Rob Harold & Filip Odqvist, IMS Health

IMS’ research has shown the window of opportunity to set your launch trajectory remains incredibly short. That means that years of preparations will be judged in the manner of months with victors experiencing steep trajectories leaving the conquered with trajectories hugging the x-axis. So what determines a product’s trajectory? And how do you ensure that the trajectory exhibits steep uptake? 

While literature on the topic often focuses on how a company ensures launch success internally, this article will delve deeper into the fundamentals of how a new product enters the market at launch. It will focus on the component most critical to a product’s launch success, the dynamic market, and illustrate how the dynamic market affects a product’s trajectory. 

The dynamic market: a trajectory’s source

	A pharmaceutical market can be divided into two components: (a) The static market which includes patients who continue on their current therapy, and (b) the dynamic market, which consists of patients who (i) switch from one therapy to another (ii) add therapy to their existing treatment paradigm and (iii) are new therapy starts. For a new product, the dynamic market is crucial as it represents the main source from which the product establishes its trajectory. 

First of all, by definition new products can only launch into the dynamic market since there is no previous patient base (Fig. 1). That is, on the first day, 100% of prescriptions written for a product come from the dynamic market. Secondly, in the first six months approximately 60% of the total prescriptions written for a product come from the dynamic market (Fig. 2). A product that fails to penetrate, or has trouble penetrating, one or several of the patient segments within the dynamic market, will therefore not achieve the maximum steepness of its trajectory. 

Thus, one of the most crucial components of a successful product launch is to understand the dynamic market. Put simply, why do patients present to a physician’s office? What triggers the initiation of a new therapy or a change in treatment? And more importantly, how does my product satisfy the reason for that change versus my competitors? In addition, how does the dynamic market change over time? And what is the size of the dynamic market? This will, of course, differ for every patient segment, therapy area and country, since no market exactly mirrors that of another. 

The Relative Consistency of the Dynamic Market:

	The dynamic market remains relatively consistent over time. The introduction of a new product, for example, does not necessarily grow the dynamic market. Instead, new products generally compete for a share of the existing dynamic market. Consider Fig. 3, which shows the size of the dynamic market in seventeen chronic markets over the past three years in the United States [1]. While the market fluctuates, it has not grown over time. And clearly over the three-year period, several products have entered the market. 

So why is this? The reality is that patients present to a physician and change treatment for reasons other than the introduction of new products. They do so because of symptoms, a diagnostic test or because of dissatisfaction with current therapy. Rarely does the mere introduction of a new product drive the change, however. It certainly will alter the options available for patients, but to expect a new product to fundamentally change the flow of the market is a tall order. This does not mean, however, that new product launches inherently cannot grow a market. It simply means that companies should not count on them doing so. 

There are occasions where launches (and marketed products as well, for that matter) can grow the size of the dynamic market. First of all, in the event that the introduction of a product also increases the diagnosis of a particular disease, the patient pool and the dynamic market would certainly increase [2]. Chantix (varenicline; Pfizer), a product for smoking cessation which launched in June of 2006, did precisely this. In the first half of 2006, prior to Chantix’ introduction, the number of prescriptions written in the dynamic market was around 250,000. In the second half of the 2006, however, the number of prescriptions written in the dynamic market grew to approximately 800,000. While many of these patients may already have been treated by an OTC product, the introduction of Chantix clearly drove an increase in dynamic market prescriptions. 

Second, a product launch can grow the number of prescriptions in a market place if the product provides an additional benefit when added to existing therapy. This has the greatest impact when a market currently does not have add-ons. Abilify (aripiprazole; Bristol-Myers Squibb) is a good example of this. As the first product to gain an indication as an adjunct therapy in major depressive disorder, it managed to grow the number of dynamic market prescriptions of the market from 280,000 Rx per month to 300,000 Rx per month. 

