Expensive medicines and where it’s all going?

Aussie Blog Image2The Australian Commonwealth spending on PBS drugs is currently around $9 billion AUD per annum.  It is forecast to be over $15 billion by 2023. We are seeing this upward trend due to the increasing incidence of chronic illnesses and conditions, the ageing population of Australia and the cost of new PBS medications.

We know the hurdle to getting drugs listed on the PBS is higher than ever.  But when they get listed why are these medications so expensive for governments and should we listen to those criticising the Pharmaceutical Companies who discover, commercialise and manufacturer these medications?

Bruce Booth wrote an interesting article recently on Forbes.com where he looked at two very different calculations around the total cost of drug development.  All things equal, and dipping into a Tufts Centre for the Study for Drug Development, it looks like the cost is now upwards on $2 billion USD per drug.  That’s huge by anyones standards.  But consider the journey to approval.

  • It takes an average of 10 years to bring a discovery to the approval stage.
  • Only 8% of drug candidates make it from discovery to the market – and that’s regulatory approval not reimbursement.  Reimbursement is a further stumbling block.
  • The cost of failures is the largest part of the overall cost in this analysis.

70% of the calculated cost of developing a new drug is that cost associated with the failures along the way. In a good article, Booth suggests we need to do things better, faster and cheaper.

I tend to agree. New technologies and the digital world we live in should mean we can share new information, new clinical data and new treatments more rapidly. Most products in the drug-pipeline are now complex, highly technical and often target new pathways and therefor HCPs will need to have a more in-depth understanding of the mechanism of action and science behind these innovative compounds and classes of drugs.

The other question is how can the ‘Big Data’ we keep reading about help us develop the right products for the right patients in a healthcare landscape that is constantly changing and evolving?  A load of patient, HCP and product data itself won’t help us.  We need to be able to analyse and sift through it to find meaningful truths and insights that change the way we develop and commercialise new medicines.  This will make a difference.


Originally published on Ogilvy CommonHealth Australia’s blog: http://www.ogilvycommonhealth.com.au/blog


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At Face Value

At Face Value ImageThe recent 60 Minutes episode on the “eye popping” cost of cancer drugs painted pharmaceutical manufacturers and community oncologists as greedy scoundrels only interested in making huge profits at the expense of desperate cancer patients.

Reporter Lesley Stahl keyed in on a common target in the debate over rising healthcare costs—drug price, and a new term being used by oncologists: “financial toxicity.”  The program singled out ziv-aflibercept (Sanofi-Aventis) as a high-priced agent for metastatic colorectal cancer that cut its price in half only after three doctors at Memorial Sloan Kettering wrote a negative op-ed article in the New York Times suggesting that manufacturers determine drug prices similar to how one shops in a Turkish bizarre.

To emphasize the industry’s greed, the producers highlighted imatinib (Novartis), and although they acknowledged it was indeed a true advance in the treatment of chronic myeloid leukemia when it was approved, they chose to focus only on how the price has more than tripled over the past decade despite the availability of several newer, more effective treatment options.

Media coverage like this, along with ongoing policy discussions, continue to focus on whether the cost of new cancer therapies is putting urgently needed, life-saving therapy out of the reach of patients.

The Personal Side

Ogilvy CommonHealth Worldwide supports a number of organizations, including a number focused on cancer and oncology patients. One such nonprofit is the Cancer Research Institute (CRI), an organization founded in 1953 and dedicated to harnessing the power of the body’s own immune system to conquer cancer. Through their efforts, and the efforts of other institutions like them, a promising new class of therapy called immune-oncology (IO) has emerged.

Think about that—over six decades of research, funding, clinical trials, and education has led to some of today’s most promising IO agents. I imagine there are a lot of lost bets along the way; despite the millions of dollars that go into the research and development of new cancer treatments, only 13% of all compounds in development are ever approved for use in patients.1

But through the perseverance, commitment and investment of many, including the pharmaceutical manufacturers, what today is a reality would not have been possible.

I had the opportunity to attend CRI’s annual event and had the pleasure of meeting many post doc fellows and researchers, and I can assure you the value they saw in their work was not the profit their research would have for their companies, but the life-saving impact it would have for patients urgently awaiting new treatments.

