Differentiation Strategiesfor the Generic Industry
Biosimilar Drug Development WorldBoston, Tues 19th Nov 2013
The PlanSession 1: IntroductionWelcome, Who?!, Why?Current differentiation strategies
Session 2: ChallengesProduct, Organisation, Intimacy, Execution
Session 3: IdeasProduct, Organisation, Intimacy, Idea Factory
Session 4: The FutureTrends, Insights, Expectations
Fujifilm Kyowa Kirin BiologicsGreenstoneLaboratorios EcarPfizerPharmascience
WelcomeWho are you?
AbbottAlfred E.TiefenbacherAvannlab - MedicusBoehringer IngelheimCapsugelEva Pharma
WelcomeWho am I?Founder Generic Pharma 2.016 years in Gx:6 years Packaging, API, C/M8 years Business Development & Licensing2 years market intelligence & global consulting
Imagineering: Insights, ideas, strategy
Have done ‘something’ with:- Pfizer & Greenstone- Boehringer Ingelheim- Pharmascience
WelcomeWho am I?
WelcomeWhy are we here?- Future of the industry is very different from today- Growth markets are “easier said than done”- Biosimilars will be branded, few have sufficient capital- Competition in small molecule never ends- Government funding and policies fluctuate- MNC’s into generics, generics into speciality pharma, speciality into OTC
The challenge:
Where should time be spent and investment be made?
WelcomeWhy are we here?To discuss DIFFERENTIATION:- The process or action of being different (duh!)- To show a difference that distinguishes
To discuss STRATEGIES for it:“The intelligent allocation of limited resources through a unique system of activities to outperform the competition in serving customers”
Why is this workshop needed?Companies in the generic pharma industry (generally)...Underinvest & focus on alternative strategies for competitive advantage
WelcomeWhy are we here?
To be better than the competition!Competitive exclusion principle:
“No two members of the same species can coexist that make their livings in the identical way”
Competitive AdvantageDefined:
“An offering of superior value based on differences in capabilities and activities”
Three components:
- Distinctive Capabilities: Resources + Competencies
- Investment in Activities: Optimisation + Co-ordination (value chain)
- Market Offerings: Consistent positive difference + Credibility/Trust
Competitive AdvantageTransformation Options:1) Better alignment between offering and capabilities
2) Create new capabilities
3) Influence customer preference
4) Change the game - innovate to create a space without competition
Competitive AdvantageBusiness Value Options:
- Product Leadership- Operational Excellence- Customer Intimacy
Alternative to singular focus
MEDIOCRITY & COMMODITISATION
Need to be either; better or different.. we will focus on different
Competitive AdvantageThe problem (status quo)Product Leadership:Generic drugs by definition are commoditiesPatent expiries determine portfolio and drive growthSignificant market share is gained by being the lowest cost
Operational Excellence:Focus on manufacturing & supply chain (to lower costs)Regulatory & legal are the tools to unlock new revenue
Customer Intimacy:A generic company cannot influence (end) consumer preference or intimacyThe trade customer shows loyalty only to price
Competitive AdvantageThe AnswerYou, me and this workshop!
Current StrategiesWhat is happening out there?
Is anyone actually differentiating in generic pharma right now…
PiSA - MexicoDenver Pharma - ArgentinaBiocad - RussiaHelp Remedies - USAAbbott / Piramal - USA / IndiaAlvogen - Iceland / USA
You decide.
Current StrategiesWhat is happening out there?PiSA Farmaceutica - Mexico
Operations: Manufacturing Excellence- Solid Orals - Injections - Infusions
Product: All categories- Nutrition - OTC - Gx Retail - Gx Hospital - Biosimilar
Intimacy: Key services- Low income pharmacies next to hospitals- In-house logistics & distribution centres- Dialysis Centres
Current StrategiesWhat is happening out there?PiSA Farmaceutica - Mexico
Which one is strongest differentiator?
