Using business intelligence for strategic advantage in REMS Received (in revised form): 23 rd November 2010

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1 Original article Using business intelligence for strategic advantage in REMS Received (in revised form): 23 rd November 2010 Ashwin Mathias is a manager at ZS Associates. He has 8 years of experience in Health-care and Pharmaceutical Sales, Marketing, and Commercial Operations, and obtained an MBA from the Kellogg School of Management and an MS from the Illinois Institute of Technology. Kurt Kessler is a Principal at ZS Associates. He has 20 years of experience across the entire pharmaceutical commercialization process, and obtained a PhD in Applied Statistics from Syracuse University and a BA in Psychology (with Honors) from LaSalle University. Sudhanshu Bhatnagar is a consultant at ZS Associates. He has more than 3 years of experience in Health-care and Pharmaceutical Sales, Marketing, and Commercial Operations, and obtained a Bachelor of Technology from Pune University (India). ABSTRACT The FDA has mandated Risk Evaluation and Mitigation Strategy programs to manage risks associated with drugs. REMS programs comprise elements to assure safe use (ETASUs), and companies need to implement some (least restrictive) to all ETASUs (most restrictive) required by the FDA. Implementing ETASUs can require companies to perform a number of different activities from better educating customers and end-users to continuous monitoring of customers and end-users for risk of adverse events. In performing activities required for ETASUs, companies need to acquire, create and manage significant amounts of data on their customers, end-users, product use, distribution and so on. If effectively done, these data can be married with other data from customer relationship management, marketing campaigns and so on to create a business intelligence goldmine to support and enhance marketing and sales effectiveness, and business operations. Journal of Medical Marketing (2011) 11, doi: /jmm ; published online 14 January 2011 Keywords: REMS ; business intelligence ; specialty pharmacy distribution Correspondence: Ashwin Mathias ZS Associates, Management Consulting, 400 S EL Camino Real, Ste 1500, San Mateo, CA 94043, USA INTRODUCTION Since 2007, the FDA has mandated Risk Evaluation and Mitigation Strategy (REMS) programs for therapies that have clinical value but come with a significant potential for either serious adverse events or abuse. As of April 2010, there were 129 therapies in the market or coming to market that required a REMS program. As part of managing the risk associated with a therapy, companies need to implement REMS programs that comprise elements to assure safe use (ETASUs). The complexity can vary from implementing some (least restrictive) to all ETASUs (most restrictive) as required by the FDA ( Figure 1 ). In performing activities required for ETASUs, companies need to acquire and SAGE Publications, Journal of Medical Marketing Vol. 11, 1, 84 89

2 Using business intelligence for strategic advantage Figure 1 : High-level overview of REMS requirements. Box 1: Overview of Market Potential As of June 2010, 129 products have a REMS requirement. 1 In 2008, REMS was mandated in 31 per cent of all new molecular entities (drugs/ biologics). 2 Largest product classes affected so far are opioids ( ~ $ 6.5B) 3 and erythropoiesis-stimulating agents (ESAs) ( ~ $ 5B). 4, 5 manage significant amounts of data on their customers, end-users, product use, distribution and so on. Done effectively, these data can be married with other data from customer relationship management (CRM) systems, marketing campaigns and other corporate systems to create a business intelligence (BI) goldmine to support and enhance marketing and sales effectiveness. As more therapies with REMS requirements come to market ( Box 1 ), there will be an increase in the availability of data that can be collected and mined to gain competitive advantage. Marketing, Sales, Business Operations and IT departments at pharmaceutical firms, and therapy distribution entities need to take notice of this paradigm change, and develop the capabilities to provide 360 business-focused visibility to marketing, sales and business management stakeholders. From a BI context, this can be achieved by doing three things: (1) taking steps to acquire, integrate and link different sources of data now made available owing to a REMS program; (2) developing key performance indicators (KPIs) and metrics to measure REMS program and partner effectiveness; and (3) Developing the systems and processes to provide dashboards, reports and alerts to business stakeholders on business performance. A CLIENT CASE STUDY A client recently launched a product requiring REMS with ETASUs in a therapy area that had several challenges including several competitor and surrogate therapies, and the need for a partnercontrolled specialty distribution channel (that is, in control of various touch-points with customers, physicians and patients). The company had no prior experience with either REMS or the specialty distribution channel, and the onus was on the company s business analytics (commercial operations) group to ensure that the information needs of all stakeholders in Marketing, Sales, Regulatory / Compliance, Business Operations and Finance units were met once the product launched. Implementing REMS with ETASUs provided the company with access to 85

