Pharma Focus Asia

WINNING IN LAUNCH

How Indian Generic Pharma can use forecasting to ace the game?

Sanobar Syed, Associate Director Beigene

In a pharmaceutical world that is changing rapidly, the only strategy that is guaranteed to fail is not taking risks. How do you quantify these risks? Forecasting & analytics is the modern day ‘crystal ball’ which is rescuing decision makers and how?

In a pharmaceutical world that is changing rapidly, the only strategy that is guaranteed to fail is not taking risks. How do you quantify these risks? Forecasting and analytics is the modern day “crystal ball” which is rescuing decision makers and how?

Generic and innovator pharmaceutical companies have stark differences such as times, resources and costs allocated to launch products. Given longer clinical phases and regulatory approval periods in innovator companies, it takes a great deal of time, while such requirements are not mandatory within generic companies. The innovator companies have leapfrogged in the use of technology in deriving key critical decisions. However, generic pharmaceutica companies still lag behind in adopting technology in commercial functions. The objective of generic companies is to get fastest to the market at the lowest cost. But the industry is consolidating and hence there is a need for 'differentiation’.  This can be achieved by using the appropriate market research, forecasting and analytical techniques to drive uniqueness in the crowded generic market. If generic companies in pharma want to thrive it’s time to reimagine traditional business models and embrace new technologie that put the patient front and centre. Learning key best practices from the innovator industry will not only let them thrive but also soar high.

India has grown into an epicentre of the generic industry and is rightfully known as the “pharmacy of the world” due to the low cost and high quality of its medicines.

According to InvestIndia.org, The Indian pharmaceutical industry is expected to reach US$65 billion by 2024 and to US$130 billion by 2030. The pharmaceutical industry in India is currently valued at US$50 billion. India supplies over 50 per cent of Africa’s requirement for generics, ~40 per cent of generic demand in the US and ~25 per cent of all medicine in the UK. India has the maximum number of pharmaceutical manufacturing facilities that are in compliance with the US Food and Drug Administration (USFDA) and has 500 API producers that make for around 8 per cent of the worldwide API market.

Generic companies aspiring to capture the growth opportunities must ensure they have functional and commercial excellence in place. They will need to master a staggering set of capabilities in product development, supply, and commercialisation. For some companies, achieving operational excellence is a matter of survival. Conside the Indian generics players that hav transformed their manufacturing operatin models and undertaken ambitious lean programs in recent years. The keys to success include having a clear operations agenda, building centres of competence, ensuring an open environment, creating opportunities for their best talent, and constantly searching for the next extraordinary goal. As a result, Indian companies are among the leaders in the generics industry, and their manufacturing plants are among the world’s top-performing facilities, with conversion costs per production unit of less than 10 percent of the industry median.

But how much have top Indian pharmaceutical companies adopted modern forecasting practices? Before we deep dive into this it is important to understand the value of right launch.

Launch is one of the most critical moments in a product lifecycle. For 85 per cent of pharmaceutical launches, the product trajectory is set in the first six months. Especially in generic industry this is the time to penetrate the market reap the benefits of market share. Historically, limited real-life insights and an inflexible commercial model made it impossible for generic pharmaceutical companies to monitor performance dynamically and make timely course corrections.

What do the companies need to know? The wealth of data now available in the form of hospital data, clinical data and social media data, can boost the industry’s ability to respond to increased market complexity and enables the adoption of leading practice from other industries. These trends are shifting the basis for competition in pharmaceutical launch away from share of voice to share of insight. With this increased data transparency, winning launches will require pharma to harness new sources of information to develop superior real-time insights, and rapidly operationalise decisions based on these insights.

In the consumer packaged goods (CPG) industry, the first month of a product launch are critical in determining its success, brand teams monitor product launches and adjust their strategy in close to real-time. For pharma there are important questions: which doctor prescribed it and where? To which patient? What did the doctor and patient think about it?

Barring few leaders like Dr. Reddys Labs, Glenmark, or Cipla, the rest of the companies are still looking at traditional ways of predicting or forecasting their future sales. While this may have worked until now, will it really give them the edge in the growing consolidated generic space?

Most Indian players are using inorganic growth as their main strategy. More deals are happening in Indian companies acquiring assets in US/Europe, rather than MNCs acquiring Indian companies. As a general principle (assuming management bandwidth is not constricted), Indian companies are better off buying companies overseas than in India for the following reasons: Financial reporting in US/Europe has higher compliance and balance sheets are cleaner (penalty for noncompliance is very high); cost of borrowing capital is 2-3X lower than in India; regulatory and quality compliance is higher (USFDA approved assets); valuations are more reasonable and in sync with market realities.

The industry focus is shifting from ‘growth’ to ‘sustainability of growth’. Profitable growth for the Indian generic pharma industry has been fuelled primarily by exports to regulated markets like USA. Fortunes for the likes of Sun Pharma, Dr. Reddy’s, Aurobindo, Lupin etc. are determined primarily by what happens to their US business. True 'information integration’ will happen only when the following are evaluated and implemented. To caution that this is not an exhaustive list but an indicative suggestion to raise the decision-making bar high in the company.

