Keeping up with the shifting sands of access

Eric Ratinetz

ghg access

There is increasing awareness that we are confronting an intensity of trends regarding pharmaceutical product development and commercialization both in the US and Europe that has already begun to have a major impact on marketers. These trends demand that we change our focus from what has worked in the past, to what will ensure success moving forward. Below is a review of three of these trends, and ways to navigate a dramatically changing environment:

Trend 1: from blockbuster brands to ubiquitous generics

One of the biggest challenges is the increasing dominance of generic products at the expense of new branded ones both in the US and in the UK. Recent IMS data shows that new product launches are not replacing revenues lost to generic competition. Branded products make up only 25% of all drugs dispensed in 2010. This number is expected to drop to under 15% by 2015. Many describe 2011–2013 as the “patent cliff” years, when over 100 branded products, including many blockbusters, go generic. So where will we find opportunities in the future?

"Manufacturers have responded by insuring that their pipelines are focused on the specialty markets, where reimbursements are higher and there is less concern regarding formulary status (for now)."

Another statistic from IMS was that prescribing by specialists (oncologists, rheumatologists, and immunologists) is trending up. Manufacturers have responded by insuring that their pipelines are focused on the specialty markets, where reimbursements are higher and there is less concern regarding formulary status (for now).

Trend 2: specialty market products take the spotlight

Payors are developing new strategies to better manage specialty products especially in regard to the “last frontier” – the management of oncology care. Costs for oncology treatments are growing exponentially, with little in the way of standardized evaluations to drive appropriate use or measure outcomes. Guidelines such as those disseminated by oncology organizations (e.g. ASCO and NCCN) usually do not focus on which products work best in which types of patients. With nothing definitive to refer to, health plans are forced to defer to oncologists, whose participation in the plan is vital to their ability to attract customers, and patients themselves, who need appropriate care but with whom there are concerns that denial of any treatment will turn into a lawsuit.

"Recent reforms in Germany where pharma can no longer set the market price for new products points to a changing dynamic that marketers need to be able to address."

Several challenges also complicate the picture further. The side-effect profile of most of these products is extensive. Patients are also being asked to share more and more of the costs of these treatments. This points to the need for processes that effectively measure outcomes and provide more patient-centric guidelines to drive appropriate utilization of these products that are logical, humane, yet value-based and cost effective. US politics aside, the UK NHS changeover to a value-based pricing mechanism may be an important harbinger across the globe for the creation of rational models of healthcare delivery that insure appropriate access to effective therapies. Recent reforms in Germany where pharma can no longer set the market price for new products points to a changing dynamic that marketers need to be able to address.

Trend 3: the rise of biosimilars

While the EU has had experience with biosimilars since 2006, in the US we are now starting to see regulations addressing these generic versions of biologic pharmaceuticals. A component of the recent health reform legislation was The Biologics Price Competition and Innovation Act (BPCIA). This created a pathway for biosimilars (or “generic biologics”) market entry. The law created an abbreviated biologic license application (ABLA) process and a biosimilar and interchangeable biologics approval process. While the regulatory framework still needs to be developed by the FDA, there will be standards for establishing biosimilar status. Products that are highly similar to the reference product and can show proof of no greater risk of safety or diminished efficacy are considered interchangeable biologics, while those that are similar but have differences in efficacy are called biosimilars. The patent protection period in the US for branded products will be 12 years, and the expected pricing differentials are not expected to be as great as projected (10%–30% less than the brand).

"As we are already beginning to see, it’s harder for certain brand messages to be heard above the clamor for lower costs."

Biosimilar and interchangeable biologics represent a critical public health benefit to patients. They have the potential to offer life-saving or life-altering benefits at reduced costs to the patient. Yet they also represent another market change that will ultimately impact many of our clients and by extension us.

What does this mean for us?

Capitalize on opportunities for brands now. As we are already beginning to see, it’s harder for certain brand messages to be heard above the clamor for lower costs. Generics, biosimilars, and value-based policies that are a result of healthcare reform will make it even harder for branded messages to resonate in the future.

Tell a value story. Cost offsets, better adherence, overall survival, and improved quality of life are just a few of the metrics that can help make a brand stand out to providers and payors.

Prioritize resources around emerging market trends. Because new product launches are not replacing revenues lost to generic competition, we need to re-focus on the best opportunities moving forward. Some of the most attractive areas for growth are in emerging, generic, and specialty markets. Let’s be ready to deliver value to these emerging new players…as they are a large part of the future of our industry.

About the author:

Eric Ratinetz is the SVP, Access Strategy Director at ghg access, a ghg company. In his current role he and his team are responsible for ensuring that payor and policy trends are being addressed though innovative initiatives that drive access and utilization. ghg access in New York and WG (Westaway Gillis) in the UK comprise the global network of access solutions companies within ghg. As US and global markets all move toward similar value-based models, our worldwide expertise in building brand value propositions makes us an invaluable partner to many brands. For more information about how we can help your brand gain broader access in your market, contact Eric Ratinetz at eratinetz@ghgroup.com.

Are you ready to deliver value to the emerging new players of our industry?