This article was originally published in In Vivo.

The world's most successful pharma companies aren't winning on the basis of absolute scale; they succeed instead thanks to their leadership in a few clearly defined product categories. That approach delivers outsized returns, while helping firms navigate a changing health care landscape where payers and providers increasingly demand evidence of treatment efficacy.

• Category leaders are those firms that employ a common set of capabilities to develop products that serve a defined set of end-users and often exist without common competitive class. The products are bought using a common purchasing process managed by common stakeholders.
• The key to understanding category leadership is to view categories through the eyes of the customer—patients, prescribing physicians and payers.
• Current industry trends play to the strengths of category leaders. Payers and providers are demanding evidence of efficacy, creating new hurdles for drug approval, and category leaders are the best positioned to deliver compelling evidence.
• The rise of drugs prescribed by specialists instead of primary care physicians also favors pharma companies with deep networks and strong relationships within the specialty.