Pharma industry: present landscape and main trends
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Transcript of Pharma industry: present landscape and main trends
Pharma industry- present landscape and main trends
November, 14th 2012
www.pwc.com/es
PwC
The PwC Pharma 2020 Series
2
PwC
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Pharma Industry
End of an era?
PwC
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…or a New Beginning?
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Agenda
1. General landscape and main challenges 2. What way to choose?
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General landscape and main challenges
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Key growth drivers and resistors facing healthcare payers and pharma
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1 = Growing patient populations stretches existing healthcare resources2 = Economic downturn puts pressure on payers through reduced funding via taxation as a result of growing unemployment3 = Economic downturn results in less out-of-pocket spend on healthcare (e.g. in the US), thereby impacting Pharma4 = The patent cliff and erosion of branded drug sales directly impact Pharma5 = Cost-containment strategies implemented by payers negatively impact Pharma* = Sales loss for the top 50 global pharma companies in the US, Japan, France, Germany, Italy, Spain and the UK
A B = A has a negative impact on B
Global economic downturn Patent cliff
1 2 3 4
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• Aging patient populations• Growing prevalence of chronic diseases• Greater use of expensive treatments• Expanding public healthcare coverage
Rising healthcare costs
Cost-containment and regulatory pressures intensify
• Reducing healthcare budget • Pricing and reimbursement cuts• Driving generic uptake• Growing regulatory scrutiny
• Governments look to pay down debts
• Reduced out-of-pocket spend
• $100bn* in lost branded sales due to generic erosion during 2010–14
• Biosimilar uptake set to accelerate
Pharma’s strategic responsesStrategies to drive profitability• Innovation• Diversification• Cost savings
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Indicative profit potential of the human and animal health care sector
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The avalanche of new biomedicine knowledge at the origin of the growth of healthcare expenditure
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Pharmaceutical &
biotechnology manufacturers
Medical device
makers Medical
suppliers
Information technology
firms
Governments
Employers
Individuals
Insurers
HMO’s
Pharmacy Benefit
Management
Hospitals
Physicians
Integrated delivery
networks
Pharmacies
Wholesalers
Mail order distributors
Group
purchasing organizations
Purchasers Fiscal intermediaries Providers Product
intermediaries Producers
Innovation
Money
Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002. Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
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Traditional pharmaceutical industry survives thanks to the introduction of new molecules in the sector
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
The higher added value of the pharmaceutical industry is generated in pre-clinical and clinical research, particularly in the first, segment of the value chain that originates the intellectual property of the new molecules
Pharmaceutical industry value chain
Marketing Distribution Production Clinic Research
Pre-clinic research
R&D activities
Sophistication of necessary skills
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Pharma is increasing recognition of its interdependence with payers and providers…
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Provider
Payer
Pharmaceutical
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Global Pharma is growing
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Breakdown of global market 2005
Other G7 30%
E7 8%
RoW 20%
US 42%
Breakdown of global market 2020*
Global $520bn
Other G7 23%
E7 18%
RoW 20%
US 39% Global
$1.3trn
• By 2020 ~20% global sales from E7 countries
• E7 nations: Brazil,
China, India, Indonesia, Mexico, Russia and Turkey
• Assumes G7 grow at
mid-singledigits,E7 grow low- to mid-double digits
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Pharma’s Investment Model
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R&D 12 Years Marketing & Sales 7 Years
$
R&D Productivity
Extend Patent Life
Marketing & Sales
$1.0 Billion
Costs
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More people are living longer with chronic diseases which were previously fatal
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
0
2
4
6
8
10
12
50-64 65-69 70-74 75-79 80+
US Canada UK Australia Japan Germany Sweden Spain
Age Group
Hea
lthca
re c
ost r
elat
ive
to
50 -
64 a
ge g
roup
Sources: Laurence Kotlikoff and Christian Hagist, “Who’s Going Broke?” National Bureau of Economic Research, Working Paper No. 11833, December 2005, p.25; World Factbook, 2006; OECD Health Data 2006; IMS Sales Data 2005.
