Market Access for Growth

Building market access excellenceto secure future success in thepharmaceutical industry

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Contents

Pharmaceutical industry dynamics increase the urgency of market access 3

Assess markets for the likelihood of success 6

Develop, plan and implement a market access strategy 8

Combine access strategy development with pharmaceutical business processes 10

Conclusion: Realize high performance throughmarket access strategy 11

About the authors 12

About Accenture 12

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Pharmaceutical industry dynamics increase the urgency of market access

Comparing this “golden age” withtoday’s stark realities reveals a muchaltered business landscape. Today,companies must meet the needs ofmultiple stakeholders, such asregulatory bodies, payers, physicians,key opinion leaders and patientgroups. Gaining approval does notmean automatic reimbursement, andprice setting has never been morecomplex. To address these moremultifaceted approval andreimbursement processes,pharmaceutical companies have tomaintain continuous contact withregulatory bodies and otherstakeholders from early in theprocess.

But what kinds of market shifts havecreated these adverse conditions?

In drug development, breakthroughinnovations are increasingly difficultto achieve and incrementalinnovation may not be rewarded.Competition from generic drugs isgrowing and premium pricing is arisky path because of assertive costcutting claims by health careregulating bodies. Leading playerscomplement the “blockbuster” modelwith more focused, specialistapproaches. Emerging countries -especially the “E8” emergingeconomies of China, India, Brazil,Russia, Indonesia, Korea, Mexico andTurkey - are becoming much moreimportant markets and will impactglobal pharmaceutical profits to agreater degree than ever.

Together, these factors havesignificantly altered thepharmaceutical sector. Earliercharacterized as a seller’s market,the pharmaceutical industry’seconomic model is becomingincreasingly demand driven.

Increasing costs lead a shift to value assessmentsToday, health care decision makersbase their investments for newhealth technologies on evidence, andthere is a move toward valueassessments. For example:

• Rising health care costs are beingcounteracted by measures tocontain costs, for instance,reference pricing systems.

• New legislation is underscoring theimportance of the payer’s position,for instance, by allowing directcontracts between payers and

During the 1990s, introducing new drugs was relativelysimple. At that time, “premium pricing” was the onlystrategy, supported by limited market research rightbefore launch. New drugs generated sufficient demandand profits in established markets. Emerging marketswere ignored.

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manufacturers, while limitingmanufacturer’s discounts topharmacists and hospitals, andincreasing patient awareness ofcosts through drug co-payments.

• Health technology assessments are being used more often byregulatory bodies to evaluate thevalue of therapeutic interventions.

• Health economics and outcomeresearch groups are nowsuccessfully contributing to brandteams supporting reimbursementand listing based on demonstratedvalue.

Clearly, value can be defined innumerous ways depending on thestakeholder group and itsexpectations. For instance, regulatorscare about safety, efficacy and costeffectiveness, while payers focus onbudget impact. Physicians considerefficacy, side effects and compliance.Patients seek quality of life. Therelative shifting of “value,” based onstakeholder definitions, influencesthe method pharmaceuticalcompanies apply to demonstratingvalue to each unique constituency.

Globalization and access strategiesThe fact that the market is notglobally uniform increasescomplexity. Buying power, financingstructures and regulations all vary by country. There are also dramaticvariations in the demand for newtherapies and a diversity ofcompetition. As companies’ access to markets provides a noticeablecompetitive advantage, pharma -ceutical executives responsible for commercial operations ininternational settings need tounderstand these challenging marketdynamics - and to develop acontext-sensitive plan using tailoredmarket access strategies.

Meeting stakeholder requirementsThere is no doubt that openingaccess to markets is the No. 1 globalcommercialization strategy forpharmaceutical companies. The key isto carefully study the potentialimpact of any single product on agiven market and, in turn, develop anunderstanding of how the changingmarket may impact the product’sperception. A well-considered accessstrategy must address the followingquestions:

• Who are the country-specificstakeholders and whatexpectations do they have?

• How do the company’s productsaddress these expectations?

