Pharmaceutical new product launches require many different activities and levels of investment. It is critical for launch teams to understand the right level of resources required for the key activities that give a new product its best chance for gaining a market foothold. This study provides current data on the funding levels of the key activities necessary to bring a new product into the U.S. market. Data are presented not only for launch year but also for each of the three years preceding product introduction. Brand and marketing leaders can use the results of this study to identify shifts in launch activity spending priorities across the industry and to compare spending levels for their own launch preparation programs against industry averages. Based on a recent Best Practices, LLC benchmarking project, the study provides quantitative metrics to help companies chart effective budget strategies and allocate funds for new brands.

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Best Practices, LLC
Strategic Benchmarking Research
New Product Launch Spend:
What It Takes to Win in the U.S. Market

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Executive Summary
 Project Objectives & Methodology
 Key Findings & Insights
 Companies Participating in Study
 Participant/ Product Demographic Data

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Project Objectives & Methodology
Best Practices, LLC developed a customized survey tool to capture industry data and
deployed it to a representative sample of 27 brand & marketing leaders at 23 leading
biopharmaceutical companies.
Contents:
The objective of this
benchmarking study was to
help biopharma leaders develop
competitive launch and pre-
launch activity budgets to
ensure successful U.S. market
entry for new products.
This data will serve as a
reference or comparison point
for brand and marketing leaders
as they develop budgets and
allocate funds for their new
brands.
 Industry average cost for new
pharmaceutical product launch
 Average cost for specialty and
primary product launches
 Percentage of budget allocated
to 12 key marketing, education and
market access activities during and
prior to launch
 Timing for conducting 50+ activities
 Anticipated budget & activity trends
 Top 3 success factors
Study Objective:

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Universe of Learning: Companies Participating in Study
Benchmark participants included 27 executives and managers at 23 leading
biopharmaceutical companies.
Survey OnlyParticipating Companies
Abbott, Amylin, Astellas, Bausch & Lomb, Baxter Healthcare, Bayer HealthCare, Bristol-Myers Squibb,
EMD Serono, Genzyme, GlaxoSmithKline, Inspire, Lundbeck, Merck & Co., Noven, Novo Nordisk, Onyx,
ProStrakan, Regeneron, Roche, sanofi-aventis, Shire, Teva, Xanodyne.

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Participants’ Job Titles & Functional Areas
Directors and Vice Presidents make up more than three-quarters of the benchmark
class. More than half the respondents work within marketing functions or departments.
(n=27)
Participant Job Titles Participant Departments/Functions
19%
7%
7%
52%
11%
Marketing
Commercial
Managed
Markets
* Other
* Other= R&D, Medical Affairs, Regulatory Affairs,
Product Launch, Market Analytics, Business
Development
New Products
(n=27)
VP/EVP/
SVP
22%
Director/Senior Director/
Executive Director
60%
Manager/
Sr. Manager
11%
Other (Head, Leader)
7%

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Launch Investment
Benchmarks
Research Protocol for Participants
 Focus all responses on a single product launched recently into the
U.S. market.
 Provide total investment for launch activities during four budget
years leading up to launch.
 Total investment is defined as: The total U.S. investment for pre-
launch/launch activities in a given budget year. Includes all
resources invested in promotional (marketing), educational and
market access activities. Excludes only clinical trial costs.
 Launch Year: The budget year in which the product was launched.
 Launch Years -1, -2 and -3: The budget years one, two and three
years prior to the Launch Year.

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Launch Year Investment Averages $XXX Million
TOTAL BENCHMARK
CLASS
Launch Year
Launch Year
-1
Launch Year -
2
Launch Year
-3
High $XXX $XXX $XXX $XXX
Top Quartile $XXX $XXX $XXX $XXX
Average (Mean) $XXX $XXX $XXX $XXX
Median $XXX $XXX $XXX $XXX
Bottom Quartile $XXX $XXX $XXX $XXX
Low $XXX $XXX $XXX $XXX
n= 19 16 14 9
Q. Indicate your total U.S. investment for pre-launch activities for your product in the three years
prior to the U.S. product launch. Include all resources invested in promotional, educational &
market-access activities. Exclude only clinical trial costs.
Launch year spending wins a lion’s share of investment resources. For the total
benchmark class Launch Year spend nearly equals the approximate sum of all
previous years commercialization investments on average.

