The Economist Pharma Summit 2013
pharmaphorum recently attended the Economist’s Pharma Summit 2013 at The Dorchester Hotel in London. This article details the issues within the pharmaceutical industry that were discussed and how the companies are adapting to challenges around driving innovation in cost-constrained markets.
Friday 28th February saw pharmaphorum attend The Economist’s Pharma Summit 2013 at The Dorchester Hotel in London. The theme of the day was “Back to basics: the real business of pharma”, with speakers from Johnson &, Johnson, AstraZeneca, Roche, the Innovative Medicines Initiative and FTI Consulting, to name just a few.
To begin the day, Severin Schwan, CEO of the Roche Group, gave a pharma perspective on the industry following the recent patent cliff and the move from the blockbuster business model. One of his key points was a suggestion that variable pricing across different markets is need to pay for innovation whilst also supporting access to medicines in poorer countries. A realistic or aspirational solution?
Figure 1: Everyone takes their seats at The Economist’s Pharma Summit 2013
In the pharma industry, the emphasis on R&,D return naturally creates a lot of tension and pressure for companies. The first panel discussion of the day, between Liz Shanahan from FTI Consulting and Kate Bingham from SV Life Sciences Advisers (SVLS), discussed this issue, looking at partnerships from a venture capitalist perspective.
New collaboration models – the R&,D department of the future?
The second panel discussion of the day focused on the different types of collaboration models, from pharma and academia, to patient lobby groups, the Government and not-for-profit organisations.
Klaus Wilgenbus, the Corporate Senior Vice-President of Boehringer Ingelheim, said he believes pharma partnerships had “changed dramatically” in the past decade. Nowadays, according to Wilgenbus, partnerships between pharma and biotech companies are “by far more flexible” and “more exciting”, but that it will take some getting used to for pharma to work with different types of partners, such as patient advocacy groups.
“…partnerships between pharma and biotech companies are “by far more flexible” and “more exciting”…”
While this may be true, the Executive Director of the Innovative Medicines Initiative (IMI), Michel Goldman, believes that “focusing on patients’ needs” is critical to moving forward. New approaches should be based primarily on “the risk-benefit for patients” he said, but that “affordability for healthcare payers” should also be taken into consideration.
Edwin Moses, the CEO of Ablynx, said that his biotech company would like to get involved in partnerships at an earlier stage, but that most companies needed to internally overcome many hurdles before being able to go to a partner with an idea. The solution, according to Moses, is to create an early discovering advisory group, as such, to decide whether or not the idea was worth creating a new partnership for. He said that while it sounds like an obvious idea, a “lack of trust” is the reason it is not widely used as of yet, but that “the opportunity is so large we need to overcome this issue”.
However, trust is not the main issue for all partnerships, according to Clive Stanway, the CSO of Cancer Research Technology (CRT). A recent partnership between CRT and (AZ) works as a shared model, he explained, because it “builds on trust and expertise” and that AZ values the “access to the academia community” that CRT can provide. Stanway mentioned that this alliance has just recently been renewed, proving its success.
Open innovation – the next frontier in R&,D?
“Open innovation is an oxymoron”, stated Roch Doliveux, CEO of UCB, at the start of the next panel. The question is how can we innovate and to what degree?
“We used to have this very neat, linear, left-to-right business system value chain between the industry discovery and ultimately exploitation. I think it’s now a ball of spaghetti – different people doing different things with different people,” said Dr Richard Barker, the Director of the Centre for the Advancement of Sustainable Medical Innovation (CASMI).
The Executive Vice-President of Drug Development at Lundbeck, Anders Gersel Pedersen, was also a panellist during this discussion. He brought up the challenges and difficulties of open innovation within research centres because of the high costs, so the only solution is to get involved in outside collaborations.
“Does open innovation need a new business model?”
The audience agreed with this sentiment, as during his opening speech, Dr Barker invited everyone to take part in a quick ‘hands up’ with the question: “Who believes the most important ideas to transform pharma lie inside life sciences? And who believes it will come from outside pharma?” Most hands were raised for the latter.
Paul Stoffels, the Pharmaceuticals CSO at Johnson &, Johnson, said his definition of open innovation was “collaboration innovation” and that it’s a way to find similar minded people and together say, “how do we solve this problem?”
Charlotte Howard, moderator of the day and The Economist’s Healthcare Correspondent, asked the panel: “Does open innovation need a new business model?” Stoffels answered by saying no. He believes that pharma needs a “fundamental management mindshift” because while pharma could try and change the regulations and the R&,D process, it’s better to work hard and work through it. He “wouldn’t wait twenty years to change the model” but that he “would act now”.
Doliveux agreed, saying that its other aspects of the business model that need to change: “Every one of us will have to make our choices on what we want to control, what we want to share and really the key issue is access to technology in order to find a solution”.
Referring back to the title of the conference “Back to basics”, Dr Barker surmised that while it is important to understand and learn from historic experiences, now is the time to move forward.
