Challenge
The problem with portfolios is that they are looked at as one and this does not reflect the reality. This portfolio was 15 medicines, the majority of which were in one therapy area. As a whole the portfolio was losing volumes year on year, losing revenue and losing margin to an even greater degree but this varied across the products. The affiliate were under pressure from the parent company to take action in order to arrest, or ideally reverse, the decline.
Action
Our first step was to gain granularity. One portfolio became 15 products, and related brands were grouped. We reviewed their revenues, margins, market shares and trends and used that data to identify the brands to focus on – more than 80% of the business came from a third of the products. We understood where the loss was coming from: declining markets, loss of market share or increasing discounts for example and, from there, made recommendations.
Result
Having understood the reason for the decline we reviewed options of actions to take. It was important to highlight which levers to pull – the “play” for a generic where the point of dispensing is key is quite different to a brand where it is the point of prescribing. For each target brand we explained the position and trend, presented the options to change the trajectory and the risks, upsides and timelines. We agreed with the client which options fitted the business best and moved to a deeper dive.
Next Steps
The choices were driven not only by what would work best but also by what fitted the organisation’s current needs. The affiliate team presented the situation and one of more potential solution, costed out, to upward management. The global company understood the position and either went on to agree the programs or, where the options were to expensive, too risky or too slow to give a return, to accept the forecasts.
If you have a similar project, please do get in touch – info@hawkpharmaconsulting.com