Success:- No1 domestic Pharma in Mexico- $500m revenue (estimated, private company)- Defended against MNC’s & international generics- Operations across region, export 2million med devices to USA
Competitive Strategy:- Full integration, 360 healthcare provision
Current StrategiesWhat is happening out there?Product, Operations, Intimacy
Denver Farma - Argentina
Operations: Nothing special. Solid oral, liquid, semi-solidProduct: Gx Retail, some OTC
Intimacy: Promotion- Large pharmacy sales team- Mass media consumer advertising
Success: 40% annual growth, moving up 20 ranking places in 3 years
Current StrategiesWhat is happening out there?Biocad - Russia
Operations: Biotech Focus- Technical leaders in biotech production
Product: Disease focus- Viral infections; developed novel formulations of Interferon- International partnerships on disease area
Intimacy: KOLs- Strong connections with hospitals and clinicians (and government!)
Success: Founded 2001, 1st product 2005, 2014 sale likely $750m-$1bn
Current StrategiesWhat is happening out there?Help Remedies - USA [HelpINeedHelp.com]
Current StrategiesWhat is happening out there?Help Remedies - USA
Current StrategiesWhat is happening out there?Help Remedies - USA
Operations: No manufacturing, No regulatory. Just marketing.
Product: Design, Branding, Message
Intimacy: As close as possible! [Video]
Success: Launched 2008 300million visitors, international awards Stocked by hotels, major pharmacies, national retailers Recently acquired for undisclosed amount Next stop, international growth
Current StrategiesWhat is happening out there?Abbott (Piramal) - India- Acquired Piramal for sales force- Historic Indian family name (vs Abbott 1910)- Low cost manufacturing capabilities
Corporate Social Responsibility activities- Health information phone lines and telemedicine- Mobile health units for those beyond 3km from centre (400k treated)- e-Swasthya; provide training & cell phone to local women, connected to diagnosis call centre- Government nutrition partnership, enhanced rice (500k people helped)
Current StrategiesWhat is happening out there?Abbott (Piramal) - India
Product: Global brands & locally developed products
Operations: Local manufacturing. Massive distribution. Deep rural access.
Intimacy: Focus on Corporate Social Responsibility; builds deep trust
Success: Biggest & fastest growing pharma in India
Current StrategiesWhat is happening out there?Alvogen - USA
Current StrategiesAlvogen Inc - USA
Current StrategiesAlvogen Inc - USA
Current StrategiesAlvogen Inc - USA
Current StrategiesAlvogen Inc - USA
Current StrategiesWhat is happening out there?Alvogen - USA
Product: ‘hard to make’ and first-to-file Gx, OTC, Biosimilar (coming)
Operations: Lean & quick. Pharmerging focus + USA (50/50 revenue)
Intimacy: Engaging marketing; Corporate brand for OTC
Success: Profitable. Acquiring (big deals in 2012), aiming for Top 10
Current StrategiesWhat is your company value strategy?- Product Leadership- Operational Excellence- Customer Intimacy
AbbottAlfred E.TiefenbacherAvannlab - MedicusBoehringer IngelheimCapsugelEva Pharma
What about industry ‘leaders’?
- Teva- Mylan- Watson- Sandoz- Hospira- Amneal
Fujifilm Kyowa Kirin GreenstoneLaboratorios EcarPfizerPharmascience
Session 2: Challenges
My ambition
My ability
ChallengesBe better, not just different
Internal Challenges - Investment: growth stage, ownership, control - Human resources: talent, expertise, desire- Management: risk tolerance, vision, commitment - Shareholders: time horizon, understanding, vision
External Challenges- Competitive market forces- Government policy- Availability of resources (data, expertise, finance)
ChallengesWhat is required?
