On Track for Launch Excellence. SUCCEEDING WITH THE RIGHT KEY PERFORMANCE INDICATORS (KPIs)

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1 On Track for Launch Excellence SUCCEEDING WITH THE RIGHT KEY PERFORMANCE INDICATORS (KPIs)

2 In a world where pharmaceutical launches have a few short months to make their mark, companies are under pressure to maximize uptake with very little margin for error. Yet, fewer new brands are succeeding in gaining significant market share.

3 On Track for Launch Excellence IMS Launch Excellence KPI Study In a world where pharmaceutical launches have a few short months to make their mark, companies are under pressure to maximize uptake with very little margin for error. Yet, fewer new brands are succeeding in gaining significant market share. Diligent and early preparation is key to ensuring an optimal course with the ability to monitor both pre- and post-launch activities. Going forward, companies on track to excel will have well-designed leading and lagging KPIs at the center of their global launch program, thus enabling full alignment across all activities, visibility of progress towards strategic goals, and the ability to resolve deviations from plan in a timely and effective manner. Those that fail to optimize KPIs in a best-practice KPI framework run the risk of sabotaging years of research as well as millions in commercial investment. The growing importance of KPIs comes at a time when R&D is yielding fewer innovations, patents are expiring in increasing numbers and maximizing the value of every product launch is imperative for long-term success. Adding to the pressures are major shifts in stakeholder power and changes in the focus of launches themselves from primary care to specialist-led and niche therapy areas. Approaches to market are also more complex, with the increasing pursuit of multiple indications, expanding presence in emerging pharmaceutical or pharmerging economies 1 and healthcare reforms bringing new considerations for market access and global launch sequencing. Also significant is the very short timeframe in which new products must succeed. Rarely can those that start poorly significantly improve their trajectory within the first six months; long-term performance may even be determined in as little as three months from launch. With the growth contribution of launches falling and fewer new products capturing significant market share, ensuring optimal readiness and flawless execution is essential. Despite the imperative to succeed, fewer than 1% of new brands excel in today s pharmaceutical environment. Over the course of three launch excellence studies, IMS s analysis of thousands of new brands across 90 therapy areas and 8 different countries in a 10-year period 2 revealed that many companies still fail to deliver on the four fundamentals for success: Align and prepare the organization for the launch Build a powerful and pertinent value proposition Engage all stakeholders effectively Define and track launch success From a launch preparation perspective, our experience has shown that alignment, visibility and quality of execution, while essential to planning an optimal course, are significant issues for many organizations. Internal misalignment, lack of clarity around critical success factors and poor visibility into launch performance are common, resulting in functional silos instead of crossfunctional teams, major disconnects around strategic goals, and critical gaps in understanding. Without a structured, systematic approach to monitoring and managing the progress of launch preparation and execution, companies continue to run the risk of turning potentially winning brands into also-rans. 1 IMS definition as described in Pharmerging Shake-up, IMS White Paper, March IMS Launch Excellence studies of 4,000 launches in more than 90 therapy areas, across 8 different countries over a 10-year period IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY 3

