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Read The 2020 Hot Indications List

How can companies determine where to focus as they develop their pipelines and determine new growth opportunities? Kx Advisors’ 2020 Hot Indications List can help. In our 6th annual analysis of global R&D investment, our experts identified the top indications for industry focus.

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Category: Insights

Six Considerations to Evolve Your Capital Equipment Pricing Strategy

Posted on by Evelyn Tee

Six Considerations to Evolve Your Capital Equipment Pricing Strategy  

Capital Equipment Pricing Models  

As the world of capital equipment changes rapidly, manufacturers must find innovative ways to stay competitive. With new technology and enhancements, such as software upgrades and digital and connectivity solutions, as a crucial part of the value proposition of capital equipment, manufacturers can offer alternative pricing solutions to provide greater customer customization. Flexible pricing is especially pertinent for higher–value equipment on the market, such as AI-assisted imaging equipment, robotically–assisted surgical equipment, and advanced monitoring equipment. With the shift in procedures from hospitals to smaller office-based labs and ambulatory surgical centers, manufacturers can also capture new business opportunities with these alternative models.  

New Pricing Models for Capital Equipment  

The traditional pricing models offered three options: an upfront purchase with each component sold separately, a consumable upcharge model, or a leasing model. A combination of new technology and more customized pricing improves a manufacturer’s value proposition. With new pricing models, manufacturers can boost revenues, increase penetration, and build long-term relationships with clients by offering greater flexibility.  

These new models include:   

  • Risk-based or outcomes-based model: Risk-sharing pricing strategies factor in a cost savings component from any operational efficiencies gained and clinical outcomes achieved in this model 
  • Recurring revenue stream model: Instead of the traditional transfer of ownership model, manufacturers offer a subscription with a recurring fee. The purchaser or user is granted access to a set number of capital equipment devices for the subscription period. This fee may or may not include unlimited usage in the number of consumables 
  • Patient usage pricing model: Based on patient usage, manufacturers can offer a per-patient fee for the equipment over a period of time with this model 
  • Enterprise–level model: This model bundles the customer‘s capital equipment needs across entire care units and multiple hospitals within the network. The bundle would normally include both equipment and services components. Payment schedules could be yearly or bi-yearly

Six Considerations for Identifying the Right Pricing Model  

With so many pricing models emerging, it can be challenging to identify the right one for your product offerings. As your organization moves towards a new pricing model, like the ones above, there are six key considerations to keep in mind to identify the most effective model for your team: 

  1. Set clear objectives: With an identified goal, your organization can better evaluate the potential models. Objectives can include increasing revenue, expanding the adoption rate, smoothing revenue, maximizing profit, and expanding account use of a suite of products and services. For example, if a manufacturer’s goal is to increase the use of a full suite of products, the recurring revenue stream model may be a better fit for their goal 
  2. Identify the value drivers of your product:  Drivers, such as clinical efficacy, payment model, ROI, and the strength of existing relationships, impact pricing and the manufacturer’s ability to customize the pricing model  
  3. Determine the decision-maker: Sometimes the end-user who makes the purchase decision is different from the purchaser who chooses the pricing model. Broadly, there are three types of capital equipment buyers: economic, clinical, and operational. The economic buyer’s sole focus is to improve their organization’s profit. In contrast, the clinical buyer is more focused on the clinical value of the product offerings, like patient outcomes or improved patient experience. Operational buyers typically focus on other factors such as department workflow, device integration with key clinical systems, or maintenance and uptime. Knowing the levels of influence and priorities for each buyer type will help determines which pricing model to offer. If the buying decision is more committee-based, the pricing model will need to consider all stakeholder needs  
  4. Consider the impact on clients’ budgets: Pricing structure might impact where a client categorizes a purchase (i.e., capital expenses or operational expenses). Often capital expenses will fall under the hospital’s capital budget while operational expenses fall under the department’s budget, which may sway some clinicians towards a capital expense model  
  5. Understand clients’ financial health: Innovative recurring pricing models might be a better fit for clients working under capital restraints. This consideration is crucial overseas, especially in countries where COVID-19 has ravaged hospitals, which would seek to reduce the upfront cost of purchasing capital equipment  
  6. Establish benchmarking metrics: This consideration is the most important for risk-based or outcomes-based pricing, as identifying the equipment’s impact on patient outcomes or operational efficiencies dictates price. These metrics could include hospital readmission rates or the number of adverse events related to the equipment. When determining these benchmarks manufacturers must ensure they are measurable and that clients have the right infrastructure system in place to measure them 

How Kx Can Help You  

With our expertise in pricing strategy, Kx Advisors can guide your team through developing an optimized capital equipment business model. Our team of healthcare experts will help you evaluate your base, identify your customer segments, effectively appeal to your ideal customer, and position your organization for long-term success.  

