cardiovascular therapeutic market: insight-driven commercial models
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8/7/2019 Cardiovascular Therapeutic Market: Insight-Driven Commercial Models
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1 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright 2011 IHS.
How Can Insight-Driven CommercialModels Deliver Value in Cardiovascular
Therapeutic Markets?
The Sourcefor Critical Information and InsightTM
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The ast-changing dynamics o the pharma industry
require re-evaluation o analytical models and
streamlining o insight-development processes to
ensure sustainability .................................................. 3
Stakeholder value expectations are the highest in
the cardiovascular therapeutic area, where insight
will play a vital role in uture growth models ............... 4
Growth Model 2.0: Analytical processes that
integrate portolio management, competitive
intelligence, and stakeholder engagement will be
central to uture sustainability. ................................... 5
Function: Market Access .......................................... 6
Function: Competitive Intelligence /
Strategic Planning ..................................................... 7
Function: Research & Development .......................... 8
New commercial models integrating insight-
development processes will be the cornerstones
o success ................................................................ 9
Meet the Author ...................................................... 11
The IHS Global Insight Healthcare
and Pharmaceuticals Practice ................................. 11
How can IHS help you? .......................................... 11
Contents
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The pharmaceutical industry is going through a
period o signicant change driven by the rise o
generic drug markets, payer-centric commercial
models, the growth o pharmerging markets, and
outcomes-based decision making.
In 2009, the industry grew at a rate o 7% to $837billion1, largely because o both horizontal and vertical
consolidation. Key growth actors included the
increasing demand or major therapies in emerging
markets and the rise o specialist-driven markets.
The pharmaceutical industry typically consists o many
independent, highly concentrated sub-markets aligned
to therapeutic categories. Companies compete aggres-
sively in each category, oten using a dual strategy:
Market dominance in one particular disease class Risk-benet-based portolio diversication orthe remaining disease classes
Market leadership in each category is largely
governed by a companys depth o technological
capability and the market penetration o its
existing portolios.
Evolving analytical
models need to
harness consolidated
inormation sources
in order to allow
efcient, intelligent
decision making.
So Whats Changed?
Over the last 50 years, intrinsic innovation was the
main driver o industry growth. During this time,
pharmaceutical companies typically invested
around 15% o their net revenues in Research and
Development (R&D), relying heavily on the success
o single blockbuster products.
Escalating R&D costs, declines in productivity, and
ailures o many late-stage pipeline assets have raised
doubts about the traditional blockbuster-dependent
approach. Many industry experts oresee a payer-
centric growth model driven by coordinated insight-
development processes as the next rontier o success.
Although industry growth is expected to continue, the
nature and structure o growth is evolving rapidly. On one
hand, there are tremendous opportunities in the emerging
markets, and on the other hand, there is a tightening com-
petitive and regulatory landscape in developed markets.
What Does It Mean?
In order or pharmaceutical companies to successully
navigate the opportunities and challenges o this evolv-
ing landscape, it has become ever more important or
them to optimize their insight-development processes.
A robust insight-development process relies on
eective inormation compilation and ensures a
coordinated fow o inormation rom one business
unction to another. It will help pharmaceutical
companies increase commercialization eciency
by engaging proactively with various stakeholders
(payers, regulators, patients, and physicians).
The ast-changing dynamics o the pharma industry require re-evaluation o analyticalmodels and streamlining o insight-development processes to ensure sustainability.
1 Source: IMS
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The cardiovascular therapeutic segment and its
subsequent disease markets are the leading areas o
growth in the pharmaceutical industry. They command
the largest market or prescription drugs and in 2009
generated $110 billion in sales, accounting or about
13.5% 2 o the total market.
Over the last 30 years, pharmaceutical companies
have invested heavily in the cardiovascular arena to
develop and commercialize molecules or various
indications. Competition within the eld has intensied
as a result o:
Rise in the level o investment Stakeholder commitment towards deployment
o resources
High unmet clinical needs Expected greater returns on employed capital Technological advances Greater disease understanding
The increased competition has not only led to signicant
developments in the treatment landscape, but has also
altered the dynamics o the therapeutic category by
placing greater emphasis on the value o cardiac care.
