sources—not only customer-relationship-management (CRM) systems, sales records, and quantitative surveys, say, but also claims data for providers at a physician’s office. Innovative approaches can yield surprising results. In the United States, for instance, some pharma companies found they can predict physicians’ willingness to engage with reps more accurately from foot traffic and credit-card spend in a given zip code than from local state restrictions or COVID-19 infection rates.
Since relevant historical data on physician preferences on interactions with sales reps is seldom available at launch, the process of generating insights typically begins with field reps reporting on the impressions they gained of HCPs’ preferences during prelaunch interactions with them. As the product launch progresses, important factors such as physician feedback, field insights, and prescription volume are used to flesh out and update this preliminary picture. Through a continual process of refinement, the predictive model on launch success becomes more powerful and its output better aligned with the realities of the market. As a physician’s preferences evolve—both in response to the new product as well as in engagement channels—the model adjusts its recommendations, enabling reps to fine-tune content and channel choices for an audience of one to provide an optimal personalized experience at launch.
To implement an analytics-based approach to engagement, pharma leaders also need to ensure that two critical enablers are in place: a tech and data backbone to enable seamless integration across channels and data sources, and a platform for running advanced-analytics models to enable leaders to distinguish signals from noise, improve decision making in real time, and optimize messages, channels, and timing in individual HCP interactions.
Innovative patient channels and services
In a McKinsey survey of 300 physicians in September 2020, 74 percent of respondents reported noticing their patients delaying necessary care, with consequences including an increase in complications from injury or disease, a loss of income from missing work, and a rise in the costs of care. For new product launches, this finding is significant, since patients who have yet to be treated for a new medical condition are often the ones most interested in a new product for treatment. However, as patients delay care due to the COVID-19 pandemic, the pool of new patients that may have benefited from being treated with a new product is declining as well. The new hurdles created by the COVID-19 pandemic call for innovative services from pharma companies, as well as from healthcare systems and professionals, to stay connected with patients.
As the survey indicates, the perceived risk of engaging with health systems has made many patients wary of face-to-face interactions in all but the most serious cases. Those suffering from nonurgent conditions, such as migraines, insomnia, and depression, are less likely to request appointments with primary-care physicians. Responsive companies have been stepping in to facilitate interactions with HCPs by offering telemedicine diagnostic platforms in app form or through the integration of web, text, and voice.
Maintaining or adjusting treatment can also be difficult in today’s circumstances, especially for infusions, injections, and other therapies that require attendance at a hospital or clinic. Innovative companies are developing alternative infusion sites, enabling “at home” infusion, and offering guidance on how to minimize risk when visiting health facilities.
Nimble frontline operations
As pharma companies gear up for remote launch activities, they can help their sales reps build new capabilities that can enhance their impact on launch success. As virtual calls replace in-person visits, reps can foster a sense of proximity with HCPs by learning to make the most of cameras, screen sharing, and other interaction tools. Soft skills such as deep listening will help sales reps gather insights on physicians’ unmet needs and sources of dissatisfaction. Feeding these insights back into CRM systems will enhance their predictive power and enable the organization to rapidly correct course where needed.
As the use of video, interactive content, and multiperson interactions increases, companies will also need to rethink marketing materials so that they are effective in remote settings. Meanwhile, marketing staff will need to further develop their ability to optimize marketing campaigns based on HCP engagement, as well as using CRM data and dashboards to assess the effectiveness of past and future actions. Capability-building programs will equip staff with the soft and hard skills— from empathy to proficiency with advanced digital tools—required for success in a rapidly changing launch environment.
Capabilities aside, launch programs give companies an opportunity to reassess the setup of their field force. With less time spent traveling and waiting to see HCPs, reps have more capacity to pursue value-added opportunities. One example might be expanding physician engagement beyond the treatment network—through referral networks, for instance—especially now that location is no longer a constraint. Building a fuller view of customer-facing roles and interactions should allow launch leaders to allocate frontline capacity in a more effective and granular manner.
Today’s environment makes agile ways of working a necessity. With launches no longer following a common regional or national strategy but tailored to suit local contexts, each initiative must be tracked and redirected in real time as early feedback and results on sales tactics are gathered. This kind of closed-loop execution requires changes in governance and in how decisions are made.
For instance, regional leads should be empowered to fine-tune targeting philosophy and product positioning in response to the feedback they gather locally. Meanwhile, central launch teams can share best practices or make suggestions by aggregating the success rate of different approaches across various target segments and regions. Campaigns that prove effective can be scaled up across broader geographies, while ineffective campaigns can be replaced with new campaigns that are tested and, in turn, refined or replaced as needed based on their results. Consequently, launch plans are updated in rapid iterations at national and regional levels to ensure that insights and opportunities are fully captured. To manage this process and experiment with new methods and ways of working, some companies set up launch situation rooms that pull together data on sales, volume uptake, and other standard metrics with field insights garnered through rep apps to analyze launch performance in real time. Adopting an agile operating model with processes that support cross-functional collaboration enables launch teams to rapidly create campaigns to address shifting customer needs.
The turbulence of the past few months has made pharma companies keenly aware of the need to rethink their medical education, engagement channels, and platforms—but it has also left some of them paralyzed by uncertainty. Should they invest now in transforming their commercial model or wait to see how things play out? As commercial leaders consider their go-to-market plans for new drugs, they have a unique opportunity to experiment with new approaches without disrupting their entire business model. Innovations developed for new drugs that prove valuable for commercial success will reshape the commercial strategy of the whole company.