Pharma Marketing: Time For A Disruptive Change with A New Breed of Marketers

In Today’s fast-changing world, as I indicated in several of my previous articles, more and more people first try to understand the causative factors of their ailments, and options available for effective remedial measures. They strive to get such information, either from the cyberspace or by word of mouth from well informed individuals or other sources. This process starts before treatment, and continues, at times, even after remission of the disease.

Even in the developed countries, a scope exists for self-medication for common ailments with OTC drugs, duly approved by respective country’s drug regulators. A point to ponder, most of these were ‘only prescription’ medicines before going off-patent, and after enjoying 20 years of exclusivity with pricing freedom. During their patent life, self-treatment was illegal with any of these molecules, if not dangerous. The same tradition continues today.

The bottom-line is, many patients are now trying to understand their diseases from sources other than the physician. Good or bad, the reality is, such patients generally prefer to visit a doctor as and when they deem it necessary. While visiting a clinic, they already have, not just some idea of the ailment, but also in what way they would prefer to get themselves treated and approximate cost of each. One should not presume, either, that majority of them are unaware of the risks involved with this approach.

Pharma marketers today can’t just wish away this emerging trend of patients and patient groups getting increasingly more informed. Trying to stop this trend will be a Herculean task, similar to swimming against a very strong current. Managing this situation in a win-win way is now a key task of a pharma marketer. In this article, dwelling on this trend, I shall focus on the need for a disruptive change in pharma marketing and the new breed of drug marketers.

Calls for a fundamental shift in pharma ‘marketing focus’:

Achieving this objective warrants a fundamental, if not a disruptive shift, in the ‘marketing focus’ of pharma companies – from traditional ‘product management’ to modern ‘brand management.’

With patented ‘me-too’ drugs, including ‘Fixed Dose Combinations (FDCs)’, as well as generics, now dominating the market, some sort of ‘commoditization’ of drugs are taking place in the pharma industry, whether one likes it or not.

No significant differential advantages oruniqueness exist between such products manufactured by different drug companies. Consequently, doctors or patients have enough choices to prescribe or buy, drugs with comparable efficacy, safety, quality standards and matching price range, from different pharma players.

Shift from product marketing to brand marketing:

One may possibly ask aren’t both quite the same? Is there any meaningful difference between these two? Thus, taking a pause, let us try to understand what’s the difference between these two.

Yes, for many there is not much difference between these two, especially in the pharma industry. Hence, many drug companies name this function as ‘product management’, while others call it ‘brand management’. In fact, these two are often used as interchangeable terminologies in the drug industry. Nonetheless, this understanding is far from being correct.

The key focus in ‘pharma product marketing’ is on the drug itself – its intrinsic value offerings to patients in terms of efficacy, safety, quality and often the cost. Thus, ‘product marketing’ approach may work for breakthrough drugs, but not for ‘me-too’ patented drugs or generic ones to achieve the desired goals of the respective companies, consistently.

Whereas, pharma ‘brand marketing’ in its true form, creates much more value than pharma ‘product marketing.’ The former dovetails intrinsic values of the drug with a set of strong feelings and emotions around the brand, purely based on what patients or consumers would want to experience from it. This process makes even a me-too brand stand out, creating a strong personality around it and differentiating itself head and shoulder above competitors. Importantly, the bedrock of conceptualizing these powerful feelings and emotions, must necessarily be robust, relevant and fresh research data. No doubt, the task is a challenging one– and not every marketer’s cup of tea.

Why building personality for pharma brands and services is necessary?

If we look around the healthcare industry, we shall be able to realize the importance of building personality for a medicine, especially generic drugs with a brand name, in the Indian context.

For example, many hospitals offer similar medical treatment facilities, follow similar treatment guidelines and their cost may also not be very different. But why different people prefer different ones among these, and all hospitals don’t get a similar number of patients? Same thing happens during the patients’ selection of doctors from many, having similar qualification, experience and expertise.

This happens mainly due to the attachment of a persona around each that creates a particular feeling and emotion among patients while choosing one of them. The process and reasons of creation of a persona may be different, but it certainly differentiates one from the other for the consumer. The same thing happens with virtually undifferentiated ‘me-too’ patented drugs or generic medicines.

Time to create a ‘strong pull’ for a drug, instead of ‘push’ by any means:

To create a ‘strong pull’ successfully, specifically for ‘me-too’ patented molecule or generic drugs, there is an urgent need for a fundamental change in the organization’s marketing approach – a shift in focus from ‘product marketing’ to ‘brand marketing’.

Otherwise, current pharma marketing practices for creating a ‘strong push’ for drugs that often involve alleged serious malpractices’ will continue. But continuation of this approach is not sustainable any longer, for scores of reasons.

