Bringing a new oncology drug to market in the U.S. is expensive. However, cost-effectiveness can be achieved, especially if the drug has several 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 examined 17 different areas of market costs and found that in eight of them, companies can effectively save more than 20% on further indications. Services for patients represent the largest savings of 50%, then non-personal promotions and digital non-personal promotions, in which the costs were reduced by 30%. Five other areas are patient care, sales force prep and training, education, and samples and DTC expenses.
This is good news for companies, as 40% of them said they plan four indications, while the remaining 60% said they expect three or more indications.
The study demonstrated that most companies viewed their medications for oncology with several indications as a franchise, but regarded each indication as a separate brand with different management and marketing.
The idea of sales, marketing, and cost-effectiveness separately for multiple indications is traced not only in oncology but also in other areas of treatment, such as rare diseases and immunology.