June 27, 2008
Medical Affairs Teams Prove Value Again ... and Again
Medical affairs groups often serve as the main scientific conduit between pharmaceutical companies and the medical community. Companies rely heavily on medical affairs groups to deliver scientific information and messages. While companies steer away from tying medical affairs value to sales figures because of compliance issues, medical affairs teams evaluate their value on other terms.
To demonstrate their teams' worth, most medical affairs groups use a combination of hard and soft success measures. Ranging from soft measures, such as feedback from thought leaders, to harder metrics, such as the number of medical abstracts produced over the year. However, a number of the activities medical affairs groups are tasked with are difficult to quantify with hard measures. Nonetheless, it is important for medical affairs groups to have some sort of measurement model in place in order to understand the value created by their activities as well as identify improvement areas.
Another reason medical affairs groups should make a concerted effort to measure their success is that they can leverage their value to justify additional funding or resources. In many cases, medical affairs group have to vie for limited resources against functions such as marketing and commercial operations which are able to point to definitive sale numbers in support of their success. Thus it is critical for medical affairs group to have some form of measurement that they can leverage to demonstrate their value to the organization. It is often important for senior management to have some indication of the value medical affairs brings when making resource allocation decisions.
Posted by Amanda Zuniga | Permalink | Comments (0)
June 03, 2008
Prescription Drug Prices on the Rise
Preliminary study findings from Cutting Edge Information show a notable increase in prescription drug prices over the past five years. Overall, drug prices increased by 47% between 2003 and 2007, or by 31% after adjusting for inflation. The trend toward higher industry pricing shows no signs of slowing, either - the News & Observer reports that the industry's two largest companies, Pfizer and GlaxoSmithKline, raised prices on their 10 highest performing drugs by 9% in 2007 alone.
While most therapeutic areas have seen inflation-adjusted price increases of less than 20% since 2003, and some have even been outpaced by inflation, other therapeutic areas have undergone much more significant price raises during this time interval. For example, dermatology product prices climbed by a notable 41% between 2003 and 2007. The diabetes market experienced the most dramatic increase of all therapeutic areas - on average, diabetes drug prices rose by 85% (or 64% in inflation adjusted dollars).
Multiple market factors have contributed to the steady increase in pharmaceutical prices. As long-time blockbusters near patent expiration, few up-and-coming treatments promise to fill in the gaps that those top performers will leave behind. Once-robust pipelines have become thin and slow-moving, and companies must maximize the profitability of those precious few drugs they do have on the market - which often means raising prices for new treatments as well as old ones. Complex drug development technologies translate into high development costs and ultimately result in higher prices once products reach the market. In addition, generic competitors have become increasingly aggressive and have begun challenging brand patents earlier and earlier in the product lifecycle. To help offset the losses that result from generic market entry, innovator pharmaceutical companies have begun to raise prices long before their brands' patents expire.
In addition to the data summarized here, Cutting Edge Information's full strategic pricing study, to be released later this summer, follows up on similar research conducted in 2005 to examine how the pharmaceutical industry's approach to pricing continues to evolve. The new study will delve into various aspects of companies' pricing strategies, including oversight, headcounts, costs and timelines for pricing studies. The study will also analyze pricing levels and trends by therapeutic area. To receive complementary study findings on this timely issue, please visit http://www.cuttingedgeinfo.com/studies/PH119/StrategicPricing.htm and complete a short survey.
Posted by Haley Wynn | Permalink | Comments (0)
May 29, 2008
Where is FDA in the presidential discussion?
Maybe I have a bit of tunnel vision, but has anyone else been waiting for the candidates of both parties to start paying more attention to the FDA? Clearly, healthcare has been a central issue of debate. Understandably, the candidates have focused on providing better and cheaper healthcare coverage to their potential constituents. At this point, as candidates McCain, Clinton and Obama are pressed more than ever to articulate their vision for the nation, or in this instance, the nation's health, it seems only logical that they discuss how they would solve the myriad of problems at the gigantic central government agency pivotal to this proffered health.
According to a recent statistic, the FDA regulates 25 cents of every dollar spent in the United States. Over the last two decades, Congress has broadened the FDA's reach and responsibility 127 times, and, oh-so-unfortunate but typically, have not put their money where their legislation goes. Most recently, another headline emerged from China—the land everyone loves to hear connected to a scandal concerning harmful chemicals—with the Baxter/Heparin debacle. Personally, I think Baxter could see sales fall for a tangential reason: the fact that so many people now know heparin comes from pig intestines. This latest event makes the seemingly outlandish idea of establishing an FDA office in China and other countries overseas to monitor imports seem less and less ridiculous. But it also shows how out of touch the FDA's role is with the modern, globalized world.