4 WHAT ARE KPIs? You can't manage what you don't measure. This adage may be old but its truth remains as valid as ever within the context of pharmaceutical launches. Given the need for complete alignment and concord around the strategic goals for the launch, all companies can agree on the importance of KPIs in defining a successful outcome. IMS analysis has confirmed that proactively establishing metrics and closely monitoring performance both pre- and post-launch are central to ensuring an initial strong trajectory the ultimate key to long-term success. While hundreds of performance indicators and thousands of metrics are possible, the phrase key performance indicators depicts the guiding definition. By their very description, KPIs imply a focus on only the most important and pertinent metrics. They must be crucial and relevant to the organizational or brand strategy, be actionable for managing brand performance and initiating positive change, and when measured against specific criteria or thresholds, yield insights towards the desired objective. FIGURE 1: MAXIMIZING INTERNAL AND EXTERNAL PERFORMANCE WITH THE USE OF KPIs Internal Benefits Alignment Visibility KPIs External Benefits Adherence Adoption Access Every product has its own unique success factors; the window of opportunity is perilously small and the market is unforgiving if errors are not immediately corrected. The use of KPIs enables companies to better prepare for a successful launch from both an external and internal perspective (Figure 1). External Benefits Externally, the success of any given launch is driven by its use in the market as it progresses through the cascade from advocacy, approval and market access, to adoption and, ultimately, adherence. In order to plan for a successful launch, companies must leverage KPIs to ensure that all five drivers of product uptake are addressed during their preparation: Achieving brand advocacy among regulators, payers, key opinion leaders, prescribers, patients and other stakeholders Gaining brand approval with optimal labeling for the right patients Securing market access on the most favorable terms with national and local payers, health systems and medical groups Attaining brand adoption for the optimal patient segments with a focus on working with prescribers and providers to achieve early strong positioning in the dynamic market (new, switch and, if relevant, add-on patients) Ensuring brand adherence by retaining patients as loyal repeaters for as long as is clinically appropriate KPIs enable progress tracking and measurement of external goals in terms of: achieving optimal access with payers/formularies; gaining physician adoption; understanding whether prescribers try the product and become regular users; and whether patients stay on therapy. Approval Quality & Timeliness Advocacy 4 IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY

5 Internal Benefits From an organizational perspective, KPIs can offer powerful insights into the status of internal preparedness. They enable consistent tracking of objectives and strategic alignment, the definition of success and critical success factors, as well as visibility into launch plans, performance, and overall quality and timeliness. Determining the right KPIs is an essential step in preparing for launch success, but it does not go far enough. Organizations must also ensure that KPIs can be tracked and existing gaps identified, interpreted appropriately, and acted on quickly should any of the metrics fail to reach a satisfactory value. KPIs are pivotal to achieving a brand s vision and business objectives because they help launch teams gain near-immediate awareness of issues to which they can rapidly respond. This is particularly relevant given the vital importance of the first few weeks post-launch when the long-term growth trajectory of most new brands is established. FIGURE 2: TRACKING LAUNCH SUCCESS WITH RELEVANT, INSIGHTFUL AND ACTIONABLE KPIs Conventional Indicators (Lagging/Not Insightful Pre-Launch) CHALLENGES IN IMPLEMENTING KPIs While the design and implementation of a KPI framework may seem intuitive, many companies flounder in the process. Failure to use a holistic set of metrics and execute well on those metrics are two common issues that impede their optimal use. Failure to Use Holistic Metrics In launch situations, many pharmaceutical companies still track brand performance using prescriptions, sales and market share. While important, these conventional metrics are essentially lagging and of minimal value in providing the granular information needed to ensure an optimal course. Moreover, they cannot be used pre-launch. The goal is to advance this conventional perspective to include relevant, insightful and actionable KPIs (Figure 2). These should be a combination of leading and lagging indicators that are specific to the brand and in line with its critical success factors. They should allow for tracking of both launch preparation and early success in the market, measuring progress towards organizational alignment, the development of a pertinent value proposition and effective stakeholder engagement. Relevant, Insightful and Actionable KPIs to Define and Track Launch Success Scripts Sales Market Share Aligned and Prepared Organization Pertinent Value Proposition Trained Country Teams Launch Plan Gaps Closing FF Hiring/Training Sales Rep Quality Payer Perception Message Test Response Brand/Message Recall Physician Perception Intention to Prescribe Barriers to Prescribe Time to 1st Prescription Patient Perception Patient Satisfaction Patient Refill Rate Source of Business Growth Effective Stakeholder Engagement KOLs Reached KOL Message Publication SoV Media Noise Payers Engaged Patient Groups Engaged IDNs/GPOs Engaged IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY 5