• How can the company buildorganizational and processcapabilities to establishprofessional partnerships withstakeholders to negotiate listingand reimbursement at optimalprices by demonstrating value?

Companies must contend with thesecomplexities across an entiretherapeutics portfolio and incontinually evolving environments. Thisis why market access strategies needto be developed in collaboration – andacross functions – based on:

• Target product profiles, whichmust take into considerationhealth economics as early asfeasible.

• Brand positioning in the targetedmarkets - defined by marketing.

• Regional/local implementation atthe sales level, which needs toadapt its view on andcommunication with customers.

Market access strategies linkregionally executed product launchesand marketing and sales strategieswith corporate market and productstrategies. They lay the groundworkfor a successful local product launchand act as a guide for corporateexecutives to successfully executetheir strategies in regional markets(Figure 1).

Market and ProductStrategies

Launch and Marketingand Sales Strategies

Market Access Strategies

Corporate Regional/Local

Figure 1. How access strategies fit into the marketing process.

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Figure 2 exemplifies a set ofindicators and rankings, which canhelp companies determine whether amarket falls within an emerging oradvanced status. According to thestatus of the market the stakeholdersmanagement approach has to bealigned to the fact that emergingmarkets display a limited number ofminor experienced stakeholders,while advanced markets arecharacterized by highly skilled,multiple stakeholders.

The second dimension evaluates aproduct in terms of its effectivenessand its position in the indicatedtherapeutic area. Figure 3exemplifies indicators that rankproducts and target indications.Along this categorization themessaging needs to be aligned forstandard drugs and supported byintensive broad band messaging. Forinnovative drugs, selected messagingis more appropriate.

Stakeholder influence

Environmental characteristics

Sales drivers

Government/RegulationsKey opinion leaderPayerHealth care providerGeneral practitionerSpecialistsPharmaciesPatient groupsSpending capacitySelf-payInsurance coverageCost containmentTherapy guidelinesReimbursement listingShare of VoicePricing

LowLowLowMediumMediumMediumMediumLowLowHighLowLowLowLowHighMedium

HighHighHighMediumMediumMediumHighHighHighMediumHighHighHighHighLowHigh

Status of marketEmerging Advanced

Drug

Indication

Innovation gradeEfficacySafetyCompetitionMedical needMe-too versus First in classLifestyle versus Life threatening

LowLowLowHighLowLowLow

HighHighHighLowHighHighHigh

Status of drugStandard/Low need

Differentiated/High need

Figure 2. Indicators to identify market status.

Figure 3. Indicators characterizing a drug and its indications.

Assess markets for the likelihoodof success

The market access strategy is significantly influenced bythe nature of the targeted market as well as the productcategory and its position in a therapeutic area. Marketstatus can be defined by the composition of stakeholdersand their relative influence, healthcare environment andsales drivers.

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The matrix in Figure 4 combines themarket and the product andindication dimensions to definedifferent market access strategies.Mapping market and stakeholdersagainst indication and scientificvalue and the need for newtherapies, the four quadrants emergewith attendant strategies. Pricing,stakeholder management, messagingand sales model are example factorsthat marketers might use to definethe appropriate market accessstrategy.

Recent examples of market accessstrategies illustrate the ways inwhich pharmaceutical companiesmight shape their approaches givena particular drug’s placement in thematrix (Figure 5).

Moderate PricingLimited StakeholderManagementProduct aligned MessagingPull Model

Premium PricingSelected StakeholderManagementDiversified MessagingSelected Channel Model

Low PricingLow StakeholderManagementMass MessagingPush Model

Innovative PricingMultiple StakeholderManagementSuperior MessagingKey Account Model

Differentiated/High need

Standard/Low need

Emerging Advanced

Product &Indication

Market

In 2007 Altargo/Altabax was launched inthe United States and emerging Europeancountries

Toricel received orphan drug status for renalcell carcinoma, an indication of high unmetmedical need

Taxotere is approved for five cancer indicationsThe manufacturer offered an efficacy guarantee, if a defined threshold of disease management was not reached

Sales of various products are pushed byclassical marketing campaigns in emergingmarkets

Altargo/Altabax

Toricel

Taxotere

Variousproducts

Market Access Strategy

In the European emerging countries, Altargo/Altabax is sold at a price more than 50 percentlower than in the United States

Toricel went to the market with high annualtreatment costs of around EUR 60,000

after six months, the manufacturer would payback drug costs to the insurerThe program lasted for six months before it went to market

For example in Brazil sales of standard drugsare fostered by loyalty card programs, dualbranding strategies, couponing or awarenesscampaigns

CommentProduct

Figure 4. Align markets and product characteristics todetermine market access strategies.