If, however, patients in a particular market already receive some type of add-on therapy, then the introduction of a new add-on will in all likelihood simply capture a share of the existing add-on market. Januvia (sitagliptin; Merck), a product for Type II diabetes, is a good example of this. Despite its strong performance and the fact that it was a new class, Januvia did not actually grow the dynamic market. It simply captured a large share of it. Even in the add-on segment, where one may expect to see an increase, the market remained stable. Januvia simply took share from other products currently prescribed as adjunct therapy (Fig. 4). 

Lastly, a product can increase the relative size of the dynamic market to the total market (though not, in terms of volume, grow the total market overall) by increasing the number of product switches that take place (i.e. churning patients from the static market to the dynamic market). Examples of this are extremely rare, however, and usually do not manifest because of a new product launch. The most common example of change in the dynamic market due to increased switches stem from the introduction of a generic. Because of automatic substitution at the pharmacy, the number of switches increases dramatically once a generic product enters the market. Shortly thereafter, the dynamic market returns to its “normal” state. 

Growing the dynamic market in any of the ways mentioned above certainly presents a large potential for a new product launch but companies should recognize the challenge and difficulty of doing so. As outlined above, the fact that the dynamic market has remained fairly stable over the past five years despite the entry of numerous products provides evidence that, overall, product launches primarily compete for a share of the dynamic market rather than expand its size. 

In addition to its general consistency over time, the size of the dynamic market is surprisingly small. On average, it makes up only about 10% of prescriptions written in chronic therapy areas [3] (Fig. 5). Of these ten percent, about 60% is for new therapy starts, thirty percent is for patients switching therapies and only about ten percent is for patients receiving additional therapy. This has tremendous implications on a product’s trajectory. In the event, for example, that a product does not get access to new therapy starts, a staggering 60% of the potential market disappears and its trajectory will depend on its ability to penetrate the remaining 40% (switches and add-ons) [4]. And a product with an indication specifying use only in combination with another product competes for a share of only 1% of the overall market place (10% of 10%). That is an extremely small patient base by which to build a trajectory. 

This does not mean that a product cannot succeed without penetrating new therapy starts, however. The product simply has to do relatively better in the remaining segments. Victoza (liaglutide; Novo Nordisk), a GLP-1 inhibitor for the treatment of Type II Diabetes launched in 2010, is a good example of this. Even though it is not recommended for first-line therapy, it has managed to penetrate the diabetes market well. In fact, six months post launch it has captured almost twice the share of Byetta (exenatide; Amylin, Lilly) (another GLP-1 inhibitor) in switches and add-ons (Fig. 6). 

That is particularly impressive given that Byetta launched in 2005 and that both Januvia and Onglyza (saxagliptin; Bristol-Myers Squibb) (two DPP-IV inhibitors) also compete in the same space. So while the exclusion of a given patient segment will limit the maximum trajectory a product can achieve, it does not mean that the product cannot still perform well in the market place. 

The currently treated patient: The driver of the trajectory 

We just outlined the overall size of the dynamic market and its sub-components (new therapy starts, switches and add-ons). When a product enters the market, however, it does not penetrate the dynamic market by the same proportions. Analysis of the United States market shows that while new therapy starts make up 60% of the dynamic market (as mentioned above) they represent only about 25% of new product launches’ source of business. The biggest patient segment is actually switches, which represents about 50% of new products’ source of business at launch. Lastly, add-ons make up the remaining 25% (Fig. 7).

This means that a product’s launch trajectory is primarily built by patients currently on some form of therapy (i.e. patients who either switch from or add to a current therapy) rather than patient who is not receiving some type of therapy at all. And this makes sense intuitively. Why would a physician try a new product (with which he has little experience) on a new patient (of which he does not necessarily have any treatment history)? Better then to try the product on a patient whose treatment history is known and whose current therapy does not achieve the desired results. Consistent with this logic the proportion of new therapy starts grows from about 25 to 30% of the dynamic market after about a year. 

