38-40 - NICE – but not enough:

NICE is a global reference point – with much of Europe (and the rest of the world) looking to it as a reliable barometer of payer thinking. For pharma, NICE Technology Appraisals (TA) – where they apply – represent critical milestones in the life cycles of brands, with positive guidance generally expected to be a catalyst for strong revenue growth. But great expectations don’t always work out.

In the UK, all medicines recommended by NICE must be funded/implemented within a mandated period of time once final guidance has been issued – with NHS organisations having a maximum of 90 calendar days after NICE publication to make a treatment available. This falls to 30 days for products included in the Early Access to Medicines Scheme (EAMS)
or those designated for Fast Track Appraisal.

The mandate is explicit, unless individual guidance specifies otherwise. As such, most pharma companies work on the basis that a green light from NICE is a guarantee of formulary adoption and, in turn, product sales. And they set their commercial expectations accordingly.
It’s wishful thinking.

A NICE recommendation may be a good indicator of payer thinking – but it’s not a slam-dunk for commercial success. It’s NICE, but it’s not enough.

This article looks at ways in which you can flex your strategy to improve commercial performance. Ultimately, winning is all about having great intelligence.

So, if we’re talking about intelligence, it makes sense to start with words of wisdom from someone widely considered a genius – Albert Einstein: ‘Assumptions are made. And most assumptions are wrong.’

Einstein wasn’t describing pharma’s approach to commercial strategy when he spoke of the dangers of guessing – but he very easily could have been. In too many cases, strategic decisions – in key commercial areas like targeting, segmentation, resourcing and multichannel planning – are based on assumptions not evidence. The data to help is out there, most notably buried in formulary updates that paint the real-world picture of what’s happening at the local level. For many companies, formularies are a source of untapped potential. There’s gold in them there hills.

Tracking formulary change isn’t easy – there’s no uniform format for publishing information and surprising variation in the ‘traffic light’ systems that define local availability. The legends that sit behind each formulary are diverse and nuanced, making them difficult to compare like-for-like. Furthermore, the spheres of influence of local formularies vary enormously, with huge implications for customer targeting. However, without a good grasp of the landscape, pharma’s commercial resourcing risks being scattergun and inefficient. What’s more, it’s likely squandering clear opportunities to accelerate growth.

Formulary change is constant and it happens almost by stealth. But the ability to map, understand and respond to it is key to executing evidence-based strategies. In a world shaped by assumptions, agile formulary intelligence is the only way to move from guesswork to differential detailing – where market access teams are deployed to target payers and get medicines on formulary, and sales messaging targets prescribers to get pull-through where adoption is secured. Differential messaging and resourcing is the only way to drive commercial success. Anything else is scattergun.

Let’s start with the assumption that NICE recommendations are implemented within
the mandatory 90-day period (or 30 days for fast-tracked products). A great illustration of why this is unfortunately a myth can be seen in Figure 1, which charts the formulary adoption of Olumiant (baricitinib) – Lilly’s once-daily pill for moderate to severe rheumatoid arthritis.

Olumiant launched in 2017 and received positive recommendations from NICE and SMC in the middle of Q3 that same year. However, by the end of the 90-day period, the product had been adopted on just 44% of NHS formularies in England. Today – more than three years after its NICE TA – Olumiant is finally approaching full implementation. Yes, that’s right – three full years. This pattern is not unusual – it’s repeated time and again across many new products buoyed by a positive NICE TA. In fact, Lilly’s achievement of 44% in the first 90 days compares favourably with other brands.

Driving implementation isn’t easy, irrespective of NICE directives; the NHS moves slowly, and local factors will invariably trump national mandates. Worse still, the financial impact of COVID-19 on local health economies has only increased the challenge; hard just got harder. It’s therefore ever-important to understand the local environment, be intelligent in your targeting and deploy resources accordingly.

Good data, and robust analysis of formulary trends over time, can help identify patterns of behaviour. Which localities are slow to implement? Who adopts early? Who prescribes early? And what are the factors on the ground that might be influencing NICE TA implementation? Knowing this allows you to align market access and field force resources – and indeed multichannel engagement in the pandemic era – with the right customers at the right time with the right message. But you cannot guess. You’ll only get there by looking at the evidence.