Contact Our Team Today

Using Your Product Launch Forecast as a Strategic Tool

Posted on by Brett Larson

Using Your Product Launch Forecast as a Strategic Tool 

Forecasting as a Decision-Making Tool

Too often, commercial planning teams approach revenue forecasting as a required financial exercise rather than a strategic planning activity. The highest performing teams, however, develop revenue models to drive decision-making and reinforce strategy. The forecasting process – designing the model, understanding the demand funnel, gathering insights, aligning on assumptions, and analyzing results – can drive decisions and deliver more value than the output itself. Elevating a revenue forecast to a powerful decision-making tool requires careful planning and thoughtful design considerations.

Crafting Your Product Launch Forecast to Inform Strategy

While revenue models are commonly designed to inform resource allocation, investor communications, or inventory planning, the most robust and accurate models are also designed to inform commercial strategy.  With the correct design considerations, your commercial planning team can learn more about the patient segments driving forecast value, identify opportunities in the patient journey to drive product adoption, and pinpoint the investments needed to drive share. Further, the most effective models consider multiple scenarios to plan for key unknowns.

Unfortunately, many project teams jump into forecasting with unclear objectives, insufficient data sources, or too many scenarios, and ultimately fail to develop a useful decision-making tool. Your team can avoid common modeling pitfalls by following best practices in three critical planning steps:

  1. Create the decision-making framework  
  2. Find the applicable data for the model   
  3. Define the scenarios    

Create the Decision-making Framework

The first step of any model should be aligning on the end goals (i.e., defining the decisions model will inform).  An end goal could be, for example, determining the focus and magnitude of commercial investments, evaluating strategic options in the face of a new market force, or determining supply need for a quarterly production plan. After identifying the overarching question(s), your team can determine how to approach the model.  

Your team can use the end goal to decide on the type of model. The type of model, from market share model to launch planning to production demand, determines the model’s specificity. Analyzing the structure before gathering data to ensure the model aligns with the end goal will save your team time and effort.  For example, is an annual model sufficient to calculate net revenue, or does the organization need monthly/weekly sales granularity to inform production planning? Is there a need (and reliable data) to support international country-level forecasts, or would a regional forecast be more accurate and equally actionable? Once you understand the key questions the model is answering, the desired output, and the aligned model type, your team will have the clarity to move to the next step: finding the data.     

Find the Applicable Data for the Model    

First, your team should identify and classify relevant data sources about your product and market, such as epidemiology studies, claims data sets, qualitative interviews, quantitative surveys, historical product sales, and competitor sales, among others, for input. Forecasting teams should take a “best source” approach –evaluating every assumption individually for the highest confidence source. Without pinpointing potential knowledge gaps, models can provide incorrect or incomplete information, impacting the outputs of the model, and ultimately, the launch’s success.  

If the data does not exist in the public domain or within research resources, it can often be collected. Kx specializes in designing and executing market research with key stakeholders (e.g., providers, patients, and payers) to inform quantitative forecasts.   When designing primary market research, it is important to start with the model structure and work backward to design the research to fit the model. Designing for the model’s purpose will lead to a more accurate forecast. Finally, research should be designed to enable a “living, breathing” forecast. Research approaches such as choice-based conjoint surveys can allow forecasters to simulate new market conditions as they arise and update key assumptions without conducting additional market research. 

Define the Scenarios  

After outlining the criteria for the data, the next step is to determine which scenarios need to be analyzed. Often teams will initially attempt to investigate and list all possible options, but if the model becomes too complex, it will lose its effectiveness. Instead, the best practice is to define a base case or most likely scenario. A base case typically uses a consensus estimate or confidence-based weighting along key assumptions to drive forecast outputs. Once your team identifies the most likely scenario, define the parameters you want to test. Identifying priorities and areas of uncertainty will help determine which scenarios to test. For example, breadth of market access or coverage, varying price points, the impact of future clinical study outcomes on adoption, and changes to competitor mix are some of the most frequently explored scenarios.  

How Kx Can Help With Your Product Launch Forecast

Over the last four decades, our team has developed proven modeling and forecasting  approaches that produce accurate, insightful outputs and drive strategic decision making. Our team acts as strategic partners to help guide you through the entire process, including developing the product launch forecast, gathering the underlying data and insights, aligning internal stakeholders, and ultimately preparing the model for you to run.  

 

Contact Our Team Today

How Understanding Cognitive Bias Can Drive Patient Volumes

Posted on by Evelyn Tee

How Understanding Cognitive Bias Can Drive Patient Volumes

Understanding Patient and Healthcare Provider Behavior 

We all strive to make rational choices. But as humans, we are prone to bias and misjudgment. In the medical field, cognitive biases can have a profound impact on both patients and healthcare providers. Kx frequently conducts studies to uncover cognitive biases in referral pathways, including specialist referrals for more advanced therapies or interventions.

By pinpointing these biases, our team helps specialty drug and medical device clients focus their marketing and education efforts and increase market penetration within their eligible patient population. 