The benefits of pharma ‘brand marketing’ in bullet points:

To summarize the key benefits of ‘brand marketing’ in pharma, the following points come at the top of mind:

  • ‘Brand marketing’ of drugs helps escaping avoidable and unsustainable heavy expenditure to create a ‘strong product push,’ often resorting to contentious marketing practices.
  • Proper ‘brand marketing’ of drugs needs high quality cerebral and multi-talented marketing teams, rather than the power of ‘deep pocket’ to buy prescriptions. This creates a snowballing effect of cutting edge talent development within the organization, along with a culture of leading by examples, for a sustainable future success.
  • ‘Brand marketing’ is a better, if not the best way to make a drug most preferred choice in a crowd of similar branded generics or ‘me-too’ patented drugs.
  • Paying doctors for prescribing a drug does not help developing loyal customers, but creating feelings and emotions for a brand among them, helps foster brand allegiance.
  • Creative ‘brand marketing’ of drugs will appreciably boost the image of the organization, as well, but ‘pharma product’ marketing in its present form, will not.

Pharma ‘brand marketing’ and ‘patient-centricity’ to work in tandem:

My article, ‘Increasing Consumerism: A Prime Mover For Change in Healthcare’, published in this blog on June 11, 2018, deliberated an important point. It was:

If the pharma strategic marketing process is really effective in every way, why is healthcare consumerism increasing across the world, including India?

The focal point of rising consumerism in the pharma industry is unsatisfied, if not anguished or angry patients and patient groups – in other words consumers. There could be various different reasons for the same. But the core point is, contentious marketing practices that pharma players generally follow, is self-serving in nature. These are not patient-centric, and mostly devoid of efforts to create feelings or emotions for the product, among both prescribers and other consumers.

The pharma marketers to keep pace with changing environmental demands:

As I discussed several times in the past, pharma marketers are often found wanting to meet the changing demands of the business environment. This is important, as the general pharma practices of influencing the prescribing decision of the doctors are facing a strong headwind of increasing consumerism, India included. This is slowly but surely gaining momentum. For example, patients in India are realizing:

  • That a vast majority of people pay ‘out of pocket’, almost the total cost of health care, without having even a participatory role in their treatment choice, including drugs.
  • That they no longer should remain unassertive consumers, just as what happens in other industries when a consumer buys a product or service.
  • That they need to involve themselves more and be assertive when a decision about their health is taken by doctors, hospitals, realizing that pharma and medical device companies often ‘unfairly’ influence doctors’ prescribing decisions.

The role and requisite talent required for pharma marketers have changed:

Keeping aside ‘one size fits all’ type of strategy, even if I look at so called ‘targeted marketing’ in pharma, it appears somewhat baffling. It is somewhat like, ‘empty your machine gun magazine at the target with a hope to win over competition.’ Whereas, today’s environment requires making healthcare product marketing, including drugs and services, more personal, and in some cases even individual, like latest cancer therapy. The wherewithal for technological support to move towards this direction is also available. State of the art marketing and product research tools and analytics should be put to use to facilitate this process.

Increasing usage of digital marketing, in an integrated or holistic way, is going to make traditional pharma marketing less and less productive, whether we like it or not. To maintain a sharp competitive edge in this new ball game, on an ongoing basis, pharma marketers will need to keep raising the bar.

Consequently, the role and requisite talent required for pharma marketers have also changed. The new generation of drug marketers will not just be creative, but their creativity will be guided by a huge pool of credible research-based data, avoiding gut-feel. All guesses in this area must pass the acid test of validation by what the research data reveals. Moreover, pharma marketers will need to possess, at least the working knowledge of various digital platforms and possible usages for each of these.

Conclusion:

There is an urgent need to realize that drug marketing is now at the crossroads, pharma players will have a choice, either to follow the same beaten path or gradually make a course correction to keep pace with changing environmental demands. If a company decides to choose the second one, the role of pharma marketers and the talent required for doing the job effectively, will be significantly different from what it is today.Maintaining the status quo in this area, carries an inherent risk for the future success of pharma companies.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Is India A Success Story With Biosimilar Drugs?

How Indian generic companies are expanding, if not shifting their business focus on biosimilar and complex generic drugs, may be a current trend of general discourse – but the initiative is not a current one. This journey commenced decades ago with an eye on the future. In those days, Indian players were already dominating the global markets of small molecule generic drugs. Interestingly, it started much before the big global players decided to enter into this segment – especially post patent expiry of large molecule blockbuster drugs.

This strategy not just exhibits a sound business rationale, but also benefits patients with affordable access to biosimilar versions of high cost biologic drugs. In this article, I shall dwell on this subject, basically to understand whether India is a success story with large molecule biosimilar drugs, both in terms of drug development, and also in its commercial performance.

India’s journey began with the dawn of the new millennium:

About two decades back from now, some Indian pharma companies decided to step into an uncharted frontier of large molecule biosimilar drugs. According to the ‘Generics and Biosimilars Initiative (GaBI)’, in 2000 – the first biosimilar drug, duly approved by the Drug Controller General of India (DCGI), was launched in the country.  This was hepatitis B vaccine from Wockhardt – Biovac-B.

I hasten to add, in those years, there were no specific regulatory pathways for approval of large molecule biosimilar drugs in India. Thus, the same marketing approval guidelines as applicable to small molecule generic drugs, used to be followed by the DCGI for this purpose. Specific guidelines for biosimilar drugs were implemented on September 15, 2012, which was subsequently updated in August 2016. To date, around 70 large molecule biosimilar drugs, including biopharmaceuticals, have been introduced in India, as the GaBI list indicates.

