So far, the first quarter of 2009 has been full of initiatives that call for, if not push for, change in the pharmaceutical industry and in medical science overall. Some may say it started when Obama took office. Within six weeks of leading the country, he announced $1.1 billion for comparative effectiveness research. Then, his proposed FY 2010 budget included support for a regulatory pathway for follow-on biologics. And this week, he reversed the ban on the use of federal funding for stem-cell research.
Others may say industry change began a couple of years ago with the start of the global recession and the end of the blockbuster moment. Companies have been forced to restructure and downsize while maintaining a global presence and market share. They’ve been encouraged to specialize in niche products and then to diversify their portfolio (biologics, anyone?). And now, says PricewaterhouseCoopers, they need to restrategize once again.
The accounting firm has released a new report as part of its Pharma 2020 series, Marketing the Future—Which path will you take?, that highlights how the industry needs to re-examine its marketing and pricing plans. The full report is available for download, but some highlights include:
o Pay-for-performance is on the rise. In other words, drug manufacturers need to do more than ensure their products are safe and effective. They need to ensure their products provide “value for money” and are “better than” alternative therapies already on the market. “By 2020, we think that all new medicines will be paid for on the basis of the outcomes they deliver,” says the report. (A bill introduced in the Senate March 4 would allow wholesalers and pharmacies to import qualifying drugs from countries abroad—also impacting competition and pricing decisions.)
o Pharma will be able to play a larger role in health management (e.g., prevention of disease) but will have to improve its public image first.
o Detailing and gifts to doctors as well as DTC advertising are not all they’re chalked up to be and should remain on the decline.
o Marketing/Sales departments as well as healthcare payers, patients, and doctors will need to be more heavily involved in R&D to determine which drug candidates are best to focus on in terms of the overall value chain.
o ePrescribing and electronic health records are inevitable (Congress recently passed a law to increase ePrescribing in the Medicare program and Obama’s stimulus package calls for the use of electronic medical records; other countries are already ahead in this game).
o Even though mergers and acquisitions are helping to diversify company pipelines, demand for generic drugs and specialty drugs are not going to go away. To stay at the top, therefore, drug companies may want to look into healthcare packages and bundled products, and take on more of a “brand” focus (respected brands will also go a long way toward improving pharma’s public image).
o In the regulatory arena, harmonization will be more prominent and “live licenses” are likely to be the method of “drug approval” by a regulatory agency. These licenses will allow a manufacturer to release a new drug to multiple countries simultaneously, on the condition that further in-life testing in various populations will lead to “rapidly evolving labels” on the new products.
If PWC’s predictions are accurate, much change is on the way. Although a large portion of the life sciences community has been waiting for some of the pending changes (e.g., a follow-on biologics pathway, additional stem-cell research) for quite a while, the industry overall is not so ecstatic about other changes (i.e., comparative effectiveness research, overseas drug imports). For decades, pharma has had control over its market and what its products are worth. But it looks as though a combination of the global economic downturn, the end of the blockbuster-drug era, and a more liberal US administration are coalescing to change industry practice as we know it.