6 FIGURE 3: COMMON ISSUES WHEN DESIGNING AND IMPLEMENTING AN OPTIMAL KPI SOLUTION No link between KPIs and critical success factors Too many key performance indicators Monitor performance against strategic objectives Incorrect or no benchmarks/targets No alignment on targets Imbalance between KPIs across functions and regions Build insightful measures and ensure they remain relevant KPIs Identify areas for improvement Suboptimal use of data Critical success factors are not correctly identified Source: IMS Consulting Group KPIs not locally relevant Initiate appropriate actions Lack of alignment No governance process for corrective action Poor Execution Another key challenge lies in the design and implementation of an optimal KPI solution. Here, a number of pitfalls are frequently encountered (Figure 3). In many cases, companies continue to use analogs that are 10- to 15-years old when more recent benchmarks which reflect today s launch environment would be more appropriate. Another major problem is the inclusion of too many KPIs, a clear indication that most are probably not key. Imbalance between KPIs across functions and regions, and failure to link KPIs to critical success factors are also widespread. Furthermore, the selected KPIs may be relevant globally but not tailored to local needs. While aggregation on a global level is important for senior management reporting, KPIs must also provide an opportunity to drill down to the local level. Also critical is the omission of a governance process which leaves many companies unable to react in good time when remedial action is required. As a consequence, investment in KPI systems is often wasted. Many fail to contribute directly to performance; others are simply useless; and some can even be counterproductive. DEVELOPING A BEST-IN-CLASS SYSTEM The goal of an effective KPI system is the ability to track and benchmark performance regularly and consistently across functions and markets, using metrics which provide early indicators of progress that are linked to corrective actions. Therefore, a best-in-class framework should consist of insightful and actionable metrics, clear definitions and benchmarks, a reporting process that requires minimal manual intervention, and governance oversight that enables fast, proactive responses. All parties must agree on the chosen KPIs, benchmarks and targets, and be clear on how action will be triggered from the management system. 6 IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY

7 There are four essential steps to achieving the optimal structure: 1. Select the right metrics Well-defined and monitored KPIs are central to steering an optimal launch course. Choosing the right ones is key. They should be relevant to the therapy area, product strategy and geography, clearly linked to critical success factors, focus on market results or output quality, and number no more than 6-15 in total (Figure 4). As a guiding principle, KPIs should be designed against the three dimensions of launch success: An aligned and prepared organization: These KPIs focus on ensuring internal preparation and should be geared towards ensuring that adequate resources are available, country and functional teams are fully up to speed, clinical and commercial teams are accountable for the quality of delivery, and plans are in place for closing gaps Pertinent value proposition: Initially, the focus is on ensuring that the value proposition is both powerful and relevant, and accepted by all key stakeholders including payers, physicians and patients. This can be measured by KPIs that address such issues as message response, brand/message recall, intention to prescribe, physician perception, etc. Effective stakeholder engagement: KPIs that track a brand s market impact may include the number of KOLs reached, publication share of voice, degree of media noise, level of patient group engagement, etc. It is important to ensure that the chosen KPIs are truly aligned with the overall launch strategy, concentrating only on those that will make a difference. They should be a mix of pre-launch and post-launch, as well as launchindependent KPIs the latter focusing on areas such as disease awareness and education, scientific publications and KOL contacts. FIGURE 4: UTILIZING GUIDING PRINCIPLES WHEN SELECTING RELEVANT AND ACTIONABLE KPIs Performance Measures Initial List Guiding Principles and Process to Select Launch Key Performance Indicators (KPIs) Alignment with Launch Strategy + Timely, Impactful and Feasible + Alignment and Corrective Action Relevant, Insightful and Actionable KPIs to Define and Track Launch Success Aligned and Prepared Organization Pertinent Value Proposition Effective Stakeholder Engagement Trained Country Teams Launch Plan Gaps Closing FF Hiring/Training Sales Rep Quality Payer Perception Message Test Response Brand/Message Recall Physician Perception Intention to Prescribe Barriers to Prescribe Time to 1st Prescription Patient Perception Patient Satisfaction Patient Refill Rate Source of Business KOLs Reached KOL Message Publication SoV Media Noise Payers Engaged Patient Groups Engaged IDNs/GPOs Engaged Keep it simple: Stick to 6-15 KPIs overall IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY 7

