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Pharma Launch Spending Patterns Shift from Market Prep to Promotion as Brands Progress towards Launch

Our recent in-depth study of 15 pharmaceutical brands showed the degree to which decision support spendingThough no two pharmaceutical brands’ commercialization strategies are exactly the same, the majority of companies follow similar launch spending patterns when launching new products. As brands move from early Phase 3 to approval and eventually launch, commercialization spending quickly shifts from market prep activities to advertising and promotion expenditures.

(primarily market research and competitive intelligence) decreases as a percentage of commercialization spending as products move closer to launch while advertising and promotion spending increases over the same timeframe (see Figure 1). Companies aim to have their strategies for entering markets ready in advance of launches so they can concentrate fully on implementing these strategies in the real world when launch day arrives.

Pharma brand launch commercialization spending

FIGURE 1: Commercialization spending shifts from market preparation to physician and patient promotion as brands progress toward launch (click for detail)


As shown, during Phase 3 of clinical development, decision support activities consume 20.8% of commercialization spending. This category of spending decreases to only 7.4% of the spending mix after launch. Advertising and promotion spending increases over the same time frame, from 34.6% in phase 3 to over 50% of the spending mix during launch. (For the purposes of this study, this does not include other Direct-to-Consumer activities, which would drive these percentages significantly higher.)

Executives interviewed for the study noted that almost all prerequisite market preparation spending would ideally be complete prior to launch with only minimal amounts required for continued coverage of market access and decision support needs. This allows brand teams to dedicate the vast majority of resources to physician- and patient-focused activities that can help the new drug capture the greatest possible share of the market within the first six months after launch.

During the same time, medical affairs activities remain fairly constant through the launch window, though resources shift between the sub-categories slightly as products move closer to launch. Market access spending increases as a percentage of the commercialization spending mix right before launch as companies make a final push for formulary access and pricing and reimbursement contracts prior to hitting the market. Overall, however, spending for market access activities does not increase on average. Instead, actual dollars spent remains somewhat constant from the prior time frame.

David Richardson
Senior Director of FMV Services

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