Though a failure sure to be tied to the FDA, this latest event really indicates that the FDA passed "over-extended" about 28 extensions ago. Washington has finally come to this realization in response to a series of investigations - apparently all the crises weren't enough to solidify the fact. Luckily, the investigations do note that the FDA's lack of capability does not stem solely from a paucity of funds, but also from the need to make major reforms to the bureaucracy's structure, testing and priorities. The study distressingly found that the FDA cannot keep up with the advances of modern science and many of the regulation, statistical requirements and study guidelines by which the FDA plays no longer apply. Moreover, the FDA often does not have the correct staff to appropriately understand, evaluate and approve drugs in new, complex fields.
While depressing to hear, to me this seems to be a more acceptable reason for the low number of new drugs approved this year as opposed to the FDA being unnecessarily stringent in the face of public outcry and political pressure. Being scientifically out-of-date is far better than pandering at the expense of science. It also seems to be a more tractable problem with a more direct solution. Yet, the two problems could also be coalescing. Applying archaic standards to modern science and not having the capacity to change it, while also being pressured to step up the monitoring and safety, seems quite the recipe for squeezed bureaucrats to start worrying more about performance reviews and less about scientific advancement.
Yet, solutions will only be found if the problems are acknowledged and we all know how accustomed those on Capitol Hill are to the elephant in the living room. There has been much more discussion about the fact that the proposed increase in the budget is far too little for all the demands of the FDA, and none about the fact that FDA may have too much on its plate. Nor has there been any serious discussion about reforming the agency to reflect today's market, rather than that of the 50s when the policies were instituted. It's so much easier to conspicuously throw money at a problem rather than solve it.
I guess this is why I keep waiting for the people vying for the top job in the land to address the issue. All three of the candidates left standing have talked about reform and fixing a broken Washington. Neither dedicating more funds to the FDA, nor cutting government programs, nor raising taxes, nor lowering taxes, nor bi-partisanship in and of itself will solve this problem. It will take true reform. This side of healthcare should be discussed and potential solutions offered as part of a larger overhaul of American healthcare. But I am guessing the FDA will just have to take a ticket and get in line.
Posted by Jordan Stone | Permalink | Comments (0)
May 13, 2008
Ins and Outs of the Healthcare Issue
Fortune interviewed Aetna CEO Ron Williams about the state of health care insurance in America. I found the stats in the quote below fascinating:
"I'm always amazed that 20% of the 47 million uninsured are eligible today for Medicaid or the Children's Health Insurance Program. They could sign up and have a relationship with a primary-care physician. About 10% of the 47 million are college and university students, very inexpensive to insure. Slightly more than 20% are not citizens but are in the country legally."We might find a way to link visa entry or other mechanisms with comprehensive coverage. And about 20% have household incomes above $75,000. On this we agree with many of the presidential candidates. Aetna believes there is a place for an individual coverage requirement for individuals who can afford insurance. I think reasonable people could agree that at some point there's enough income that someone should be expected to participate in the health-care system. That leaves us with about 14 million to 17 million who really need tax credits and subsidies or tax deductions."
We'll take his stats at face value for the moment, and halfway discount the Aetna commercial for government-required coverage of people earning $75,000 or more.
I'm left with three thoughts:
#1, significant parts of the uninsured issue parallel the patient compliance issue. Blaming the uninsured is a not the solution, but a good portion of those who are uninsured are either unaware that they don't have to go without insurance or unwilling to pay a manageable amount for it.
#2, the number of people who fall fully outside the system with no present way to get health care is more manageable than many people think.
#3, as a small business owner, I can tell you that many of the real problems of American health insurance are to be found in the costs for the fully insured.
Posted by Jason Richardson | Permalink | Comments (0)
April 30, 2008
Chinese Connection Doesn't Look Good for FDA
Back in November, I warned that China could ill afford bad publicity as its API market took its first steps into a full-fledged, finished product pharmaceutical manufacturing industry. If their drugs turned out to be no safer than their toys, the FDA would take a huge hit and this new industry would be set back tremendously. Recently a link surfaced between Baxter's generic Heparin and a Chinese API manufacturer that looks quite bad for China.
And while the Chinese plant has absolutely not been established as the cause of the potentially life-threatening reactions, the fact that we may never know makes the FDA look far worse than Chinese industry, because they're absolutely at fault. The Chinese plant has never been inspected, and now that something has gone horribly wrong somewhere, the FDA plans to show up as soon as possible. In the mean time, you can bet that the manufacturers just brought in an oil tanker full of Clorox and a pressure washer, and are currently spraying every inch of the plant down three times.
While major news outlets will probably be focusing on the Chinese connection, or possibly the FDA's lack of Chinese oversight, I think this points to a larger problem at the FDA today. The organization has lost focus on what's most important to ensure consumer safety. The FDA's budget is smaller than it should be; in fact, its task is simply impossible at any budget level. But since you can't physically inspect every piece of fish sold in the local supermarket, or make sure every customer knows the trial results of the drug they're taking, you should make sure you hit the important parts.