8 Some key questions to consider when establishing launch KPIs include: Are the KPIs aligned to the launch strategy and critical success factors for the brand? Is there a good mix of leading and lagging indicators across the three dimensions? Will information against the KPI be available in a timely manner, and at what cost? How will performance be tracked against the metric, and what are the expectations? How quickly can a performance gap be detected and corrective action taken? Who will own each action item? 2. Establish definitions and benchmarks Prior to implementation, each KPI should be defined in detail, to ensure clarity on metrics and feasibility. For example, in tracking KOL engagement it is important to establish exactly what each KPI means. Does it imply that KOLs are speaking well of the brand or actively advocating its use? What is the hierarchy in terms of reaching national and regional KOLs? How will engagement be measured? And who is responsible for monitoring and reacting if remedial action is necessary? Benchmarks are critical to ensuring alignment on the chosen targets and should be set as soon as the final KPI framework has been approved. They can be gathered using analog selection either in partnership with an external vendor, derived from secondary data, experts, and input from stakeholders, and/or derived from the launch goals themselves. Multiple available data sources should be leveraged to address the key needs of the tracking system, including sell-in/sell-out data, chart audits, longitudinal patient information, and existing ATU studies. In the interest of ensuring a cost-effective KPI system, these should all be considered in advance of additional primary research. 3. Enable a single version of the truth Providing all stakeholders with a clear view of launch preparations and performance across functions and geographies is essential. Historically, the majority of companies, both within and outside the industry, evolved with local management, often around specific business units operating in silos. Sales management and marketing were strictly local activities highly configured and customized to the demands of each individual market. To a certain extent, this remains true today as operating environments still vary considerably by country. However, the move towards global and regional management calls for more consistent and synchronized coordination of launch activities, thus enabling a single version of the truth. This calls for a new set of skills and core capabilities including: the ability to gain insights and added value from numerous disparate data sources; better integration of data systems across multiple markets; effective sharing of knowledge and best practices; faster strategy implementation, tracking and performance measurement; and assessment tools for the global market as well as local geographic market comparisons. Fundamental to this approach is the employment of more sophisticated management tools within the context of an integrated strategy, to more effectively handle and deliver information (Figure 5). An easy-to-use tracking dashboard (Figure 6) provides an effective tool for creating transparency across the entire organization and ensuring the availability of up-to-date information on each of the chosen parameters and metrics. These dashboards can vary from a simple Excel spreadsheet to advanced web-based platforms. They should be selected with the tracking objectives, focus, budget, organizational structure, team size, geographies, and number of brand launches in mind. 8 IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY

9 FIGURE 5: EFFECTIVE DATA MANAGEMENT AND INTEGRATION PROCESSES WITH DASHBOARD VISUALIZATION TOOLS, ENABLE A SINGLE VERSION OF THE TRUTH SFE Dashboards Reports Automation Forecasting CORPORATE INFORMATION ASSET Business Information Model Incentive Comp Executive & Management Dashboard Master Data Management ETL Procedures Data Validation Advanced Analysis Primary Sales Budgets Stock Sales Market Forecasting Research Secondary Sales Budgets FIGURE 6: A TRACKING DASHBOARD ENSURES TRANSPARENT, TIMELY INFORMATION Home Help Star Category Overview Executive Report Selected Country View By: Star Brand Performance Time Period: MTH Measures: Value Europe Category Performance in Europe Europe Total market Europe : 655,516 (000) Belgium France Category Evolution Index based upon: Germany Italy Netherlands Portugal Spain ALL ANTI INSECT DERMOTHERAPEUTICS Oct-09 Nov-09 Dec-09 Market Share Growth Market 15,347 2,982 2,171 12,795 2,148 1,737 14, % -18.5% 100 1, % -2.5% 120 1, % -18.0% 101 Total Category Toal Market Switzerland HOME DIAGNOSTIC 1,209 1,138 1, % -12.7% SKIN CARE 6,552 5,792 7, % -19.7% SLIMMING % -33.8% SNORING AND SLEEPIN 1,438 1,162 1, % -24.2% The Star Brand Category Performance view provides a top-line summary of Omega 5 star brand category performance, for a selected country, measure and time period, against each of the Key Performance Indicators. Coloured buttons highlight Omega s performance against agreed benchmarks. Time periods and measures can be changed using the dropdown lists above. IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY 9