Common Dilemmas

Often specialists do not refer patients for treatment quickly enough or at all. These delays in or lack of treatment not only allow the patient’s condition to deteriorate, but also prevent the drug and device companies from fully reaching their addressable patient population. In our recent studies, Kx found that cognitive biases exist at each stage of the referral process.

Cognitive bias map of specialist referral pathway
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The Kx Solution

When guiding healthcare organizations by improving their specialist referral pathway, the Kx team runs an in-depth qualitative analysis speaking with specialists to understand critical attitudes, behaviors, and beliefs across the population of relevant doctors. Key differences within demographic segments (e.g., age, specialty, practice type) and behavioral segments (e.g., willingness to refer, referral choice) help identify drivers of attitudes and potential solutions for changing these behaviors. 

Uncovering Cognitive Bias to Reach the Addressable Patient Population  

Kx developed the following key findings to drive the patients through the specialist referral pathway:

  1. Awareness that symptom recognition is often the most significant barrier in the referral process and education to combat the issue. Early in the referral process, during the diagnosis phase, cognitive biases result in the specialist not probing consistently, missing symptoms by not asking the right questions, or simply not asking enough clarifying questions. Incorrectly identifying patients’ health status based on outward appearance or insufficiently probing symptoms can result in critical underdiagnoses or undertreatment.
  2. A clear path to referral, particularly one with a singular point of contact, can help referring physicians feel more at ease. Successful drug and device companies reduce friction in referral pathways by helping referring physicians establish clear points of contact across hospitals, specialists, and surgical teams. Elucidating a single point of contact cuts down on ambiguity and removes an obstacle for referring providers.
  3. Direct relationships between the referring specialists and the treatment teams (surgery team) build comfort and encourage referrals.
  4. When creating tools for doctors, simplicity and ease of use are key factors. Biases exist among doctors to simplify complex thought processes. Though tools, like decision guides for complex cases, can be extremely beneficial, they must be simple and easy to understand and use to overcome biases and help physicians better identify which patients need further treatment.

How Kx Can Help

Our healthcare experts can guide you by adjusting various aspects of our corporate strategy, including your referral pathway, with insights from market research. Cognitive bias is built into our research methodology, enabling your team to overcome any we find and fulfill more referrals. As data-driven decision-makers, we design research using both traditional factors and behavioral science to pinpoint process improvement and qualitative analysis opportunities. 

 

Contact Our Team Today

Kx’s Four-Step Customer Segmentation Process

Posted on by Evelyn Tee

Kx’s Four-Step Customer Segmentation Process

How To Level Up Your Customer Segmentation Strategy: Behavioral Segmentation  

Kx‘s customer segmentation delves deeper than any traditional segmentation by looking at underlying behavioral and attitudinal factors that can replace the standard identifiers. Your team can improve your process by expanding on the factors you include in your segmentation beyond demographics and traditional commercial indicators. Below are some of the behavioral segmentation variables your team can include:  

  • Attitudes: These variables influence customers’ perception of products and their receptiveness to trying out a new product  
  • Roles and  level of influence: Customers’ roles can impact drivers of purchase or use, and prioritizations of these drivers, based on different roles/responsibilities and experiences of the user/purchasers    
  • Experience and situational context: Analyzing these factors can showcase different unmet needs based on the type of user and provide context into what healthcare companies can do to drive increased adoption/purchase

Customer Segmentation Graphic

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Developing Customer Segments With Sales Teams In Mind 

While customer segments are a vital marketing tool, focusing on behavioral segmentation allows your sales team to provide a more personalized experience. Throughout this process, marketing teams must ensure that each segment is:  

  • Specific: the segments are mutually exclusive and collectively exhaustive, and each customer can only fit in one segment  
  • Meaningful: apparent differences exist among segments, and these differences are significant drivers of behavior and preferences  
  • Actionable: markers for different segments support easy identification and targeting for therapy development teams  

Creating digestible segments specifically for the sales funnel empowers the sales team to better secure business. 

Kx‘s Four–Step Approach For Segment Profiles 

Our experts uniquely leverage these variables to identify accounts that give the biggest share of wallet. Kx conducts the segmentation through three steps: 

  1. Determine segmentation goals: Kx works with organizations on clarifying their goals and mapping their segments to match these goals, including identifying the segments that are most likely to drive profit and have the most significant lifetime value  
  2. Identify the markers for distinct segments : Defining key demographics is critical for the success of the segmentation process as it dictates the approach of any go-to-market strategy. Our experts start with traditional indicators and slowly work through the in-depth behavioral indicators, identifying the deep and nuanced permutations within the target base
  3. Develop and quantify segment profiles or archetypes: When Kx works with organizations on customer segmentation, our team builds out the different segment profiles, or “archetypes“ of customers. Our team performs in-depth qualitative research to understand the drivers of high product affinity within each segment, giving your sales team insights they need to message to their targets effectively. After setting the boundaries, quantifying each segment’s size allows your team to gauge which segments are the highest value for your team, and provide the most significant growth opportunities. To do so, we conduct quant research and K-clustering to identify combinations of variables that statistically show segments 
  4. Implementation: Perhaps the most challenging aspect of the implementation process is where the tie between marketing and sales matters most. The cardinal implementation rule for marketing teams is that all archetypes rolled out must be unique. With that in mind, the fewer archetypes, the better the sales team’s result as they can customize their approach and connect more effectively with their targets. Our team is skilled at designing tailored strategies for implementation and can support your team through the procedure 

