FDA’s New Breakthrough Therapy Designation: What does it mean for Pricing and Market Access?

By Ram Subramanian, Tory Sheppard, Brad Rubin, and Chris Kramer

The U.S. Food and Drug Administration’s (FDA) new breakthrough therapy designation represents perhaps the most important effort to date to reduce the time required to bring new drugs to market. According to the FDA a breakthrough therapy is a drug that is:

The breakthrough therapy designation allows for early and positive awareness of a drug’s therapeutic value, signaling that the product delivers substantial improvement on at least one clinical endpoint.

Currently, there are 20 known breakthrough designations (Figure 1), and 8 of those have gone to novel oncology therapies that are currently being developed. With faster approval times for breakthrough products, pricing and market access (P&MA) activities for these drugs could fall on the critical path. By filing for approval on the basis of compelling Phase 2 data, a breakthrough-designated product could potentially come to market approximately 3 years sooner than a drug without the breakthrough designation (Figure 2).

FDA’s New Breakthrough Therapy Designation: What does it mean for Pricing and Market Access? (cont.)

For example, ibrutinib [Pharmacyclics and Janssen]—a first-in-class oral agent that selectively inhibits Bruton's tyrosine kinase, a critical signaling kinase in the B-cell receptor pathway—filed a New Drug Application based on the results of a Phase 2 trial. With the breakthrough designation, the company may have significantly pushed up ibrutinib’s potential launch date, and management will be under increased pressure to get ibrutinib’s P&MA strategy completed in a much shorter time period. 

Time will tell how recipients of the breakthrough designation will ultimately be affected; but much excitement surrounds the possibility that the program will significantly decrease the length of clinical development for these therapies. Such an opportunity requires a paradigm shift in standard pharmaceutical and biotech pre-launch P&MA planning practices, and we recommend three strategic initiatives, which manufacturers should consider when preparing the launch strategy for a new breakthrough drug.

  1. Initiate P&MA planning earlier and leverage excitement generated by the breakthrough designation. 

With the power to drastically shorten drug development timelines, the breakthrough therapy designation has the potential to impact almost every aspect of the pharmaceutical and biotech industry. Clinical research and manufacturing elements will have to contend with changes introduced by the new designation, as will sales and marketing teams.

Underscoring the importance of a well-crafted commercial strategy, a breakthrough designation and associated faster launch may translate into up to 3 years of additional peak or near peak annual revenues. The revenue impact of this will depend on a variety of factors such as relative patent expiration and competitive dynamics, but for many breakthrough drugs the impact will easily reach into hundreds of millions of dollars.

With compressed development timelines and expedited launch schedules, a drawn out refinement of commercial strategy will not be possible for drugs negotiating the breakthrough therapy program. Where previously drug companies could afford to wait until Phase 3 development before addressing P&MA challenges, manufacturers with a breakthrough product will have to start crafting such strategies in Phase 2.

While compressed development timelines will present a challenge, the new approval pathway will also lend support to P&MA activities. The positive clinical stage attention provided by the breakthrough designation will likely aid market access. Payers will find it more difficult to restrict access to a drug whose therapeutic value has been singled out by the FDA and which may have already generated excitement among physicians and patients. In a period of increasing focus on drug prices, especially within the oncology space, the breakthrough designation may prove to be a useful shield against media scrutiny.

  1. Be prepared to craft a compelling value story for your breakthrough product with limited data.

By thinking strategically about the product and the role it will play in the treatment paradigm, it is possible to craft a compelling value story before Phase 3 data are available and create a plan to address any gaps identified in the value story.

In order to get a true picture of the product’s value with limited data, it is important to identify the product’s key value drivers, such as the critical clinical endpoints and performance measures that drive market access and product utilization. During P&MA strategy development, conducting a landscape assessment will help to fully capture market dynamics and identify key value drivers critical to P&MA. Understanding how the product performs against the competition on the key value drivers, enables the manufacturer to refine its value story appropriately and achieve optimal market access.

As shown in a simplified hypothetical example (Figure 3), the relative importance of the value drivers and the performance of the product on these factors can be mapped to create a “Matrix of Competitive Advantage”. This matrix highlights the critical value drivers to securing optimal P&MA as well as the product’s relative strengths and weaknesses.  


Due to the expedited nature of clinical development, a breakthrough drug could fall short of generating extensive, compelling evidence to convince payers/healthcare providers of its value at the time of launch. From our experience, there is a segment of payers and healthcare providers who can make the leap without complete clinical data. These “Product Champions” are willing to “buy in” to the value of the product with only preliminary data and infer clinical value based on their understanding of the product’s mechanism of action. On the other hand, some payers and healthcare providers are likely to reserve judgment on drugs arriving in the market without the support of full Phase 3 trial data. Marketing teams need to adapt traditional value story approaches in order to persuade these “Product Skeptics”.

Identifying “Product Champions” and “Product Skeptics” through market segmentation allows the manufacturer to implement strategies to target the specific concerns of each of these types of individuals. The manufacturer should be prepared to justify the value of the product without full efficacy and safety data by preparing objection handlers that articulate the clinical relevance of the preliminary data outcomes and the science that distinguishes the product from the other therapeutic options in the market. For example, if overall survival data for an oncology therapy is not available, make sure to articulate the value of the available clinical endpoint(s) (e.g. progression free survival data) and explain why the overall survival data will not be available until after launch.

  1. Use scenario-based market planning to harness the full market potential of breakthrough products. 

Given the multiple data gaps before Phase 3 data become available, many elements of a breakthrough drug’s clinical profile will likely remain projections. Target product profile design will therefore be complex, requiring careful, assumption-based forecasting. Adding to the challenge, those crafting a comprehensive value story will only have one shot at getting it right. Here, too, the condensed developmental timeline means there will not be enough time to incrementally build a value story and refine it.

Even with the best forecasting, straightforward market research will not generate the knowledge base necessary to craft optimal launch strategies for breakthrough drugs. For reasons of both research practicality and lack of clairvoyance, it will be impossible to clearly test all potential clinical outcomes and market launch conditions. Instead, the output of successful sales and marketing planning efforts must be a holistic understanding of how foreseen and unforeseen market events will impact a breakthrough drug’s commercial prospects.  

Additionally, compressed clinical development timelines may allow a rival drug company’s promising early stage molecule to rapidly advance and secure FDA-approval. Thus, the breakthrough designation program necessitates increased scrutiny of other manufacturers’ clinical pipelines for possible competing products. The breadth of this knowledge will be particularly valuable in areas with more common off-label prescribing, such as oncology. A product may launch in its breakthrough indication, but obtain significant prescribing in other indications. Competitor pipelines should be closely monitored for potential breakthrough candidates, and the impact of such competitive entry must be captured through the scenario based approaches.

Key Takeaways


About the Contributors

Simon-Kucher & Partners is a global consulting firm with 690 professionals in 27 offices worldwide focusing on Smart Profit GrowthSM. Founded in 1985, the company has 28 years of experience providing strategy and marketing consulting and is regarded as the world’s leading pricing advisor.
