commercial considerations in early drug development

W COMMUNICATION AGENCY

Specialists in international B2B communications since 1998

Three sectors with a specific need to translate product features

into brand benefits

INDUSTRY

Alfa Laval Duni Ecophon Inwido NSK Microbas Sandvik Mining Perstorp Tetra Pak Thorn Lighting Trelleborg

TECHNOLOGY

Baldwin Cliniclands Comsys SCAN COIN Sovplym Sydantenn Wayne

LIFE SCIENCE

Grünenthal Lundbeck Norgine Novo Nordisk UCB Airsonett


WHAT DO WE MEAN BY INNOVATION IN THE PHARMACEUTICAL INDUSTRY? INNOVATION IN THE RESEARCH ENVIRONMENT

SUNIL RAMKALI, ACCOUNT DIRECTOR,

W COMMUNICATION AGENCY 3RD MARCH 2016

CLINICAL DEVELOPMENT PROCESS: QUALITY, SAFETY AND EFFICACY ARE REQUIRED FOR REGULATORY APPROVAL

4

Phase 2 Phase 1

First human dose

50–100 volunteers

Dosage and side effects

First efficacy dose

100–1,000 patients

Long-term effects,

optimal dose and efficacy

Phase 3

Confirmatory trials

Up to 9,000 patients

Safety and efficacy

X years

CLINICAL DEVELOPMENT / REGULATORY PROCESS

5

Phase 4 Initiation Phase 1 Phase 2 Phase 3a Phase 3b

RESEARCH DEVELOPMENT COMMERCIALISATION

Manufacturing

Product up-scaling formulation

Non-clinical testing

Safety and tolerability

Clinical trials

Proof of clinical concept, safety and efficacy

Product registration

Global regulatory requirements

and product labelling Preparing for launch

Product communication and

market access

Research

Discovery and validation of

clinical proof of principle

Reaching the market

Product expands treatment options

for people with chronic conditions

Initiation: Average industry time to develop a new molecular entity in R&D = 10 – 15 years at an estimated cost of around $1 billion

Source: innovation.org - Drug Discovery and Development: Understanding the R&D Process, Feb 2007.

TRADITIONAL ‘ROAD MAP’ FOR BRINGING A

PHARMACEUTICAL PRODUCT TO THE MARKET

Need for the product

Identify the product

Develop the product

Study the product

Approve the product

Reimburse the product

Sell the product

3000 raw ideas

300 ideas worked

125 Concepts

9 Projects

2 Commercially ready

1 Commercial Success

THE PIPELINE – FOOD FOR THOUGHT!

Source: Dow Chemical Company

Innovation = Brand value

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: www.wikipedia.com)

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: www.businessdictionary.com)

Healthcare definition?

• Scientific breakthrough in basic research or discovery and transforming them into marketable products that can be successfully launched into highly regulated markets.

OBJECTIVES OF TODAY

The pharmaceutical landscape is rapidly changing and the pharmaceutical industry needs to adapt

Understanding the customer definition of brand value (innovation) is critical for achieving access to the market

The cost of delivering brand value (innovation) to the pharmaceutical industry

OBJECTIVES OF TODAY


To every action there is always opposed an equal reaction. Sir Isaac Newton, Physicist

1

4

ACTION – GLOBAL TRENDS ARE RESHAPING THE

PHARMACEUTICAL MARKET PLACE*

• 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 report (2008): Pharma 2020: Marketing the future. Which path will you take?

• 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 risk-adverse

‘ACTION’ – PHARMACEUTICAL LANDSCAPE

Aging population leading to increase drug spending

Devolution of budgets from national to regional healthcare organisations, leading to cost containment

at a local level

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 / non-trivial diseases

Increased use of generics = 2nd/3rd/ 4th line positioning for ‘new’ & branded products

‘REACTION’ – PHARMACEUTICAL LANDSCAPE

Reduced access to healthcare professionals

New customer groups to address – payers / healthcare technology assessment bodies

Down sizing of sales forces

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’ (after generics)

Need for tailored marketing communications – specific value story for payers

INNOVATIVE BRANDS 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).

OBJECTIVES OF TODAY

Understanding the customer definition of innovation is critical for achieving access to the market

UNDERSTANDING STAKEHOLDER NEEDS IS CRITICAL

FOR COMMERCIAL SUCCESS

Budget

impact /

affordability

Quality Safety Efficacy P & R

Regulatory assessment

Marketing authorisation

Payer assessment

Value demonstration

‘4th hurdle’ ‘5th hurdle’

Pre

scri

bers

All parameters are critical for market penetration Adapted from Paul & Trueman (2001), Fouth hurdle reviews , NICE, and database applications, Pharmacoepidemiology and Safety, 10 (5), 429 - 438

Industry

perspective Innovation based on “novel“

pre-clinical capabilities “new mode of action“

“first in class“

“highly selective …“

Payer perspective Innovation based on “improves compliance“

potential and benefit for “health consequence of side effects“

patient management “improves health status“

“clinical important to the patient”

“reduced treatment costs“

Definition Attributes

Payers need to be convinced of the value for money

of the product

“INNOVATION” FOR THE PHARMACEUTICAL INDUSTRY

AND EXTERNAL STAKEHOLDERS ARE VERY DIFFERENT

TYPE OF EVIDENCE FOR TREATMENT INTERVENTIONS

Efficacy

Does it work in clinical trials?

