Drug sales life cycle?

[Olmsted]

I normally shy away from biotech (ok, not shy away so much as avoid it like the plague).  But I'm looking at a couple ideas that require me to determine peak sales for a new drug, how quickly peak sales are reached, and what sales would look like for the first 18 months after approval. 

 

It seems that someone, somewhere ought to have compiled data on past drug introductions and the shape of the sales "curve" over time.  Having trouble finding anything like that though.  Any pointers?

[CONeal]

I normally shy away from biotech (ok, not shy away so much as avoid it like the plague).  But I'm looking at a couple ideas that require me to determine peak sales for a new drug, how quickly peak sales are reached, and what sales would look like for the first 18 months after approval. 

 

It seems that someone, somewhere ought to have compiled data on past drug introductions and the shape of the sales "curve" over time.  Having trouble finding anything like that though.  Any pointers?

 

If its a band new drug to market normally it takes 6 months to ramp up the sales process.  Around 6 months you will have an idea if the drug will be successful.  All the drug tracking companies use statistics to come up with their weekly numbers so they can be off.  In the past I have seen drug launches where the IMS weekly script numbers were so horribley off, the difference was over 10,000%. 

 

It's hard to look out over a year for a brand new dug b/c alot of factors come into play and really its just guess work.

 

If its a new generic drug coming to market.  Full pentration will be achieved within 60 days.  Normally its 30 days.  PBM's start to dwindle down the brand name drug so that everyone needs a refill around the time the generic is expected to come to market.  There is a court hearing if the generic can be sold.  PBM's already have the generic on hand and within a week of court approval they are sending out letter letting people now they need to switch to the genric b/c they will not be covered for the brand drug.  Generics are where the PBM's get their margins.

 

 

[Olmsted]

I normally shy away from biotech (ok, not shy away so much as avoid it like the plague).  But I'm looking at a couple ideas that require me to determine peak sales for a new drug, how quickly peak sales are reached, and what sales would look like for the first 18 months after approval. 

 

It seems that someone, somewhere ought to have compiled data on past drug introductions and the shape of the sales "curve" over time.  Having trouble finding anything like that though.  Any pointers?

 

If its a band new drug to market normally it takes 6 months to ramp up the sales process.  Around 6 months you will have an idea if the drug will be successful.  All the drug tracking companies use statistics to come up with their weekly numbers so they can be off.  In the past I have seen drug launches where the IMS weekly script numbers were so horribley off, the difference was over 10,000%. 

 

It's hard to look out over a year for a brand new dug b/c alot of factors come into play and really its just guess work.

 

If its a new generic drug coming to market.  Full pentration will be achieved within 60 days.  Normally its 30 days.  PBM's start to dwindle down the brand name drug so that everyone needs a refill around the time the generic is expected to come to market.  There is a court hearing if the generic can be sold.  PBM's already have the generic on hand and within a week of court approval they are sending out letter letting people now they need to switch to the genric b/c they will not be covered for the brand drug.  Generics are where the PBM's get their margins.

 

Interesting - and helpful!  Let's just say it is a brand new drug with expected peak sales of $1b/year.  You say about a 6 month sales ramp-up.  After 6 months, what rate of sales compared to peak might be a reasonable guess?  50%?  75%?

[CONeal]

I have never look at it as a % of total sales at peak.  The billion number that the company gives out is bs for peak.  6 months after launch you will know if you have a drug that is actually marketable and if doctors are accepting the drug and writing scripts for it.

 

The new drug will need a drug code in order for it to be accepted by Medicare and Formulary.  These things can not be done before approval.  Most try to fit under an existing code at first.

 

If your drug has competition is it the best of breed?  Are there benefit that your drug offers not available by other drugs on the market?  doctors will keep this in mind when considering to write scripts.

 

A doctor has to be comfortable with what the drug does to his patients.  In the first couple of months he might try it out on a few patients to see how they react before writing the script for all patients.

 

One very important thing to keep in mind.

 

The company that is selling your new drug, do they have other drugs already on the market?  If not and they plan to sell the drug themselves, they have to build up a sales force.  Eduction and training of the drug takes time.  It's completely different to be a research company and a drug manufacture.

 

The biotech companies I invest in is first do I understand the drug and its benefits.  I'm not the sharpest tool in the woodshed so it has to be something very easy to understand.  The more complex the drug and benefits the harder it is for acceptance.  There has to be a clear benefit to the drug from a doctors view.

 

There will be delays and rough sailing bringing a drug to market.  You have to be comfortable and prepared for the setbacks.  If you know your drug works and that there is a clear benefit above everything else on the market. It makes it easier to ride the rough waves.  And there is sure to be several.

 

I do look at the total number of people affected and could use the drug. 

[CONeal]

also, where is your drug at in the approval process?  Phase 2, Phase 3, Submitted for approval?