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Pharmaceutical Product Branding Strategies

Pharmaceutical Product Branding Strategies

Name Pharmaceutical Product Branding Strategies — Simulating Patient Flow and Portfolio Dynamics
Modelers Mark Paich, Corey Peck, Jason Valant
Contact Jason Valant or Corey Peck
Client Numerous Pharmaceutical Companies
Client Type Corporation

The Official Website

Lexidyne, LLC specializes in helping clients understand and leverage key cause–and–effect relationships using the principles of System Dynamics. Combining strong facilitation skills with powerful simulation tools and over 100 years of collective System Dynamics experience, the Lexidyne team offers consulting solutions to government agencies, non–profit organizations, and several Fortune 500 companies. Headquartered in Colorado, Lexidyne works with clients across the country and around the globe.

The Issue You Tackled

Pharmaceutical companies face many complexities guiding a new drug through the development process toward the launch of the product — a complicated endeavor involving numerous milestones and a large investment of human and financial resources.

The efforts of the Brand Plan team result in a comprehensive look at the disease marketplace, the competitive landscape, currently available and pipeline treatment options, the assessment of the unmet medical needs in the market, and other information designed to inform decision makers about the conditions into which a new compound might be introduced. From a marketing standpoint, however, the key outcome of the Brand Planning process is the concept of brand positioning. Brand positioning helps establishing a series of product strategies created to leverage the collective knowledge of the disease market and effectively use resources to increase uptake of the new product. The strategies are often categorized by areas of target influence, such as patient and or physician segmentation, impact on the regulatory environment, effect on pricing/reimbursement, publication strategy, etc.

The typical brand planning process can be hindered in four key ways:

  1. Misapplication of product analogs
  2. Failure to leverage the institutional knowledge of cross-functional team members
  3. Inherent limitations of static approaches
  4. Maintaining consistent assumptions when evaluating alternative strategic options

Often there is a lack of integration between forecasts and product strategies. In the prelaunch timeframe however, rigorously testing the effects of possible strategies is impossible without an operational way to evaluate the expected outcome of strategic marketing decisions.

What You Actually Did

This updated Second Edition of Pharmaceutical Product Branding Strategies details how marketers, forecasters, and brand planners can achieve optimal success by building internally consistent simulation models to project future behavior of patients, physicians, and R&D processes. By introducing the reader to the complexities facing many pharmaceutical firms, specifically issues around cross-functional coordination and knowledge integration, this guide provides a framework for dynamic modeling of interest to several pharmaceutical markets, including epidemiology, market definitions, compliance/persistency, and revenue generation in the context of patient flows or movements.

Using clear terminology, Pharmaceutical Product Branding Strategies provides a solid framework for dynamic modeling to help marketers, forecasters, and brand planners to successfully:

  • Predict the behavior of patients, physicians, and R&D processes
  • Build a successful brand management strategy
  • Target a wider audience with your product
  • This didactic guide discusses the complexities faced by many pharmaceutical firms and explains how dynamic modeling effectively addresses these problems in a systematic way. The positive effects of this method are supported by articles from recent business publications, literature reviews, definitions sections, and collectable market-level data. Dynamic modeling is also compared and contrasted with other existing techniques to give the reader background information and context before initiating a plan.

Strategies highlighted as part of a strong brand planning formula include:

  • Cross-functional coordination and knowledge integration to assess the patient’s needs
  • Diffusion, segmentation quantification, and ultimate calibration to encourage doctors to adopt your product
  • Choice models, conjoin analysis,, competitive sets, data collection/estimation, and market calibration to create an “attractive” treatment for consumers
  • Integration of three basic analysis platforms (patient dynamics doctor adoption, and treatment attractiveness) to sell your brand.

A “typical” disease market model would follow the following evolution (Doctor Adoption and Portfolio Model examples follow similar processes):

  1. Begin by leveraging the system dynamics principles of stocks and flows to establish epidemiological projections for specific disease markets
  2. Often times a combination of modeling approaches are used within this framework

    a.System Dynamics models provide a clear aggregate view of epidemiology dynamics.

    b.While Agent Based models support the inclusion of more extensive segmentation and discrete dynamics.