One such person I met at the CRI event was “Sue,” a young woman recently married and living with a rare form of cancer (angiosarcoma) diagnosed in less than 300 people per year. She told me about how appreciative she was of the funding from CRI, manufacturers, and industry to the work she was doing and the hope that she’ll one day play a role in helping cure people like herself living with a deadly form of cancer.

Which made me think… If manufacturers and nonprofit organizations like CRI did not sustain the commitment and investment (in the billions) in search of new therapies, including areas of rare disease, what would become of patients like Sue, without the combined efforts and commitment of these institutions?

The Flip Side

So today, patients are being asked to absorb a larger portion of their prescription costs as a result of more aggressive payer cost management and growing pressure on healthcare budgets overall.

However, it’s important to recognize the overall savings to the system cannot be recognized in terms of savings for a patient individually. And the true value of cancer medicines goes well beyond the cost of a particular drug.

R&D of novel treatments has the potential to not only help patients today, but also provide longer-term value by investing in therapies for tomorrow. By limiting our view to a short-term cost savings approach, the potential to develop new, innovative treatment approaches, like IO, may never occur.

So when considering the price of drugs, remember this reflects the cost and risk of medicine development, the complexity inherent in treating cancer, as well as value to the patient, the healthcare system, and to society. So don’t take price at face value!

The Rest of the Story

So while the producers of 60 Minutes focused solely on the “devastating” side effect of cancer (the bill), a far worse side effect would be if manufacturers chose to cut the amount (billions) they now invest at risk to commercialize new therapies. This would be especially detrimental in rare disease areas like angiosarcoma, where the investment will outweigh the profit—and ultimately the patient would have the most to lose.

Through an environment and policy framework incentivizing and rewarding research, a healthy competitive environment will pave the way for new advances so desperately needed, and everyone benefits.

One thing is for certain, the path forward should focus on continued (albeit targeted) investments, improving access to these important oncolytic advances, development of biosimilars, and for crying out loud, doing a better job communicating the value proposition (aka, demonstrate product value) of emerging therapies to providers, payers AND patients.

Reference: 1. DiMasi A, Reichert JM, Feldman L, Malins A. Clinical approval success rates for investigational cancer drugs. Clin Pharmacol Ther. 2013;9(13):329-335.

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Access to High-Cost Medications: A Balancing Act

UKBlogImageSmallAs continuing innovation moves us further toward personalized healthcare and the development of targeted treatments, how can patients across Europe ensure they have fair access to high-cost medications?

Securing reimbursement remains one of the biggest challenges to delivering market access for new treatments. The debate around balancing tight health budgets with fair access for patients is shaping the way governments and payers respond to these advancements. Cancer treatments are a specific concern, especially those designed to target rare and aggressive cancers, and as such have a particularly high development cost per patient.

So what’s the way forward?

This was the question posed by the Ogilvy Healthworld UK Market Access team earlier this summer when we brought together a panel of leading experts in front of an audience of industry figures, academics and patient representatives.

The panelists discussed the issue from the viewpoint of each of the 4P’s of healthcare—payers, prescribers, policymakers and patients—to chart out the future course of reimbursement.

What was the outcome?

After a far-ranging debate, five key ideas stood out as important for taking the conversation on the introduction of high-cost medicine ahead:

1. While schemes like the UK Cancer Drugs Fund have been a success, they may prove unsustainable in the long term. New systems to assess and support the uptake of new treatments must be a national priority.

2. Three key areas that will affect the cost of medication over the next decade are:

– Technological development; as new innovations make treatments more expensive, not cheaper

– How care is delivered; and potential cost-savings that can be made in reforming healthcare systems

– Whether health systems can reform the way that healthcare is funded to support uptake of new technology

3. New treatments will not necessarily lead to cost-efficiencies, but rather higher costs for payers. This means that demand and pricing must be controlled to maintain a healthy balance between supporting innovation and ensuring access to new medicines for patients.

4. Current value assessments are too narrow and need to be reformed to better reflect their full value. As newer medicines that raise costs are developed, a more complex assessment model will be necessary to ensure that their total cost/ benefit to the healthcare system can be successfully mapped.

