Magazine Article | January 29, 2015

How To Make Your Science A Sustainable Business

Source: Life Science Leader
Rob Wright author page

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

The term “sustainable business” is frequently associated with a company being “green” and minimizing its environmental impact. According to Jim Robinson, president of Astellas Pharma US, sustainability in biopharma should equally be associated with having a positive cash flow. “People fall in love with the science, which is always exciting,” he attests. “Ultimately, however, scientists hope their idea will result in the launch of a commercialized medicine that will benefit patients.” Robinson, a 20+ year veteran of the commercial side of biopharma, shares business insights to consider when taking your company’s drug development dreams from concept to commercial reality and also reveals how to avoid letting the allure of science sink your potential product’s or company’s sustainability.

Robinson and I have something in common — we both got our start in pharma as field sales representatives. “I find some people are hesitant to say they are in pharmaceutical sales,” he shares. “When I encounter this, I tell them they should be proud, because sales is a noble profession.”

Think you can’t benefit from connecting more closely with the commercial side of the business? Think again. Some of the most successful pharmaceutical executives in the world got their start in sales. For example, Alex Gorsky, chairman and CEO of Johnson & Johnson, began his career at the world’s largest pharmaceutical company in 1988 as a sales representative with Janssen. Another pharmaceutical executive fond of saying he “carried a bag” is Fred Hassan. A legendary pharmaceutical company turnaround expert, Hassan brought Pharmacia back from the brink to be acquired by Pfizer for $60 billion, as well as Schering-Plough, which was acquired by Merck for $41 billion.

Jim Robinson was an employee at Schering during Hassan’s tenure as chairman and CEO. “I was very fortunate to observe Fred Hassan when he came into Schering-Plough to rebuild the company during a difficult time,” he states. Hassan was a big proponent of leveraging salespeople to gain valuable insights to improve his strategic decision making, a concept captured in the Harvard Business Review (July 2006) article, “Leading Change From The Top Line.” Robinson also is a believer of this strategy/model. Though his list of responsibilities at Astellas includes management of U.S. commercial operations across a diverse and growing portfolio of products, encompassing urology, immunology, oncology, infectious disease, and cardiovascular, Robinson interfaces a great deal with Astellas scientific and medical affairs (ASMA) and global medical development (GMD) in order to help the top 20 biopharmaceutical continue to build its U.S. business. “My organization represents what we call a strategic view of product planning,” he states. “We [the commercial side of the business] are involved in the development phase, in terms of the stage gates of our development, from Phase 1 through Phase 3.”

According to Robinson, sales and marketing play a pivotal role in developing the target product profile (TPP), which at Astellas is referred to as the product scheme sheet (PSS). The PSS provides a format for discussions between the company and the FDA throughout the drug development process — from pre-investigational new drug application (pre-IND) or IND phases of drug development through postmarketing programs that pursue new indications or other substantial label changes. If you have any experience in developing drugs, you are most likely familiar with the benefits of using TPP (e.g., serves as a living document to house the most current information on the intended product’s characteristics and use, provides your R&D team vision and focus very early in the process as to what the actual product could look like). However, depending upon your level of commercial exposure, you may not be familiar with how to leverage the knowledge and experience of commercial leaders to improve your drug-development process, or even why you should.

"Once you see a PoC, you definitely want to make sure there are clear and transparent partnering discussions taking place between commercial and development as to what makes sense in bringing a drug to market in the U.S. versus Asia or Europe."

Jim Robinson
President of Astellas Pharma US


For those who wonder how and why commercial insights should play a pivotal role in your drug development process, Robinson explains it this way: “We provide the R&D department information on what the customer — the payor, patient, and provider — finds important. This kind of data helps us understand what these customer groups need to see from the clinical development program or, in the final submission, to make a worthwhile product for our organization to commercialize. There are processes at Astellas that enable us to have a very robust review at each step in the development cycle.”

According to Robinson, at Astellas the commercial team becomes actively engaged in development when a product reaches Phase 2B. “Until this point, you’re really looking at proof of concept,” he states. “Once you see a PoC, you definitely want to make sure there are clear and transparent partnering discussions taking place between commercial and development as to what makes sense in bringing a drug to market in the U.S. versus Asia or Europe.” However, Robinson suggests you not discount the value of involving your commercial team even earlier in order to develop the best product with the maximum opportunity for reimbursement and access for patients. With today’s tradeoffs and limited resources, bringing commercial insights into a Phase 2A discussion could prevent working toward a PoC for a product that will never have any marketable value. “Why not kill it then,” he asks, “versus spending money on Phase 2B, then getting into Phase 3 where you’re spending a lot more money?”

Sitting across from Robinson during our interview, I must have unknowingly given him a look of skepticism as to the value of bringing the “voice of the customer” into a drug development discussion prior to Phase 2B, because he then leaned forward and stated, “I'll give you a real example.” Astellas had a drug in early-stage development. “Clinically, it looked valuable,” he relates. “Prior to the finalization of PoC, it looked really valuable.” This is the point at which the commercial team conducts a thorough market evaluation. “Our marketing intelligence organization did exhaustive market research, beginning with the therapeutic area,” he recounts. “They understand the market, the current products — if any exist — and make sure there is a well-defined and well-established unmet medical need. From there, we try to define the right product profile needed to be able to deliver on value outside of what the current treatment regiments are. Are we differentiated, or are we too similar to what the current standard of care is? If we are similar, what do we need to do to differentiate the product to be able to provide value?”

