Preparing for product launch

Transcription

1 Preparing for product launch A Finance Perspective CBI Conference September 28, 2017

2 Today s presenters Today s presenters Susan Garfield Principal Advisory, Life Sciences EY Bill Roberts Partner Northeast Life Sciences Leader Financial Accounting Advisory Services EY Bill Roberts Partner Northeast Life Sciences Leader Financial Accounting Advisory Services EY Rick Capasso Executive Director Financial Accounting Advisory Services, Life Sciences EY Rick Capasso Executive Director Financial Accounting Advisory Services, Life Sciences EY Page 2

3 Today s Discussion Topics Timing and organizational considerations Market access Supply chain and distribution Working with service providers/3pl s Lessons learned and pitfalls to avoid Page 3

4 Timing and organizational considerations The Big Picture balancing the strategic with the tactical ~18 24 mos. ~12 18 mos. < 12 mos. Launch Post -launch Plan capital/funding scenarios Begin to develop Commercial strategy, goals, objectives and timing Form cross-functional executive leadership committee Outline ROW commercialization plan (IP/supply chain) Begin enterprise resource planning Identify internal infrastructure requirements Establish a plan for new functions to achieve launch readiness Determine insource vs. outsource strategy at functional level Identify potential service providers Identify and prioritize key hires needed within each function Begin to mobilize talent acquisition Execute on hiring plans Formalize 3PL relationships Establish policies, procedures and internal controls: Supply chain Revenue recognition (GTN) Government pricing Compliance Refine investor relations strategy Talk to your auditors Establish external reporting framework Establish cadence for cross-functional meetings Establish process for issue mitigation and resolution Continuous learning and improvement Be flexible Connect with your peers (internal and external) Page 4

5 Market Access can be considered in all aspects of development and commercialization Embed market access perspectives into all commercial planning activities Market Access Tactics De-risk development programs and portfolios Align activity with market requirements for value demonstration Achieve optimal pricing Leverage data and create partnerships Explore innovative contracting Market Access R&D Commercial Pricing Reimbursement Funding flows Coding HTA engagement Payment models Incentive mapping Big data and outcomes Value articulation and development Advisory boards/war gaming Questions? Who in your Org? Are you leveraging big data to build value? Head of market access Do you have a multi-stakeholder value proposition? HEOR teams What is your pricing strategy? Medical affairs What is your approach to innovative and risk-based contracting? What are the incentives driving utilization of your product? Business development Brand and commercial team Are you organized to sell value? Page 5

6 The Life Sciences Supply Chain begins with the sourcing of Raw Materials and encompasses all physical activities until the Finished Product is consumed or destroyed Raw materials Delivery Transport/fulfill Patient consumption Product destruction Drug/device production Channels Pharmacy hospital Returns/ recalls What you might not know! Raw Materials are not heavily regulated by FDA, and can come from anywhere in the world Onus is on the Life Sciences company to qualify the vendor Overall cycle time from Raw Material to Finished Goods can be 6-12 months Raw Materials have a shelf life Manufacturers nay have up to 100,000 SKU s All sites are subject to regulatory inspection FDA has extra budget and staff for enforcement Whistle blowers get a portion of the fine Wholesalers may have 800,000+ SKUs Drug prices are 2X rest of the world, margins can be 80% Most hospitals/health systems are break even/losing money Interest and late payment fees from GPO s can be greater than the savings Hospitals may stock 50,000+ SKUS Product may be counterfeit Product returns may include fraudulent claims Credit/rebate/charge-back management is very complex Serialization and UDI are coming and are having a massive impact on the supply chain Take away A supply chain is defined as The movement of goods, money and information between trading partners. Life Sciences SCM is subject to extensive regulation and is more like a commodities trading exchange than a physical supply chain. Page 6

7 Sales and distribution model VP Brand / Franchise HCP Team Developing the brand promise and positioning Marketing analytics Analyzing effectiveness and performance of brands, campaigns and field force to enable decision making Creating mulitchannel vehicles to inform patients as to a disease and/or product Patient Team Field sales force Calling on doctors to prescribe their drugs to patients Market access Analyzing and communicating the value of the product to a range of customers (e.g., payers, hospital purchase managers, PBMs) who influence uptake. Pharma Corp Government/Payers Wholesaler Patient Medical Science Liaisons Publishing medical data and liaising with physicians to provide scientific information relating to products Pharma Corp Source: Kaizenforpharma, March 2015 Page 7

8 Bringing it all together: It takes a village Consultants GP Counsel Data Hubs Revenue Management Software Keys to post-launch synergy Automated GTN Solutions Data Aggregators 3PL s CMO s GP Calculations Page 8

9 Lessons learned and pitfalls to avoid

10 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. About EY s Financial Accounting Advisory Services (FAAS) Group Today s global enterprises need help understanding and addressing the effects of their business decisions on complex accounting and financial reporting requirements. Meeting this challenge requires not only technical resources, but also advisors who understand the issues companies face in their industries and who have the experience to provide practical, effective services. EY s FAAS professionals are deeply experienced in offering up-to-date insight into standard setting and regulatory developments, along with relevant industry perspectives. And to help companies receive the market, technical and regulatory insights they need, we can coordinate global teams of highly qualified resources in accounting, tax, systems, IT and transaction advisory. It s how EY makes a difference Ernst & Young LLP. All Rights Reserved. ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com