What do we mean by brand value (innovation) within the pharmaceutical sector? Biomedicine Master Program, Lund University, Sweden
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1 What do we mean by brand value (innovation) within the pharmaceutical sector? Biomedicine Master Program, Lund University, Sweden Sunil Ramkali Account Director, W Communication Agency 11 th November 2014
2 Traditional road map for bringing a pharmaceutical product to the market Need for the product Identify the product Develop the product Reimburse the product Approve the product Study the product Sell the product
3 Traditional road map for bringing a pharmaceutical product to the market Need for the product Identify the product Develop the product Reimburse the product Approve the product Study the product Sell the product
4 The pipeline food for thought! 3000 raw ideas 300 ideas worked 125 Concepts 9 Projects 2 Commercially ready Source: Dow Chemical Company 1 Commercial Success
5 5 R&D process: 1 in 10,000 ideas make it to market
6 6 Clinical development process: safety and efficacy
7 However, regulatory approval is not enough for commercialisation of a new product
8 The industry is adapting to the changing landscape (GSK) Andrew Witty was quoted to have said to his senior R&D Managers you will receive your bonuses, not on how products are approved by the regulators, but on how many products are reimbursed by the payers
9 How do we define innovation? General definition Innovation is the application of new solutions that meet new requirements, inarticulate needs, or existing market needs (source: Business definition The process of translating an idea or invention into a good or service that creates value or for which customers will pay (source: Healthcare definition? Scientific breakthrough in basic research or discovery and transforming them into marketable products that can be successfully launched into highly regulated markets.
10 Objectives of today The pharmaceutical landscape is rapidly changing and the pharmaceutical industry needs to adapt Meaningful value demonstration for a new product is critical for achieving access to the market What will the pharmaceutical industry need to do in order to secure market access for new products in the future?
11 Objectives of today The pharmaceutical landscape is rapidly changing and the pharmaceutical industry needs to adapt
12 To every action there is always opposed an equal reaction. Sir Isaac Newton, Physicist
13 Action global trends are reshaping the pharmaceutical market place* The burden of chronic disease is soaring Increasing influence of policy makers/payers on prescribing decisions Increase in pay-for-performance Increased focus on prevention rather than treatment The regulators are becoming more riskadverse Increasing demand for health care services cost containment Priority to serious diseases Increasing requirement that products prove: Incremental clinical benefits vs. SoC Cost-effectiveness Affordable / BI analysis *PWC 1report (2008): Pharma 2020: Marketing the future. Which path will you take?
14 Action pharmaceutical landscape Aging population leading to increase drug spending Significant increase in the influence of health technology assessment bodies Increased use & enforcement of prescribing guidelines / drug listings Increased focus on drug development in niche therapy areas / nontrivial diseases Increased use of generics, leading to second line positioning for new and/or branded products
15 Reaction pharmaceutical landscape New customer groups to address payers / healthcare technology assessment bodies Develop specific value story for payers, i.e. value demonstration vs. SoC. Increased joint drug development between different companies reduced risk Increased focus on drug development for more serious conditions New drugs being positioned as add-on or 2 nd line product positioning (after generics)
16 Reaction brand communications must focus on value demonstration! Value demonstration Delivering brand communications that are compelling, meaningful and relevant is mandatory. Differentiation vs. the competition Communicating the incremental clinical benefit/s & value for money of your brand is critical. Strategic & creative execution Executing brand communications via creative, relevant and motivating channels is a must, if we are to change prescribing behaviours (& funding decisions).
