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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 at 02:24 PM | 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 at 08:22 AM | Comments (0)