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Pharma has to develop medicines the market wants to buy
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
0
5
10
15
20
25
30
35
40
45
50
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*
R&D
spen
d ($
bn)
0
10
20
30
40
50
60
NMEs
and
Bio
logi
cs a
ppro
ved
PhRMA member R&D spend ($bn)
NME and New Biologics Approved by FDA
NME: New Molecular Entity. Excludes vaccines, antigens and combination therapies which do not include at least one new constituents
* PwC estimate
R&D productivity continues to decline
Over last decade:
• PhRMA member R&D investment almost tripled, reaching an estimated $46bn in 2007
• FDA approved medicines declined by two thirds - 56 in 1996, 19 in 2007
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Yet the industry is unable to develop affordable innovative treatment to meet these future demands
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
• R&D investment doubled since 1996, to >$55bn p.a. and expected to reach $160bn in 2020 at current growth rates
• FDA approved medicines declined by 60% - 53 in 1996, 22 in 2006 WHY?
• Phase III trials typically cost between $135m and $270m
• 20-40% of R&D spend on line extensions
• Over 40-45% of all drugs fail in phase III
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Main long term trends
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Main long term
trends
From blockbuster
to niche medicines
Changes in the way of launching
Regulatory changes
Changes in marketing
From chemistry to
biotechnology
Changes in the way of
pricing
New Technologies Threats and
Opportunities
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Pharma shifting to Specialty Products
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
• 25% US Market is specialty products
• 19% EU market is specialty products
• > 60% of Pharma’s pipeline is specialty products
• $10,000 - $600,000 + cost/patient
• Imperative specialty products can command premium price
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Which will polarise the industry
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
‘Mass market’
Low cost Branded generic /over
the counter treatment
Management High volume
Protocol driven Poly pharmacy & bundles
Direct to Consumer communications
Speciality / Niche
High cost Disease modifying
Cure Price
Physician driven Risk sharing
Specialist targeted Packages of Care
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Marketing strategies tailored for product type
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Mass-market medicines Specialist therapies Marketing implications
Treat common illnesses Treat rare diseases and specific disease subtypes
Smaller target market Generally used with a diagnostic
Relatively simple products Complex products More educated reps & No Samples
Typically prescribed by general practitioners Prescribed by specialists Much smaller sales force
Low price per dose Very high price per treatment
Extensive proof of clinical efficacy Outcomes-based pricing
Usually oral formulations Usually delivered by infusion or injection
Intensive education & monitoring
Easy to manufacture Difficult to manufacture Less vulnerable to generic competition
Easy to transport Usually require cold chain More expensive to ship & store
Generally kept in stock Often delivered to order More flexible supply chain essential
PwC
Linear phase R&D process will progress to in-life testing and live licensing by 2020
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Today – Intensive all-or-nothing regulation
Developing leads
Discovery &
screening
Pre-clinical evaluation Phase I Phase II Phase III Submission
MAA / NDA Phase
IIIb / IV
Scientific advice / pre-IND
Submission of CTA / IND
CIM CIS Launch
2020 – Collaborative, evolving, automated regulation
CIM
Discussion and agreed
plan of action with
Regulators Limited launch
with Living Licence
Instant automated approvals
Development loop for extended indications
and regulatory activities
Patho Physiology
Molecule Development
In-life licensing
trials
Automated submission/
approvals
CIS
CIM = Confidence in mechanism CIS = Confidence in safety IND = Investigative New Drug CTA = Clinical Trial Application MAA = Marketing Authorisation Application
PwC
Linear phase R&D process will progress to in-life testing and live licensing by 2020
26
Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Today – Intensive all-or-nothing regulation
Developing leads
Discovery &
screening
Pre-clinical evaluation Phase I Phase II Phase III Submission
MAA / NDA Phase
IIIb / IV
Scientific advice / pre-IND
Submission of CTA / IND
CIM CIS Launch
2020 – Collaborative, evolving, automated regulation
CIM
Discussion and agreed
plan of action with
Regulators Limited launch
with Living Licence
Instant automated approvals
Development loop for extended indications
and regulatory activities
Patho Physiology
Molecule Development
In-life licensing
trials
Automated submission/
approvals
CIS
CIM = Confidence in mechanism CIS = Confidence in safety IND = Investigative New Drug CTA = Clinical Trial Application MAA = Marketing Authorisation Application
We predict all medicines will be launched with
live licences
PwC
Impact of Regulatory Harmony and Live Licenses
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
$
One Big Bang Launch
Multiple Smaller Launches
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Greater international regulatory co-operation
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Access Regulators use risk benefit analyses not average outcomes. Complexity will
increase
Value for Money Payers / providers use Cost-effectiveness /
HTA assessments for all regulatory reviews plus
safety and efficacy
Transparency Public will demand independent
verification of all clinical data
Single global regulator?
