The highs and lows of drug launches

Every drug has its beneficiaries, whether they are suffering from a common chronic disease, a more severe form of cancer or a rare condition that affects 1 in 10,000 people. However, some drugs are more lucrative than others financially.

Pharmaceutical companies are hopeful that after years of hard work in drug R&D, regulatory approval is granted, they will be able to generate a steady and substantial revenue stream to make their investment worthwhile. It all begins with a successful launch.

Because a company can only launch a drug once, the first promotion phase is crucial. It’s your chance to make a first impression.

There are many things that can go wrong. Pushback on reimbursement, manufacturing hiccups and new safety flags. Physicians’ reluctance or refusal to try a new option.

According to McKinsey & Co.’s 2014 analysis of drugs launched between 2003-2009, around two-thirds fail to meet their prelaunch sales goals for the first year. This is a warning sign of what’s to come. The analysis revealed that most of the underperformers remained behind their initial expectations for the next two-years.

Think about the slow launch PCSK9 cholesterol fighters–Amgen’s Repatha and Sanofi and Regeneron’s Praluent. They were held back by fierce competition, pricing errors and payer pressure. The high cost of CAR-T therapies developed by Novartis and Gilead Sciences has led to a loss in commercial patients.

Clovis Oncology’s Rubraca and Tesaro’s Zejula were not as successful early sales as AstraZeneca’s first-to-market Lynparza. This combination of Lynparza’s head start and two smaller companies’ limited commercial power made AstraZeneca’s Lynparza a more popular choice. GlaxoSmithKline’s two-drug HIV combos will face a difficult battle to persuade doctors to abandon tried-and-true triplets.

A drug’s slow launch does not necessarily mean it will fail. Take Entresto, Novartis’ pioneering heart failure medication. Payers were sceptical early on and cardiologists were reluctant to prescribe the generic mainstays. Entresto sold only $170 million in 2016, its first year on the market, despite multibillion-dollar sales projections. However, sales rose 70% year-over-year to $1.73 Billion by 2019.

A rapid launch does not guarantee long-term strength. Consider Epclusa, Gilead’s hepatitis C medication. It was the first antiviral that could treat all six major types of HCV and it made $1.75 billion in the first six months following its June 2016 approval. The entire HCV market declined, and Gilead’s Epclusa franchise made $1.97 billion in 2019, a flat increase over the previous year. AbbVie’s Mavyret was the archrival and suffered the same fate.

The manufacturer will be able to recoup its research costs and fund future drug discoveries, as well as make solid profits by maximizing the commercial potential of an approved drug. The most important step in the drug’s lifecycle is its launch.

The consulting report revealed that 40% of the meds approved in 2004 and 2016 fell short of Wall Street’s prelaunch sales forecasts, by more than 20%, within their first three years.

Many other diseases have not fared well as well. These include cancer, immune disease, infectious disease, ophthalmology and blood disorders. Brain diseases and cardiovascular and metabolic diseases are just a few examples. These disasters have been caused by companies ranging from Big Pharma to biotech startups. With the exception of Amarin’s Vascepa which was added to the list following a significant label expansion, all were first drug approvals.

We found some problems that were beyond our control. These included new safety signals that emerged after approvals of Novartis’ eye drug Beovu and Sanofi’s dengue vaccine Dengvaxia.

Other cases were caused by poor product differentiation or management mistakes. Clovis Oncology’s Rubraca is a PARP inhibitor, Merck & Co.’s Steglatro is in the SGLT2 space, and Pfizer’s Steglatro is another example.

Drug developers often get caught up in not getting favourable reimbursement status, or miscalculating the market’s willingness to accept a new product. Ask bluebird bio. After failing to get coverage in Europe for Zynteglo, its expensive gene therapy, the company has reverted to being commercial biotech.

These are just a few of many obstacles that can prevent new drugs from being developed companies we reviewed also had manufacturing problems, clinical trials failures in key indications and pandemic-related slowdowns. We also wish to clarify that the list does not include products designed to combat the COVID-19 pandemic. They should not be compared with other drugs.

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