IMS sets out top 10 strategic issues facing pharma industry

By Phil Taylor

- Last updated on GMT

Related tags Pharmaceutical industry Clinical trial

IMS has identified 10 critical developments in 2007 that could have
a fundamental effect on the operating environment for
pharmaceutical companies in the coming years.

These 'harbingers of change' - published annually by the pharmaceutical statistics and consulting company as part of its Intelligence.360 product - are focused this year in six key areas: payer agendas, innovation, regulatory safety, supply chain and distribution, patient/consumer influence and pharmaceutical company restructuring.

Adel Al-Saleh, president, Europe, Middle East and Africa at IMS, told a press briefing in London yesterday that these harbingers have " major implications for the industry's future, and will require major action by companies to respond to them. "

But those that can react " will have an opportunity to change their position in the marketplace ," he added.

Payer agendas - risk sharing The influence of payers on the industry was brought into sharp relief by one key event in 2007 involving Johnson & Johnson and the UK's National Health Service, according to Chris Huckle, vice president sales and consulting for IMS UK, Ireland and South Africa.

The NHS declined reimbursement for Velcade (bortezomib), J&J's new cancer drug in early 2007, and this prompted the company to come back to the table with a novel proposal.

In a nutshell, the NHS will only pay for the drug if a blood test shows that it is effective.

If not, the cost will be refunded by the drug manufacturer.

" The cost of treating a patient up to the point of the go/no-go blood test is about $24,000 ," said Huckle, adding that this is the first time that a pharmaceutical company has adopted all the risk in delivering a treatment.

" J&J is now involved in outcomes of treatment, the first time this has occurred in the industry," he added. "

But we do not believe this deal will be last of its kind; it will go into other sectors and geographies ," said Huckle.

This clearly has major implications for pharmaceutical companies as they now need to think about generating health economic data as part of the drug development strategy.

Here, as in many things " the devil is in the detail ," commented Huckle.

In the case of Velcade the threshold for proving the treatment works - a 50 per cent reduction in a tumour-associated protein - is relatively straightforward.

But it will be much tougher to define criteria for other diseases - such as hypertension or high cholesterol - which rely on so many other factors such as patient compliance with therapy and the effectiveness of treatment delivery.

Innovation - HTAs helping out Murray Aitken, senior vice president for IMS' Healthcare Insight group, highlighted another key event under the innovation banner was the decision by the UK health technology assessment (HTA) body - the National Institute for Clinical Excellence (NICE) - to offer consultation to Novartis on the design of a Phase III trial.

NICE will provide advice to Novartis in the areas of clinical and cost effectiveness prior to the start of the study, and Novartis is hoping that this dialogue will reduce the chances of the HTA issuing a negative verdict on reimbursement.

" This is a sensible and useful step forward ," said Aitken, noting that the UK has a record of very slow uptake of new products and 40 per cent of NICE appraisals are disputed - signalling the potential for disagreement in interpreting clinical evidence.

Nevertheless it has significant implications for the pharmaceutical industry, he added.

While broadening the consensus on clinical trial design is to be welcomed, companies must be wary that the desire to meet NICE's requirements could affect the clinical outcomes of the trial.

" It is also important to realise that NICE is making no guarantees here - what will happen if Novartis follows its advice and in the final analysis the agency still does not recommend the drug for coverage ?" asked Aitken.

Nevertheless, it appears to be a route that other companies would like to go down, with Al-Saleh noting that NICE is in dialogue with a couple of other companies with a view to a similar arrangement.

Whether the agency has the resources to manage this type of collaboration - should it become commonplace - is a key unanswered question.

The other key harbingers - some of which will be visited in future articles on - are: - Payer agendas : Germany's adoption of managed care style contracting with cost benefit assessments and reimbursement limits - Payer agendas : Decisive action by the US Centers for Medicare & Medicaid Services - Regulatory safety : The FDA Amendment Act bringing new transparency to safety issues, and imposes new requirements on the agency regarding post-marketing surveillance - Supply chain/Distribution : US approves first New Drug Application (NDA) from China - Innovation : research agency in US sponsors head-to-head trial of rival treatments - Patient/Consumer influence : Marketers adopt personalised promotion strategies, with more than 40 per cent of total spending in US now going on direct-to-consumer activities - Pharmaco restructuring :

Exubera withdrawal from the marketplace indicates companies are increasingly prepared to take tough decisions.

- Pharmaco restructuring : outsourcing of manufacturing on the increase, with other commercial functions also expected to go down this route.

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