This evidence-based approach is far more effective than ‘carpet-bombing’ the market – and it’s far more likely to turn NICE news into great news.

The second assumption is incredibly common: that adoption on formulary naturally leads to product sales. The hypothesis is, to a large extent, true. Being on formulary will inevitably give you some sales – but, without laser-focused effort and differential messaging, it isn’t enough on its own. Securing formulary approval isn’t ‘job done’ – it’s just the start-point for pulling through sales.

Evidence shows that the links between formulary adoption and product sales are nuanced. For example, sales traction is often clearly correlated with the level of restriction a product has on a formulary. Medicines that have open access – ie, there’s no restriction on their use – tend to perform better than those that are second line or restricted to specific patient cohorts. This is entirely to be expected – and it’s borne out by the evidence…

Figure 2 shows the sales of GSK’s respiratory treatment, Anoro Ellipta, across the various availabilities. In it, we give products with unrestricted access an Availability Index (AI) score of 100, with second line products scoring 50 and restricted an AI of 30. The chart reveals that Anoro Ellipta gets most sales when availability is unrestricted. On formularies where it’s second line, sales revenues are far lower. This, once again, is common sense – and it illustrates the value of securing open access. Moreover, it highlights a commercial conundrum: is it worth the cost of promoting products in localities that only offer you restricted access? Arguably not. Therefore, it’s important to identify those areas and target them with market access activity to liberate access and elevate it to an AI of 100. But you can’t do it without the evidence.

So far, so obvious, right? Think again. Whilst formulary position often provides a good yardstick for product sales, it isn’t an exact science. Figure 2 shows the national picture for Anoro Ellipta, but – as can be seen in Figure 3 –when you drill down to the local level, it’s possible to identify areas that buck the national trend. There are countless examples of products that have restricted formulary access in a locality and yet still enjoy great sales. For instance, access to Anoro Ellipta was restricted in NHS Camden CCG (now part of North Central London CCG as of 1 April 2020) – but still outperformed competitor brands (Figure 3). Clearly, understanding adoption and prescribing patterns in specific PCOs can significantly inform territory planning, targeting and messaging.

Similarly, there are products that have launched and achieved spectacular formulary positioning – and still not achieved the anticipated sales. A great example is Steglatro, MSD’s treatment for type 2 diabetes. Steglatro launched as a new SGLT2 in early 2019 and was quickly bolstered by two NICE TAs. Around the same time (late 2018), Novo Nordisk launched Ozempic, also for type 2 diabetes, though a different class (GLP1). Armed with positive NICE guidance, MSD did a great job of getting Steglatro on formulary. However, its formulary positioning didn’t translate into sales. Figure 4 shows the comparative national sales of Steglatro and Ozempic over the first 12 months of them both being in the market. As you can see, Ozempic – which launched without a NICE TA – outperformed its rival. This, once again, highlights the perils of making assumptions – and undermines the hypothesis that formulary adoption automatically equates to sales. It doesn’t.

So what does all this mean? Fundamentally, it underlines the value and importance of robust formulary intelligence. If you want commercial excellence, you cannot guess – you have to be guided by the evidence. You need to know the intricacies not only of where you’re on and off formulary, but also of your relative positioning versus competitors. A NICE recommendation is neither a guarantee of formulary adoption nor an assurance of optimal positioning. If you want to drive the best performance – particularly in the crucial first year of launch– you need to ensure you’re working with each locality and understanding the way it behaves. If you can get sales without unrestricted access – and even without NICE – you should be mobilising sales resource to target prescribers in that locality. But if you can only get sales when you’re optimally positioned, you should pivot to market access resources and target payers accordingly.

That’s the definition of differential messaging – and formulary intelligence provides a real-world gateway. What’s more, in the post-COVID normal where boots on the ground are almost non-existent, it’s the key to geotargeting customers and tailoring multichannel campaigns that drive commercial performance. Anything less is just noise.

Ultimately, when it comes to commercial strategy, it pays to follow the evidence. Because, as Einstein said, assumptions are made… and most assumptions are wrong.

NICE – but not enough: why evidence is better than assumption when executing commercial strategy

Einstein intelligence

Evidence not assumptions

Assumption #1:
NICE recommendation = formulary adoption

Assumption #2:
Formulary adoption = sales

Follow the facts