Below is a guest post from Aroon Krishnan. Aroon has consulted for a variety of health care organizations on issues such as strategy and forecasting. He is currently a Director of Global Insights for J&J.
Levitra (GSK) launched (in 2005) as a third to market drug in the ED (Erectile Dysfunction) space ( Viagra launched in 1998 and Cialis in 2003). At its peak, Levitra had about 5% market share. The ED Market remains a duopoly with Cialis and Viagra each with about 45-48% share. Why didn’t Levitra ever reach the level of traction with patients and prescribers that Cialis and Viagra received?
Analyst and GSK expected the drug to be a revolutionary billion dollar drug.
Levitra was an “entry ticket” drug:
- It offered no significant clinical benefit over Cialis (Effects of Cialis lasted for 30 hours)
- It lasted longer than Viagra (5 hours vs. 4 hours)
- It was thought to have fewer side effects than Cialis or Viagra
In the eyes of the customer, these side effects were rarely significant enough to invoke a change in brand. The marginal benefit of Levitra to Viagra was undistinguishable to patients. Thus, Levitra lost the clinical battle and never achieved widespread adoption.
The lesson from this case study is that new products can fail when their less important benefits are emphasized to patients and physicians. These benefits fail to trigger an actionable response. Being able to distinguish which benefits matter and the level of improvement desired in these benefits is the greatest challenge drug / device companies face today. In essence, innovation must focus on identifying and delivering on the unmet needs in the marketplace.
Most current approaches used to identify innovation opportunities focus on current behavior. Unfortunately, catering to current behavior does not generate breakthrough products. The typical approach involves asking KOLs, sales reps, and marketing how to improve current offerings. The results are typically incremental improvements and rarely game changing products (i.e. Levitra). GSK must have felt that they had a great product that lasted an extra hour – unfortunately, the market didn’t see it that way.
Alternatively, KOLs, sales reps and marketing say that they want “everything” which creates the ubiquitous innovator’s dilemma.
So how
has this process improved in the last 10 years? Analytic organizations in medical device and pharmaceutical companies are using rigorous analytics to understand the relative importance of a laundry list of benefits of a particular device/drug/product to their customers. They have developed new metrics for quantifying the level of unmet need of these product benefits. They have then performed rigorous quadrant analysis to provide R&D with the ‘components’ of a product that must be improved and the “game-changing potential” of that improvement.
has this process improved in the last 10 years? Analytic organizations in medical device and pharmaceutical companies are using rigorous analytics to understand the relative importance of a laundry list of benefits of a particular device/drug/product to their customers. They have developed new metrics for quantifying the level of unmet need of these product benefits. They have then performed rigorous quadrant analysis to provide R&D with the ‘components’ of a product that must be improved and the “game-changing potential” of that improvement.
In this example below for a new COPD product, R&D is clearly able to prioritize their focus based on product strategy. The upper left quadrant shows the bare minimum a product must deliver. If the strategy is to develop a game-changer: what they must improve in is clearly highlighted. Also, focus areas which are clearly not important to their customers are highlighted. Finally, R&D can focus on high value improvement and stay away from low ROI improvements.