When assessing a potential market, another key component not to be overlooked is local, regional, and national insurance reimbursement and pricing. “When we looked at the current reimbursement environment, we found there were changes taking place,” Robinson says. “In terms of reimbursement, there was basically almost what I would call a DRG.”

In case you aren’t familiar, a DRG (diagnosis related group) is a means of classifying inpatient hospital stays for payment purposes. By grouping patients of similar disease state and stage, hospital administrators can accurately determine the type and quantity of resources required to treat a particular group, thereby providing better cost of treatment predictability. The DRG system, conceived in 1982 by Yale University’s Robert Fetter and John Thompson, is an effort to standardize hospital costs and reimbursement. Assigning patients to a specific DRG places the burden on facilities to work within a structured reimbursement system.

According to Robinson, assessing the reimbursement landscape for the early-stage drug revealed that payment would be capitated at a rate in line with other already-available treatments. These low rates of reimbursement would prevent the product from achieving profitability. Despite Astellas having a product that looked good clinically and with a clearly established unmet medical need, the decision was made to end the development program. “If there is no payment in Medicare Part B, and there’s no payment from the standpoint of commercial insurers, then the commercial opportunity doesn’t exist,” Robinson affirms.

He cautions scientists not to interpret his insights as commercial folk seeking to become experts in clinical development. “We’re not the ones who will know how to effectively power the study to achieve the optimal outcome,” Robinson says. “Our value add is bringing the voice of the customer into a partnering approach with development to help product differentiation that is best for the patient.” That being said, Robinson suggests that partnering your drug development program with commercial expertise should not be approached as a short-term commitment where sales, marketing, or managed-markets people are brought in sporadically to share insights. If you think of the partnership between drug development and commercial running from at least Phase 2 through loss of exclusivity, this could be a 15-year commitment requiring continuity to maximize productivity. “We’re not going to stop this relationship once the product' has been commercialized. Because, as you know, we have postmarketing approval commitments,” he reminds.

With regard to the early-stage drug, had the sole focus on science been allowed to cloud the business decision behind killing its development, Robinson believes Astellas would have ended up selling the product for pennies on the dollar. To effectively determine a product’s commercial opportunity, task the team first with determining the net present value (NPV) of the opportunity, being sure not to allow the allure of “cool” science to leak in and potentially sink your company’s sustainability — something Robinson knows from personal experience (see sidebar, "Don’t Let Your Science Go To Your Head" on p. 26).

Because so many biopharma start-ups are founded by scientists, the possibility exists for company founders to lack commercial experience. Virtual and small companies in early stages of startup may have limited resources to gather the voice of the customer. Regardless of your background, the stage of your company, or the size of your company, the worst approach to product development is for leaders to think they know what is best for the customer based on their own biased opinion. Scientists might believe their training in applying the scientific method (i.e., developing a hypothesis and setting out to prove it wrong) prevents them from falling prey to personal bias. However, the reality is that scientists are also as susceptible to the phenomenon psychologists refer to as “confirmation bias” — the tendency to seek evidence to support, rather than challenge, one’s beliefs. Even worse, according to author and philosopher Matt Ridley, confirmation bias seems to get worse with greater expertise.

When I asked Robinson how he would go about advising scientist leaders on how to avoid confirmation bias from getting in the way of commercial success, he responded, “I would ask them to tell me about the market for this drug and why it is needed. What unmet medical and patient needs will it fulfill? Do you believe you can successfully compete in the marketplace and win? Oftentimes, you’ll have discussions with folks who will say, ‘All we need is 3 or 5 percent of the market.'" According to Robinson, any time you hear leaders start with a caveat, you should question what they are trying to accomplish with the product. “When I hear the modifier, ‘All we need is’ at the beginning of an explanation, it sets off my antenna that either they’ve set their expectations too low, or they know the product does not have significant commercial potential.”

"If there is no payment in Medicare Part B, and there’s no payment from the standpoint of commercial insurers, then the commercial opportunity doesn’t exist."

Jim Robinson President of Astellas Pharma US

When asked what advice he had for executives lacking commercial experience, Robinson advised them to become phone and road warriors. “Talk to physicians, payors, and patients, within the appropriate confines of what the FDA will allow, and ask them to define for you what the perfect product would be for the therapeutic category you may be seeking approval. If the drug you're developing doesn't come close to their definition, then you've got to rethink your approach.” Robinson says, “If you want to know the answer as to whether or not a product will be reimbursed, best to pose the question to the person who’s going to influence such a decision.” Robinson says he has found insurance customers to generally be very candid and more than willing to give advice.

