I keep hearing that pharma needs to focus on smaller specialist disease areas, that the blockbuster model is broken/dead.

But when we want to invest in those markets, we find the fight for resources hampered because we can't show the returns that bigger markets have. Even when we show a positive ROI, there is always pressure to reduce the investment because of the smaller total sales.

And yet some of these niche markets can be more costly in terms of market education, MR, targeting etc.

Am I the only person encountering this? And if not, do we feel that the days of assigning resource as a fixed % of forecast sales are passing?

Posted 16th October 2009, 15:20:02

With the smaller markets I think you are looking at more incremental revenue models involving multiple launches into different niche therapy areas (think cancer therapies gaining new indications), so this can still lead to strong sales forecasts, potentially with lower risk.

In terms of market education etc. I would argue that with a smaller specialist audience and the advancement of modern technology for reaching them (e.g. e-detailing etc.) costs can be managed far more successfully than in the days of the old blockbuster.

Finally, following on from above I do think that assigning resource as a fixed % of sales doesn't make sense any more, because the precise type and number of influences, engagement channels and engagement tools are changing so rapidly.

Posted 23rd October 2009, 17:24:50

Development / trial costs also tend to be lower in these markets due to shorter / smaller trials which can also help the ROI calculations.