It is equally important to note that well before any other countries, domestic pharma companies launched in India, AbbVie’s blockbuster Humira (adalimumab) and Roche’s breast cancer treatment Herceptin (trastuzumab). In this context, it is worth mentioning that US-FDA approved the first biosimilar product, Zarxio (filgrastim-sndz), in March 2015.

Will India be a key driver for global biosimilar market growth?

According to the Grand View Research Report of July 2018, increasing focus on biosimilar product development in countries, such as India, China and South Korea, is a major growth driver of the global biosimilar market. As this report indicates, the global biosimilars market size was valued at USD 4.36 billion in 2016, which is expected to record a CAGR of 34.2 percent during 2018-25 period.

Europe has held the largest revenue market share due to a well-defined regulatory framework for biosimilars was in place there for quite some time, and was followed by Asia Pacific (AP), in 2016. Growing demand for less expensive therapeutic products and high prevalence of chronic diseases in the AP region are expected to contribute to the regional market growth – the report highlighted.

Further, the Report on ‘Country-wise biosimilar pipelines number in development worldwide 2017’ of Statista also indicated that as of October 2017, India has a pipeline of 257 biosimilar drugs, against 269 of China, 187 of the United States, 109 of South Korea, 97 of Russia and 57 of Switzerland. However, post 2009 – after biosimilar regulatory pathway was established in the United States, the country has gained significant momentum in this segment, presenting new opportunities and also some challenges to biosimilar players across the world.

Is Indian biosimilar market growth enough now?

An important point to ponder at this stage: Is Indian biosimilar market growth good enough as of now, as compared to its expected potential? Against the backdrop of India’s global success with generic drugs – right from the initial stages, the current biosimilar market growth is certainly not what it ought to be. Let me illustrate this point by drawing an example from theAssociated Chambers of Commerce of India’s October 2016 White Paper.

According to the Paper, biosimilars were worth USD 2.2 billion out of the USD 32 billion of the Indian pharmaceutical market, in 2016, and is expected to reach USD 40 billion by 2030. This represents a CAGR of 30 percent. A range of biologic patent expiry in the next few years could add further fuel to this growth.

A similar scenario prevails in the global market, as well. According to Energias Market Research report of August 2018, ‘the global biosimilar market is expected to grow significantly from USD 3,748 million in 2017 to USD 34,865 million in 2024, at a CAGR of 32.6 percent from 2018 to 2024.’

Many other reports also forecast that the future of biosimilar drugs would be dramatically different. For example, the ‘World Preview 2017, Outlook to 2022 Report’ of Evaluate Pharma estimated that the entry of biosimilars would erode the total sales of biologics by as much as 54 percent through 2022, in the global markets. It further elaborated that biologic sales may stand to lose up to USD 194 billion as several top blockbuster biologic drugs will go off-patent during this period.

Although, current growth rate of the biosimilar market isn’t at par with expectations, there is a reasonable possibility of its zooming north, both in India and the overseas markets, in the near future. However, I would put a few riders for this to happen, some of which are as follows:

Some uncertainties still exist:

I shall not discuss here the basic barriers that restrict entry of too many players in this segment, unlike small molecule generics. Some of which are – requisite scientific and regulatory expertise, alongside wherewithal to create a world class manufacturing facility a complex nature. Keeping those aside, there are some different types of uncertainties, which need to be successfully navigated to succeed with biosimilars. To get an idea of such unpredictability, let me cite a couple of examples, as hereunder:

1. Unforeseen patent challenges, manufacturing and regulatory issues:

  • Wherewithal to effectively navigate through any unexpected labyrinth of intricate patent challenges, which are very expensive and time-consuming. It may crop up even during the final stages of development, till drug marketing, especially in potentially high profit developed markets, like for biosimilars of Humira (AbbVie) in the United States or for Roche’s Herceptin and Avastin in India.
  • It is expensive, time consuming and risk-intensive to correct even a minor modification or unforeseen variation in the highly controlled manufacturing environment to maintain quality across the system, to ensure high product safety. For example, what happened to Biocon and Mylan with Herceptin Biosimilar. As the production volume goes up, the financial risk becomes greater.
  • There are reports that innovator companies may make access to supplies of reference products difficult, which are so vital for ‘comparability testing and clinical trials.’  This could delay the entire process of development of biosimilar drugs, inviting a cost and time-overrun.
  • Current regulatory requirements in various countries may not be exactly the same, involving significant additional expenditure for overseas market access.

2. User-perception of biosimilar drugs:

Studies on perception of biosimilar vis-à-vis originator’s biologic drugs have brought out that many prescribing physicians still believe that there can be differences between originator’s biologic medicine and their biosimilar equivalents. With drug safety being the major concern of patients, who trust their physician’s decision to start on or switch to a biosimilar, this dilemma gets often translated into doctors’ preferring the originator’s product to its biosimilar version. One such study was published in the September 2017 issue of Bio Drugs. Thus, the evolution of the uptake of biosimilars could also depend mainly on similar perception of physicians.

What happens if this perception continues?

Whereas, the W.H.O and drug regulators in different countries are quite clear about comparable safety and efficacy between the originator’s product and its biosimilar variety, some innovator companies’ position on biosimilar drug definition, could help creating a perception that both are not being quite the same, both in efficacy and safety.