Resources
Regulators lack manpower for expanded range of
studies. Greater need / use of
specialist panels or “notified bodies” ~ medical devices
Qualified auditors
Lifecycle regulation Life time monitoring of all treatments (Live License)
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Customers are more complex and ever changing…
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
TOMORROW Key Account Managers
TODAY Sales Representatives
Secondary Care Practices • Management Board • Professional Executive Committee • Prescribing Advisor
Primary Care Practices • Practice Manager • GPs • Practice Nurses
Secondary Care Practices • Management Board • Professional Executive Committee • Prescribing Advisor
Primary Care Practices • Practice Manager • Family Practitioners • Practice Nurses
Retail Pharmacies
Government / Payers
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Customers are more complex and ever changing…
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TOMORROW Key Account Managers
Government / Payers
Secondary Care Practices • Management Board • Professional Executive Committee • Prescribing Advisor
Primary Care Practices • Practice Manager • GPs • Practice Nurses
Retail Pharmacies
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Multi-channel marketing combines traditional and novel (web–based) approaches
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Expediting Development
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and shift their agenda from treatment to prevention and cure of disease
Nanotherapeutics • Delivery of Therapeutic agents or repair to specific cells or
organs in the human body
Regenerative Medicine • Replacement or regeneration of human cells to restore
normal function and potentially reverse the course of a disease
Gene Therapy • Introduction of modified DNA into a human cell with the
intent to produce a functional protein and improve the effective treatment of some diseases and potentially provide cures for others
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Flexible Pricing
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
• Capitated
• Pay for Performance
• Discounts & Rebates
• Others
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New Technologies Threats and Opportunities
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Disruptive Healthcare Technology Proactive Pharmacovigilance
(Sentinel, SAEC, AMGA) ePrescribing and Interventions
Medvantx Generic Sample Distribution Automated Prescription Delivery System
Electronic Medical Records (EMR) Genomics: Diagnostics and Personal
(23&Me, deCodeGenetics) Health 2.0
(Healia, Patientslikeme, MEDgle) Outcomes Exchanges & Consortiums
(NCCN Oncology, AMGA)
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What way to choose?
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To succeed in the ‘2021’ era choose your business model carefully…
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What is pharmaceutical innovation? More than just products…
Who determines what is innovative? More than just Clinicians…
Commoditised Pharma
Innovative Pharma
Divergent industry
Premium Price Volume not price
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Innovation spans the value chain
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
Cures a disease or condition
Prevents a disease or condition
Decreases mortality
Decreases morbidity
Decreases cost of care
Increases QALY’s
Increases safety
Increases ease of use
Increases persistency or compliance
Will command a premium price
Product or / service which…
Etc…
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However the development of medicines alone will not be sufficient
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
• Problems stem from three invalid assumptions • Movement into healthcare management – health screening,
compliance programmes, nutritional advice, exercise programmes & facilities, etc
• Requirement for accompanying diagnostics • A web of alliances will be needed to offer supporting services • New sources of revenue generation • Closer relationships with patients, payers & providers • Build stronger brands and protect value of medicines
Value comes in the form of products
Pharma alone determines
value
Technical data is sufficient for selling products
Good products alone will not guarantee the industry’s long-term future
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Innovation is a team sport: All stakeholders must be convinced the products and services are innovative
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Fuente: Lawton R. Burns. “The Health Care Value Chain”. San Francisco. Jossey-Bass. 2002.
An innovative product or service needs all decision makers to be convinced that it is convenient for their patients
Creating winning strategies requires a new more adaptive business model across the value chain to orchestrate success for all stakeholders
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PwC
What does it mean to be a partner?
1. Better understand the entire value chain 2. Further integrate in the value chain 3. Participate in the risk
42 noviembre 2010
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