What has driven the rise in stakeholder
value expectations?
Demographic Shifts
According to the World Health Organization (WHO),
the high prevalence o cardiovascular disorders is
attributed to aging populations, coupled with advancesin diagnostic technologies. The aging population is
driving the heightened emphasis on social care in
healthcare systems worldwide.
Payer-centric Solutions
There has been a considerable shit in the balance
o power between payers and pharmaceutical
companies. Patient solutions have evolved towards
payer-centric approaches that rely on outcome-
and evidence-based decisions. The quality ocare, improved patient outcomes, and cost o
aordability are the principal areas o controversy
between stakeholders.
Growth of the Generic Drugs Market
A recent study indicated a higher level o generic
availability in cardiovascular markets than branded
products due to cost-containment strategies in
healthcare systems worldwide. This has led to a
signicant pressure on margins or existing players
in the category.
Specialty-focused R&D
There is an ongoing trend in cardiovascular towards
more specialized therapies, as this approach
oers greater competitive advantage and ensures
sustainability. This carries signicant upward risk
and a higher cost base, but has the potential to
deliver ar greater value or all stakeholders.
Stakeholder value expectations are the highest in the cardiovasculartherapeutic area, where insight will play a vital role in uture growth models.
2 Source: Adpated from Cowan Report 2009
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Cardiovascular therapeutic markets need a strategic
re-ocus because o stakeholders high value
expectations. Key uture success actors will centre on:
Portfolio Diversity and Optimization
Diversication ensures optimized allocation o nite
resources towards projects with greater return oncapital at an acceptable level o risk. The level o
diversication depends on a companys core strategy
and its relative position in the market. Successul
diversication strategies rely on up-to-date market
inormation and agile analytical models.
Dynamic Competitive Intelligence
Integrated intelligence processes act as principal
levers o success in a highly competitive environment
by ensuring aster movement o inormation between
markets and decision makers.
Evidence- and Outcome-based Decision Models
Success in the new pharmaceutical landscape will
largely depend on how ast companies implement
outcome-driven strategies. Quality and consistency
o inormation are core oundations o outcome-
based models.
Prioritized Stakeholder Engagement
The evolving market dynamics place greater emphasis
on the need or much broader engagement between
various stakeholders.
An eective engagement strategy depends on
inormation sharing and processing in order tomake value-driven conclusions.
Opportunities Ahead
There are tremendous opportunities or growth within
the segment, but the development and commercial-
ization landscape has shited to a more value-driven
ramework. To gain market access, newer therapies
and solutions must exceed existing value expectations
and increase the total level o cardiac care.
In order to achieve uture growth, pharmaceutical
companies will need to eectively monitor inormationacross many verticals and integrate those inormation
paradigms into insight-development processes.
In the ollowing case studies, we examine the
signicance o inormation and insight-development
practises or three unctions within the pharmaceutical
industry: market access, strategic planning, and R&D.
Growth Model 2.0: Analytical processes that integrate portolio management, competitiveintelligence, and stakeholder engagement will be central to uture sustainability.
The development and
commercialization
landscape has shitedto a more value-
driven ramework.
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Market access is one o the most important
unctions in the pharmaceutical industry and is
directly responsible or late-stage commercialization
o a companys drug pipeline.
Market access is typically a three-stage process
commencing with regulatory approval, reimbursementor pricing approval, and ormulary inclusion.
To gain market access or dierent assets, a pharma-
ceutical company must develop an evidence-based
approach ocused on three undamental principles:
Demonstration o clinical and economic value Price evolution according to market conditions Early timetable integrating clinical and economicendpoints
The key challenges faced by market access
professionals:
Understanding the pricing and access landscape
Interpret and orecast payer behavior or newproducts given the current barriers to market entry
Analyze the impact o current trends on theclinical landscape
Optimise potential value propositions to gainaster market access
Deciphering the value drivers
Identiy the value drivers or dierent stakeholdersand potential strategies to overcome reimbursementhurdles
Understand the role o clinical variables rom apayers perspective
Creating value propositions to fully capitalize
existing Pricing and Reimbursement (P&R)
opportunities
Identiy market-access barriers and model payerperception towards dierent scenarios
Conclusion
For companies to mitigate all the key challenges and
develop a strategic road map, inormation processes
play a central role. Timely, consistent, and analytically
rich inormation serves as a undamental building block
or an integrated market-access strategy. An integrated
data source that incorporates dierent verticals oinormation will eectively minimize the time-to-market
challenges by providing greater insight.