How Kx Can Help 

With product planning and launch strategy expertise, Kx Advisors can guide your team through customer segmentation and targeting. Our team of healthcare experts will help you evaluate your base, identify your customer segments, effectively appeal to your ideal customer, and position your organization for long-term success.  

Contact Our Team Today

Why Your Orphan Drug Needs A Global Market Access Strategy

Posted on by Jenna Riffell, PhD

Why Your Orphan Drug Needs A Global Market Access Strategy

Key Takeaways

  • An effective global market access strategy for rare diseases requires a higher degree of regional customization compared to other launch prep activities
  • While regulatory approval in first-tier US and EU markets can often translate on a global scale, as many local regulatory bodies look to FDA or EMA approval as the gold standard, local market access requirements vary significantly
  • This variation includes, among other factors:
    • Price referencing
    • Health technology assessments
    • Public vs. private payer dynamics
    • Rebates and discounts
    • Reimbursement restrictions (e.g., step-through requirements)
    • Real-world-evidence-based payment models
  • Companies must be ready to develop individual market strategies to address these country-specific challenges

Why You Need A Global Market Access Strategy

Each country poses unique challenges in developing a rare disease market access strategy. While some areas face a scattered patient population, others may face challenges such as immature physician and patient advocacy networks. Additionally, the high cost of certain drugs, like gene therapies, are handled differently by different countries. These nuances in market behaviors and structure underlie the importance of looking across the global landscape when developing a market access strategy. For US-based pharma companies, developing a comprehensive market access plan, rather than simply pivoting off a US-focused market access strategy, will ensure the long-term launch plan meets global needs and is positioned for success.

World Map Showing Why Companies Need Global Strategy

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How To Develop A Global Market Strategy

Rare disease companies need to answer complex key questions:

  1. Which markets will be targeted for launch?
  2. How much compromise in pricing is possible to gain access in global markets, particularly given reference pricing?
  3. What evidence is available or will be developed to support global market access?­

The first step in entering a market is to identify which markets offer a path to reimbursement with sufficient pricing potential. The next step is assessing your pricing flexibility, as offering a lower price than in the US or even the EU5 can increase the likelihood of reimbursement in key OUS markets. When making these assessments, identifying patient access schemes, such as named patient supply (NPS), can validate and drive demand. Once an orphan drug gains regulatory approval, companies must be prepared to work with stakeholders, such as patient advocacy groups and KOLs, to demonstrate need for the orphan drug, clinical and cost effectiveness, and drive favorable reimbursement decisions. These stakeholders are pivotal in some markets, ensuring that patients can get treatments at affordable costs throughout the duration of their treatment. As an example, in Brazil, patient advocacy groups work closely with patients to navigate court systems that enable patients to make a legislative case for drug access and coverage before national approval, including for orphan drugs (see more below). 

Rare Disease Brazil Case Study

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External Reference Pricing

External reference pricing adds significant complexity to global market access strategy as the application of referencing varies greatly among countries, including:

  • Product Applicability: categories of products for which referencing is applied, including referencing only for drugs in a specific care setting (e.g., inpatient hospital), innovative medicines for which there is no alternative available on the market, or high-cost medicines
  • Basket Composition: both the total number and specific countries selected to include in the reference basket (typically selected based on comparable GDP per capita)
  • Calculation Method: use of either an average price or selection of the lowest price of basket countries
  • Decision Process: whether used as the main systematic criterion (most common) or as supportive information only when setting a drug price
  • Re-evaluation: pricing must be re-evaluated frequently after initial price is set

In Europe, the vast majority of countries use some form of reference pricing. With reference pricing, there is increased pricing interdependence between countries. Given the high prices of orphan drugs, it is critical for rare disease companies to develop a launch sequencing strategy that factors in price referencing. This could include strategically launching first in high-priced countries without reference pricing, then focusing on lower-priced countries.