If you have access to a field or managed-care market sales force, he encourages you to get your scientists to go for a ride along with a field salesperson that doesn’t involve a “milk run,” and one that is possibly not in your home office’s backyard. “A milk run is when sales reps set up a day of going to all their favorite doctors to make sure all is well,” Robinson explains. While this might result in plenty of customer face time, it also is a biased sample. As for why to consider doing a ride-along away from your corporate office headquarters, despite the convenience and cost-savings benefits of doing it locally, the rationale is fairly obvious — cluster confirmation bias. While states like New Jersey and cities such as Boston can boast pharma and biotech clusters, if your company is in such a hub and seeking insights of local KOLs, odds are pretty good that so too are your competitors. And while KOL insight is always valuable, you would be wise to seek additional sources beyond those which are merely geographically convenient and perhaps more biased to tell you what they think you want to hear. Robinson’s final piece of commonsense advice is to be open-minded to what the customer has to say. “Be willing to listen to what they have to say in helping you to understand the market, and be less concerned about how their insights impact the perspective you hold for the product you're developing,” he suggests. Sustainable science and meeting patients’ unmet medical needs require commercial success, which is predicated on having thoroughly studied the market first.

Strong Mentors Don’t Always Come From The Workplace

Jim Robinson, president of Astellas Pharma US, admits to having been the fortunate beneficiary of strong industry mentors, such as Masao Yoshida, current CEO of Astellas Pharma US; Roch Doliveux, recently retired CEO of UCB; and leaders such as Fred Hassan, former CEO of Schering-Plough. For example, Doliveux pushed Robinson out of his comfort zone of working in the field to take a home-office position. “It was one of the best things for my career,” he relates. Observing Hassan played an important role in the development of Robinson’s leadership philosophy. “I heard him define leadership as ‘Know the way, show the way, go the way’,” he recalls. “I have lived this leadership definition ever since I heard him say it.” As for Yoshida, his current mentor, Robinson has been afforded the opportunity to enhance his team-building skills.

To be sure, any rising pharmaceutical executive would be blessed to have worked with and observed the abovementioned leaders. But you might be surprised to learn the name of a mentor who prompted Robinson to do what he says is one of the smartest things he ever did. Prior to joining Astellas in 2005, he read the book, The First 90 Days by Michael Watkins. “My mom actually got it for me when I came from Schering to Astellas,” he laughs. “It's the best advice — best book — I ever got for a particular career transition.” Thanks to mentor mom, after reading the book, he approached going from Big Pharma to a much smaller organization (at the time) with humility and a willingness to learn. “I listened for the first 30 days,” he relates. “I listened to the folks in the department; I listened to their frustrations, challenges, and issues. I listened to our internal customers in terms of the sales force, marketing, and finance.” In the next 30 days, Robinson built a plan with some of the people he met in the first 30 days who “knew their stuff,” as well as the folks experiencing the “pain points” and greatest level of frustration. “By the time the last 30 days rolled around, I had identified the low-hanging fruit and what was necessary to address in order to build momentum and belief and then foster long-term support for the department.”

This small act of mentoring by his mom continues to leave a lasting impact on Robinson. “Every time I have had someone leave or join the company, I insist they read The First 90 Days,” he shares. Like any good mentor, rather than relying on someone to go out and buy the book, Robinson, like his mom, provides a copy so they can get started on their first 90 days right away.

Don’t Let Your Science Go To Your Head

“Scientists getting too close to the science,” is a theme I hear consistently in my experience in industry. The expression relates to scientists falling prey to their own biases and letting their love for a drug, device, or theory drive bad business decisions. But scientists aren’t the only people susceptible to this phenomenon. We fondly remember how Steve Jobs proved doubters horribly wrong with Apple’s successful launch of the iPad. Critics expected the iPad to flop, and yet, it went on to become the hottest selling consumer electronics device of all time. But let’s not forget that Jobs, like many other entrepreneurs, had a lengthy list of failures (e.g., the Apple Lisa, Macintosh TV, Apple III, and the Powermac G4 cube), many the result of allowing his passion for a product to blind him to his personal bias.

Jim Robinson, president of Astellas Pharma US, can relate to Jobs as well as to scientists. “I’m better because of my failures,” he admits. For example, when working at a company prior to Astellas, Robinson was adamant the company had a better product than its competition. “We believed this so strongly that we pushed the leader of our overall specialty organization for a head-to-head trial,” Robinson recalls. “It’ll be the proof point, once and for all, that we've got the better product, right?” Wrong. According to Robinson, the certainty of having a superior product translated into bravado, which resulted in pushing for an unnecessary study. Modeling showed there was little potential benefit to be gained. “But we pushed and pushed, and so eventually, it was done,” he confides. What was the result? Turns out the expensive study revealed a tie. “The lesson learned is to know your boundaries,” Robinson attests. “Know what you're good at, know what you're not good at, and share with the team the challenges you're facing.” In this way, you can find multiple ways to address the challenges being faced and tease out the best approach. For example, Robinson says the company didn’t have to do a head-to-head comparison. “We could have done a couple studies to show benefits in discrete patient populations.”

If put in a similar situation, Robinson says, given this experience, he would take a much more measured approach. His advice: “Spend the money to do the right studies and build a robust dossier so you can paint a good picture of patient populations that will benefit from your product, instead of going for the home run everyone thinks is always possible.”