Function: Market Access
Current MarketScenario
ClinicalLandscape
PipelineDynamics
RegulatoryEnvironment
Number o competitors Genetics growth rate Market size Positioning o current assets Prive evolution o each asset
Country risk assessment Regulatory guidelines Engagement scenarios
Endpoint data Adverse events assessment Post-marketing trial inormation Evolution o clinical guidelines
Competitor pipelineassets
Clinical trial results Pipleine monitoringand analysis
Figure showing the information
dimensions of Market Access and
the critical information needs.
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Sustainable perormance in todays complex industry
environment relies on how quickly companies process
market inormation and develop strategic processes to
gain competitive advantage.
Competitive Intelligence (CI) is one such inormation-
harnessing unction. High-quality data is theoundation o an ecient intelligence unction and
ensures aster development o insight-driven
solutions at both the tactical and strategic levels.
Intelligence-rich data enable companies to interpret a
given situation, e.g., a recent trend or uture orecast,
and base strategies or uture developments on the
current situation and knowledge.
A key challenge or any CI unction in the pharmaceuti-
cal industry is the optimization o insight-development
processes and implementation methodologies.To develop an optimized CI process, companies
need timely data ocusing on:
Current Competitor Activity Price cuts Product-labelling updates Major licensing and agreement developments Patent expiration
Market Landscape Variables P&R environment in dierent countries Clinical and regulatory policies Orphan drug designations Post-marketing trial inormation
Pipeline Monitoring Endpoints o various trials Potential new entrants in same sub-therapeuticcategory
Forecasted market positioning KOL opinion analysis
Conclusion
In order to achieve the ecient level o optimization
or intelligence models, insight-development processes
play a central role.An integrated data source, together with an
advanced analytical platorm, will help pharmaceutical
companies gain competitive advantage and ensure
uture sustainability.
Function: Competitive Intelligence / Strategic Planning
A successful intelligence
framework depends on
the three fundamentalbuilding blocks of
structure and process,
awareness and culture,
and planning and
implementation. This
structure is constantly
reinforced through
effective compilation
and utilization of
information.
Communication
Analysis
CollectionInterpretation
Awareness and Culture
Planningand
Implementation
Structureand
Process
INFORMATION LANDSCAPE
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R&D is one o the most important unctions in the
pharmaceutical industry, as it ensures uture growth
and sustainability. Nevertheless, over the last couple o
years, this unction has come under intense pressure
because o declining productivity and rising costs
o introducing new compounds. This situation is
heightened in the cardiovascular market with its highstakeholder value expectations.
Many pharmaceutical companies have started to
reorganize their R&D programs by incorporating
market variables into the development structure. There
has been a growing debate that R&D unctions must
not be isolated rom the pricing or reimbursement
environment. A clinical development program must
take into account the payers perspective on the
design, implementation, and interpretation o
clinical variables.
A ully integrated approach needs continuous
monitoring and analysis o competitive, regulatory,
and payer activity, including:
Competitor pipeline variables Indications o various trials Detailed primary and secondary endpoints Results o completed trials Number o enrolments in major trials Saety and ecacy inormation
Regulatory landscape Detailed inormation about registration trials Response o regulatory agencies to clinicalresults data
Payer behavior towards clinical outcomesConclusion
The eectiveness o the R&D unction largely depends
on integrating three main levers o inormation:
regulatory landscape, clinical environment, and
market-access scenarios.
A ully comprehensive data source will help
pharmaceutical companies develop a cost-eective
and market-responsive R&D strategy by providing
greater insight on stakeholder perspectives.