To illustrate this point, let me reproduce below how a top ranked global pharma company - Amgen, defines biosimilar drugs, starting with a perspective of biologic medicines:

“Biologic medicines have led to significant advances in the treatment of patients with serious illnesses.These medicines are large, complex molecules that are difficult to manufacture because they are made in living cells grown in a laboratory. It is impossible for a different manufacturer to make an exact replica of a biologic medicine due to several factors, including the inherent complexity of biologics and the proprietary details of the manufacturing process for the original biologic medicine, often referred to as the reference product.It is because of this that copies of biological products are referred to as “biosimilars”; they are highly SIMILAR but not identical to the biologic upon which they are based.”

Could dissemination of the above concept through a mammoth sales and marketing machine to the target audience, lead to creating a better perception that the originators’ biologic drugs are better than their biosimilar genre?

Other realities:

Despite the availability of a wide array of biosimilar drugs, the prescription pattern of these molecules is still very modest, even in India. One of its reasons, as many believe, these are still not affordable to many, due to high out-of-pocket drug expenses in India.

Thus, where other biosimilars of the same category already exist, competitive domestic pricing would play a critical role for faster market penetration, as happens with small molecule generic drugs.

Another strategic approach to address cost aspect of the issue, is to explore possibilities of sharing the high cost and risks associated with biosimilar drug development, through collaborative arrangements with global drug companies. One good Indian example in this area is Biocon’s collaboration with Mylan.

Conclusion:

The question on whether Indian biosimilar market growth is good enough, assumes greater importance, specifically against the backdrop of domestic players’ engagement in this segment, since around last two decades. Apart from the important perception issue with biosimilars , these medicines are still not affordable to many in India, owing to high ‘out of pocket’ drug expenditure. Just focusing on the price difference between original biologic drugs and their biosimilars, it is unlikely to get this issue resolved. There should be enough competition even within biosimilars to drive down the price, as happened earlier with small molecule generics.

That said, with around 100 private biopharmaceutical companies associated with development, manufacturing and marketing of biosimilar drugs in India, the segment certainly offers a good opportunity for future growth. Over 70 such drugs, most of which are biosimilar versions of blockbuster biologic, are already in the market. Today, Indian companies are stepping out of the shores of India, expecting to make their presence felt in the global biosimilar markets, as they did with generic drugs.

The future projections of biosimilar drugs, both in the domestic and global markets are indeed very bullish. But to reap a rich harvest from expected future opportunities, Indian players would still require some more grounds to cover. Overall, in terms of biosimilar drug development since 2000, India indeed stands out as a success story, but a spectacular commercial success with biosimilars is yet to eventuate.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Unbossing’ Pharma Culture For Millennials – A Sine Qua Non For Future Growth

Wishing All My Readers A Very Happy, Healthy, Peaceful and Prosperous 2019

‘Unbossing’ an organizational culture is an interesting idea – more in the context of promoter driven Indian drug companies of all sizes and scale. The word – ‘unboss’ is associated with nonhierarchical and open leadership culture, aiming to achieve value-based higher goals, across the organization.Not many pharma companies are attempting to imbibe this culture, just yet, barring a very few.

‘The organizational culture is something that comes with the job’ – has been the general perception of all working for the company, including most CEOs, since long. Pharma industry being a more tradition bound, and hierarchic, such acceptance is more visible in drug companies. However, some industry majors have started challenging this status quo by asking: ‘Has our organizational culture, over a period of time, become too hierarchical and somewhat archaic? Are we still clinging on to the dated, and somewhat fossilized views and practices of the great predecessors, which were quite relevant in those days, but no longer now?’

In today’s changing scenario, the corporate culture of a pharma company should be able to unleash the full potential of its employees, who are an increasing number of vastly talented millennials, with generational differences in behavioral pattern.  They come with different values, mindset, expectations, aspirations, and feel comfortable working in a an ‘unbossy’ culture.

In this article, I shall explore how in the new millennium some pharma CEOs are going beyond mere tweaking, to usher in a substantive change in the sensitive area of organizational culture, keeping pace with time. This seemingly rare breed of head honchos clearly recognizes that developing a positive corporate or brand image, starts with the development of an enabling corporate culture.

Let me now start linking the organizational culture and business practices with brand or corporate image, through stakeholder loyalty, to corporate business excellence – all in the pharma context.

Intended corporate image starts from practices within the company: 

Instead of being always combative to prove how unreasonable are the stakeholder demands emanating from the complex business environment, drug companies need to accept some hard facts, and act accordingly. One such fact is – a positive corporate image or reputation based on an enabling corporate culture that is aligned with organization’s identity and good business practices, help earn stakeholder loyalty and enhance business performance.

This concept has passed the acid test in several research studies, over a period of time, e.g. the research paper on ‘Corporate Identity and Corporate Performance’, published in Scandinavian Journal of Business Research (Beta), (ISSN 1504-3134. Its findings may be summarized as: It is important for managers to understand that while building a strong reputation, the intended image projected by the company, needs to be consistent with the actual identity perceived inside the company, especially by the important internal stakeholder – the employees.