- Expertise - Insights - Resources (internal & external )- Time
ProductOperations
Intimacy
ChallengesProduct
Resources - Manufacturing- R&D- Distribution - Market access
Expertise - Regulatory- Legal & IP - Marketing
Insights - Selection criteria / strategy - Market intelligence (competition plans)- Future needs of the buyer - Disease data
Time - Evolution vs radical - Type: small, biotech, otc - Type: formulation, delivery, packaging,
ChallengesOperations
Expertise- Efficiency - Product Development - Resource management - Project management - Partnership and collaboration
Insights - Effective communication - Future of the effective organization - Market intelligence - Future of manufacturing - In house vs out source
Resources - Partner network - Collaboration tools - Communication tools - Management information systems
Time - Organic vs inorganic - Gap analysis - Current culture- Management effectiveness
ChallengesIntimacy
Expertise - Relationship building- Market research - Data analysis/interpretation- Marketing and branding - Product adaptation
Insights - Future needs of buyers- Market nuances- Government and industry policy (payment, availability, cost, category etc )
Resources - Marketing services- Access to customers- Integrated organization
Time - Investment- Credibility- Readiness of organization- Access to customers
ChallengesThe Big Challenge
- Where to get ideas from- How to buy or build them- How to 'on board' them within resistant org.- How to improve likelihood of success
How to dissolve/modify/overhaul status quo of current organisation?!
Give the past and present, does your company have the ‘make up’ to succeed
Session 3: Ideas
IdeasRealistic Differentiation Potential
Within realms of possibility. Short, medium, longBetter, not just different Likely competitive advantage
IdeasKey attributes for a successful Gx company:
- Selection of new products- Delivery of products- Profitable production of - Partnerships- Regulator and payor relations - Access new markets for growth
IdeasDifferentiation for a successful Gx company:
- Product Leadership- Operations Excellence- Customer Intimacy
ProductProduct Leadership
Focus areas for potential competitive advantage through differentiation.
Having better products
ProductDose Management/Compliance- Data collection: Home dispensing recorders- Monitoring: Patient communication systems/service- Intelligent Packaging: Dose regimen notifications- Reminders: Integrated with MHR, insurance, pharmacies- Dispensing systems: Multi-drug machines- Education: Content systems to reduce intentional non-adherence- Labels: Clarity, Weight/dose information
ProductSafety- Child & Geriatric best practice: pack design, readability- Anti-counterfeiting: digital verification, hologram- Dose form: stamps, coating, colour, taste- Dosing: Part doses (also patient cost reduction)- Abuse deterrents: Non-crushable, irritants, antidote combo, bio-activated
ProductFirst to market- Orphan drugs: new indication for old molecule (<clinical + >safety)
- Patent challenges: salts, alternative formulations (505b2), invalidity(Finances - litigation funding, at-risk launch insurance)
- Reformulation: SR/ER, Pegylation/Liposomes, >stability (global req.), bioavailability (reduce volume), fast acting (ODT, thinstrip), solid to liquid, semi-solid to patch/tape, phase release (early morning, mid sleep etc)
"Is it valuable to the patient, valuable to the physician or valuable to the health providers/insurance companies"
ProductPatient Centric- Convenience: Films, liquids, unit dose, direct-to-mouth, patch/tape Regimen/patient packs (blisters vs bottles)
- Preference: Foam or spray vs cream/gel/ointment Size - "bigger is better" vs easy-to-swallow
OperationsOperations Excellence
Focus areas for potential competitive advantage through differentiation.
Having better operations.
OperationsOperations Excellence
OperationsR&D
- Special forces DARPA model for innovation- Optimisation (market vs manufacturing vs resources vs strategy)- Venture capital/Darwinian view of project approval
Manufacturing- Complexity/variant management:- Local 'manufacturing for local markets', regional CMO's- Continuous manufacturing (2 sites worldwide)- Manufacturing techniques e.g Foam (vs wet) granulation
OperationsSourcing/Supply-Chain/Procurement
- Market intelligence via in-market sourcing offices- API R&D price reduction exchange for royalty (subject to timetable, patents etc)- Co-development (cost/profit sharing) for higher risk (competition, time, costs, reg.)- Co-invention projects for global exploitation- Global benchmarking ('local' price = future regulated price)- Sourcing/purchasing plaforms, e.g io-pharma.com
OperationsServices- First to market, support 'early' launch (patent breaking) with legal services- Anti-counterfeiting 'services'- Pharmacy education (product reformulation, value add etc)- Information for pharmacies (availability, new products, patents, promotions)
Outbound Logistics- Dis-intermediation (direct to pharmacy + support contract flexible buyers)- Online pharmacy (direct to patient)
OperationsTechnology- Monitoring and analysis of firm-wide data:
- Decision making- Insights- Quality- Communication
- Connection of data between partners and customers- Help suppliers and buyers to improve their business- Build integrated networks with seemless data
OperationsHuman Resources- Create the Google of Pharma, somewhere people want to work- CA by attracting the brightest and best in the industry (and outside)- An investor in people (vs assets)
Infrastructure- Flat, no-boss organisation like Valve Software
- Compensation based on ranking- Select projects to work on
- Knowledge factories vs labour factories
IntimacyCustomer Intimacy
Focus areas for potential competitive advantage through differentiation.
