Product planning groups integral to drive profitability

A highly functioning New Product Planning (NPP) group is a company’s first line of defence against losses caused by products that fail to reach the market, according to research and consulting firm Best Practices LLC. After conducting a study, Pharmaceutical New Product Planning: Structure and Activities to Drive Growth and Profitability, the company has identified activities that it believes NPP groups should be performing across the development cycle, as well as the optimal structure and roles of NPP groups.

In a press statement, the firm explained that only 1 in 10000 compounds tested reach the consumer market. When a project is halted late in the development cycle, companies can lose hundreds of millions of dollars, which they will then need to recoup in the pricing structure of the future medications that it brings to market.

To avoid this, companies must ensure that the right new products are developed efficiently, with minimum risk and maximum value. A company’s NPP group has a huge role in helping to achieve this. The study says: “With pressure on all stakeholders in the pharma industry and the few new drugs that came to the market in recent years, NPP should take on more and more importance in driving what projects to dedicate resources to,” said the study.

In particular, the firm believes that NPP should be involved early in the development process to accelerate decision making and to prune low-value projects early on. “NPP must provide an early and objective view of the unmet need, market potential, competitive landscape and risk associated with commercialising drugs,” says the study.

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