This is because, a positive corporate image reflects the way customers perceive a company’s product and service offerings to them and vice versa. This is not a recent phenomenon. It has been happening over decades. But only a few companies have taken it seriously to bring necessary changes within the organization, by remolding the organizational culture in sync with time. This point was also vindicated by the August 1998 article on ‘The Effect of Corporate Image in the Formation of Customer Loyalty’, published in the Journal of Service Research.

The findings of the above study from the goods and service sector are based on theory of consumer behavior, cognitive psychology, and social cognitive psychology. It clearly articulates that corporate image has a significant, but the indirect impact on customer loyalty. The authors claimed that customer loyalty is also driven by positive corporate image.

A positive corporate image originates from an enabling corporate culture:

That developing a positive corporate image or reputation starts with the development of an enabling corporate culture, is also corroborated by the above article featured in the Journal of Service Research. It highlights that a favorable corporate image is formed through a process of continuous updating without any behavioral time-lag within the organization.

Like many other industries, this holds good in the pharma sector, as well, to excel in business. Itis fundamental to ensure that the concerned pharma company always enjoys the confidence and loyalty of its internal customers – such as employees, along with the external customers that include employees, doctors, patients, Governments and the general public, among others.

This is equally important to make sure that the overall organizational culture does not get fossilized, at any period of time. It should always remain in conformance with the changing needs of time – new aspirations of the employees to unleash their full potential, for the best possible business outcomes through customer delight.

Some early indicators of an image problem:

In the pharma industry, some of the early signs of a company’s brand or corporate image problems get manifested by its indirect impact on customer/stakeholder or employee loyalty. The symptoms may encompass a whole gamut of areas, ranging from high employee turnover, through difficulty in getting brand prescription support from doctors and hospitals, into deteriorating relationship with the government, culminating to declining company share value with business growth stagnating or going south.

Positive or negative culture originates from the C-suites:

Many may be well-aware that both a positive or a negative corporate culture originates from the C-suites – mostly starting from the CEO office, including his direct reports, percolating down to even the first line managers, across various functions. A CEO should obviously carry the can and be held accountable, unless such incidences are aberrations or restricted in some functional areas. The reason being, an adverse company reputation or image, usually develops when the concerned CEO’s primary focus is on short-term results – not investing enough time on developing a positive and enabling organizational culture.

As the famous Warren Buffett once said:“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” This is important for all consider, especially in pharma, and in today’s scenario.

In the Indian context, one recent example, could be the ruckus created, especially in the United States and Europe, on the dubious quality and pricing of generic drugs. A bit older example is – how once top ranked Indian pharma corporate Ranbaxy almost vanished in the thin air, over good manufacturing practices and drug quality standards.

What culture would the millennials want with pharma companies?

The December 10, 2018 report on the Best Company Culture for 2018 of Comparably - a workplace culture and compensation monitoring site, highlight some important parameters on what type of organizational culture the millennials appreciate and look for. To illustrate this point, let draw the following examples from the report:

  • Open and collaborative company culture, where everyone is updated on the latest and greatest things happening to the company as a whole, across functions.
  • Autonomy with willingness to help, from all.
  • Everyone is trusted to do their job, no micromanaging.
  • Anyone can ask questions and provide input that will genuinely be heard.
  • Hanging out with each other.

These are just a few examples to get a flavor of the change. It is also quite likely that many senior pharma managers may say: ‘Oh! We are already doing these and much more.’ It’s a different matter, though, that millennials of the same company may not be on the same page with these managers.

Unbossing pharma culture – the ball has started rolling:

At the Forbes Healthcare Summit 2018, held in New York City from November 28 -29, 2018, the global CEO of Novartis - Vas Narasimhan, called for a cultural shift to cater to the millennial generation’s needs, expectations and aspirations at the work place. He said: “The goal we set out to do is create an ‘unboss’ culture.” Half of Novartis current 120,000 employee strength being millennials. This move is directed to enhance the company’s appeal to them. A part of ‘unbossing’ the company culture in Novartis would be relaxing the current rules, by allowing employees to wear jeans to work.

Expanding the point while talking to Business Insider, Vas Narasimhan said: “For many people, they love the idea of the culture change, everybody then wants to know why can’t it happen right away. So, then you have to explain to people, this takes time, leadership, it takes a lot of changes in how we work. But I think there’s been a lot of acceptance of the culture change, but now the hard work has begun.” 

Some key traits of ‘unboss’ culture:

The article titled, ‘5 signs that you might be an ‘unboss,’ appeared in YOURSTORY on April 08, 2017 explains: The word ‘Boss’ originates from the Dutch word ‘Baas’, meaning ‘Master’. Where there is a master, there are slaves, and that’s not a good thing. More often than not, this word leaves a bad taste in the mouth, and rightly so. Thus, in a ‘unboss’ company culture, the topmost quality that the person in-charge, irrespective of organizational functions should possess, is being ‘unbossy’.