3 Mathias et al rich patient- and physician-level data, including demographic profiles, physician prescription activity and patient-level product dispense information. These additional data, if acquired and integrated correctly in a timely fashion, could provide stakeholders with various new information including effectiveness of marketing and sales campaigns on physician behaviors, and impact of business process enhancements in the specialty distribution channel on ensuring patient persistence and compliance to therapy. In order to avoid boiling the ocean, the business analytics group developed a vision of what was essential to be measured, both to determine impact of the implemented strategy and to further improve the business process. With a clear objective in mind, the group defined KPIs and metrics, and proactively worked with partners and stakeholders to develop the business process, data collection, data integration and reporting capabilities. This did not come easy, and typically companies will need to invest in this phase to ensure that they develop the right capabilities to support the longer-term business needs of the firm. The REMS life cycle can be broken down into three distinct phases, namely the pre - launch phase, the immediate post-launch phase and the steady - state phase. The three phases repeat each time there are changes to the REMS program design or implementation, and the level of effort required varies according to the nature of the change. With correct prioritization and execution of activities in each of these phases, the company ensured the successful launch of a business process that was outrightly effective at launch and proved scalable in a continuously evolving market space post launch. Pre-launch phase In the pre-launch phase, companies identify what their goals and objectives for the product and market are going to be, develop the metrics and KPIs they would need to measure and monitor their business performance to goal, and define requirements for the BI systems. Before launch, the group worked with corporate strategy and marketing to assess the goals and objectives for the product and market. This enabled them to work with their stakeholders and partners to develop the KPIs and metrics required to measure performance to goal and market. The group worked with many unrelated and competing partners with different reporting capabilities and varying business significance to the company, to make sure that they agreed to a common data strategy that the company wanted to implement. This was necessary to ensure minimum cost overhead for the company and the partners in capturing and integrating information. In addition, knowing of any major partner s inability to report the required information elements upfront would have allowed the company sufficient leeway to adjust its data strategy and business rules accordingly. In addition, they were able to use surrogate and competitor product data 6 from third parties, and specialty distribution partners, to prototype BI systems and scenario model business rules. This step helped validate their business processes, data flow, business rules, KPIs and metrics, and gave the group and their stakeholder confidence in their post-launch ability to monitor both process and partner performance, and ensure REMS compliance. Immediate post-launch phase The immediate post-launch phase occurs right after the product hits the market and the REMS program is in effect. This is a critical phase as it can make or break a launch, and set attitudes among customer 86

4 Using business intelligence for strategic advantage segments, and product adopters. At this time, companies are rightly focused on launching hard, meeting forecasts, and eliminating bottlenecks or barriers in product adoption. Given the high patient lifetime value of therapies, investments in BI can pay handsome dividends by ensuring that patients adopt and stay on therapy. Once the product launched, the business analytics group turned focus to actively monitor KPIs and metrics, and adjust business rules to reflect realities in business process and data quality. Early on, the group was able to achieve several quick wins, by identifying bottlenecks in the distribution channel that were impacting the product s launch performance. Some examples of these bottlenecks include: partners who were unable to provide product to patients within a 2-day window (agreed upon service level), physicians writing prescriptions for compliance purposes, partners who were projected to run out of product inventory because of high patient triage volumes. The rapid identification of bottlenecks enabled the company to resolve issues in days rather than months. This ensured a consistent rate of adoption and maintenance of patients on therapy, and prevented negative publicity from vocal early-adopting customer / physician segments about gaps in process or partner service. 7 Over the next 6 8 months, the company continued to develop BI capabilities to provide sales and marketing stakeholders with near real-time visibility into performance to plan sales force penetration and product uptake by customer segments. These capabilities were also used to monitor channel partners and ensure compliance with FDA-specified procedures for information management and that their behaviors are creating a positive experience and truly mitigating the burden associated with REMS programs, to improve product uptake and customer satisfaction. Steady-state phase The steady-state phase, as the name suggests is an ongoing phase where continuous improvement and refinements in business process capabilities are done to support the product. BI can be leveraged here for two main objectives: (1) support the ongoing business process by providing visibility into metrics and KPIs across different key dimensions such as product sales, sales force and promotional effectiveness, customer segments, and partner and process performance; and (2) monitor that changes to the business process, related either directly or indirectly to REMS requirements, do not impact product adoption. After ~ 12 months, when the majority of issues were operational rather than implementation related, the business analytics group shifted focus towards standardizing key analysis, metrics and KPIs required on a periodic basis by key stakeholders in marketing, sales, compliance and management. This was done to move towards a more mature operational support model, which is more efficient, cost-effective and would free up resources to focus on other responsibilities. The company s BI investment continues to scale up, serving the company stakeholders in marketing and sales by helping measure return on investment (ROI) of promotional programs (marketing campaigns and sales force activity), aid behavior-based customer and end-user segmentation efforts based on actual treatment patterns and product usage. In addition, stakeholders in business and marketing operations benefit from being able to monitor partner and process performance. Two recent examples of the value of the approach include identifying delays in insurance benefits verification 87