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SPECIALTY
SEGMENTATION
Launch Year
Launch Year
-1
Launch Year
-2
Launch Year
-3
High $XXX $XXX $XXX $XXX
Top Quartile $XXX $XXX $XXX $XXX
Average (Mean) $XXX $XXX $XXX $XXX
Median $XXX $XXX $XXX $XXX
Bottom Quartile $XXX $XXX $XXX $XXX
Low $XXX $XXX $XXX $XXX
n= 12 8 8 4
Q. Indicate your total U.S. investment for pre-launch activities for your product in the three years
prior to the U.S. product launch. Include all resources invested in promotional, educational &
market-access activities. Exclude only clinical trial costs.
Specialty Launch Year Investment Averages $XX Million
Specialty Care launches mirror the overall investment patterns reflected in the full
benchmark class with spend trending upward each year. However, investment levels
at launch are lower and more compressed around the median.

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PRIMARY CARE
SEGMENTATION
Launch Year
Launch Year
-1
Launch Year
-2
Launch Year
-3
High $XXX $XXX $XXX $XXX
Top Quartile $XXX $XXX $XXX $XXX
Average (Mean) $XXX $XXX $XXX $XXX
Median $XXX $XXX $XXX $XXX
Bottom Quartile $XXX $XXX $XXX $XXX
Low $XXX $XXX $XXX $XXX
n= 7 7 6 5
Q. Indicate your total U.S. investment for pre-launch activities for your product in the three years
prior to the U.S. product launch. Include all resources invested in promotional, educational &
market-access activities. Exclude only clinical trial costs.
Primary Care Launch Year Investment Averages $XXX Million
Market entry for primary care product launches consumes far greater resources than
specialty launches. Correspondingly they receive two to three times greater budget
resources at Launch Year to reach the much larger population of primary care
physicians.

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Investment Data by
Product Segment
Data is segmented by:
 Projected Peak Annual Revenue
 Therapeutic Areas – Oncology & Endocrine/Metabolic
 Product Market Entry Position

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(n=27)
Q. What was the projected peak annual revenue (in $US) for your product before launch?
Projected Peak Annual Revenue
<$250M21%
$250M-$500M25%$750M-$1B 18%
$1B-$2B 25%
$500M-$750M
11%
Peak Annual Revenue Projections Correlate With Resource Allocations
Benchmarked products covered a wide range of market opportunities – each reflecting different projected
peak annual revenues. At the high end, one-fourth hope to earn more than $1 billion peak year revenues; at the
low end, 21% projected peak earnings of less than $250 million. Peak-year revenue is the metric that most
clearly reflects the market opportunity assessment and corresponding market entry budgets.

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Total Launch Investment by Peak Revenue Category:
Data for Launch Year
PROJECTED PEAK
ANNUAL REVENUE:
LAUNCH YEAR
# Responses
in Range
Average
(Mean)
High Low
<$250 M 4 $XXX $XXX $XXX
$250M -$500 M 5 $XXX $XXX $XXX
$500 M - $750 M 2 $XXX $XXX $XXX
$750 M - $1B 3 $XXX $XXX $XXX
$1 B- $2 B 5 $XXX $XXX $XXX

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Average Spend Comparison for Each Market Entry Position
Market Entry Position Launch Year
Launch
Year -1
Launch
Year -2
Launch
Year -3
TOTAL
Differentiated Product in Novel
Treatment Area
$XXX $XXX $XXX $XXX $XXX
Differentiated Product Entering
Established Market
$XXX $XXX $XXX $XXX $XXX
Crowded Market Upstart Product $XXX $XXX $XXX $XXX $XXX
Crowded market products spend less than one-third overall than do differentiated
products in either novel or established areas, however, they close a large portion of
that gap in the final year, when their spending increases nearly eight-fold over Year -1.
(Total n=27)
Average Total Spend by Market Entry Position
Differentiated products entering
established markets have the highest total
spend, with the greatest difference
occurring in Year-1.

