Introduction: Spotting the Threat You Didn’t Expect
This week’s article is based on a project I completed earlier this year as part of a small team of consultants. It involves a company proactively assessing threats to a drug, but taking a broader view of what constitutes a competitor.
It is always refreshing to support clients with this kind of project.
As I have written about before, it’s not uncommon for pharma and MedTech companies to consider their competitors through a narrow lens and then struggle to adapt to indirect threats. Porter’s Five Forces is the classic framework that anyone working in competition, marketing, or brand leadership should remember – the “Competitive Rivals” being the direct competitor (i.e drug in same class with the same mechanism of action). Still, it is easy to forget the “Threat of Substitution” (an earlier line medical intervention that makes your drug irrelevant).
For drugs, we see this when companies only consider competitors to be those in the same class. With medical devices, this can occur when a company looks at competitor products as those that look the same or limits it to those with the same “features.”
However, it is always important to remember that medical practitioners are looking for solutions to their problems, not products with a particular set of features, and that a competitor to your product can take a different form. If you’re not looking for these types of threats, you could well face pressure on your product from an unexpected source.
Why the Client Needed to Reevaluate Their Competitive Set
In the case study, our client wanted to understand the impact of a “new” entrant on their ongoing launch and roll-out of a novel therapy.
The new entrant was not another drug or even conceptually new. It was an invasive medical procedure that has been around for 20+ years and used in multiple indications. However, historically, it was rarely used in the indication for which the client’s drug was approved due to its poor risk/reward profile, being more suitable in severe conditions with imminent mortality.
However, data from an investigator-led clinical trial demonstrated a new protocol with lower risks associated. Unsurprisingly, this attracted much interest from leading health care professionals (HCPs) in the space and caused concern at the client’s headquarters.
Because of this, they wanted to know how it would impact their product.
Building a Comprehensive View Through Research and Segmentation
Our task was to conduct a structured assessment of how this would affect the treatment landscape and the opportunity for our clients’ drug.
This was done similarly to how we would assess a drug competitor. We looked at the treatment landscape and patient journey, how HCPs decided what options to give, and which options they had a bias or preference for.
With this information, we were able to segment the prescribers and build an understanding of their behaviour today and how it could evolve in the future to impact their decision-making.
This was done through a series of interviews with relevant physicians across a host of geographies, occupying a few types of roles to understand the whole journey and identify gaps and challenges for our client.
Rather than just sending a report to their inbox or doing a one-way presentation, we supported the development of next steps with a workshop. In this workshop, we looked at opportunities for the client based on the findings to build a set of tactical actions to take over the coming years and incorporate.
Helping the Client Prioritise and Adjust Their Plans
Although the disease and treatment options were complex and nuanced, the project approach was simple and powerful. It increased the organisation’s knowledge of a competitive entrant and gave valuable, usable outputs.
Some of the activities were underway or planned already, and the findings validated their approach or pointed to those to prioritize more urgently. It also provided more substantial evidence for leadership that their actions were correct. Meanwhile, other workstreams were tweaked or needed re-exploration after initially being paused/deprioritised.
How can you position yourselves to understand substitute competitors
It is easy to see why unexpected competitors can blindside brand teams or product leaders.
Given how many drug or device markets feature clusters of similar offerings, your team is focused on incremental advantages over the direct competitors. However, proactively reviewing potential substitutes or new entrants every quarter using Porter’s framework is a valuable approach if you can bring in one or more people from outside your brand or cross-functional team with different experiences, to “red team” and develop new ideas.
If you come up with potential substitutes, you can test them with experts from the disease area to see how and when they might impact your patient journey and your product.
This approach can be valuable for start-ups or spinouts from universities just starting their development journey, as well as late-stage companies with in-line products facing new competitors.
If you’re unsure whether this approach would benefit your drug or device and would like an open, honest discussion, get in touch today.