5 Mathias et al that were having a negative impact on patient service, product adoption and physician perception of the REMS program and product inventory stockpiling beyond contract compliance ahead of annual price increase. Key benefits In the course of this case, we observed several benefits this company reaped from their BI strategy, which can be useful for others facing a product launch requiring a REMS program. Specifically, this company: averted a sluggish sales take-off of product sales during the critical 3-month window post launch, by identifying business process bottlenecks and their causes, and assessing sales impact; identified and mitigated sales impact, owing to negative changes in customer preferences and behaviors, brought about by changes to marketing messaging, business process changes and sales force activities; improved partner performance and behavior, by auditing partner KPIs and metrics to meet contractual service-level agreements; enhanced ongoing business functions by providing rich, accurate and timely data for use in segmentation, targeting, forecasting, inventory management and brand planning. DISCUSSION REMS programs with ETASUs create a burden of compliance, which can have an impact on a company s business Effective and holistic BI is a critical tool to help manage the business impact of REMS, while creating opportunities for marketing and sales using the rich patient- and customer-level data available owing to REMS. BI is driven by the emphasis on KPIs and other business metrics (financials, sales, growth and so on), which are in turn driven by the quality of data acquired, and the quality of data integration. Having a well-defined BI plan can help one unlock value from the data a firm is mandated to collect, turning a burden into a resource to drive business effectiveness. Companies either in, or potentially going to be in, an REMS program should consider the following questions: Does your company collect, integrate and report on data collected across various touch-points in the REMS required business process? Have you used this information to help your company streamline the business process, or monitor partner performance? Have you combined the information across your REMS business process with other third-party data sets and internal systems to improve your marketing and sales force efficiency and effectiveness? Table 1 illustrates the underlying business benefit associated with having BI capabilities around key ETASUs. Limitations The case study outlines the benefits for a company that had restrictive REMS with ETASUs, and started developing a BI strategy 6 months before launch. Companies hoping to follow a similar path may have limitations, which include: Lack of BI ROI, owing to the nature of product, therapy area or market dynamics. Ability or capability to develop and implement a BI strategy. Level of cooperation and competition across partners in the distribution channel, and the ability of the company to control it. 88

6 Using business intelligence for strategic advantage Table 1 : Business intelligence and business potential of REMS ETASUs ETASU Business intelligence potential Business benefi t Patient / physician enrollment Patient data collection Managed distribution Get customer information (both patients and physicians) including their profi les, demographics, prescription habits Get periodic information on patient lab test results, demographic changes, prescription and physician changes Get patient-level information on who is on, how much, when they go on / off therapy In addition payer information can be obtained for advanced managed care analytics Knowing your customers, can help in segmentation, targeting, forecasting and business planning Keep information on customers current Utilize additional data collected for mining potential impacts to sales, targeting, forecasting, segmentation, business planning Track patient persistence and compliance to therapy over time Mine data for segments by patient and physician behaviors, and use information for marketing messaging development and sales force effectiveness improvement REFERENCES 1 US Food Drug Administration. ( 2010 ) Approved risk evaluation and mitigation strategies, InformationforPatientsandProviders/ucm htm, accessed June US Food and Drug Administration. ( 2010 ) FDA drug safety communication: Erythropoiesis-stimulating agents (ESAs): Procrit, Epogen and Aranesp, PostmarketDrugSafetyInformationforPatientsand Providers/ucm htm. 3 BioPharma Today. ( 2008 ) The REMS report card: FDA using new tools for one-third of new drugs in first six months. 11 November, 4 Jeffrey, S. ( 2009 ) FDA to require risk evaluation and mitigation strategies for opioids : Medscape Medical News, February, viewarticle/ ZS Associates. ( 2008 ) Internal firm research and analysis. 6 IMS Health. ( 2009 ) Pharmaceutical industry sales and new product introductions data. 7 WK Health. ( 2007 ) Pharmaceutical industry sales and new product introductions data. 8 Morel, H. and Murphy, R. ( 2009 ) Dealing with REMS challenges in drug commercialization. Pharmaceutical Commerce (July / August) : Shelley, S ( 2009 ) Industry tackles the new REMS hurdle. Pharmaceutical Commerce (November / December) : Deshpande, R. ( 2009 ) REMS Programs: 5 Trends to Watch. The RPM Report, August, pp