Continuing the series on Analytics in Life Sciences, let’s explore analytics for competitive and market intelligence. The life sciences industry is facing evolving healthcare reforms, increasing regulatory scrutiny, and changing market demands. The need for targeted and profitable market strategies, however, is not changing.
Pricing and Launch Sequence
Product launches are critical moments for any organization, and this is no different for life science companies launching a drug and working to build a healthy pipeline. Given that the initial six months from launch often define a product’s lifetime revenues, setting optimal pricing and geographical launch sequence is an ideal avenue to employ analytics. With access to international reference pricing rules, one can use demonstrated data science methodologies to: determine a launch price that maximizes potential revenue and margin; perform simulations to gauge pricing decisions and launch sequencing impact; and identify alternatives should new risks or opportunities surface.
In addition to launch price, managed-markets relationships have become equally crucial in product success. In the US, product demand is influenced by health plans, insurers and group purchasing organizations. As a result, life science companies negotiate contracts that include rebates for preferred formulary positions and tiered access. This rebate expense continues to increase, though the subsequent measurement in revenue growth is often not fully evaluated or understood. Improved business analytics capabilities can not only monitor performance using measurement reporting on key indicators (like market share and sales volume), but also transform the effectiveness of the contract itself. Companies can then meaningfully allocate rebate dollars, prioritize specific plans and benefit designs with high market share correlation at contract renewal, and fully assess the degree of contract compliance prior to rendering any rebate payments.
Competitor & Consumer Intelligence
Maximizing revenue aside, creating a competitive marketing strategy requires knowledge and awareness of competitors’ market positions and consumer practices. Today, this means automated software to complete customized searches optimized for value and quality of generated insights. Competitor products, positioning and priorities can reveal therapeutic white space. On the other hand, a vast amount of data directly generated by consumers via social media and other digital channels can offer new insight once collected, mined and analyzed. Johnson & Johnson continues to make positive strides in the social intelligence space, processing billions of social media posts to extract insights, enabling further digital marketing, public relations, customer service and sales. Throughout this series, we have enjoyed sharing how market intelligence and analytics can produce actionable insights that drive the strategic and tactical response in new product development, manufacturing & quality, supply chain management, and market intelligence for life science companies. So, how do you make advances in analytics maturity? In our next blog post, we encourage you to review just that – your implementation approach.