Trilogy Tidings
October 2015
in this issue
     I'm obsessed (some would say pathological) about the importance of assessing the commercial potential of a new-product idea at the point of conception - well before serious time and money are consumed by its development. That obsession plays out again in this newsletter. Please hear me out, and save yourself and your enterprise some grief.
     I also weigh in on the continuing, and now escalating, critique of US drug costs.


The Power of Pre-Prototype            
     An article with the same title as this headline was recently published in MedTech Intelligence by Terri Marion. I commend it to your attention.

Pre-Prototype Process  
     Here's my own introduction to the topic of pre-prototype development activities:
Ask any product developer about their worst nightmare. Most will tell you it involves spending many months (perhaps years) and some serious capital developing a wonderful innovation and having it fail miserably in the market. Happens all the time. And, in the great majority of cases, it happens because an appropriate assessment of that product's market fit and business potential was not performed prior to its detailed development. I've encountered variations of this nightmare at least a dozen times in the course of my own development career.
      The aforementioned article does a nice job of defining pre-prototype activities, the early stages of the new product development (NPD) process, and highlighting the roles played by these early steps in the process. Its most important point is the huge influence on outcome and relatively low cost of the pre-prototype phase.
     A follow-up article addresses some strategies to employ in exploiting this pre-prototype power. The two strategies that I favor are (1) a collaborative culture and (2) front-loaded problem solving and concept testing. These represent the hard work of the process. In just about any enterprise you will have to deal with the politics of collaboration to achieve a unified sharing of goals and beliefs. The org chart will often get in the way, but you must work through these challenges to conduct honest assessments of user-perceived value, commercial potential, and product-concept definition.
A Quick Screener             
     You may have seen my screener to guide new-product assessment. It addresses the pre-prototype step generally known as opportunity analysis. I've developed a one-page version, a quick screener, that you can bring into your development-team meetings and investment pitches when the topic of discussion is assessment of a proposed new medical product.
     I can also provide you with an iBooks or Kindle version of this tool upon request. (I cannot provide a link because my web host cannot accommodate those file types.)
Drug Prices Run Amok             
     Drug makers, in case you've been hiding out in a cave, your world is facing some serious trouble. The recent lead story on Daraprim's huge price increase seems to have reawakened a distracted media and rearmed politicians.
Drug Costs
     But this is just the latest warning shot across pharma's bow. Let's review the evidence:
  • Old generics reinventing themselves as premier-priced therapies, sans innovation
  • Agreements among competitive suppliers, and associated financial considerations, to retard generic conversions
  • Prohibitions imposed on the leading US payer (Medicare) to disallow pricing negotiations
  • Notable price differentials between US and non-US markets
  • Questionable estimates of drug R&D and commercialization costs and associated measures of efficiency
  • Excessive direct-to-consumer advertising and its societal costs
  • A generally low regard for the pharmaceutical industry held by the American public
     Here's the thing: The pharma industry can and does argue against these observations, sometimes quite persuasively. But the enemies are massing at the gates. Trouble is brewing. The drug industry needs to respond proactively, not defensively. If the industry does not act decisively, external constraints will almost certainly be applied; those constraints will harm the industry, investment and ultimately patients.
     It's important to remember one critical fact: Healthcare purchases are not like other consumer purchases. Patients have limited, sometimes singular, options. Life-and-death decisions are sometimes involved. Morality matters, especially in healthcare.
What does Trilogy do? 
     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Development and critique of business strategies and plans
  • Characterization of market drivers and adoption dynamics
  • Identification and evaluation of fitting technologies
  • Surveillance of competitors and emerging threats
  • Market-testing of development-stage product concepts
  • Assessment of clinical value and comparative economics
  • Support for partnering, acquisition and divestiture initiatives
  • Quick-turnaround M&A due diligence
  • Business and technical writing/publishing

     Inquiries to establish whether and how we might support your business initiatives are always welcome.  Contact us.

Resources from our Archives 
     Check out our Reading Room to view my published articles, presentations and white papers on a variety of topics.
     And, you can examine an archive of my prior newsletters (since February 2007).
Contact Information
Joseph J. Kalinowski, Principal