  3. Each patient’s journey can be virtualized based on probabilities that are tied to conditional probabilities related to their micro-demographic epidemiology status.
  4. Once robust epidemiological underpinnings have been established, we analyze longitudinal treatment data to distill segmented therapy dynamics that are incorporated into the simulation structure thus creating opportunity for strategic insights.

The Results

Numerous pharmaceutical companies have adopted this dynamic modeling approach to evaluate disease markets, doctor adoption, and the R&D pipeline process. Over 100 models have been implemented across numerous indications both in US markets and internationally.

These models have been instrumental in creating optimal strategic initiatives and have enhanced the forecasting process. These models also often serve as the repository for analytics from “big data” as well as institutional team knowledge about the disease area and provide a transparent shared view of data driven dynamics and market assumptions. The “what if” scenario testing capability of the models provides these organizations with a tool to test marketing strategies and evaluate hypothetical changes in future market evolution dynamics, allowing these organizations to understand implications of an uncertain future.

Publications

Pharmaceutical Product Branding Strategies: Simulating Patient Flow and Portfolio Dynamics Download

Did You Know?

System Dynamics Forrester Award

The Jay Wright Forrester Award recognizes the authors of the best contribution to the field of System Dynamics in the preceding five years. In 2010, the award was presented to Mark Paich, Corey Peck, and Jason Valant of Lexidyne, LLC for their winning work Pharmaceutical Product Branding Strategies: Simulating Patient Flow and Portfolio Dynamics, published by Informa Healthcare; 2nd edition March 2009. More information on this book can be found at this link.

The citation and winners’ speech (delivered at the award ceremony in Seoul) has been published in full in the System Dynamics Review.
(Jul 2010)

Polio Eradication

Polio Eradication

Name Polio Eradication
Modelers Kimberly M. Thompson,and Radboud J. Duintjer Tebbens
Client World Health Organization (WHO)
Client Type NGO

The Issue You Tackled

Following successful eradication of smallpox and impressive progress in the elimination of polio in the Americas, in 1988 the World Health Assembly committed to global eradication of wild polioviruses by the year 2000. By 2000, the Global Polio Eradication Initiative (GPEI) had significantly reduced the global circulation of wild polioviruses. However, in 2002–3, faced with insufficient funding to continue intense vaccination everywhere, the GPEI focused its vaccination efforts. At the time, wild polioviruses continued to circulate in six countries, but many other countries remained vulnerable to importation. Political and logistical challenges led to outbreaks and exportations, and between 2004 and 2006 wild polioviruses appeared again in previously polio-free African and Asian countries.

Toward the end of 2005, debate began about abandoning the goal of eradication. How could the world continue to justify the significant use of resources (both financial and human) on polio, particularly with the number of cases globally already so low and so many other disease control and health services programs in need of resources? In 2006 a prominent editorial questioned whether polio eradication is “realistic” and expressed concern that “international assistance for polio could have negative effects on other public health efforts”. The editorial suggested that “the time has come for the global strategy for polio to be shifted from ‘eradication’ to ‘effective control’”.

What You Actually Did

Given our then current work on assessing the risks, costs, and benefits of post-eradication policies we could use many of the components we previously developed to model a shift from eradication to control. Notably, our dynamic disease outbreak model for polio allowed us to estimate potential numbers of cases. Our analysis came at a critical time. In February 2007, the WHO Director-General, Dr Margaret Chan, convened an urgent stakeholder consultation to discuss the option of switching to control. We had the opportunity to present the preliminary results of this work at that meeting.

 

The Results

Following publication of the paper, an article about the paper published in the same journal as the editorial mentioned above noted that our analysis provided “a nail in the coffin for the idea that there is a cheap and painless way out”. Since then, efforts have continued to focus on finding the resources needed to complete eradication and on dealing with the other complex challenges that remain.

National and global health leaders and financial supporters have recommitted to completing eradication, and this has led to several hundreds of millions of dollars of resources.