10 4. Incorporate a governance process A strong, customized governance structure consisting of a cross-functional and cross-geographical team, along with a process for escalation and resolution, is key to ensuring alignment on the performance tracking system and clarifies how action will be triggered. It positions companies with maximum lead time to ensure the launch is on track, and enables rapid adjustments as required. In summary, a best-in-class system for successful launch tracking (Figure 7) should include: A list of relevant, actionable, KPIs (based on the brand s critical success factors) to define and track launch success KPI definitions, including clear descriptions, calculation rules, data sources, ownership, format and frequency Realistic, challenging, country-specific benchmarks, based on relevant analogs A user-friendly tracking dashboard for fast visibility and a single version of the truth A strong governance process with clear stipulation of how often the dashboard will be updated and reviewed, and the timing, nature and ownership of action FIGURE 7: THE ELEMENTS OF A BEST-IN-CLASS KPI SYSTEM 1. Right KPIs 2. KPI Definitions/ Benchmarks 3. Enable a Single Version of the Truth 4. Governance Process Relevant, insightful and actionable KPIs are needed to define and track launch success, in line with the critical success factors. KPI definitions & country-specific benchmarks ensure consistency in implementation and best-in-class execution. Effective data management and integration processes, with dashboard visualization tools, enable a single version of the truth. This ensures visibility across functions and geographies and fast identification of issues. A strong governance structure ensures geographic and functional alignment and swift escalation and resolution of issues. 10 IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY

11 KPIs in Practice EARLY PERFORMANCE INSIGHTS ENSURE PAN-GEOGRAPHIC LAUNCH SUCCESS Challenge: A large pharmaceutical company was interested in maximizing the uptake of its new cardiovascular intervention using a performance management program. However, it was performing sub-optimally on several dimensions including: alignment of KPIs with critical success factors; definition of metrics; establishment of benchmarks; and failure to set up a governance process for corrective action. KPIs not categorized along company s critical success factors CSFs Name KPI Definition Focus Market Market share in Post-Launch Share Units (retail hospital) units within the same segment (ex-factory vs. budget Availability Hospital (listing/formulary) % of target hospital pharmacies in which drugs is listed/on-protocol Post-Launch Gain access Promotional SoV % rep calls/other promo activities in defined markets vs. compeitiors Post-Launch No clearly defined KPIs and no suitable thresholds/ targets derived Market Access % of patients that have access to drug Post-Launch Demonstrate superiority Awareness Physician Disease Unaided top of mind % of physicians/speciality that are aware of drug Aided/unaided % of physician/specialty that are aware of unment needs Pre- to Post- Launch Pre- to Post- Launch KPI responsibilities not adequately defined Ensure adherence No consistent & timely approach to assess product performance across countries Message Recall Source of Business Adoption Status Perception Launch Date Key Performance Indicators Summary Internal Sales (000s) External DOI (000s) US Canada UK Germany France Italy Spain Brazil China S.Korea Net Price Hospital Access Retail Market Access Trial (Adoption) Message Recall Brand Perception Dynamic Market Share Brand loss to switching Communication and governance process not in place Our Approach: IMS worked with the company to close these gaps and establish an optimal KPI system, using a three-stage process of definition, design and implementation: Develop customized KPI framework with clear definitions Derive appropriate benchmarks & targets based on agreed best-in-class analogs Design & develop launch performance tracking tool Client Benefits: A clearly defined KPI framework ensured consistent, relevant and early insights into product performance across countries, enabling open discussion of shortfalls in performance, proactive resolution of functional and geographical issues, and faster product uptake based on best-in-class launch execution. Besides, outstanding performance on some metrics enabled highlighting and sharing of best practices within country teams. IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY 11

