The SituationCase Study:

When to Remove Sales Force Support For a Brand Losing ExclusivityBusiness IssueWhen facing patent expiration, there are a number of tactics a pharmaceutical company

employs to ensure that the life of that branded drug is prolonged just enough to meet

forecasted demand. It is critical that resources are allocated appropriately so that last

stage promotional strategies continue to influence without unnecessary expenditure.

Finding the right balance of tactics that help to mitigate the effect of predicted sales

loss is key. Often, approaches to finding this balance require years of advanced planning,

A major drug on the market for more than a decade was facing patent expiration within 18 months. Key considerations for the brand team were:

• Preferred drug in its class for treatment

• Ranked high among specialty and primary care audiences for effectiveness and tolerable side effects

•No new drugs within the same class in development by the company

• $2 billion forecasted in annual sales

Deciding when to end or reduce sales force support was critical to the company’s financials. Factors affecting the brand team’s analysis and final recommendation included the following:

• Effect on rep employment

• Significant loss in employee training investment

• Potential impact on customer satisfaction from loss of support and product samples availability

• Prospect of higher revenue loss from prematurely ending sales coverage

such as line extension strategies; other approaches can be developed and executed within

the year prior, such as strategic pricing initiatives. The ideal mix of sun setting tactics

is almost always influenced by the unique dynamics of a market for that particular drug.

However, these complex regional attributes, such as level of customer adoption and loyalty,

the number of generics entering the space, or even the ease or complexity of delivery

methods, can limit the ability to uncover both tactical and strategic performance insights

for effective decision-making.

• Significant cost savings of $157 million

• $2 billion forecast met

• Predicted sales loss between $4 million and $8 million was not realized

• Definitive actionable insights robust enough to satisfy scrutiny or challenge

Key Outcomes

Decision Point:When should sales reps stop promoting this product?

Copyright © 2012 Model N Inc. All rights reserved. Model N is a trademark of Model N, Inc. All other trademarks mentioned are the property of their respective owners.

1800 Bridge ParkwayRedwood Shores, CA 94065Phone: 650-610-4600Fax: 650-610-4699www.modeln.com

Solution

A highly informed, data-driven decision process that leveraged rigorous analytics

Due to the sensi t i ve nature and s t ra tegic implications involved, the decision materialized in two stages.

Stage 1: Data Production and Delivery

First, the brand team took steps to analyze and organize the data from the following sources:

• 24 months of detailing and sampling history

• 24 months of territory vacancy data

• 24 months of NRx and TRx sales at the physician level (IMS Xponent Monthly)

• Cost of territory information from finance

The brand team then produced the following two data sets:

• A physician level data set with historical calls, samples, and Xponent information

• A territory level data set with Xponent trends over 24 months as well as specific months of territory vacancy

Stage 2: Author and publish deep exploratory analyses

Using Model N’s Brand ImpACT, the brand team conducted the following analysis for insights into promotional and regional response:

• First data set contained physicians segmented by specialty and by cluster

—60 segments developed for individual behavior analysis

—Segment cur ves viewed to analyze territory vacancy occurrence

• Second data set studied territory vacancy to observe erosion over time

• The two data sets were then triangulated for further analysis

The brand team ultimately determined that more Primary Care Physicians (PCPs) were new brand writers, since new indications shif ted from a

specialty drug to a primary care drug. With monthly refreshes of Model N’s Brand ImpACT, analysts confirmed the findings and spun off additional related analyses, such as rep vacancies.

Results

Definitive insights resulting in significant savings and no observed sales loss

Based on accurate, specialized and consolidated data sets leveraged by Model N’s Brand ImpACT, the analysis process revealed that:

• Recent sales growth came from non-targeted physicians

• The end of personal promotion could begin 9 months before patent expiration

• Additional reminders on the use and efficacy of the product were not needed for prescribers to continue its use

• Vacant territories showed an initial increase in sales (likely due to lack of cannibalization by samples), followed by a slow erosion

• Segments that were not receiving promotion at all were actually growing in volume

Based on these insights the following action was taken:

• S ale s f o r c e s w er e d isb an d e d a t t h e recommended 9 months prior to LOE

From this, the company ultimately benefited from the following:

• Cost savings from removing sales support estimated at $157 million

• Projected sales loss set between $4 million and $8 million was not realized, in fact no sales loss occurred

• Sales continued to rise to the $2 billion mark

An additional benefit resulting from this analysis was that hundreds of sales reps were able to move to other positions within the organization through natural attrition. Early planning and a clear plan of action allowed valuable resources to remain with the company.

For further information please contact:

sales@modeln.com

About Model NModel N is the leading provider of Revenue Management and analy t ics solu t ions for L i fe Sciences manufacturers. Our Revenue Management Solutions deliver substantial value by enabling our customers to capture lost revenue, improve gross margin, and reduce financial risk. Top ten and emerging industry leaders use Model N analytics solutions to gain actionable intelligence and drive strategic decisions across Marketing, Sales and Finance.