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Prilosec to Nexium. OxyCodone to OxyContin. ProAir® HFA to ProAir Respiclick. What do they all have in common? The original versions of these drugs have since been improved through the process of reformulation. In this article, we’ll discuss the the benefits of reformulation as a business tactic that extends beyond the lab.
At Pharma Acumen, we have helped clients apply reformulation strategies to lengthen the life cycle of their business assets and to expand or develop new services for pharma companies. In our experience, the ability to reformulate assets is often the differentiating factor between successful companies and ones that fall by the wayside.
Reformulation Strategy
Drug companies rely on reformulation to improve therapies while protecting the loss of patents. Reformulation can also be a compelling strategy for businesses that sell to pharma. The art of taking existing assets or capabilities and reformulating them for new clients or situations can increase profits and reduce initial time investments. However, to safeguard success, several factors needs to be considered before beginning the reformulation process.
1. Why?
Reformulated drugs hinge on their ability to meet patients’ needs better than the original formulation. Before beginning the process of reformulating your own assets, you must determine why you are reformulating. Revamping offerings just to increase profits may backfire unless you are able to offer additional value or meet a previously unmet need.
“If nobody wants or needs your product, it is bound to fail,” writes Juan Manuel de Toro at Forbes. “The starting point for all product development should be to analyze the needs of current and potential customers, their levels of satisfaction with what the competition is offering, their consumption habits and the technical possibilities for improving existing products.”
2. Timing
Reformulating an asset is useless if you miss your window of opportunity for offering it to the market. Pharma companies whose reformulations enter the market after a generic of the old drug has come onto the scene are less likely to succeed. In the same vein, releasing a revamped offering after a competitor puts your business in a weaker position than if you had relaunched first.
In our own experience working with dozens of businesses that sell to pharma companies, we have seen that the best way to avoid mistiming a product reformulation is to ensure that your evaluation and planning process is consistent and systematic. Part of your process should include analyzing the market need and timing for a potential new reformulation.
3. Pipeline
Along with timing, your development pipeline is important to keep in consideration when evaluating which offerings to reformulate. It’s critical to determine the number of assets that need reformulating while at the same time remaining agile enough to maintain existing offerings.
While reformulation can be a great strategy for creating and sustaining business growth, it’s easy to overtax your existing resources with too many changes at once. We’ve found that spreading your systematic planning throughout the year and not just by annual budgets is a successful strategy for combating the tendency to take on too much. Consider planning out the next 5-6 quarters and updating your plan every quarter (instead of once per year). “A good business or product offering is fluid in its design and is constantly trying to improve, to keep up with its competitors and its customers’ needs,” notes George Deeb at Entrepreneur.com. Yet, he cautions that “you can't expand while your house is on fire.” Reformulation, while valuable to success, needs to be integrated into a wider business strategy to be effective.
4. Competition
The last, but certainly not least, factor to consider when reformulating assets is the competition. Your competitors are waiting to copy your offerings and steal business. Reformulation can keep you one step ahead while ensuring that you are abreast of industry trends and what clients value. Stave off the competition by focusing on what differentiates you and translating your value to customers in a meaningful way.
Reformulating also boosts your prominence as a thought leader. If you have your pulse on industry trends and know how to convert those trends into valuable products, your clients will notice. Others will copy you, resulting in new business and opportunities.
Conclusion
Reformulation isn’t just about increasing the bottom line; it’s about helping clients. To be successful, reformulation should offer something valuable or new to clients. Understanding why you are reformulating an offering is paramount to its success. We have also seen that precise timing, strategic pipeline planning, and awareness of your competition are also factors that need to be considered to improve your reformulation strategy.
When it comes to evaluating your company’s product reformulation, whether you need a second opinion or could use more in-depth analysis, Pharma Acumen has the tools and knowledge to help you successfully reformulate aging assets. We’d love to put our extensive experience to work for you. Contact Brian Bamberger to learn more about how we can help your business.