Real-World Evidence

RWE is gaining momentum globally as real-world data (RWD) sources become available—specifically electronic health records and claims data that provide a basis for evaluating outcomes. New treatment costs remain high for rare diseases, putting pressure on pharma and biotech companies to demonstrate results for premium pricing with payers. Gene therapies are especially costly due to their complexity, making RWE an ideal tool. A prime example is the AveXis-Novartis approach to payer contracting with Zolgensma, a one-time gene therapy treatment that replaces lifetime chronic therapy for patients with spinal muscular atrophy Type 1, and which launched in the US in June 2019. Gene therapies are breaking pricing norms since manufacturers are only able to generate revenue from “one-shot” treatment for each patient, and Zolgensma made waves with a US price point of $2.1M per patient—the most expensive treatment on the market as of this writing. Novartis worked with payers to establish efficacy-based reimbursement and a 5-year installment payment option to spread payment for treatment over time. With these arrangements, risk is lower for payers, who can pay $425K annually for five years and better justify a patient switch from Biogen’s Spinraza, a chronic treatment estimated to cost $4M+ over a 10-year period. Zolgensma won coverage for 90% of US commercial patients within its first full quarter on the market, with all payers taking advantage of value-based contracting; however, initial uptake of the installment-based payment system was limited.  

Similarly, in May of this year, Zolgensma received conditional approval in Europe with the “Day One” access program, which ensures the cost of patients treated before national pricing and reimbursement agreements are in place aligns with the value-based prices negotiated following clinical and economic assessments. Working within the existing pricing and local reimbursement frameworks, the “Day One” access program for EU governments and reimbursement agencies allows the company to tackle entry into markets faster and with more flexibility. This system sets up a win for each stakeholder: the patient, the health and reimbursement bodies, and AveXis-Novartis. With the Temporary Authorization for Use (ATU) program, it became immediately accessible in France and should be available in Germany shortly. 

Coverage for therapies like Zolgensma remains dependent on demonstrating values, so companies must leverage proof of value when looking to capture new patient markets. RWE and patient-reported outcomes (PROs) provide stakeholders with concrete data to inform formulary addition and clinical trial outcome endpoints.

Case Study USA

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Moving Forward

An effective global market access strategy for orphan drugs must be adaptable to different regions and their unique challenges to be effective. As companies work through the key questions outlined above to create a successful global market access strategy, tools like RWE and external reference pricing can support tackling a large range of location-specific issues.

How Kx Can Help

Our experts evaluate business opportunities, deliver top-notch expertise, and make data-driven recommendations to our healthcare clients. Kx Advisors can guide your organization through the process of developing and implementing a global market access strategy for your rare disease drug.

Contact Our Team Today

Sources

https://www.pacificbridgemedical.com/wp-content/uploads/2014/03/Orphan-Drugs-in-Asia-2017.pdf

http://info.evaluategroup.com/rs/evaluatepharmaltd/images/2014OD.pdf

https://www.europeanpharmaceuticalreview.com/article/62846/orphan-drugs-regulation-eu/

https://ec.europa.eu/health/sites/health/files/files/committee/stamp/2015-05_stamp2/5.pdf

https://www.eurordis.org/training-health-technology-assessment

https://www.rtihs.org/sites/default/files/Rare%20Disease%20Webinar%20Slides_Final%20Feb%2027.pdf

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4802694/

https://www.biospace.com/article/releases/avexis-announces-innovative-zolgensma-gene-therapy-access-programs-for-us-payers-and-families/

https://www.fiercepharma.com/pharma/novartis-zolgensma-beats-data-woe-payer-resistance-strong-and-high-interest-ceo

https://www.globenewswire.com/news-release/2020/05/19/2035354/0/en/AveXis-receives-EC-approval-and-activates-Day-One-access-program-for-Zolgensma-the-only-gene-therapy-for-spinal-muscular-atrophy-SMA.html

https://mapbiopharma.com/home/2020/04/landmark-pay-for-performance-contract-agreed-in-germany/

How Medical Practices Can Keep Patients Safe: COVID-19 Best Strategies

Posted on by Chris Waybill

How Medical Practices Can Keep Patients Safe: COVID-19 Best Strategies

As medical practices reopen to pent-up demand, they must adjust the patient experience to protect both patients and staff from COVID-19. Kx Advisors surveyed one hundred aesthetic physicians across the US to understand the obstacles they face in each step of the patient experience, analyzing the extent of COVID-19’s impact. Building on guidance from the CDC, our experts compiled best practices from these physicians on how they are addressing these pain points. These COVID-19 best strategies aren’t exclusive to aesthetic practices; many can be applied to other clinics and provider practice settings.

COVID-19 Best Strategies For Medical Practices

Map Showing COVID-19 Best Strategies For Medical Practices Pain Points and Solutions

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Waves of COVID-19 restrictions

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Applying These Prevention Methods  

Our experts compiled these strategies into four main prevention methods that practices can use:

  • Reduced time: Practices can limit the time patients spend in the practice, reducing the risk of COVID-19 spread
  • Reduced carrier density: Practices can space out appointments, space out waiting room chairs, and eliminate physical check-out to reduce density in the practice
  • Transmission prevention equipment: With PPE for both physicians and patients, medical practices can keep staff and patients safe
  • Adapted infrastructure: Using an online scheduling program, installing plexiglass at check-in, asking patients to wait in their cars, and leveraging telemedicine can reduce additional risk

Practices also shared suggestions to industry partners on how companies can support them during this reopening period.  Top items included product pricing adjustments, expired product replacement, marketing support, limited rep office visits, and help with product-specific guidelines for safe administration. Companies that serve medical practices can adjust their strategy to align with the above guidance and better support their clients.

