Covance buys market access communications firm Medaxial
The London-based consultancy will give Covance greater reach in markets outside North America, the contract research organisation (CRO) told Outsourcing-Pharma.com.
“Our geographic presence was far too US-centric,” said Marc Ginsky, VP of Covance Market Access Services. “This is a substantial increase in ex-US expertise.”
He added Covance had also been keen to acquire some of Medaxial’s devices and software know-how.
“A lot of their work is with multimedia and iPad-based tools, taking complex economic models, and visually displaying them in a way that is easier to understand to a broad array of stakeholders. In the past we’ve had to look to external providers for that.”
Nevertheless, added the VP, “I don’t view this as a technology acquisition – it’s the talented people [we value most in the deal]. They’re better at leveraging technology in their iOS programming than we have been.”
Global cost pressure
The acquisition of a market access specialty company reflects changing worldwide approaches to drug development and sales.
Given that “global economic pressure is being felt by every government to reduce healthcare spend,” the world is moving away from a model of paying for care in itself, and “towards paying for health outcomes,” said Ginsky.
“There’s more and more ‘at-risk’ contracting for the sale of products – meaning companies get paid if they deliver an outcome.”
This is especially true outside the US’s idiosyncratic healthcare system, he said, which is likely to change in response to foreign influences.
“The reality is the rest of the world is considerably further ahead in thinking about paying for value and outcomes than the US. You see it in particular in NICE in the UK, and German authorities have been talking about pricing for a long time.”
These pricing concerns are having a “tremendous impact on drug development,” he said, with development becoming more closely tied to commercial success, and companies thinking about market strategy earlier in a product’s life cycle.
For instance, he said, these cost pressures “put a real premium on keeping people on their prescribed regimen. So companies are thinking about ways to drive adherence, and this has an impact on how you develop a drug’s delivery.”
Acquisitions
Ginsky described his company as “not particularly acquisitive;” negotiations surrounding the Medaxial acquisition had taken three years. Yesterday’s purchase adds to Covance’s modest acquisitions portfolio, which took on Neogenomics and Pathoquest late last year. The company is “considering” others, the Covance VP told us.