Publications

Using System Dynamics to Develop Policies That Matter: Global Management of Poliomyelitis and Beyond Download
Economic analysis of the global polio eradication initiative Download
Economic benefits of the global polio eradication initiative estimated at $40-50 billion Download
Modeling Global Policy for Managing Polioviruses: An Analytical Journey Download
Eradication versus control for poliomyelitis: an economic analysis Download

Diabetes

Diabetes

Client Centers for Disease Control and Prevention (CDC)
Authors/Consultants Jones AP, Homer JB, Murphy DL, Essien JDK, Milstein B, Seville DA

Diabetes mellitus is a growing health problem worldwide. In the United States, the number of people with diabetes has grown since 1990 at a rate much greater than that of the general population; it was estimated at 20.8 million in 2005. Total costs of diabetes in the United States in 2002 were estimated at 2 billion.

Health planners in the National Center for Chronic Disease Prevention and Health Promotion of the Centers for Disease Control and Prevention used system dynamics simulation modeling to gain a better understanding of diabetes population dynamics and to explore implications for public health strategy. A model was developed to explain the growth of diabetes since 1980 and portray possible futures through 2050.

The model simulations suggest four characteristic dynamics of the diabetes population.

First, it shows obesity’s role in driving the growth of prediabetes and diabetes prevalence.

Second, the model quantifies the “backing up” phenomenon (in which reduced outflow from a population stock causes a buildup in that stock) that may undercut the benefits of management and control efforts. Third, management and control efforts alone are unable to reduce diabetes prevalence in the long term. Fourth, there are significant delays between primary prevention efforts and downstream improvements in diabetes outcomes.

Pharmaceutical Product Life-cycles

Pharmaceutical Product Life-cycles

Client Anonymous Pharmaceutical Company
Authors/Consultants Jones L (Ventana Systems UK)

A leading global pharmaceutical company wanted to understand the interdependencies between resource levels and experience through the life-cycle of drug products. It was also interested in the impact of organisational design on its ability to manage the product pipeline.

In a series of workshops, we developed further an internal qualitative model of the system and produced a quantitative simulation tool for assessment of the likely impact of investment in resources & training. This project model enabled multiple drug products to be evaluated throughout their life-cycle as they affect resource requirements (numbers of people, experience etc) and also to assess the relationships between organisation capabilities and life-cycle progress and success.

The work built on a number of previous engagements with the client and benefited greatly from the experience gained by the modeller and the client team. Using large-scale posters of model overview diagrams, the modelling team were able to bring into the design and development phase a number of senior executives with the experience required in order to gain confidence in the approach.

The organisation now has a quantitative model in which to evaluate the possible impact of investment in resources, training etc on the product portfolio and, ultimately, on profitability. We delivered a comprehensive “cockpit” user interface enabling involvement by non-expert users and model development continues in the light of user feedback.

The effective management of product life-cycles is of critical importance to pharmaceuticals, made worse by the ‘ticking clock’ of the patent life for a drug. Better management of this issue can be worth many millions of dollars for a single product, and since this project enhances decision-making across numerous products, it is delivering very considerable overall value.

More Information

For more information on this case, please contact Lee Jones at Ventana Systems UK.

Medical Device Company

Medical Device Company

Name Medical Device Company
Modeler Kim Warren
Contact For more information on this case, please contact Kim Warren at Strategy Dynamics.
Client ALK-Abello, Denmark
Client Type Corporation

The Issue You Tackled

The company faces total loss of sales for a consumer medical device – very well known amongst the 100,000 users and doctors – with the ending of a patent in 2010. It has developed a replacement product, but faces the challenge of migrating patients and doctors from the existing brand, which will have to happen very fast. What kind of marketing and sales effort should be made, over what period of time, with what likely results?

What You Actually Did

The project started with a one-day workshop with the four person management team, mapping the resources involved – patients, doctors, specialists, sales force – estimating key numbers and causal relationships. The second step was a three week modeling effort between one expert and two key executives. The third and last step involved a half-day workshop reviewing and confirming results, and testing strategy options.

The Results

The project resulted in several benefits to the company. An initial idea – to capture patients via a website proved impossible because usage would be too low, and their engagement with the new brand limited. Direct sales effort and marketing to doctors would not work, because the medical condition was too rare to engage their interest.

The solution was to involve specialists in the routine training-updates that doctors have to undertake, then follow up with sales calls to those specific doctors who had attended the training. This would require five times the previously estimated cost and effort, but deliver attractive results. Current sales volume, worth €1 million in annual profits, would disappear with the loss of the current product.