How Kx Can Help

Kx Advisors is continuing to evaluate business models, deliver top-notch expertise, and make profitable recommendations to our healthcare clients. Our team of experts can help your organization assess how you can best support your aesthetic clients and adapt your  corporate strategy to position you for long-term success.

Contact Our Team Today

How Does COVID-19 Change Clinical Pipeline Prioritization?

Posted on by Brett Larson

How Does COVID-19 Change Clinical Pipeline Prioritization?

Gauging The Impact Of COVID-19 For Your Organization

The healthcare industry faces specific hurdles, resulting in reduced physician-patient interactions and lower procedure volume. Pharmaceutical and medical device organizations face several unique barriers as COVID-19 persists, highlighting the potential need to adjust strategic planning for both new and existing products. One of those barriers is the disruption to clinical study timelines, including delayed initiation of new studies and challenges to completing ongoing studies safely and efficiently. Depending on the severity of a delay or obstacles to initiation, certain programs may need to be deprioritized. Corporate leaders, clinical development decision-makers, and new product teams must consider what the new normal may look like and assess their pipelines, adapting their plans accordingly.  

Analyzing COVID-19 Challenges

We see pipeline prioritization as an iterative process that is necessary to maximize growth potential and manage risks for all biopharma and medical device companies. COVID-19 poses several disparate challenges for clinical companies as they adjust estimates for development costs, timing, risk tolerance, and strategic priorities within their pipelines:

  • The changes made in response to COVID-19 may have a long-lasting impact: Healthcare provider closures and a rise in telemedicine may foreshadow future patterns. Oral treatments for severe conditions are seeing strong adherence and higher-quantity refills to minimize person-to-person contact. However, we anticipate a slowdown for recently launched products and potential discontinuations for therapies that require regular physician office or hospital visits for administration or dose titrations
  • External funding hurdles may emerge: External continued pipeline financing advancement exists, but pre-revenue companies will continue to experience an increased pressure to showcase their unique capabilities in a competitive market. Clinical organizations will need to show that their innovative treatments can attain clinical trial results in a socially-distant era
  • Ongoing clinical trial challenges will persist: Both small and large biotech companies are experiencing clinical trial disruptions, as new risks to patient and provider safety have emerged.  These disruptions include trial site closures, increased safety precautions for patients, delayed assessments, and supply shortages. Additionally, Institutional Review Boards may be unable or unwilling to review new protocols or amendments, halting further clinical progress

Pipeline Prioritization During COVID-19

As we continue to monitor the lasting impact of COVID-19, strategy, clinical development, and new product teams must analyze and monitor these hurdles and their effect on business:

  • Analyze the magnitude of impact on your unique organization: How these considerations fit together internally and within the competitive landscape is unique to each organization – for larger organizations, incremental timeline extensions and associated costs will be manageable, while small biotech companies may be at risk of missing milestones to generate data to support follow-on fundraising. This analysis provides a foundation to segment your pipeline
  • Rethink your timeline and identify potential program tradeoffs: Re-examine your path to launch based on newly emergent clinical development hurdles and their impact on your business. Teams should also assess what program tradeoffs can be made regarding project timelines and costs. Additionally, organizations should consider the extent to which current and planned programs are adaptable to this disrupted environment through remote monitoring, data collection, and investigational drug management
  • Revisit Net Present Value (NPV) inputs for development costs and commercial opportunities: The attributes most desirable in a clinical development program under normal circumstances are primarily associated with our lower impact category. Still, changes on the margin may impact overall forecasting of clinical development costs and peak commercial opportunities and must be considered

Kx Advisors Is Here For You

With biopharma expertise and corporate strategy experience, Kx Advisors can guide you through the impacts of the pandemic. Our team of healthcare experts will help you evaluate your pipeline, revise critical timelines, assess tradeoff decisions, and identify new ways to take advantage of new opportunities within the fluid global landscape.

Contact Our Team Today

Elective Procedures After COVID-19: How To Support Rebounding Demand

Posted on by Jenna Riffell, PhD

Elective Procedures After COVID-19: How To Support Rebounding Demand

Due to COVID-19, pharmaceutical and medical device organizations face unprecedented obstacles, impacting product forecasting, pipelines, and overall corporate strategy. One major business challenge created by this pandemic is the policy-driven limitation on elective procedures, resulting in restricted healthcare provider (HCP) accessibility for patients.  Approximately 27% of patients experienced an elective procedure delay or cancelation due to COVID-19, according to an April 13th poll of over 2,500 US adults.  

