McKinsey's 4 drug launch flavors: Good, bad, ugly and misguided

Zytiga--Courtesy of Johnson & Johnson

What's the probability of a good drug launch? About one in three, according to a new McKinsey & Co. analysis. And if a launch is good, it tends to be very, very good, beating forecasts year after year.

That means two-thirds of drug launches fall short of expectations. And once a drug launch goes bad, it stays bad. Fortunately, says McKinsey, a sharp analysis of the product and its market can start things off on the right track.

McKinsey consultants looked at 210 drug launches and found that half of the drugs that beat forecasts did so by twofold or more. The products that performed continued to do so, too, with about two-thirds beating expectations their second year on the market. But of the drugs that fell short in their first year, 78% lagged their second-year forecasts, too. And 70% of those laggards didn't measure up during their third year on the market.

On that disappointing news, the researchers took a closer look at a sampling of new drugs--60 in all, some of them obvious home runs and others not so much. Here's what they found:

Johnson & Johnson's ($JNJ) prostate cancer treatment Zytiga exemplifies the best kind of launch: a new drug for a pressing health problem that's very different from its rivals. These products might seem to be no-brainers, but that sort of complacency can kill a debut. "Capturing their full potential still requires shifting substantial resources from in-line brands to finance the launch," the consultants wrote. That means anticipating potential obstacles--reimbursement, for instance--and spotlighting the drug with doctors and patients, early and often.

The Zytiga model accounts for only one in four launches, though. More than half involve drugs that are "moderately differentiated" from competitors, stepping into disease areas that are already well established. The mission here? Stand out from the crowd. That means finding a product's edge, by divining patients' and doctors' needs better than the competition does. Competing on price can't hurt, either.

The remaining one-fourth of drug launches involve uncharted territory. About 15% of all new drugs amount to well-differentiated treatments that have to create their own markets. McKinsey's researchers cite Gardasil, Merck's ($MRK) human papillomavirus vaccine. The company had plenty of data showing the shot worked but had to persuade parents and doctors it was necessary. McKinsey says pharma companies need to understand the market's unmet needs, invest enough resources and be prepared to change course if their efforts aren't working. Merck arguably did all of those things, but it's still struggling to win over skeptical parents.

And then there are the drugs McKinsey dubs "market shapers." They're undifferentiated products in disease areas that aren't well established. The advice? "Once the decision to market such a product has been made, the priority for these market-shaping launches will lie in securing access for the product and effectively establishing unmet needs." Which implies that deciding to actually market such a product might not be a fantastic idea.

- read the McKinsey article

Special Report: Top 15 drug launch superstars - Zytiga | Top 10 drug launch disasters