Having better customer intimacy.
IntimacyWho is the customer?
Next buyer in chain or end consumer?Business-to-business vs business-to-consumer
● Wholesaler / Distributor / Exporter● Payor: Insurance or Government● Pharmacy / Hospital / Website● Patient / Carer
IntimacyWholesaler / Distributor / Exporter
- Market intelligence sharing (data)- Product education materials for next in chain- NPD projects for sub-sector- Rewards program
IntimacyPayor: Insurance or Government
- Demonstrative superiority- Quality (preventative systems)- Reliability (stock committment)- Efficacy (significant enough?)- Compliance (very significant)
- Services- Infusion centres- Payment/reimbursement systems
IntimacyPharmacy / Hospital / Website
- Patient education programs (in-store devices)- Transparency of supply chain for deliveries (data)- Legal and regulatory updates (data)- NPD ideas driven by clinicians and pharmacists- Drug management services/software- Outsourced service provision (?)
IntimacyPatient / Carer
- Mobile apps for disease management (trust)- Compliance and safety programs/systems (caring)- Full disclosure of supply chain information (honesty)- Disease management portfolio discount/co-pay
Corporate Social Responsibility projects
IdeasHow will you pick the best one?
- Theory vs reality- Investment analysis- Timelines
What does an idea factory for generic pharma look like?
Session 4: The Future
The FuturePharmagineering
What might affect the generic drug industry in 10 years?What is beyond emerging markets?What is beyond large molecule generics?
What does it mean for us today?
Asa’s 2030 Futurist Thoughts
Generic drugs will be marginalised in majority of marketsOnly handful of broad portfolio playersHandful of highly specialist technology driven companiesGovernment and insurance fully integrated
Data rulesSupply chains are shortPatients order their own drugs
The Future
The FuturePrevention
The FuturePreventionLifestyle diseases get lifestyle treatmentExercise & diet connected to insurance & healthcarePush responsibility to population, incentives for health (tax)
The FuturePersonal
Genome based healthcare managementLife diagnostics, real-time care and treatmentCradle to grave relationship with Pharma
The FutureTechnology
Mhealth: Smartphones, tablets & apps Data integration: manufacturing to bar codeOpen source platformsOnline drug fulfilment
The Future‘Intelligent’ Patients
Informed choice of drug providerA relationship with drug provider demandedEthics, manufacturing data, quality reports, clinical dataDrug interactions, side affects, diet, exercise
The FutureThoughts & Discussion
What does the future hold?How will it affect the generic pharma industry?What competencies will be required to succeed?What can be done NOW to improve likely success?
The FutureTrends/insights
- Self care- Personalised medicine & diagnostics- Technology facilitation - Connectivity and collaboration - Social responsibility - Environmental conscience- Globalized mobilized workforce - Income disparity & fiscal responsibility
- Gender roles and activities - Protectionist/self reliant government- Role of Dr, Pharmacy and Hospital - Aging population - Generation differences - Southern hemisphere power houses - Funding models (crowd/networked)
What do you see?
The SummarySession 1: IntroductionWelcome, Who?!, Why?Current differentiation strategies
Session 2: ChallengesProduct, Organisation, Intimacy, Execution
Session 3: IdeasProduct, Organisation, Intimacy, Idea Factory
Session 4: The FutureTrends, Insights, Expectations
Differentiation Strategiesfor the Generic Industry
Biosimilar Drug Development WorldBoston, Tues 19th Nov 2013