The average development time is around 12 years, driving investments of some $2.6 billion. Only 1 in 5 new drugs make it through Phase III of the clinical trial so the introduction has the highest possible visibility. Adding to the challenge is the competitive and cost-conscious market of today where launch success is decided in the first 9 months.
A successful introduction gives a return on invested time and resources, strengthen the company’s position on the market and ultimately improves the health and life of patients. A failed introduction, on the other hand, could impact the company’s future and may even lead to bankruptcy for smaller companies.
Failure may lead to billions of dollars lost and a significant drop in share price.
A New Product Introduction is exposed to a range of different obstacles, from product recalls, customs delays and airport shutdowns to natural disasters such as volcanic eruptions and hurricanes. Other obstacles include technical problems, delayed flights or batches being damaged due to a broken cold chain, which all contribute to the risk profile.
A McKinsey study called "Expect the unexpected" has concluded that risk events in the pharmaceutical supply chain are the second largest contributor of large monthly declines in share price for pharmaceutical companies.
Thorough planning of the New Product Introduction and taking a life-cycle view are important measures to achieve operational excellence over the lifetime of the drug, to avoid or mitigate the risks and to manage costs.