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Launch Activities
Benchmark partners were asked to indicate which launch activities
they fund within each of the following categories during the last
four budget years leading up to launch.
 Agency Fees (excluding DTC)
 Direct to Consumer & Advertising Expenses
 Health Economics/ Outcomes Research
 Launch Meeting/ Kickoff
 Managed Markets/Market Access
 Market Research/Analytics (excluding DTC)
 Medical Affairs
 Patient Education/ Assistance
 Physician Education
 Sales Force Preparation
 Other

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Activities Included in Agency Fees Spend
0%
41%
76%
76%
100%
Other (specify):
Retainers
Public Relations
Communications/
Publications
Promotional/
Advertising
Key activities funded by participants within the Agency Fees budget category were
promotion/advertising and communications/publications. Promotion was the activity
funded by the most companies in the Launch Year, Year -1 and Year -2. In the Year -3,
the greatest number of companies funded communications/publications activities.
Launch
Year -3 Year -2 Year -1
33% 80% 92%
83% 60% 85%
67% 40% 54%
17% 40% 38%
0% 10% 0%
Pre-Launch
AGENCY FEES (excluding DTC)
n = 13n = 10n = 6 n = 17
Other (Year -2):
• Positioning, campaign development
Q. Please check all of the listed activities that were included in your product's Year -3, Year -2, Year -1
and Launch Year budgets.
=most frequent
activity per year

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Activities Expected to Gain Funding in Near Future
Q. In your opinion, how will recent and anticipated market changes impact funding levels for
the following types of launch activities over the next 24-36 months?
Agency fees (excluding DTC)
Launch meeting (kickoff)
Market research/analytics (excluding DTC)
Sales force preparation
Samples
DTC
Physician education
Patient education/ assistance
Medical affairs
Managed markets/market access
Health economics/outcomes research
Significant increase Some increase
96%
84%
80%
60%
36%
36%
32%
32%
32%
16%
12%
Total
Increase
(n=29)
12%
16%
24%
28%
28%
28%
36%
52%
72%
60%
56%
% Responses
8%
4%
4%
8%
8%
8%
24%
40%
Health Outcomes and Health Economics Research are expected to grow significantly in
importance in the next three years, with 97% projecting spending increases there. A
majority of participants also expect increases for managed markets, medical affairs and
patient education spend.

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Launch Investment Allocation
 Participants indicated their total U.S. investment for pre-
launch activities for their respective product in four
different budget years: Launch Year, Year -1, Year -2, and
Year -3.
 Budget numbers provided include all resources invested in
promotional, educational & market-access activities,
excluding only clinical trial costs.
 Slides in this section exhibit average, high and low spend
allocated for activities in 12 categories for the Launch Year
and the three years preceding launch.
 Data is provided for the full benchmark class. In addition,
data is provided for the following benchmark class
segments: Primary care products, specialty products and
Oncology products.

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Investment Allocation by Activity Category (1)
Total Benchmark Class:
Launch Year & Launch Year -1
Activity Category Launch Yr. n = 18 Year -1 n = 14
High Average Low High Average Low
Agency fees (excluding DTC) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
DTC & Advertising Expenses $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Health economics/ outcomes
research
$XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Managed markets/ market
access
$XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Market research/ analytics
(excluding DTC)
$XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Medical affairs $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Patient education/ assistance $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Physician education $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Sales force preparation $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Other Marketing activities $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Launch meeting (kickoff) $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
Samples $XXXX $XXXX $XXXX $XXXX $XXXX $XXXX
* $70 mil response not included in calculations. * $50 mil and $13.8 mil responses not included in calculations.
Yellow highlights indicate highest three spend areas
for each year. Red circles indicate activities for which
Year -1 spend exceeds Launch Year investment.