Figure 5. Recent market access strategies based on matrix.

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Develop, plan and implement a marketaccess strategy

1. Assess the market’s existing healthcare environmentObjectivesObtain in-depth knowledge of theinstitutional and industrial setting ofthe regional market.

Activities• Analyze the country’s and region’s

fundamental economics - its healthcare system, stakeholders anddecision makers.

• Assess different stakeholderrequirements, including the drugapproval and reimbursement system.

• Compile facts about the current salesdrivers along with future trends andthe prevailing pharmaceutical pricingsystem.

Roles and responsibilitiesCorporate market intelligence unitsassess the market, supported byinsights from local business teams.

MilestonesPrepare profiles of company’s targetmarkets.

2. Review the therapeutic area, assesscompetition and create stakeholdervalue propositionsObjectivesGain a deep knowledge of thetherapeutic field and competitorpositions to define key stakeholders’value propositions.

Activities• Compile medical need and indication

statistics along with the present andforecasted positions of competitors.

• Develop value propositions for eachstakeholder group, for example, forregulators, payers, physicians, keyopinion leaders and patient groupsand benchmark them againstcompetitors’ drug value propositions.

Roles and responsibilities:• Brand management teams assess

products and their indication,supported by information fromproduct and clinical teams.

• Competitive intelligence teamsgather information on thecompetitive landscape.

• Health economic and outcomesresearch teams use adapted healthtechnology assessments models.

MilestonesClarifies key stakeholders’ productspecific value propositions.

Market access is not an autonomous task, but anintegral component of the drug life cycle managementprocess. Nevertheless, the focus of this section is ondeveloping, planning and implementing a market accessstrategy for which Accenture has developed a five-stepapproach.

1. Market Assessment

2. Product and Indication Assessment

3. Value Demonstration

4. Value Communication

5. PerformanceMonitoring

Figure 6. A five-step approach to creating market access strategies.

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3. Demonstrate valueObjectivesMatch pricing target with keystakeholders’ value propositions.

Activities• Demonstrate value by cost

effectiveness, budget impact, qualityof life analysis or efficacy and safetybased on each stakeholder group’sexpectations

• Perform a price sensitivity analysis tovalidate the impact of pricingdecisions.

• Develop key messages forstakeholders.

Roles and responsibilitiesMultidisciplinary team includingmarketing, research and development,health economic and outcome researchformulate key stakeholder messages tosupport pricing targets.

MilestonesContributes key stakeholders’ valuemessages.

4. Communicate valueObjectivesPerform a value-centric communicationto the stakeholders.

Activities• Develop a communication strategy

and materials for each stakeholdergroup.

• Communicate with stakeholders,overcoming potential objections withvalue propositions that have beenmet.

• After conducting widespreadcommunications on the value of agiven drug complete pricing,reimbursement and listingnegotiations.

Roles and responsibilitiesCommunicate accurate, value-basedmessages through regional launchteams to the various stakeholders.

MilestonesLeads to alignment of key stakeholders.

5. Monitor performanceObjectives• Monitor access strategy performance.• Tune access strategies based on

experience and lessons learned.• Transfer key learnings from one

region to new regions through asequential global rollout.

ActivitiesEstablish key performance indicators(KPIs) and gather statistics throughoutthe launch and in subsequent years.

Roles and responsibilities• Regional sales teams gather

performance information and feed itback to corporate departments foranalysis and action.

• Corporate function determines howto transfer and incorporate thelessons learned to follow-oncampaigns.

MilestonesAccess strategy improvement measures.

