Bringing a new oncology drug to market in the U.S. is expensive, but cost efficiencies can be wrought, especially with multiple indications.
Although the majority (60%) of the 20 drugs in a new study by Best Practices fell short of their initial market sales projections on first indication launches, the research found that significant savings were possible in second and later indications. The average investment for a first indication launch was $13 million, with an average maximum spend of $20 million across the 12 pharma companies surveyed, which included Pfizer, Amgen, Bayer, Novartis and Eli Lilly.
Best Practices looked across 17 different market cost areas and found that in eight of them, efficiency savings of more than 20% could be achieved on the second or later indications. Patient services had the biggest savings at 50%, followed by non-personal promotions and digital non-personal promotions, which saw an average 30% cost reduction. The five other areas were patient assistance, sales force prep and training, non-branded education, samples and DTC expenses.
That’s good news for the drugmakers in the study, as all plan multiple indications—40% said they planned for four indications, while the other 60% said they planned three or more indications.
“Today there are market pricing pressure and payer pressures, so cost consciousness definitely comes into play. What we’re talking about here is not lifestyle diseases like erectile dysfunction or acne, we’re talking about things that are life and death … but they still have to be cost conscious. That’s part of the reason why they’re looking for ways to be more cost efficient,” Cameron Tew, the head of research services and business operations at Best Practices, said in an interview.
The oncology drugs also tend to have lower peak year sales forecasts, with 15 falling under $1 billion, making cost efficiencies more impactful.
Drugmakers need to think about “overlap in the markets in the work you’re doing like with agencies, payer groups, physician groups, and then figure out how you’re going to take advantage of that for cost savings,” Tew said.
The research found that most drugmakers looked at their oncology drugs with multiple indications as a franchise, but treated each indication as a separate brand with different brand managers and marketing messages for each.
The idea of multiple indication sales, marketing and cost efficiencies resonates not only in oncology, but in other treatment areas such as rare diseases and immunology.
Take AbbVie’s Humira, for instance, which boasts a slew of approvals in rheumatoid arthritis, GI and dermatology. Tew noted that what made Humira a top-selling drug was not its first indication, but rather its multiple indications that followed.