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Success Factors

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Top Areas to Consider in Setting Launch Budgets
Q. What are the three most important success factors to consider in establishing and allocating
new product launch budgets in today’s market?
Verbatim Responses:
“Good definition of the key influencers & decision makers.”
“Getting medical information/education to physicians without
use of sales reps.”
“Competitive differentiation for HE/OR benefit.”
“Use new/digital vehicles with field force, physician, payer,
patient.”
“Investment in physician education (CME & Promotional).”
“Expertise/presence in market today vs. being new entrant.”
“Ensure managed marketing is adequately funded.”
“Differentiating the brand via strategic marketing.”
“Using alternative marketing sources/direct to physician.”
“Creativity and collaboration from the team.”
“Focus on fundamentals.”
“Touch - the number of thought leaders that touch the drug
either in preclinical or clinical settings pre-launch.”
“Research/phase III.”
Success Factor Categories
(n=25) 13%
13%
13%
17%
21%
21%
25%
33%
38%
38%
50%
Sufficient Investment
Favorable Co-pay
Launch Trajectory
Sales Force Preparation
Physician Access
Product Differentiation
Patient Education/Awareness
Data - Clinical, Health Economics/
Outcomes, Comparative Effectiveness
Market Research/Market Analytics Data
Physician/KOL Awareness/ Education
Managed Care Access/ Reimbursement
% Responses
Other: Experience in new market, patient assistance,
understanding competition, understanding how product
will be paid for, team collaboration, advocacy.
Survey participants identified Managed Care access and reimbursement, physician
awareness, KOL relationships, and solid market research as the most important areas to
consider in establishing successful new product launch budgets.

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Most Important
Future Activities

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Activities for Successful Future Specialty Product Launch
Q. Within the next 24-36 months, what launch activities (traditional or emerging) do you think will
be the Top Three most important to achieving a successful launch for a specialty product?
(n=25)
Top Activity Categories Verbatim Responses:
“Targeted research activities that alter the standard of care
in settings where the drug is or will be used most frequently.”
“Elucidating clinically significant differentiation vs. standard
of care.”
“Use of novel channels to more frequently reach and
connect with end users (Internet).”
“Clear patient (and payer) value proposition.”
“Consumer marketing via internet and social media.”
“Non-personal education and promotion to physicians.”
“Reimbursement support/Pharmacoeconomics.”
“Outcomes Research and Studies - Comparative Outcomes.
“Claims data analysis.”
“Interactive educational tools.”
“Evidence based guidelines for product use.”
“Clinical outcomes data/post marketing.”
Physician Access
Patient Education
Value Proposition
KOL Relationships
Product Differentiation/Positioning
New Channels (e.g., social media)
Health Outcomes/Economics Research
Physician Education
Sales Force Preparation
Market Data & Analytics
(e.g., segmenting, forecasting, pricing)
Managed Care Access/Reimbursement 44%
28%
16%
28%
28%
28%
16%
12%
12%
12%
12%
% Responses
Other: CI, reimbursement landscape research & prep, test promotional
campaign, interactive educational tools, post-marketing outcomes data,
attend ad boards, use evidence-based guidelines, strong value proposition
Nearly half the participants expect managed care access and reimbursement activities to
be among the Top 3 most important product launch activities over the next few years.
Also key to launch success will be physician education, health outcomes research, sales
force prep and market data & analytics.

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About Best Practices, LLC
Best Practices, LLC is a research and consulting firm that conducts
work based on the simple yet profound principle that organizations
can chart a course to superior economic performance by studying
the best business practices, operating tactics and winning
strategies of world-class companies.
Best Practices, LLC
6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517
919-403-0251
bestpractices@best-in-class.com
www.best-in-class.com
Link for Report: New Product Launch Spend