Data galore but where are the insights?

At any point in a generic company (defined here as anywhere between 250+ products) multiple in-house projects are ongoing where their R&D data is being collected in multiple databases and warehouses. This data is valuable and needs to be consolidated for better analytics. One of the best uses is to push all the data into a data repository or a ‘lake’ and build applications. This can be used by cross-functional teams like R&D, data analysts, data scientists, and others. This data lake will eventually be used for analytics and driving efficiencies in various streams and enable to view information on the go. This also helps in record keeping and maintaining a data sequence especially when investment, budgeting & resource allocations decisions are to be taken.

Know thy customer

Better insight into patient behaviour to improve market trends and effectiveness and healthcare outcomes. At any time, there are multiple purchase orders being dispatched and shipped which generates greater amounts of data that companies can tap — coupled with advanced analytic and forecasting models, mean that pharmaceutical manufacturers can gain much greater insight into existing patient and buying behaviour. The company can then use that information to create a targeted approach and rather educate their customer about their buying patterns. Key questions can be asked if there has been a sudden dip or rise in the supply or demand of any particular active pharmaceutical ingredient or formulation. Innovators are using modern technology to improve compliance and leading to uptake and higher revenues.

Linkage between strategic forecasting and sales performance

With increasing competition from generics, big pharma is getting smarter about analysing and driving effectiveness in its sales and marketing operations. New, niche and underserved markets may be spotted by analysing information from social media, demographics, electronic medical records and other sources of data. Equally, analysing the effectiveness of sales efforts and capturing the feedback received by the sales force during client visits and using it effectively can help pharmaceutical companies get an edge on their competition. In theory, this will allow the companies to make better informed decisions, faster than ever before.

Rise with the industry

Being able to intelligently search vast data sets of patents, scientific publications, and clinical trials data should, in theory, help accelerate the discovery of new generic drugs by enabling researchers to examine previous results of tests. Applying predictive analytics to the search parameters should help narrow down on the relevant information and also get insight into which avenues are likely to yield best results. The industry is already starting to look at how it can get greater access to more data in order to help accelerate this process. The generic industry can learn and implement avenues to share information to benefit the patient at large.

Conclusion

In order to effectively integrate meaningful forecasts, organisations need to tackle three areas: secure access to the most valuable data (including through collaboration with payers, providers, academics, and third parties), develop unique granular insights by combining advanced analytics with creativity and visualisation technologies, and create organisational flexibility including creating a 'Launch Situation Room’ to rapidly course correct launch plans. Predictive analytics and forecasting can revolutionise how the generic pharmaceutical industry will approach different functional areas like R&D, clinical, sales, marketing, supply chain and inventory management by providing a valuable tool for companies to optimise their processes, minimise the number of canceled orders, and maximise revenue opportunities.

Overall, adopting appropriate business strategy and forecasting process will be a game-changer for the generic pharmaceutical industry, providing valuable insights and enabling companies to make more informed decisions and grow to an unbeatable scale and might. This will accelerate Indian generic pharmaceutical industry to become truly holistically innovative.

References

https://www.ibef.org/industry/pharmaceutical-india
https://www.investindia.gov.in/sector/pharmaceuticals#:~:text=The% per cent20pharmaceutical%percent20industry%percent20in%percent20India%percent20is%percent20expected%percent20to%percent20reach%percent20%percent2465,served%percent20by%percent20Indian%percent20pharma% per cent20exports .
Wouters OJ, McKee M, Luyten J (March 2020). "Estimated Research and Development Investment Needed to Bring a New Medicine to Market, 2009-2018". JAMA. 323 (9): 844–853. doi:10.1001/jama.2020.1166. PMC 7054832. PMID 32125404.
Now $US$5 Billion, Pushing Big Pharma To Change" . Forbes, Pharma & Healthcare. Retrieved 17 July 2016.
https://www.springml.com/customers/customer-story-drreddys/
https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/pharma%pecent20and%percent20medical%percent20products/pmp%percent20new/pdfs/generating%percent20valuepercent20in%percent20generics_final.pdf
https://www.linkedin.com/pulse/crystal-gazing-generic-pharma-industry-sanjay-chaturvedi/

--Issue 50--

Author Bio

Sanobar Syed

Sanobar Syed is currently Associate Director at Beigene. She has over 14 years of proven achievements in establishing and leading business strategy and forecasting, with Top global pharmaceutical firms (AbbVie, Novartis, McKesson). With a master’s degree in Organic chemistry coupled with MBA, she is regularly published and invited to speak at reputed industry conferences across North America and EU. She is considered a subject matter expert, delivers guest lectures & has developed academic modules at TRIEC, Toronto Metropolitan University and Schulich University (Healthcare & Biotech) Canada. She is also on the advisory board of the prestigious CPHI conference board.

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