Some common leadership traits that define a ‘unboss’ culture, as I sense from the above article, are as follows:

  • Giving a great importance to sharing of knowledge.
  • Quickly identifying the ability in others and bring out the best in each team member.
  • Never feeling insecure and passing on credit where it’s due and not coveting praise that’s rightfully others.
  • Being flexible enough and possessing maturity to also do the legwork when required.
  • Treating everyone the same, without playing favorites, ever.
  • Creating an environment of learning and encouraging the team to experiment.
  • Setting benchmarks for each individual member to assess their own career growth.

In the pharma industry, not many leaders, I reckon, possess these qualities. Some drug companies, both local and global, may pontificate about practicing these qualities, but the majority of employees may not experience most of these in the real work situation.

Conclusion:

In most pharma companies, including India, much of the workforce, in addition to field staff, constitutes of millennials, which will continue to show an ascending trend. Thus, it is critical to align the company culture to attract and retain talents from the new generation A large number of companies still don’t consider this issue as a priority task for the corporation. The example set by the Novartis CEO, as quoted above is refreshing, in that sense.

Moreover, a number of research studies have established that organizational culture helps form the context within which corporate identity and corporate image are established. There can’t be a better time for a relook at the respective organizational culture, as the image of pharma industry has still not found its bottom.

A positive image, irrespective of whether it is a brand or a company, based on a robust organization culture, establishes a stout emotional connect with stakeholders. This is central for a long-term business success, and vice versa. It isn’t an easy task for any pharma player, especially for the promoter driven Indian companies of all sizes and scale, but not impossible, either.

Be that at it may, with the pharma business environment facing increasingly strong headwind, ‘unbossing’ pharma culture for millennials, I reckon, is sine qua non for long-term success – from the corporate perspective.

By: Tapan J. Ray    

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Holistic Disease Treatment Solution: Critical For Pharma Success

The speculation over quite some time has ended now. The most important C-suite office of the world’s top pharma company will find a brand-new occupant at the dawn of a brand-new year, on January 01, 2019. Albert Bourla will now be on the saddle to lead Pfizer moving towards a new horizon of success, in place of Ian Read.

What makes this change interesting to me, is the new leader’s not just shaking up the top team at Pfizer, but his simultaneous announcement for another brand-new C-Suite role in the company – The Chief Digital Officer (CDO). She will ‘lead the company’s digital efforts across research, discovery and business processes.’

Merck & Co. also joined ‘the chief digital officer parade’ on October 17, 2018 when it announced the appointment of chief information and digital officer, also as a member of the company’s Executive Committee. Notwithstanding a few global pharma companies’ have already started creating this role, the timing of this initiative by the top global pharma player, sends an interesting signal to many. Undoubtedly, it is a strategic move, and is surely backed by a profound intent. In this article, while exploring this point I shall try to fathom whether or not any fundamental change is taking shape in the strategic space of pharma business.

A fundamental change is taking shape:

This fundamental change, I reckon, is driven by realization that just discovery of new medicines, high quality manufacturing and high voltage marketing can no longer be regarded as success potent in the industry. There emerges a palpable and growing demand for holistic solutions in the disease treatment process, for optimal clinical outcomes and reduction of the burden of disease.

That several top global pharma companies have recognized this fact, is vindicated by what the Sandoz Division of Novartis acknowledged on its website. It quoted Vas Narasimhan – CEO of Novartis saying: “We are on the verge of a digital revolution across every aspect of the healthcare sector, from the lab bench to the patient’s bedside.”

Interestingly, pharma stakeholders’ interests and expectations, including those of patients, are also progressing in the same direction. This, in turn, is changing the way of leading and managing a pharma business – requiring a kind leadership with specific expertise in several new areas. The new C-suite position for a CDO is a proof of this change gathering strong tailwind.

What prompts this change?

As I see it, besides scores of other associated factors that digital technology offers to all, a single characteristic that stands out is the changing patients’ expectations for optimal clinical outcomes out of an affordable and involved disease treatment process.

This has always been so, but is now changing from mere expectations or just a hope, to patients’ demand, from both physicians and the pharma companies. This is a clear writing on the wall in the days ahead, and all concerned should take note of it, seriously. Does it mean that the broad flowchart of the disease-treatment-process, as I call it, has changed? Before delving into that area, let me briefly explain what exactly I mean by saying so.

A flowchart of the disease-treatment-process:

The broad flowchart for most of the disease-treatment-process, have primarily 6 ‘touchpoints’ or points of references, as I see it, which may be summarized as follows:

Patients – Signs & Symptoms – Doctors – Diagnosis – Medicines – Clinical outcomes

This means, patients with signs and symptoms of a disease come to the doctors. With various diagnostic tests, the disease or a combination of diseases is diagnosed. Then, doctors prescribe medicines or any other required medical interventions for desired clinical outcomes.

Has it changed now?

There doesn’t seem to be any fundamental change in this flowchart even today. But, the way the pharma players cherry-pick their areas of focus from its various touch points, is undergoing a metamorphosis.

As it stands today, to sell medicines – innovative or even generic pharma companies primarily focus on the doctors and off-late on patients – but just a few of them, to offer clinical outcomes better or same as others. In the evolving new paradigm, a successful drug companies would need to focus on each of these six elements of the flowchart with great expertise and sensitivity, from the patients’ perspective.