Defining Elective and Essential Procedures  

There is no single definition of elective procedure, and the meaning of the term varies across the globe and from person to person, given how HCPs and patients view the urgency of medical situations. Generally, an elective procedure is recognized as a non-urgent procedure that can be scheduled in advance. The term elective procedure may be associated with non-immediately life-saving procedures; however, examples of necessary elective procedures include cancer surgeries, kidney stone removal, mental health services, and joint replacements.  

The Impact of Pandemic Restrictions   

The impact on individual hospitals and the procedures they perform is dependent on their location, the severity of the pandemic there, and how different regions are managing the epidemic. While some hospitals are fully operational, others have been prioritizing COVID-19 patients and chose, or were legislated, to scale back on elective procedures.  

We are beginning to see a rebound in hospital visits and elective procedures performed in COVID-impacted areas. There is evidence that hospital visit declines in the US may have bottomed out, with a 4% increase in outpatient hospital visits in the second week of April marking the first increase in visit volume since early March. As lockdown measures are relaxed, the re-introduction of elective procedures may take some time. The pandemic has increased anxiety about seeking treatment, keeping patients from going to hospitals. Emergency room visits are down by about 50% across New York City Health and Hospital locations. This fear could take time to subside and impact patient behavior for longer than policy measures restrict procedures.  

The evolution of elective procedures will be region-dependent, as strategies to lift lockdown measures and priorities are decided at a national or regional level. As the pandemic continues and cases decrease, nations are facing the challenging decision of whether to prioritize certain elective procedures, and if so, which elective procedures to bring back first. In the United Kingdom, mental health and cancer surgeries are being prioritized amongst elective procedures. However, as we see demand rise again for specific products or procedures, this resurgence will likely result in a backlog of procedures. This backlog will have a direct impact on other procedures. For example, we may see a surge of cancer surgeries that were delayed by pandemic mitigation measures, resulting in less available operating room space and limited opportunities for other operations.  

Preparing For Procedures Now And Post-COVID-19   

With the rollback of lockdown measures and changes on the horizon for elective procedures, healthcare organizations can support HCPs and patients in new ways. There are several factors procedure-focused companies must consider as they face the pandemic’s challenges now and throughout the global recovery:  

  • Map demand and prepare for the backlog: Companies must monitor changes in government regulations, medical association guidance, and access to personal protective equipment (PPE), as well as analyze the continuing evolution of COVID-19 to determine which products can meet demand in identified places at the correct time. Part of this calculation must include a backlog in regions that begin to allow elective procedures. With this expected backlog of elective procedures, companies must ensure they are ready to support HCPs and patients to ensure a smooth ramp up.  
  • Explore new ways to aid HCPs performing procedures: Crafting specialized product protocols, creating guidance for performing specific procedures more safely, and providing PPE where appropriate can support HCPs as they adapt. HCP accessibility and increased demand could also have implications for field team deployment. While it may now be more appropriate for field teams to actively reach out to HCPs, COVID-19 safety concerns may intensify scrutiny on sales rep involvement in surgeries. Understanding the changing landscape will be key for healthcare companies during this rebound phase. 
  • Devise additional ways to help patients: With the looming fear of exposure to COVID-19 while in care settings for procedures, pharmaceutical and medical device companies can support HCPs’ new protocols to keep patients safe during procedures. From reinforcing safety of minimally invasive procedures in outpatient clinics rather than hospitals, to crafting additional guidelines for keeping medical devices uncontaminated, companies can provide value in new ways.  

How Kx Advisors Can Help   

Kx Advisors is continuing to evaluate business models, deliver top-notch expertise, and make profitable recommendations to our healthcare clients. Our team of experts can help your organization assess demand during and after COVID-19 and adapt your  corporate strategy to position you for long-term success.   

 

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Should You Do Market Research During COVID-19?

Posted on by Sean Vander Linde

Should You Do Market Research During COVID-19?

Uncertainty Sparked By COVID-19

As COVID-19 upends daily life and wreaks havoc on the global economy, companies throughout the healthcare industry are adjusting their strategic plans and putting various activities on hold. Healthcare strategy, marketing, and business development leaders are wondering – is now a good time to do market research given the crisis? Should we move forward with market research studies when customers and other stakeholders are preoccupied with their circumstances? With the environment around the world changing so rapidly, will the findings of today be valuable tomorrow?

In most cases, the answer is yes; now is a good time to do market research. Actionable insights backed by research are more critical now than ever before. However, some barriers present challenges and may make certain types of research unfeasible or less attractive. To better understand how COVID-19 may impact your market research efforts, we recommend evaluating three research dimensions:

  • Who: Target Stakeholders
  • What: Insights
  • How: Methodologies

COVID-19’s Impact on Market Research

Who: Target Stakeholders

While many healthcare providers are on the frontlines of COVID-19, some specialists are experiencing procedure cancellations, office closures, or a shift to only treating essential patients. An overall decline in patient volume for many healthcare providers (HCP), especially in outpatient settings, solves a significant challenge that organizations typically face when conducting research – the accessibility of experts. Finding and recruiting quality stakeholders with relevant expertise can be challenging and time-consuming. For HCP studies, those specialists focused on outpatient treatment or inpatient specialists less involved in COVID-19 treatment like surgeons, are ideal candidates for market research due to potential increased availability with declining patient volume. Other stakeholders, including patients, payers, and industry experts, remain ideal stakeholders for upcoming studies as a result of increased availability with stay-at-home mandates. Inpatient providers and administrators treating the virus likely have limited availability to partake in market research, making studies focused on those stakeholders not ideal.

