A salutary tale from Big Pharma. This week, global behemoth Roche failed to sell its breakthrough breast cancer drug to the world’s largest medical buyer.
Kadcyla extends the life of patients suffering inoperable aggressive onset on average in trials by six months with little side effects.
It is deemed a “first in class” product because it does something novel in a different way. Whilst also heralding a fresh path for future industry development.
Their pricing at launch for a year’s supply to each patient is £90,000 (around $150k).
Britain’s National Health Service (the UK’s “free” cradle-to-grave never-a-question-asked universal healthcare set up) has a unit that assesses all new product suitability.
Their guidelines show that Roche’s new drug is around 8-times outside its cost-benefit framework. That’s a colossal overshoot.
So the drug barons fail in their sale. Press coverage has been remarkably pragmatic. General reaction accepts that (regardless of R&D outlay) pricing is wildly too expensive. No matter how clever and desirable a product, it appears opinion recognises; ‘only when Roche review the price could the NHS review its decision’.
With an industry-standard ten year patent seemingly in place you wonder how any sales will follow.
Sadly this is a scenario I’ve seen, thankfully in less emotive arenas, play out before.
Many a new product which genuinely brings a tangible improvement deserves to command a price premium. Yet where this equation resolves beyond the expectations of the sector’s key client by a factor of eight it is clearly destined to struggle.
Where you have such a first-in-class launch, you need serious customer super-segmenting upfront. The tendency is to do a standard launch programme. This will not succeed.
A central resource with complete accountability (working in proper tandem with field teams) is pretty much the only way.
In adoption curve terms, you need to seek out the tiny part of the population – possibly as few as one in fifty – that will be open to such a visionary concept.
They must be further profiled by having money, appreciating any associated esteem and a host of other emotional drivers.
Seasoned sellers overwhelmingly tend to race in completely the opposite direction from such first in class distraction.
Unseasoned salesforces tend to expect them to do otherwise and lose all manner of momentum and run rate business by chasing them to do so.
You must think and act differently in this case.