5. If payers are to be able to afford new high-cost medicines, cost-efficiencies must be found in the delivery of services. Although healthcare systems should remain a center of healthcare delivery across Europe, it was agreed that the way they operate must fundamentally change to provide care in the most effective way possible. This should be focused on reducing hospital visits and supporting “community-based care” systems.


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Let the Sunshine (Act) In

5116469For many of us in the healthcare industry, the advent of the Physician Payment Sunshine Act has loomed large and ominous. The mere mention conjures up visions of significant changes in the way we work with healthcare providers (HCPs), in addition to endless data collection and reporting. On March 31, 2014, healthcare manufacturers are required to submit their first annual federal reports; these reports will include data captured from August 1, 2013, through December 31, 2013. By September 30, 2014, CMS will publically disclose the information on their website. This regulation is associated with the Affordable Care Act, and as we have come to learn, there may be changes, revisions, or postponements to current guidance on reporting and timing of data review and corrections. Nevertheless, the industry needs to be prepared and many of our clients have been adapting for some time.

So to date, do we really know how this regulation will transform our corner of the healthcare geography? Are we prepared to adapt and innovate?

From a medical education and scientific publication perspective, we have already seen substantial changes in the way our clients collaborate with HCPs.  For example, in December of 2013, GSK announced that the company will begin a process that will effectively stop direct payments to HCPs for speaking engagements and for attendance at medical conferences. To fill this gap, it appears the company may expand its focus on developing multichannel capability to support the dissemination of information about its products and relevant disease states to healthcare professionals.

The effects of the Sunshine Act are also noticeable in the scientific publication realm. Due to the transparency requirements, academic research institutions are once again modifying their guidelines and tightening their restrictions on working with industry on clinical trials and subsequent data publication to avoid the perception of and potential for conflicts of interest. These restrictions also pertain to the development of disease-state articles that update standards of care and provide best practice approaches for HCPs and allied health professionals.

Clearly the Sunshine Act is meant to shine the light of transparency and public disclosure. But it also has the potential to hamper scientific exchange, which is the lifeblood of effective medical communications.

How do we as an industry respond? My vote is to adapt along with our clients and lead and encourage the innovation and continued delivery of robust scientific exchange. How will you respond?

CONTINUE THE CONVERSATION: Questions? Comments? You can contact the author directly at blog@ochww.com. Please allow 24 hours for response.



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Branding the Science

What is the “purple pill?” Most people can instantly identify this as the core branding identity behind one of the best selling prescription drugs: Nexium. But would the science behind the drug command a similar reaction of immediate recognition?

Branding the science is just as important as building the brand, and may in fact be a part of its core foundation. The unique scientific attributes of the compound are key to differentiating the brand from its competitors and establishing its overall value. Before there are platforms, positions, and brand personalities, there is a molecule that has to be called something by the press, publications, investors, investigators, and the competition.

Often, the terms used to describe new market entrants are arbitrary, focus on a particular aspect of the molecule, and are commonly predetermined by medical researchers. Scientists may excel at science—but communication of the benefits of that science is often not so clear and meaningful. Science is rife with arbitrary labels that have little or nothing to do with the key properties of the thing described, or why we should care about the molecule in the first place. Even in the most well documented content areas, such as the hepatitis C virus, labels for fundamental drug properties are essentially random. NS5a? NS3a? The labels for protease inhibitors simply reference the proteins identified in a laboratory assay. There is something here, but naming an entire class of drug over something as banal as “non structural protein 5a” seems like an enormous lost opportunity to talk about the truly differentiating properties of the drug.

However, a strong scientific lexicon is the first critical step to introducing a new product or brand long before it actually comes to market. It must accurately reflect the scientific elements of the story and be clear, concise, and simple. The scientific lexicon must also be differentiating, sustainable, ownable, and must create a unified value proposition across a broad range of stakeholders. Most importantly, the scientific lexicon must be evocative and memorable.

