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Case Study: 

Developing a Channel Strategy Through Benchmarking For a First-in-Class Product Portfolio

By Mike Scott, Partner & Paul Callahan, Principal

11.9.2021

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First-in-class products are designated as such because they have a differentiated Mechanism of Action (MOA) than those currently on the market. Innovative and developed to provide new treatment options for patients, first-in-class products – often belonging to the biologic category – pose specific challenges to the companies that develop them. Developing launch strategies, and in particular channel and distribution strategies for these products, can be arduous due to the lack of comparative data or direct competitors. While it is true that having the ability to identify what approaches worked or did not work for manufacturers marketing a similar product is critical in determining which strategies will work for a new product, there are other important considerations and methodologies that can be used to glean the information needed to construct solid channel strategies for a first-in-class product.

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Challenge 

A late clinical-stage biotechnology company had several first-in-class therapies advancing through clinical trials. They were interested in gaining deeper insights into the evolving trade and distribution landscape and were seeking assistance in developing channel strategies to support the upcoming launches into the existing competitive market. Because they had multiple products in development, our client was seeking to identify a multigenerational channel strategy and approach that would serve both their internal and external customers while balancing the needs of their channel partners against their existing key objectives, capabilities and constraints.

Our client also requested help with implementing and executing the strategies ultimately chosen, including identifying all channel partners and developing their own best-in-class channel distribution and service agreements on the client’s “paper”.

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Solution

A plan was developed in partnership with the client’s leadership team to develop a multigenerational trade and distribution channel strategy to support the first commercial product launch and the expected subsequent launches. This included creating an actionable roadmap that detailed the necessary tools and tactics necessary to execute this strategy across the US market.

 

Breaking the project into phases, Protean committed to the following:

Phase I:  Conduct a Distribution and Channel Insights Session along with a Current State analysis of the client’s contemplated commercialization strategies, including a deep dive into multiple competitive analog products to better understand who they sell to and through and the rationale behind these choices. Potential gaps or opportunities in both the contemplated strategy and the organizational structure were also assessed. The session ended with the development of the client’s channel objectives.

Phase II:  Based on the identified channel objectives, Protean then led an interactive Channel Strategy Design Session that including the development and presentation of 3 unique options including financial models, pro/con analysis and organization requirements and the identification of trade and distribution partners best suited to support objectives.

Phase III:  Create the go-forward business case and action plan based on the identified strategy. This business case included a review of the strategy process, the chosen solution, identification of the ideal specialty distribution partners, a profile of a short-list of specialty pharmacy partner(s), a review of the channel options not chosen and the rationale for non-selection. A review of the total channel costs, risks and mitigation strategies, organizational and departmental requirements, and a detailed calendar of events to support the action plan was also conducted which included the tools, tactics and timelines necessary to execute the strategy.

Phase IV:  Assist the Senior Director of Trade and Distribution with implementing and executing the chosen strategy. This included the onboarding and new manufacturer set-up with the specialty distributor network. Protean also managed the request for proposal (RFP) process to identify both the third-party logistics (3PL) provider and the specialty pharmacy provider(s) (SPP). The preparation and writing of the specialty distribution agreements on the “manufacturer paper” and negotiation support to execute the required contracts with the 3PL, SDs and the SPPs in the network were also handled by Protean.

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Results

The resulting US Distribution Channel Strategy and configuration developed by Protean in partnership with our client allowed us to accomplish the following:

  • Maximize the value of the channel – driving and protecting net revenues

  • Create sustainable strategies with longevity and competitive advantage (if possible)

  • Control variables such as product, price, site of care/site of access

  • Optimize transparency and visibility to actionable data across the commercial enterprise

  • Ensure the client’s organizational structure and the vendor partner support and capabilities met or exceeded the needs and requirements of the organization and patients while managing cost and financial limitations

  • Be multigenerational to accommodate and support current and future product launches

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