Effectiveness

Does it work in clinical practice?

Efficiency

Does it contribute to more efficient use of

resources?

Expert Rev Pharmacoeconomics Outcomes Res 2007

OVERVIEW OF AUTHORITY FEEDBACK TO

REIMBURSEMENT APPLICATIONS FOR BRAND X

22

22

Country Lack of

comparative data Lack of long-term

data Modest effect

Lack of data

in subgroups No real life data

Country A X X X

Country B X X X X

Country C X X X X X

Country D X X X

Country E X X X X

Country F X

In addition to these points, the budget impact was frequently mentioned

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 (1st 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

THE INDUSTRY IS ADAPTING TO THE CHANGING

LANDSCAPE (GSK)

Andrew Witty was quoted to have said to his senior R&D Managers

2

4

Andrew Witty,

CEO of GlaxoSmithKline

“you will receive your bonuses,

not on how products are approved by the regulators,

but on how many products are reimbursed by the payers”

OBJECTIVES OF TODAY

The cost of innovation to the pharmaceutical industry

Sources: Drug Discovery and Development: Understanding the R&D Process,

www.innovation.org;

CBO, Research and Development in the Pharmaceutical Industry, 2006.

DRUG DEVELOPMENT TAKES LONGER Developing a new medicine takes an average of 10–15 years; the

Congressional Budget Office reports that “relatively few drugs survive

the clinical trial process”

Sources: 1J. DiMasi and H. Grabowski, "The Cost of Biopharmaceutical R&D: Is Biotech Different?, " Managerial and Decision Economics, 2007; J. DiMasi et al.,

“The Price of Innovation: New Estimates of Drug Development Costs,” Journal of Health Economics, 2003.

THE COST OF DEVELOPING A NEW DRUG HAS

INCREASED

$100M

$300M

$800M

$1.3B

1979 1991 2000 2005

Cost to Develop One New Drug1

Bil

lion

s (C

on

stan

t D

oll

ars

, Y

ear

20

00

)

NME VS. R&D COSTS (FDA 1992 - 2006)

2

8

CONSEQUENCES OF GETTING WRONG!

• More than half of the costs are on clinical development, especially on multinational phase III trials.

• Failure of a drug during phase III is a significant expense to the industry.

• Pfizer is discontinuing a Phase III trial evaluating the investigational compound inotuzumab ozogamicin – the drug just isn't working as well as they hoped it would in this situation

• Eli Lilly reported that solanezumab had failed both primary endpoints in a large Phase III study for Alzheimer's.

29

ADDRESSING THESE ISSUES - HOW DOES THE FDA ENCOURAGE INNOVATION?

• The FDA uses a classification process for NMEs for ‘fast tracking’ innovative products.

• Products are categorised:

• Priority Review

• Fast Track

• Accelerated Approval

• Priority Review – has the potentially provide a significant advance in medical care - review within 6

months, instead of the standard 10 months.

• Fast track – the product treats an unmet medical need.

• Accelerate approval – treats a serious or life-threatening illness that offers a benefit over current

treatments.

3

0

2012

GROWTH OF ORPHAN DRUGS

Source: Orphan Drug Report 2013, EvaluatePharma

HOW DO WE INCREASE THE COMMERCIAL

SUCCESS OF PHARMACEUTICAL BRAND?

- UNDERSTAND WHAT CUSTOMERS MEAN

BY BRAND VALUE

GENERATE THE ‘RIGHT’ CLINICAL AND ECONOMIC

EVIDENCE FOR ACHIEVING MARKET ACCESS /

REIMBURSEMENT

3

4

“FOREWARNED, FOREARMED - TO BE PREPARED IS

HALF THE VICTORY”*

*Miguel De Cervantes – Spanish Poet

HOW TO DEFINE BRAND VALUE IN HEALTHCARE?

3

6

Brand value


3

7

Brand value = offers a clinical benefit / addresses a clinical need


3

8


+ differentiation from standard of care


3

9



+ meaningful target population


4

0



+ meaningful target population

+ competitive price

CASE EXAMPLE

COMPANY CONFIDENTIAL – FOR INTERNAL USE ONLY.

GRAZAX®

THE INNOVATION IN ALLERGY TREATMENT

• Administration advantages:

• GRAZAX is a tablet-based immunotherapy

• GRAZAX is taken once-daily and without up-dosing

• GRAZAX allows home administration


GRAZAX®


• Formulation advantages:

• GRAZAX dissolves under the tongue within seconds

• GRAZAX provides optimal exposure of allergens

• GRAZAX can be stored at room temperature

GRAZAX® provides a convenient and safe immunotherapy

treatment for home administration


GRAZAX®


• Patients benefits:

• GRAZAX is a convenient and easy-to-use immunotherapy

• GRAZAX induces immunological tolerance to grass

• GRAZAX improves the quality of life of patients

GRAZAX® allows many more patients suffering from grass

allergy to benefit from immunotherapy

SUMMARY


Understanding the customer’s definition of innovation is critical for achieving access to the market!

R&D functions need to consider markets needs earlier the drug development process


LILLA TORG 3, 211 34 MALMÖ, SWEDEN

PHONE: +46 40 665 66 90

WWW.WCOMMUNICATIONAGENCY.COM