The foundations of a clear scientific lexicon are not inherent in dense academic jargon, and must instead be strategically constructed. To do so, the linguistic landscape of the compound or disease state must be analyzed, while the competitive issues facing the brand and its unique scientific attributes must be identified. Class designation, molecule name, or disease-related language can be built and delivered via virtually any medium.

Once established, the opportunities to leverage the scientific lexicon for a new brand are nearly limitless. However it is essential that marketers begin by saturating internal communications and ingraining routine use among the people who work with the brand every day, such as commercial and clinical teams as well as MSLs.

As pharmaceutical marketers, the opportunity to signal that what is coming now is different from what has come before should not be overlooked or squandered. Once a drug looks reasonably certain to launch—with the amount of talk generated about it by analysts, the medical community, and advocates—it is time to establish significant differentiation in the minds of readers. A strategically crafted scientific lexicon has the potential to be as iconic as bold colors and a catchy tagline. Let’s give products the language that does the molecule justice.


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Does the Bell Toll for Traditional Siloed Promotional Activities in a Leaner Compliance-Driven Pharma World?

Our clients are saying that the role of Medical Education will grow in years to come…potentially biting into other traditional areas of the marketing mix. Does this spell disaster for advertising or PR?

Ogilvy Healthworld Medical Education recently surveyed its clients to assess what the future would hold for Med Ed, and the results were both thought-provoking and intriguing. The clients we involved spanned marketing and medical affairs disciplines, in global, national and EMEA roles across a range of small, medium and large pharma companies.

Looking at how agencies would need to respond to changes and turbulence in the pharma environment, five key trends emerged:

  1. We are part of a shifting landscape: attitudes, budgets and people are moving away from Sales and Marketing to Medical Affairs and Market Access. This parallels an increase in educational activities and the slow erosion of PR and promotional activities or their metamorphosis into more educational content. Our clients are telling us: “Clinical data will increasingly be at the heart of educational tools and messages ….medical education will drive a more clinically focused brand strategy and what promotional work that remains will be subject to stricter and stricter regulations.”
  2. Our pharma clients are increasingly concerned about the risk of non-compliance and, in particular, inadvertent off- license promotion. As well as a sharper delineation between promotional versus non-promotional activities, there will be a drive to improve transparency between pharma companies, healthcare practitioners, payers and patients.
  3. The hands-off approach to pharma-sponsored Continuing Medical Education (CME) is becoming a double-edged sword: although companies have reduced regulatory control, they are under increased pressure—and face stiff penalties—if content is non-compliant.
  4. As healthcare professionals communicate increasingly in the virtual space, there will be less reliance solely on face-to-face communication. Digital communications will rise to deliver more cost-effective, innovative  solutions to more targeted audiences and enhance the value of face-to-face communications.
  5. As client teams continue to downsize, there will be a growing need for strategic communications planning expertise within agencies. Potentially, those with the greatest capability to become long-term strategic partners will increasingly be seconded in as interim managers: “As pharma becomes more risk averse and cost conscious, clients will need agencies who can lighten their load, in the new leaner, compliance-driven pharma world.”

In the relentless drive to rationalize healthcare spend and tailor therapies to meet unmet needs in increasingly segmented patient groups, new drugs will hit increasing scrutiny.   In this new world, data will be king—and Med Ed is ideally and uniquely equipped to use this information to justify premium pricing over cheaper, established medicines. Ultimately, pharma’s quest for improved transparency, trust and reputation must be underpinned by programs that lead to enduring change, but which are compliant in the stringent regulatory environment in which we operate. Medical education is not just about knowledge acquisition anymore. It must facilitate and drive behavioral change, among a range a stakeholder groups operating under strict regulatory compliance. While behavioral change is most effectively achieved when all communications disciplines are harnessed, including PR, advertising and market access, it will increasingly be underpinned by robust Med Ed.

Does the bell toll for traditional siloed promotional activities in a leaner compliance-driven pharma world?


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Affordability of Medicines—the New Kid on the Block

You know the feeling: you pop into the shop and see something you want to buy, but times are tight and you simply can’t afford it. You want the best, but you feel compelled to consider all your spending priorities and choose to go for the less expensive brand—it’s a question of affordability.