Pre-existing plans would fail to rebuild more than half this profit over three years, and lose most of the market to competitors. The revised strategy, though costly, would more than recover the existing profits in two years, due to the better profit margin on the new product.

Antibiotic Resistance Dynamics

Antibiotic Resistance Dynamics

Client Texas Department of Health
Authors/Consultants Homer J, Ritchie-Dunham J, Rabbino H, Puente L, Jorgensen J, Hendricks K

Many common bacterial pathogens have become increasingly resistant to the antibiotics used to treat them. The evidence suggests that the essential cause of the problem is the extensive and often inappropriate use of antibiotics, a practice that encourages the proliferation of resistant mutant strains of bacteria while suppressing the susceptible strains.

However, it is not clear to what extent antibiotic use must be reduced to avoid or reverse an epidemic of antibiotic resistance, and how early the interventions must be made to be effective.

 

To investigate these questions, we have developed a small system dynamics model that portrays changes over a period of years to three subsets of a bacterial population – antibiotic-susceptible, intermediately resistant, and highly resistant.  The details and continuing refinement of this model are based on a case study of Streptococcus pneumoniae, a leading cause of illness and death worldwide.

Publication

Homer J, Ritchie-Dunham J, Rabbino H, Puente L, Jorgensen J, Hendricks K. Toward a Dynamic Theory of Antibiotic ResistanceSystem Dynamics Review, 16(4): 287-319, 2000.

Marketing Strategy for a New Cholesterol-Lowering Drug

Marketing Strategy for a New Cholesterol-Lowering Drug

Client a large global pharmaceutical company (Sandoz, now Novartis)
Author/Consultant Homer J

This was the first of a series of models with Sandoz dealing with the positioning of new products in various therapeutic application markets.  The cholesterol-lowering drug was a “me-too” drug entering a very competitive market.  The purpose of the model was to investigate a variety of positioning alternatives, mainly focused on pricing and marketing, to determine whether the new drug could become a winner and what it would take.  The model was capable of explaining historical prescriptions and marketing data of competitor firms and revealed the importance of product switching, pre-marketing response, and patient compliance.

Publication

Homer J.  Why We Iterate: Scientific Modeling in Theory and PracticeSystem Dynamics Review, 12(1): 1-19, 1996.

ReThink Health Dynamics

ReThink Health Dynamics

Name Local Health System Reform Strategy
Modelers Jack HomerGary B. HirschBobby Milstein, and Elliott S. Fisher
Client/Participant Fannie E. Rippel Foundation (New Jersey)
Client Type NGO

ReThink Health: Simulation models supporting local solutions to a national problem (October 29, 2013)

Presented by Jack Homer, Owner, Homer Consulting

Presentation slides: ReThink Health slides

Description: In this video, Jack Homer presents ReThink Health, a model-based approach to understanding health at the community level that has featured prominently in our last two conferences. The ReThink Health webinar is an opportunity to introduce new people to System Dynamics. If you have friends or colleagues interested in health and health care let them know. It promises to be interesting and informative. This webinar is one of the Big Data, System Dynamics, and XMILE webinar series jointly sponsored by IBM, isee systems, and the OASIS XMILE Technical Committee.

The Official Website

rethinkhealth.org is the official website that covers all information about this project including the latest news, simulators and learning tools, videos, etc.

The Issue You Tackled

Health system reform is a national priority in the U.S., but it is increasingly being pursued through a mosaic of local initiatives.

Concerned leaders in cities, towns, and regions across the country are working within their local health systems to achieve better health, better care, lower cost, and greater equity. Such ambitious ventures are, however hard to plan, unwieldy to manage, and slow to spread. Further progress could occur if diverse stakeholders were better able to play out intervention scenarios, weigh trade-offs, set aside schemes that are unlikely to succeed, and enact strategies that promise the most robust results. Through the Rippel Foundation’s ReThink Health initiative and the ReThink Health Dynamics simulation model, local leaders are learning what it takes to spark and sustain system-wide improvements in their settings.