The position of CDO is expected to be a great enabler to facilitate the process of integrating all the touchpoints in the disease-treatment-flow. This will, in turn, offer a holistic treatment solution for patients – selling more medicines being the endpoint of this objective. If it doesn’t happen, the touchpoints where pharma is not focusing today would be captured soon by the non-pharma tech players. This will make achieving the financial goals of the organization even more difficult.

Let me illustrate this point by adding just one important area from this flowchart to the traditional pharma focus areas. This touchpoint goes hand in hand with the prescription of medicines – medical diagnosis. Providing patient- friendly disease prevention and monitoring tools may be yet another such area.

Current accuracy of medical diagnosis – ‘only correct in 80 percent of cases’:

The above was quoted by Sandoz (a Division of Novartis) in its website. It highlighted that the researchers at John Radcliffe Hospital in Oxford, UK found that several medical diagnoses based on a limited range of factors are only correct in 80 percent of cases. It means ‘a diagnosis may miss imminent heart attacks, or it may lead to an unnecessary operation,’ it said.

The January 31, 2018 article published by Futurism.com - the publishing arm of Futurism, based in New York City, also underscores some interesting facts in this regard, including the above example. Some of these are fascinating, as I quote hereunder:

  • Researchers at the John Radcliffe Hospital in Oxford, England, developed an AI diagnostics system that’s more accurate than doctors at diagnosing heart disease, at least 80 percent of the time.
  • At Harvard University, researchers created a “smart” microscope that can detect potentially lethal blood infections with a 95 percent accuracy rate.
  • A study from Showa University in Yokohama, Japan revealed that a new computer-aided endoscopic system can reveal signs of potentially cancerous growths in the colon with 94 percent sensitivity, 79 percent specificity, and 86 percent accuracy.
  • In one study, published in December 2017 by JAMA, it was found that deep learning algorithms were able to better diagnose metastatic breast cancer than human radiologists when under a time crunch. While human radiologists may do well when they have unrestricted time to review cases, in the real world a rapid diagnosis could make the difference between life and death for patients.
  • When challenged to glean meaningful insights from the genetic data of tumor cells, human experts took about 160 hours to review and provide treatment recommendations based on their findings. IBM’s Watson took just ten minutes to deliver the same actionable advice.

Thus, the bottom-line is: Medical or clinical diagnosis is a crucial area where the tech savvy environment can add significant unmet needs to save lives of many. Consequently, this space is emerging as an Eldorado, as it were, for all those who are seriously interested in diving deep in search of a golden future in the related business.

Technological players are making forays:

Several tech companies have sensed the reward of a pot of gold in the above space, despite the journey being quite arduous. Consequently, many of them are coming up with user-friendly and disease-specific digital tools and health apps, compatible with smart phones or smart watches. These help patients monitoring their own health data, independently, and be aware of the disease progression, if any. Simultaneously, it also enables physicians not only to accurately diagnose a disease, but also to keep a careful vigil on the progress of the treatment.

To illustrate the point with an example – say about Apple. The company began making inroads into the healthcare space with health apps and fitness-tracking via iPhone and Apple Watch. Interestingly, riding on partnership and acquisition initiatives, it is now carving a niche for itself to provide complete health records of the users by capturing relevant disease-specific clinical data.

Apple Watch Series 4, for example, has ECG feature and the ability to detect irregular heart-rhythm, which is US-FDA approved. Reports indicate the company is also in the process of developing a non-invasive glucose monitoring tool, besides many others. Curiously, the company has already given a signal to extend the usage of iPhone to a reliable diagnostic tool for many disease conditions. Most important to note is, this concept is fast gaining popularity.

Calls for of a holistic approach in the disease-treatment process-flow: 

As this trend keeps going north, many pharma companies are realizing the underlying opportunity to adopt a holistic strategic business approach to move into the new frontier. This would encompass the entire disease-treatment-process-flow with digital technology, across the organization. Before other non-pharma companies firmly position themselves on the saddle while entering into this area, pharma needs to move fast. This calls for an urgent action to collaborate with tech companies in all the critical touchpoints of this flow, including diagnosis. That this realization gas dawned in pharma is evident from a number of related developments. Let me quote just a couple of examples, as follows:

  • Onduo, a US$500-million diabetes-focused joint venture between Sanofi and Verily Life Sciences, an Alphabet company was founded in September 2016. Onduo recently launched its first product – an app plus, a continuous glucose-monitoring device plus an insulin pump that are all linked together. The Onduo app has a built-in coach (i.e., an electronic assistant) to help patients better manage their diabetes and accomplish their health goals.
  • GlaxoSmithKline (GSK) and Verily (formerly Google Life Sciences) have formed a joint venture to develop and commercialize bioelectronic medicine – miniaturized nerve implants that modulate electrical impulses to treat certain diseases.

Lack of digital leadership talent within the pharma industry?

It is interesting to note that both the Pfizer and Merck CDOs were recruited from non-pharma companies – Pfizer’s from Quest Diagnostics and Merck’s from Nike.  Earlier, in mid 2017, former Walmart CIO was named the Chief Digital and Technology Officer of GlaxoSmithKline. This trend probably brings to the fore, the lack of top digital leadership talent within the pharma industry.