To move forward, does pharma need to build a new image?
The final panel debate of the day was about pharma’s reputation, looking at how important this image is to pharma’s success in tomorrow’s healthcare environment and how pharma can improve this image.
““Why does missing data matter?” he pondered, before going on to state that he believes it is “research misconduct”…”
Dr Ben Goldacre, author of the much publicised book ‘Bad Pharma’, began with a presentation on data transparency. He opened by saying he hoped he was the “sanest critic” of the pharmaceutical industry. “There are flaws in evidence-based medicines and it’s important we can get involved in talking about them openly, without error-picking and smearing, so we can address them and move forward”, said Dr Goldacre.
“Why does missing data matter?” he pondered, before going on to state that he believes it is “research misconduct” and one of the industry’s “fascinating cultural blind spots”.
“I think we would all agree, whether you were doing a school science project or a undergraduate dissertation, if you deleted half of the data points in one study in order to get the line to go where you wanted it to, you would rightly agree that you were guilty of research misconduct…and yet when a large group of people allow negative results to be withheld from the public space knowing full well the impact on patients…for some reason we don’t collectively recognise that it’s research misconduct…”
Part of Dr Goldacre’s speech from The Economist Pharma Summit 2013.
Dr Goldacre believes that the issue of data transparency, in order to develop the evidence-based decisions made in the industry today, can only be improved if the historic clinical trial data from the past 20 years are published. So far, Dr Goldacre and the AllTrials campaign have garnered support from some big pharma, academia and patient organisations nationally and globally, so it seems change is on the way.
Dr Goldacre was then joined on stage by three further panellists to continue the theme of pharma’s reputation. Jane Griffiths, the Group Company Chairman of Janssen, Trevor Jones, the Board Director of Allergan and our very own CEO, Paul Tunnah, shared their thoughts.
“…the issue of pharma marketing spend and its impact on pharma reputation was also raised…”
Despite the fact that the session was intended to be around pharma’s reputation in general, the discussion was inevitably steered back towards data transparency. However, the issue of pharma marketing spend and its impact on pharma reputation was also raised, with Dr Goldacre seeing little value to sales reps, whilst the other panellists counter-argued this with a view that doctors do need information from pharma and are capable of putting it in the context of their broader knowledge.
However, Tunnah brought the session back to its intended theme by raising some of the broader issues around pharma PR and the need for pharma to better educate patients and the public on how the industry operates and specifically issues such as the drug development process and why drugs are priced the way they are. In this regard, he quoted some patient interviews recently conducted by pharmaphorum, where their view of pharma was questioned.
Ending the session on a positive note, Tunnah quoted one patient who said “I recently had the opportunity to meet with pharma and it was quite a refreshing experience. It gave me hope for the future of pharma and it made the possibility of pharma becoming more transparent and patient-centred a bit more tangible.”
What does the future hold for the pharma industry, and for patients?
To conclude the day, John Castellani, President and Chief Executive Officer of Pharmaceutical Research and Manufacturers of America (PhRMA), shared his views on the key issues pharma needs to overcome in order to move forward.
“First of all, we need a system that protects patients, their privacy and their safety. Responsible data sharing is part of a credible, regulated, viable pharmaceutical research and development model,” said Castellani.
Secondly, “clinical trials in all areas of research and development are an increasingly, as we’ve heard today, collaborative process,” said Castellani. He continued to explain that this process is “one that companies invest in to the benefit of patients, but in the future, investment will only come if fair returns, as a result of intellectual property, are protected.”
“The pharma industry has evolved significantly over the past fifteen years, during which “more than 100 innovative medicines have transformed lives”…”
The pharma industry has evolved significantly over the past fifteen years, during which “more than 100 innovative medicines have transformed lives”, including treatments in hard-to-treat areas such as HIV, AIDS, diabetes and osteoporosis. The upcoming pharmaceutical pipeline is also extremely promising, according to Castellani, as there are over 5000 new medicines in development.
“In the past seven years, the number of new medicines in development has grown by 40%, thanks to R&,D investment levered with approvals and risk-taking. Think of what more we can accomplish in a more dynamic innovative ecosystem,” speculated Castellani.
So to conclude, in the words of Castellani, “if we read the science properly, if we make good policy choices and we take long-term versus expediated view of healthcare challenges and our flaws, we will have a fighting chance to meet and overcome future and growing healthcare needs.
“In short, by paying now, we will pay smarter and we will avoid paying much more later.”
About the author:
Hannah joined pharmaphorum in early 2012, after graduating with a degree in Magazine Journalism &, Feature Writing in 2011, and leads our news coverage, in addition to liaising with new and existing feature authors. With over three years’ experience working within the journalism industry alongside university, Hannah has written for a number of different print and online publications, within the women’s lifestyle, travel and celebrity sectors. Now focussed on the pharma sector with her role at pharmaphorum, Hannah is embracing the challenges of working within a fast growing media organisation in this rapidly changing industry sector.
Does pharma need to rethink its R&,D business model?