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In addition, by presenting thescientific and economic value of adrug to decision makers, the processof demonstrating value providescompelling evidence for drugapproval submissions. Next, hand inhand with demonstrating value,communicating value increasesstakeholders’ acceptance of the drug and assists product launch.

Lastly, performance monitoringmakes it possible to track progressand fine-tune communications,allowing pharmaceutical companiesto determine return on investment inboth sales and marketing.

Combine access strategy development withpharmaceutical business processes

Market access strategy development should be viewed asabsolutely essential to the marketing process withregional market and health care industry assessmentsperformed early on. With this approach in mind, clinicaldevelopment teams can, for example, harnessappropriate feedback from product and indicationassessments to target key stakeholder values.

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Market access is not a brand newinvention. What is new is itsincreased relevance and thesystematic approach to maximize adrug’s performance under the currentconditions of pharmaceuticalmarkets.

Product teams’ market access groupshave to consolidate marketintelligence information to expressand transport value messages tostakeholders. To determine the value,they need to use models derivedfrom the health economic andoutcome research arena that perform

cost effectiveness, budget impactand quality of life analyses. They alsohave to coordinate information flowand action planning among clinicalunits, health economics, marketing,country units and the corporateheadquarters.

Accenture’s five-step approach todeveloping successful market accessstrategies is based on ourunderstanding of the pharmaceuticalindustry and our experience inmarket access projects in stakeholder-and consumer-oriented industries.Our value-based pricing team

supports clients in their drug-pricingdecisions, and our global presenceprovides Accenture with regionalmarket knowledge, all with a focuson achieving high performance.

Conclusion: Realize high performancethrough market access strategy

Copyright © 2009 AccentureAll rights reserved.

Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.

About AccentureAccenture is a global managementconsulting, technology services andoutsourcing company. Combiningunparalleled experience,comprehensive capabilities across allindustries and business functions, andextensive research on the world’smost successful companies,Accenture collaborates with clients tohelp them become high performancebusinesses and governments. Withmore than 181,000 people servingclients in over 120 countries, thecompany generated net revenues ofUS$23.39 billion for the fiscal yearended Aug. 31, 2008. Its home pageis www.accenture.com.

About the Accenture Health & LifeSciences Industry GroupAccenture's Health & Life Sciencesprofessionals deliver innovation andinsight to both the private and publicsectors of the marketplace, whichincludes integrated health careproviders, health insurers, managedcare organizations, public healthorganizations and pharmaceutical,biotechnology and medical productscompanies. With more than 10,000professionals dedicated to serving thehealth and life sciences industry,Accenture works with companies ofall sizes, including 25 of the 27 healthcare and pharmaceutical companies inthe Fortune Global 500.

Michael Brückner, FrankfurtMichael Brückner is the ManagingDirector, Accenture Health & LifeSciences industry group in Germany,Switzerland and Austria. He hasmore than 13 years of internationalexperience in the life sciences andpharmaceutical industry in Europe,North America and Asia, including abroad selection of industry segmentssuch as prescription, generic andover-the-counter drugs as well asthe pharmaceuticals wholesalersector. Much of his project workfocuses on growth, innovation andmerger-related topics, strategydevelopment and implementation aswell as capability development inresearch, development, supply chain,marketing and sales, and finance andcontrolling.

About the authorsDr. Marc Bauer, MunichMarc Bauer is a consultant inAccenture’s Strategy service line anda member of the Health & LifeSciences industry group. He focuseson pharmaceutical businessstrategies, M&A strategies andinnovation strategies and theirimplementation. He has workedclosely with international clientsfrom the research-basedpharmaceutical industry in the areasof research, development as well asmarketing and sales.

Marc P. Philipp, BerlinMarc P. Philipp is a manager inAccenture’s Strategy service line anda member of the Health & LifeSciences industry group. He hasadvised the top management ofleading international research-basedand generic pharmaceuticalcompanies on various topics rangingfrom strategy formulation tocorporate restructuring as well asM&A pre- and post-deal advisory inpharmaceutical research,manufacturing and commercialoperations.