The pharmaceutical industry has a product development pathway that is unlike any other. The average cost of bringing a pharmaceutical product to market has reached USD 2 billion, yet more than a third of the new assets fail to meet expectations. With the ever-increasing drug development costs coupled with intense competition and complex distribution logistics, developing an adequate launch strategy for a new product remains one of the more difficult decisions a pharmaceutical company must make. Therefore, manufacturers must ensure product scope and efficacy due diligence before investing so much time and resources into a new product to prevent substantial losses.
What is product efficacy testing?
Product development for pharmaceutical companies is long and arduous, not to mention how capital-intensive it is. Every new molecule and similar others undergo a development pipeline spanning years of research and development. It encompasses stages like drug development, formulation, pre-clinical, animal studies, clinical, and then human testing, where it is finalized. Even after the molecule is finalized, it undergoes rigorous research and development for a successful launch to ensure adequate Return on Investment (ROI).
Product efficacy testing is essentially that phase of testing carried out in a laboratory, or in-house, to learn about the product’s characteristics and performance before it is commercialized. It is the testing that substantiates the claims made by the product. The efficacy testing of a product strongly influences its development strategies and capital intensiveness. It is also a strong differentiator for whether the product can be launched successfully or solves a particular problem efficiently, which is the driving factor behind RnD in pharma.
Why test product efficacy?
Many of the product failures in pharmaceuticals can be attributed to the market access challenges the products face. Without adequate market access, patients fail to trust the entire healthcare system’s ability to ensure proper access to modern solutions. However, this makes up 50% of drug launch failures, with 46% attributed to poor understanding of the market and customer needs and 44% to poor product differentiation.
Product efficacy can determine the product’s inherent abilities and ability to solve consumers’ problems. Therefore, adequate research and analysis of product efficacy are a driving factor in deciding whether a product can be commercially successful. Not just that, product efficacy claims drive the marketing funds that are spent on a new product – which are some of the most expensive activities undertaken during a new product launch in pharma.
Why is pharmaceutical market research so crucial in RnD?
Market research in pharmaceuticals, unlike FMCG industries, is not just a part of marketing campaigns but is involved at every stage of new product research and development. This is because pharmaceutical market research services can help companies better understand the market – allowing them to gain more insight and information, culminating in improved decision-making. Developing new products requires several key decisions, and well-structured market research helps establish proper guidance for making them. This can also allow pharmaceutical companies to get more out of limited resources, effectively reducing costs during manufacturing and new product development.
How can pharmaceutical market research help understand product efficacy?
Research and analysis play an important role in the pharmaceutical industry. The major driving forces of the pharma market are new developments in the pharmaceutical and the life sciences industry, driven by government support and positive RnD work. Therefore, product efficacy testing relies highly on dynamics and consumer understanding. Some of the benefits of understanding product efficacy through top-notch pharmaceutical market research include:
A) It allows the segmentation of markets, which provides insight into market access for the companies, helping them better their market launch strategies.
B) It allows an insight into the efficacy testing market based on products and services – like consumables, instruments, technologies, etc., which can enable manufacturers to decide whether they want to do it in-house or outsource it to CROs to save resources.
C) It can allow for differentiation based on testing markets – depending on what countries prefer the US Pharmacopoeian, European Pharmacopoeian, or Japanese Pharmacopeian standards.
D) It can allow for a geographical understanding of product demand based on regulated claims – allowing for better penetration of markets and exponentially improving market access.
E) It can help identify key players in the market – which can help understand the standards the company needs to meet in a particular product demographic to achieve maximum profitability.
While these are some of the significant offerings of pharmaceutical market research for product efficacy, many more segmentations are offered to gain invaluable insight with limited resources through market research. Business growth in pharma is highly driven by crucial market intelligence solutions, especially in product efficacy, including collaborations with clinical research organization (CRO), which can ensure a holistic understanding of the product market and minimal losses. Strong market research comes with understanding the product’s commercial relevance to the market, providing a competitive advantage.