12 Conclusion A FOUNDATION FOR EXCELLENCE The imperative to maximize product uptake as quickly as possible places heavy demands on every new launch in today s risky and challenging environment. The elements that secure a successful trajectory are complex and product-specific, but the launch window is short and errors are unforgiven unless immediately corrected. Going forward, brands that excel at launch will be supported by companies that prioritize the planning and monitoring process, and utilize a best-practice KPI framework that is specifically designed for their product. The pitfalls are many and the challenges are increasing, but by following a transparent, consistent approach and choosing the right KPIs for their brand, companies can achieve an effective and accessible reporting structure that is well understood; includes benchmarks derived from custom-selected analogs; combines various data sources in an up-to-date tracking tool; delivers regular reports in a timely manner; and supports the planning of appropriate actions to enable and enhance launch performance. 12 IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY

13 IMS Capabilities in Launch Excellence Our proven framework leveraged successfully with more than 50 launch teams ensures best-in-class diagnostics, planning and tracking for optimal launch performance. With an offering built on deep functional knowledge and expertise in more than 90 therapy areas, we combine the skills and experience of 1,700 IMS consultants across the launch spectrum, to drive best-practice launch execution and internal change management for our clients. IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY 13

14 About The Authors DR. SIMONE SEITER Senior Principal, Global Lead, Launch Excellence Simone is a senior principal at IMS Health Germany and leads the global launch excellence platform. Simone has helped several brand teams excel at product launches through the continuum of launch diagnostics, planning and tracking. In her role, Simone has worked on multiple engagements for big to mid-size pharmaceutical companies, hospitals and healthcare providers globally and supported several new product launches through different stages in the cycle. Simone has completed a postdoctoral fellowship at the NCI/National Institute of Health in the USA and has worked as a clinical dermatologist at the University of Heidelberg and Homburg/Saar Germany. MANEESH GUPTA Principal, Brand and Commercial Strategy Maneesh is a principal with the brand and commercial strategy center of excellence at IMS Consulting Group. He co-leads the launch excellence practice and is based out of IMS s Parsippany, New Jersey office. In this capacity, Maneesh has worked with several clients on launch strategy, planning, tracking and capability development in the pharmaceutical industry. Maneesh has over 14 years of experience in consulting, strategy, marketing and product management. Maneesh earned his MBA, with a concentration in Marketing, from the University of North Carolina, where he was invited to join Beta Gamma Sigma Honor society. Maneesh also holds a BSc in Chemical Engineering. SARAH RICKWOOD Director, Thought Leadership, Launch Excellence Sarah is the Director of IMS s European Thought Leadership team. She has 20 years experience in the global pharmaceutical industry as a consultant, and developer of thought leading studies on key pharmaceutical issues, including IMS s Launch Excellence series. She has published widely on pharmaceutical blockbusters, innovation, and launch issues. Sarah holds an BA from Oxford University in Biochemistry. TAL ROSENBERG Director & Senior Principal, Commercial Effectives Services Tal is Senior Principal within the Global Commercial Effectives Services team based out of IMS s London office. He has in-depth knowledge and experience in pharmaceutical Sales & Marketing effectiveness and a solid understanding of strategy development and Information Technology. In his 15 years of experience of consulting Tal has worked on multiple global and local projects for large to mid-size pharmaceutical companies. Tal holds a BA in Economics and an MBA degree from New York University s Stern School of Business. 14 IMS HEALTH IMS LAUNCH EXCELLENCE KPI STUDY

15 Going forward, brands that excel at launch will be supported by companies that prioritize the planning and monitoring process, and utilize a best-practice KPI framework that is specifically designed for their product.

16 ABOUT IMS IMS Health is the leading provider of information services for the healthcare industry around the world. The company draws on its global technology infrastructure and unique combination of in-depth, sophisticated analytics, on-shore and off-shore commercial services, and consulting platforms to help clients better understand the performance and value of medicines. With a presence in 100+ countries and more than 55 years of industry experience, IMS Health serves leading decision makers in healthcare, including pharmaceutical manufacturers and distributors, providers, payers, government agencies, policymakers, researchers and the financial community. Additional information is available at IMS HEALTH CORPORATE HEADQUARTERS 83 Wooster Heights Road Danbury, Connecticut USA Tel: For our offices across the world visit: IMS Health Incorporated or its affiliates. All Rights Reserved. LEWPKPI0811

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