The solutions are already being discussed by those in the industry, with the prodding of Congressional leaders. But it's unacceptable that, while the organization responsible for consumer safety deals with advertising regulations, an uninspected plant in China is making a drug which, even when extracted safely, is derived from pig intestines over a process that takes hours if not days. If it wasn't bad enough, these drugs are then shipped to the US for use in heart surgery or dialysis patients, whose bodies are already critically compromised.
Again, we don't know that the Chinese plant is responsible for the problems. But this goes beyond Chinese drug manufacturing. It remains unacceptable regardless of the questionable Herparin's point of adulteration. I wouldn't expect that plant to go uninspected even if it was US-based. It's a stretch to think anyone would disagree with that - and yet this was not an oversight, this was a routine decision at the FDA.
Regulating advertising is important. But given the FDA's limited budget, I'd prefer to know my prescriptions don't include e.coli, chemical precursors, or three times as much of the API as I'm supposed to be taking. This might be the single most important job the FDA has - beyond advertising, and possibly beyond even approval or rejection based on a drug's efficacy. Its effectiveness isn't very important, after all, if it kills you in the process.
Look for even more changes in FDA budgets and priorities in the coming years, as congressional fury rises due to cases such as this one.
Posted by Jeremy Spivey | Permalink | Comments (0)
April 15, 2008
Pharma Should Seize the Opportunity to Reach the Hispanic Market
Pharmaceutical companies are no strangers to market research or targeted marketing campaigns. However, there is a large segment of the market that pharmaceutical companies may not be effectively catering to - the growing Hispanic market. Statistics presented at the ePharma Summit 2008 underscore the importance of the Hispanic market and provide insights into some of the underlying characteristics of this segment.
Jorge Daboub, vice president for marketing and business development at Univision Television Group, presented several interesting statistics about the Hispanic market's use of the Internet. Among some of his points were:
* A 70% increase in Hispanic online web presence since 2000
* 79% of Hispanics have Internet access at home and typically spend the same amount of time as the general population
* Hispanics are 73% more likely than non-Hispanics to be receptive to online advertising, such as video, pop-up ads and email blasts
All of these statistics echo the fact that the Hispanic population can be readily accessed by leveraging strong web campaigns. However, particularly shocking is the last stat about how much more receptive Hispanics are to online advertising than other populations. This statistic is a market researcher's dream and paints an ideal picture for pharmaceutical companies trying to reach this key segment.
In addition to the compelling receptiveness of the Hispanic market to online advertising, pharmaceutical marketers should be conscientious of the vast size the Hispanic market now represents in the U.S. Currently, the Hispanic community is a relatively untapped market for many pharmaceutical companies.
Pharmaceutical marketers should understand that the Hispanic market has distinct characteristics that make it different from other populations and cultures. Therefore, to develop effective marketing campaigns companies must begin with market research and truly understand the nuances that influence this community. However, if pharmaceutical companies absorb cultural insights and design websites and web campaigns that target Hispanics, they might experience notable success in connecting with this segment of the market.
As with most markets, patient education is a great need. This is particularly true for the Hispanic market since a vast amount of educational material is not available in Spanish. Companies that tailor their materials to meet Spanish-speaking audiences will be satisfying a great unmet need.
The opportunity is there. Pharmaceutical companies are sophisticated enough to market effectively market to this segment. The question still remains whether pharmaceutical companies will choose to wholeheartedly pursue the Hispanic market.
Posted by Amanda Zuniga | Permalink | Comments (0)
March 31, 2008
Investigator-Initiated Trials Get Centralized
For a long time, drug companies supported IITs with varying levels of oversight. To some degree, that has changed. Many of the industry's leading companies have made efforts to centralize IIT management at the therapeutic area level or higher. A recent survey, shows that three-quarters of companies employ a dedicated IIT group to handle tasks such as proposal collection and evaluation, funding, ongoing study oversight and post-study data usage. Previous data set this level at 50%, so it's clear that large companies are formalizing their IIT management.
Centralization empowers companies to better select the most strategically and scientifically interesting IITs, track those studies' progress and employ their findings in constructive ways. Most organizations still find themselves a great distance from this ideal, however. Interviewed executives reveal that many organizations still suffer from a lack of knowledge regarding the number of IITs underway, investigator identities, funding levels and, last but not least, the progress of these trials and planned uses for their findings.
Gaps in management may yield undesirable outcomes, such as IIT results that conflict with company-sponsored research, investigators competing with a company for patients and sub-par handling of adverse events and safety reporting. In worst-case scenarios, study results get published without project or brand teams ever being aware that their drugs were the subjects of outside research. To counter these issues, every survey respondent reported a need to improve IIT management. Additionally, companies face real or perceived staffing shortages in functions that contribute to the IIT process.
Centralized IIT strategy setting and process management are only out of their infancy stages. The vast majority of IIT groups must still establish SOPs, confront ongoing challenges, refine their structures and win internal respect and support for their missions.
Posted by Eric Bolesh | Permalink | Comments (0)