Lastly, similar to how the size of the dynamic market differs between countries and therapeutic areas, the proportions by which products penetrate the market will also differ. For each product launch (or new indication for that matter) companies therefore need to study these aspects judiciously in order to ensure that they understand the specifics and intricacies of their product’s particular market. 

How a product penetrates the dynamic is an interesting aspect of the composition of a launch trajectory. How quickly this happens is equally interesting. And many may not believe the answer. A product’s share of the dynamic market on average peaks just three months after launch (Fig. 8). That is an incredibly short time in the context of a product’s lifecycle and it underscores the importance of performing well early. This, of course, does not mean that a product cannot gain a greater share of the dynamic market throughout its lifecycle. By generating the appropriate evidence a company can unlock both new patient pools and gain a competitive edge versus current competitors resulting in an increased share. It does, however, further underscore the importance of appropriate preparation for the launch overall. 

The dynamic market is the foundation on which all new products build their trajectories. Penetrate it well and your product will enjoy rapid uptake. Fail to penetrate it and your trajectory will be flat. This article has emphasized four key points about the dynamic market that all companies should consider for their future product launches. 

First of all, the size of the dynamic market remains fairly consistent over time. A new product launch therefore does not necessarily grow the dynamic market. 

Second the dynamic market is very small. A new product therefore launches into a very small sub-set of the total market. 

Third, typically new products enter the market through switches and add-ons. That is, the currently treated patient (i.e. a patient who has received some type of prior therapy) drives the trajectory rather than patient who is not receiving some type of therapy at all. 

Lastly, a product’s share of the dynamic market is set within the first three months. That is, the window of opportunity for a product to set its share within the dynamic market is incredibly short. 

All of these findings impact the development and commercialization of a new product (from forecasting and clinical trial design, to resource allocation and performance tracking), and companies should critically and honestly assess how they apply to their future product launches. In addition, companies ought to investigate the specifics of the dynamic market for their particular therapeutic area and patient segment. Only through a thorough understanding of the dynamic market and the forces that influence it will a company have the ability to maximize launch trajectory and achieve launch excellence. PC

	1. While the analysis in this paper is limited to the U.S. market, the theory of the dynamic market remains applicable throughout the world.

	2. Admittedly there is a chance that the product would only increase the switch rate and thereby not grow the patient pool but only the size of the dynamic market. That seems an unlikely scenario, however, since it would require that the diagnostic would target only a sub-set of a population that also currently was not receiving treatment.

	3. This is based on an analysis of seventeen chronic therapeutic areas: ADHD, Alzheimer’s, BPH, Dyslipidemia, COPD-Asthma, Depression, Diabetes, HIV, Hypertension, Insomnia, Migraine, Over-Active Bladder, Osteoporosis, Parkinson’s Disease, GERD/Ulcers, Schizophrenia/Bipolar disorder, Epilepsy/Seizures

	4. We do not deny the fact that products are still used off-label. It does, however, make it more difficult for a product to penetrate a patient segment that does not show up in their label. 

Rob Harold advises leading pharmaceutical companies on maximizing the potential of their new products. Since joining IMS Health in 2007, Rob has studied hundreds of product launches and has a unique perspective on the issues that new products face in today’s challenging launch environment. Prior work experience includes Boehringer Ingelheim Canada, US, and at corporate headquarters in Germany, managing the launches of cardiovascular, smoking-cessation and respiratory products. Rob holds a B.Sc. from the University of Guelph and an MBA from Columbia Business School. 

	Filip Odqvist is a Consultant at IMS where he specializes in new product launches. Since joining in January, 2009, he has helped brand teams excel at product launches through launch planning and KPI development and tracking, as well as help build IMS’ Launch Excellence platform. Prior to joining IMS Health, Filip was at sanofi-aventis where he worked in product marketing and institutional communication and marketing. Filip holds a bachelor degree in liberal arts from Middlebury College with a focus in Economics and French. 

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