In today’s environment, this is a challenge facing healthcare systems throughout the world. Coupled with this, more healthcare resources are being consumed as people are living longer with increasingly complex health problems. Add to this the increased complexity of how national health systems are assessing a medicine’s value, and you have the perfect storm.

Indeed, just as you weigh up whether you can afford to pay for something, those who pay for medicines (termed “payers”) all have affordability at the forefront of their minds. Governments are addressing the issue by driving further healthcare reforms, while payers are aggressively managing costs, limiting therapy choice, and shifting more of the cost burden to consumers.

However, if industry is to effectively support payers in their informed decision-making, it is important that they are viewed as investors in their community’s health and not simply gatekeepers of the budget.

As investors in health, payers deploy a variety of instruments to support medicines’ cost control. These can be broadly divided into supply-side and demand-side approaches.

Demand-side instruments include:

  • National-level price negotiations/price cuts
  • Reference pricing systems–using the cost of other similar drugs to set the price
  • Health technology assessments–assessing the value of a medicine using a range of tools including cost- and comparative-effectiveness
  • Promoting generic medicines and parallel imports–parallel imports refer to the practice of importing a medicine from another market where the medicine is cheaper

Supply-side instruments include:

  • Patient co-payments–this is the practice where patients will pay a certain percentage of the medicine’s cost
  • Reimbursement restrictions–restricting the money paid for a particular drug
  • Delisting–removing a product from a list of drugs that will be paid for
  • Prescribing budgets–setting financial budgets for the prescribing of medicines
  • Formularies and guidelines–a list of medicines that have been approved to be prescribed, or their incorporation within guidelines that should be adhered to

To date, the pharmaceutical industry has focused predominantly on communicating about cost and cost-effectiveness to secure optimal pricing and reimbursement for their brands at a market level. Arguably, more needs to be done to demonstrate the true benefit of treatment to patients, the communities in which they live, and society at large.

Some solutions to help demonstrate the true value of a treatment include:

  • Evaluating and demonstrating the longer-term patient outcomes
  • Demonstrating and communicating the economic value across all stages of a product lifecycle
  • Supporting payers to identify which patient segments would benefit most from treatment
  • Relating the outcomes demonstrated through clinical trials to local demographics

There is no doubt that the industry continues to go through a challenging time, while the economic crisis faced by many countries is only likely to get worse. In this environment, the issue of affordability is higher up on governments’ and payers’ agendas. However, by understanding and meeting the needs of payers and their communities, the industry will be better placed to ensure patient access to their medicines.



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HCPs Who Access Data: Just Like the Rest of Us!

Guess what! Scientists, clinicians and other healthcare professionals own and use smartphones, iPads and an array of desktop and personal computers. These same people are fundamentally interested in the clinical studies and scientific evidence that result from research studies. They read specialty and  peer-reviewed journals and are asking, “When will I be able to read more via my personal devices?” As lay consumers, they can access everything from instructions on how to build a nuclear bomb to the recipe for Uzbeki-style lamb via their digital devices, yet the journal articles that satisfy their professional needs and passions are not yet uniformly available. Go figure!

SCI Scientific Communications & Information recently utilized a three-wave electronic survey to understand just how eager clinicians, journal authors and industry stakeholders are to receive data in a digital format. The results are in line with society at large. They want more!

Data collected from 50 internal medicine and primary care practitioners showed 86% accessed peer-reviewed literature from 2010 to 2011, and the overall proportion of information accessed with these modalities increased from 52.2% to 64.6%. Mobile tablets showed the highest percentage increases.  Preliminary results from 15 authors who published more than four articles over the last three years show that they decreased their print-only submissions to 15.3%, from 25% of the submissions two years ago.

While computers and laptops remain the primary devices for accessing online peer-reviewed content, HCPs say they will want and expect that journal articles become available for e-readers and smartphone applications. These devices are likely to outpace PCs/laptops based on portability and convenience.  Industry stakeholders anticipate a rise in open access and non-print options. They aim to please as long as regulatory and compliance agents within their organizations get on board and clarify the rules around more novel dissemination approaches, such as podcasts. In the meantime, they support open access publications and utilize QR coding at congresses to disseminate posters and presentations.