Function: Research & Development
Figure: Stakeholder engagement map
for R&D function
Regulatory
R&D
MarketAccess
ClinicalEnvironment
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The pharmaceutical industry is in a state o fux,
and many orces are re-shaping its core structure.
Historically, pharmaceutical companies have
succeeded by discovering, developing, manuacturing,
and then marketing their products, oten allocating
resources in the prioritized manner.
The sequential approach (tunnel innovation) o
resource allocation has uelled the growth o the
blockbuster-dependent commercial model. One
o the principal drawbacks o this approach is the
peripheral position o inormation and how it is
used in decision-making models. Inormation was
disseminated rom one discipline to the next, but
not within disciplines, oten creating inormation
silos and masking.
A Rapid Evolution
With the rise o the inormation age, the undamental
elements o success are evolving rapidly. Pharmaceutical
companies are challenged on several ronts, and their
major areas o concern are centred on:
R&D technologies Regulatory emphasis and market access Stakeholder engagement E-business and supply chain management Marketing and consumer demands
The role o inormation has changed dramatically in
such a competitive environment. The need to compile
inormation sources is exacerbated with the rise o the
payer-centric model and the requirement or economic
endpoints in decision making.
For uture growth and success, new commercial
models must integrate insight-development processes
in order to actively engage the various cross-unctional
disciplines within a company.
Pharmaceutical companies should work towards
resolving all the roadblocks in inormation sharing
and compilation.
An integrated inormation source will help ease
many concerns or dierent stakeholders in the
pharmaceutical industry. It should give timely,
accurate, and mission-critical inormation oncompetitors, regulators, payers, and consumers,
thereby providing pharma companies with eective
stakeholder engagement points and helping them
achieve a sustainable growth strategy.
New commercial models integrating insight-development processeswill be the cornerstones o success
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PharmaceuticalCompanies
RegulatoryAgencies
Physicians/
ClinicalCommunity
Patient
PayerGroups
Inormation
The blockbuster-dependent model relies on
cyclical fow o inormation but lacks ocus to
disseminate inormation across disciplines, oten
creating inormation silos.
The payer-centric model works on undamental principles
o inormation dissemination across disciplines and between
stakeholders. It links decision-making process through
uniorm distribution o inormation.
Pharmaceutical
Companies
Physicians/
Clinical Community
Patient
Regulatory
Agencies
Payer
Groups
Figure highlights the evolving
commercial models in the
pharmaceutical industry and the
changing role of information inthe decision-making process.
The blockbuster-dependent
approach relies on information
sharing as a collateral function,
depending on communication of
results, whereas the new payer-
centric approach requires an
integrated and cross-functional
utilization of information.
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Meet the Author
Praful Mehta
Senior Healthcare Analyst, IHS
Praul Mehta is a SeniorHealthcare Analyst at IHS. He
joined the company in 2010 and
is a practice leader within its
therapeutic area services. Praul has been a long-time
advisor to senior teams within the pharmaceutical
industry on issues o market competitiveness, busi-
ness integration and commercialization strategies.
Prior to working at IHS, Praul was a Vice President
at StrataPro Analytics and Consulting, where he
developed the companys core consulting capability
or developed markets. He also led various project
teams at GlaxoSmithKline Pharmaceuticals and
Johnson & Johnson Pharmaceuticals.
Praul holds an MS degree in International
Management and Corporate Strategy rom North
Eastern University / Dublin City University. He has
a BS with honors in Genetic Engineering and
Biotechnology rom American University / M-IIT.
The IHS Global Insight Healthcare
and Pharmaceuticals Practice
The IHS Global Insight Healthcare and
Pharmaceuticals practice provides a portolio o
intelligence solutions to optimize the perormance
o companies and organizations across the
pharmaceutical, biotech, and generics sectors.
Our key ocus is to provide actionable insights to
support strategic decision making, particularly in the
elds o market access, pricing and reimbursement
(P&R), emerging markets, generics strategies,
therapeutic development pathways, and general
competitive intelligence.
Find out more about our healthcare and
pharmaceuticals practice
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