  Target Stakeholders For COVID-19 Market Research

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What: Insights

The goal of your market research is crucial in determining whether it will be successful during this pandemic. Any research focused on understanding and adapting to the epidemic can support your organization in acclimating to the evolving environment and outperforming competitors. Upstream research for products still in development can continue without significant impact, as can research to understand the general market or competitive dynamics. However, insights gleaned from research that is especially sensitive to the pandemic, like financial benchmarking or willingness to pay analysis, may not be applicable beyond this short-term timeframe and should be delayed until the global healthcare landscape settles.  

COVID-19 Market Research Insights

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How: Methodologies

With stay-at-home orders and other social distancing mandates in place across the globe, organizations should avoid face-to-face methodologies in most instances. Due to these restrictions, virtual-friendly methods are ideal for any market research during this crisis. This could include phone interviews, online surveys, and online focus groups, which specialists are still eager to participate in. These methods tap into the rise of online engagement we are seeing during the pandemic, making recruitment easier for interviews and surveys.

COVID-19 Market Research Methods

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Moving Forward With Market Research

Although COVID-19 has derailed many aspects of our society, your organization can continue with a critical activity: market research. Modifying your strategies to the conditions of the pandemic can allow you to move forward and even collect qualitative and quantitative information more easily.

Kx Advisors, Your Partner in Strategy

Our healthcare experts can guide you through adjusting your strategy with insights gathered from market research. As data-driven decision-makers, we’re experts at designing research to inform quantitative models, developing forecasts in emerging and innovative markets, and quantifying what is challenging to quantify. We can support your organization with market research and turn the results into actionable insights.

 

Contact Our Team Today

Adapting In COVID-19: A Product Forecasting Framework

Posted on by Sean Vander Linde

Adapting In COVID-19: A Product Forecasting Framework

Kx’s Key Takeaways For Product and Finance Teams    

  • Separate The Trough And Rebound: Modeling both the duration of the trough and the slope of the rebound, from peak COVID-19 infections to recovery, is critical to developing an accurate product forecast    
  • Layer In Regional Segmentation: Accurate forecasting requires more regional segmentation than most models demand due to the local variation in COVID-19 cases and varied government restrictions responding to the virus  
  • Expand Data Sources: Although COVID-19 is unprecedented in many respects, historical data can be used to model its impact. Utilizing a variety of data sources—analog regions that roll back restrictions earlier, patient and provider research, and prior economic downturns —can provide a valuable frame of reference to develop a more informed forecast  
  • Make It A Living, Breathing Model: With new restrictions and the medical community’s fast-paced response, it’s critical for companies to regularly monitor and update forecasting assumptions as the pandemic evolves   

COVID-19 Impacts Product Forecasting For Pharmaceutical and Medical Device Companies  

Dealing with significant evolving obstacles associated with COVID-19, businesses worldwide are adjusting their 2020 strategic plans. Pharmaceutical and medical device companies face particularly complicated hurdles, including procedure delays, office closures, and more that prevent patient access to their products. In this time of uncertainty, it’s critical to develop an informed view of future sales to establish a strategic plan and mitigate future risks to the business.  

Your Adaptable Product Forecasting Framework  

Kx Advisors created this framework to assist organizations in accurately forecasting sales during a time of high uncertainty with COVID-19. We recommend approaching the problem in two stages: the trough and the rebound. While organizations around the globe are currently in midst of the trough, understanding both stages is crucial for full-scale recovery. The questions we’ve identified for this framework can be split into three categories of barriers that COVID-19 presents: policy barriers, behavioral barriers, and economic barriers. Policy barriers are directly related to the pandemic management decisions of governments and medical associations, while behavioral barriers are driven by changes in industry competitor, physician, and patient behavior, and economic barriers are those created by changing economic conditions affecting willingness to pay.

 

COVID-19 Product Forecasting Framework Graphic Depicting Trough and Rebound

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Planning During COVID-19  

While no one can predict the future, this framework should help you gain critical insights to better project and respond to these challenges. Leveraging this tool to strategize is only step one; your product team must continually monitor the quickly evolving factors impacting the framework’s components and adjust your strategy as needed to stay ahead of the economic effect of this pandemic.  

Kx Is Here To Help  

Struggling with product forecasting during this crisis? With extensive forecasting experience, we’re experts at quantifying what is hard to quantify.  Our healthcare experts will rapidly analyze the changing field and build strategies with your team around the opportunities we identify. 

 

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