17 Objectives of today Meaningful value demonstration for a new product is critical for achieving access to the market?
18 Innovation for the pharmaceutical industry and external stakeholders are very different Definition Attributes Industry perspective Innovation based on pre-clinical capabilities novel new mode of action first in class highly selective Payer perspective Innovation based on potential and benefit for patient management improves compliance health consequence of side effects improves health status clinical important to the patient reduced treatment costs Payers need to be convinced of the value for money of the product
19 Payers are interested in effectiveness and less in efficacy* Efficacy: Ideal circumstances Effectiveness: Real world * Godwin M, Ruhland L, Casson I, et al. (2003) Pragmatic controlled clinical trials in primary care: the struggle between external and internal validity. BMC Med Res Methodology 1
20 Reimbursement decisions by payers combines clinical and economic elements Economics and pricing Health Outcomes and trial results Efficacy Safety Tolerability Budget impact analysis (BIA) Affordability Cost effectiveness Payer priority / Public health Quality of life (QoL) / Patient report outcomes (PROs) Reimbursement Full reimbursement Partial reimbursement No reimbursement Reimbursed but..(restrictions apply)
21 Increasing need to demonstrate added value during P&R negotiations We don t simply expect to have more medicines, but rather to have medicines that heal better, or at the very least as well as the ones that are already available - Xavier Bertrand, Minister for Work, Employment and Health, France (June 2011) AMNOG healthcare reform, Germany (1 st Jan 2011) early benefit assessment Clinical benefit - quantification of the incremental clinical benefits vs. current German standard of care The NHS (England & Wales) is considering Value Based Pricing (VBP) model The reimbursed price of a new product will be determined based upon its incremental value vs. the relevant comparator
22 Objectives of today What will the pharmaceutical industry need to do in order to secure market access for new products in the future?
23 Drug development - generate the right clinical and economic evidence for achieving reimbursement
24 Increase our understanding of stakeholder needs Involve key stakeholders early in drug development phase II / III Get their opinion on what data / clinical end points your product needs to deliver Develop a strong payer value proposition Develop a compelling story to get your product funded Talk to key stakeholders / payers before launch (Managed Entry Programme) to ensure allocation of budget for a new product Budgets are usually set 12 months before, so get in early
25 Consequences of not understanding the needs of stakeholders Limited or no market access after significant investment will lead to limited / no uptake of our brand Denied national and/or local reimbursement Negative health technology assessment appraisal No or limited funding available No or limited inclusion on treatment guidelines / formulary / product listing
26 Victoza (liraglutide) Novo Nordisk pre-launch (1) UK launch July 2009 Novo Nordisk allocated 20% of its pre-launch budget to market access activities The market access strategy was implemented 18 months before launch Specific payer materials were deliver to communicate the brand s value story Advanced budgetary notification materials Focus on disease awareness Burden of disease for patients and the healthcare system Review of existing treatments Unmet medical need How Victoza could address these needs clinically and cost-effectively
27 Victoza (liraglutide) Novo Nordisk pre-launch (2) Novo Nordisk worked closely with budget-holding opinion leaders advocates at pre & post launch A formulary pack were made available at launch focusing on the value story for Victoza Novo Nordisk engaged with NICE and SMC over 12 months before launch
28 Victoza (liraglutide) Novo Nordisk benefits In the first 12 weeks sales exceeded previous diabetes benchmark over the same time period Achieved significantly more formulary approvals compared to the previous benchmark 60% of GPs were aware of Victoza before launch
29 Forewarned, forearmed - to be prepared is half the victory * *Miguel De Cervantes Spanish Poet
30 Summary
31 How to define brand value in healthcare? Brand value
32 How to define brand value in healthcare? Brand value = offers a clinical benefit / addresses a clinical need
33 How to define brand value in healthcare? Brand value = offers a clinical benefit / addresses a clinical need + differentiation from standard of care
34 How to define brand value in healthcare? Brand value = offers a clinical benefit / addresses a clinical need + differentiation from standard of care + meaningful target population
35 How to define brand value in healthcare? Brand value = offers a clinical benefit / addresses a clinical need + differentiation from standard of care + meaningful target population + competitive price
36 Summary The pharmaceutical landscape is rapidly changing and the pharmaceutical industry needs to adapt Meaningful value demonstration for a new product is critical for achieving access to the market! R&D functions need to consider markets needs earlier the drug development process talk to your customer!
37 Thank you! W communication agency Lilla Torg Malmö
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