What You Actually Did

The effective alignment of regional stakeholders who act as stewards of their health system is a critical factor in sustainable system redesign. ReThink Health works closely with regional leaders and cross-sector coalitions to help them develop more active stewardship, effectively engage local community members, build critical relationships, set priorities, identify and pursue more effective strategies, and guide resources into smarter more sustained investments. The ReThink Health team consists of effective coaches, facilitators, networkers, and trainers in engagements with regions that may last a few days or a few years, based on a coalition’s needs.

The Results

Their work with regions helps move groups of independent actors focused on improving health outcomes to more coherent, multi-stakeholder approaches. By building relationships, enhancing system insight, redesigning core elements of the system, and implementing cohesive and well supported strategies, collaborative efforts can accelerate reaching the goals of better health, lower costs, higher quality care, and create more resilient communities.

Related Publications

Combined Regional Investments Could Substantially Enhance Health System Performance And Be Financially Affordable Download
NASPAA Student Simulation Competition: Reforming the U.S. Health Care System Within a Simulated Environment Download
ReThink Health Dynamics: Understanding and Influencing Local Health System Change Download
County Officials Embark on New Collective Endeavors to ReThink Their Local health Systems Download

Did You Know?

   

ReThink Health Dynamics Model Blog and Use Cases

“Did you know there is a blog devoted to lessons of the ReThink Health Dynamics Model, plus descriptions of how the model has been used with health leaders in several local places around the US?”

Children’s Oral Health

Children’s Oral Health

Name Exploring Prevention Strategies for Improving Children’s Oral Health
Modelers Gary B. HirschBurton Edelstein, Marcy Frosh, Jayanth Kumar.
Client/Participant Childen’s DentalHealth Project, Colorado Department of Public Health and Environment, New York State Department of Health
Client Type Government

The Issue You Tackled

Early childhood caries (ECC) – tooth decay among children younger than 6 years – is highly prevalent and consequential in the United States, despite being highly preventable. Forty-four percent of 5-year-olds have cavity experience. ECC manifests frequently as pain and infection and disproportionately affects low income children, leading to avoidable expenditures by Medicaid and the Children’s Health Insurance Program.

The problem facing policy makers is selecting interventions that have greatest potential for reducing both disease and costs.

What You Actually Did

ECC modeling projects span five years and two states, Colorado and New York. These models helped policymakers in both states explore different preventive interventions to determine their potential impact on the percentage of children developing cavities, potential savings from reducing treatment costs, and ratios of treatment cost savings to preventive program costs. Preventive programs simulated included Community Water Fluoridation, fluoride varnish application, motivational interviewing of parents, tooth brushing encouragement, and preventive dental visits and combinations of these and other programs.

The Results

The Colorado model included all children aged 0-5. The New York model represented children covered by that state’s Medicaid program. The models helped policymakers see the alternative benefits of broad-based programs affecting all children (maximum reduction in cavities) vs. programs focused on children at the highest risk of developing ECC (highest return per program dollar invested).

Related Publications

A Simulation Model for Designing Effective Interventions in Early Childhood Caries Download
Reducing early childhood caries in a Medicaid population: A Systems Model Analysis Download

Are You vMad To Go For Surgery? Risk Assessment for Transmission of vCJD via Surgical Instruments

Are You vMad To Go For Surgery?

Risk Assessment for Transmission of vCJD via Surgical Instruments

Client UK Department of Health
Authors/Consultant Stephen Curram, Jonathan Coyle, André Hare

Case summary

Although the prevalence of vCJD (a human form of “Mad Cow Disease”) was successfully reduced between 2000 and 2004, the alarming peak in cases led to concern about the disease’s possible transmission via various pathways. Surgical instruments were considered to be a plausible, if surprising potential risk.

The work was undertaken for the UK Department of Health and contributed to official reports by the UK government.

Models helped simulate potential transmission rates and the impact of mitigation policies on the general population. A wide-ranging review by both medical and modelling experts undertook a very detailed verification and validation exercise on models used in the study. The case is a strong example of model-informed policy in health-care, specifically concerning disease transmission – a topic on which many valuable system dynamics projects have been carried out.

Links to articles, presentations or models:

Are you vMad to go to surgery? Risk assessment for transmission of vCJD via surgical instruments.  Link to the Paper