Like all other consumers, HCP readers perceive that technology will make their access to information more timely, cost-effective and convenient. They want to see e-mail notifications of new articles, smartphone applications that work for middle-aged sets of eyes and tablet applications.

Summary excerpted:

Hudson C,  Cecere E, Yalamanchili R, Anderson M, Pucci M, Aloia D, Scheckner B. Utilization and attitudes on technological advances in medical publications. Podium presentation, ISMPP, 2012.  





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Finding Your Way; Making Sense of the “Must Do’s” in Early Pipeline Asset Development

Most pharma managers have little experience in deciding what the essentials are in preparing an early asset molecule for launch. Although a molecule may be too new or too far from launch to have a generic or brand name, it is not too early to start thinking about market preparation. Companies are realizing that to create a true “valuceutical” that delivers a positive outcome safely with good economic value, they must begin planning much earlier in the development process and align certain key activities. These activities will form the backbone of future go-to-market plans and will also uncover issues and gaps that can be addressed to create a robust, well-tested platform upon which a launch program can be based. They will also help avoid many of the pitfalls, lost opportunities, and blind alleys that can be caused by delayed planning, and which are hard to fix toward the end of the process, without the luxury of time.

The must-do activities ideally should be initiated before phase 3 programs begin, even before registration trials are designed, so they can be tweaked to maximize market opportunities. In our experience the activities fall into 4 simple categories: evidence; messaging; advice and endorsement; and tactical and channel planning. Sounds simple, right? Not quite. Each of these categories has a myriad of layers and complexities. Within each, parsing activities into what is essential to do first and what can wait facilitates a manageable sequential approach to early market planning, one that can be a guide to marketers and medical affairs professionals facing the “where should we begin?” conundrum.

Preclinical and clinical data is of course a must-have. However, the real essential is having the data sets on which the clinical profile of a molecule is based be easily available, organized, and most important, published in peer-reviewed literature as part of the scientific and clinical public record. Too often, in the world of company mergers, clinical plan delays, and rotation of key personnel, essential data are forgotten and never see the light of day, making the support of later clinical evidence, messages, and claims difficult. Also important to establishing a comprehensive evidence record is making sure trials are completed on time, to provide essential proof-of-concept data. A good way to ensure this is to maximize research center and patient recruitment to a trial — often difficult in a competitive environment with many trials vying for a limited center and patient pool. In long-term trials, patient retention is just as crucial as initial recruitment to preserve a study’s statistical power and speed the trial to its endpoint.

Clinical evidence underpins a sound scientific and clinical rationale for a pharma product. The clinical evidence needs to be used to answer the unmet needs expressed by HCPs, while being presented in a narrative that is relevant across multiple target audiences and geographies. The best way to approach this is to understand the current mindset of potential product users and map out the sequential beliefs and attitudes that will lead them to understand the true value of a brand. Not only do we do this, but we also identify behaviors and information that must be introduced and challenged for HCPs to move along this continuum — their thought journey. These elements define an educational curriculum that will support a brand, and, when organized into a logical narrative, will form the unifying and synchronizing blueprint for prelaunch communications. Utilized broadly, this blueprint can ensure synchronous and meaningful communications across multiple channels from investor relations, PR, publications, and early disease awareness through early branded communications.

Advice from experts is also essential, whether it is therapeutic expertise to help coalesce unmet needs, trialists to help design robust studies, or from other specialists (for example, to steer the development of plans in reimbursement). Building advocates that can represent the evidence (with full disclosure) supporting a new molecule in the most credible way across interested audiences is taking this one step further. In the past, most advice and advocacy-building activities were centered around advisory boards; now, however, online tools are being used to gather opinions and thoughts from a broader audience efficiently and quickly, with clear records of the interactions retained to maintain transparency.

With a clear message plan and foundation for advocacy in place, clearly understanding which channels will be used to communicate and educate HCPs and other constituents is the final molecule essential. It is important to define and quantify the mix of digital, print, and live communications to meet the needs and habits of each target audience, and to understand the lead times for each of these (which can be significant) so that crucial educational and brand information reaches the desired targets at the optimal time via the optimal media channels.



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