Conclusion:

Increasingly pharma companies are realizing that enormous efforts and money spent in just marketing a drug, is producing a lesser and lesser yield, as the new paradigm unfolds. As we move on, patients no longer will want to buy just a medicine from the pharma players. They will want an integrated solution for prevention, cure or management of a disease.

At the same time, strong technology players, such as Apple, Google, IBM’s Watson are on the verge of capturing a sizeable ground, offering a gamut of patient-friendly offerings in the healthcare space. This would eventually make prescription of digital therapy a new reality. These tech companies are now entering through several virtually open doors in the disease-treatment-flow process, as I call it, primarily covering – diagnosis, disease monitoring and preventive care.

To effectively compete and grow in this environment, drug companies have to cover all the touchpoints of this process, not just the selective ones as are generally happening even today.

Creation of a new C-suite position of Chief Digital Officer to address this issue in a holistic away, across the organization, gives a clear signal to this realization. Thus, I reckon, offering a holistic treatment solution, covering all the touchpoints in the disease-treatment-flow process will be a new normal for pharma, not just for excellence in business, but for a long-term survival too.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Data: The New ‘Magic Wand’ For Pharma Business Excellence?

Pharma companies focus more on defending their current practices, rather than doing things differently. A September 24, 2014 article by Bain & Company, titled ‘New Paths to Value Creation in Pharma’, made this observation.

This happens regardless of the credence that leaders who change too early, risk losing attractive cash flows from established business models, and those that move too late risk being disrupted by emerging competitors. However, analyzing the recent history, the authors observed that pharma leaders have more often erred on the side of holding on to old models for too long, leaving room for more aggressive players to disrupt them.

Analysis of the 10 companies in the above study also found: “With their sustained success, these companies refute the widely held assumption that serendipitous innovation is the key to success in pharma.” However, on the ground all 10 of these large global drug companies have prospered despite industry-wide trends such as declining R&D productivity and the demise of the primary care blockbuster model. The authors explained: “This is because they operate in a high-margin environment.”

Starting with this scenario, I shall submit in this article, why the importance of well targeted data-based decision-making process, across the pharma functional areas, is now more than ever before.

Rewriting notes in the business playbook, taking cue from new data:

Having charted in the high margin ambience, Big Pharma exhibit reluctance in recomposing notes in the business playbook, based on a new set of real-life data. This is essential for sustainable success in a fast-changing business, political and social environment. They keep maintaining a strong belief in what they have been believing, regardless of what a large volume of credible data overwhelmingly indicates. Ongoing near unanimity in their collective decision to further intensify expensive advocacy initiatives in the same direction, continues. Other pharma players follow the same course.

This vicious circle continues sans any positive outcome, neither for pharma, nor for the patients. Already dented reputation of the industry gets more dented. In my various articles in this blog, I deliberated on various areas that merit radical overhaul in the pharma business, including patient-centricity and transforming the business through digitalization.

Use of data and analytics leaves room for a huge improvement in pharma: 

Let me express upfront, I am not trying to say, in any way, that pharma companies, in general, are not making investments for customized data generation or in analytics for use in new drug discovery and development, aiming improved process productivity. But, in many other functional areas, such as drug marketing, stakeholder engagement or even in strategic corporate communication for greater effectiveness, usage of scalable data and modern analytics leave much room for improvement.

Quality of data-use – ‘the proof of the pudding is in the eating’: 

As the saying goes, the proof of the pudding is in the eating, let me give a couple of examples on the quality of data-use and their outcomes in the areas under discussion.

Sizeable data clearly establishes the wish of most stakeholders, including patients for transparency in drug pricing, alongside improved access to affordable medicines. However, Big Pharma and their associates trying to swim against the tide keep advocating how the expensive process of drug innovation merits high drug prices. Understandably, negative public perception towards the industry further intensifies. Assuming that data analytics are extensively put to use while developing such communication, can anyone possibly cite such efforts as examples of productive use data?

Similarly, if any pharma company, for example, Sanofi besides many others, claims that it aims at ‘promoting and sustaining ethics and integrity in all our activities’ and has developed a comprehensive body of policies and standards, to provide guidance on a range of challenges specific to pharma industry like anti-bribery. However, in practice, we hear and read, even very recently that ‘Sanofi to pay more than $25 million to resolve corruption charges’ and which is not a solitary instance, either. The question, therefore, surfaces, how can data play any role in the fight against corruption by uncovering, preventing and deterring corruption.

‘How data is changing the fight against corruption:’

There are many published research papers, which established that effective use of data can prevent such corruption, and surely in cases of alleged repeat or multiple offenders in the pharma industry. One such paper titled, ‘How data is changing the fight against corruption,’ published in the OECD Forum Network on February 13, 2018, also reconfirms this point. It says:Data – both big and open – is indeed changing the anti-corruption landscape, by uncovering, preventing and deterring corruption.

Is pharma leveraging the data power for holistic business success?

I am not sure, but available evidences suggest most of them are not – at least, aiming for holistic business success. This is because, in the pharma industry, including Big Pharma, as I wrotein the past, alleged corrupt practices are widespread and continue unabated. This is quite evident from the national and international business magazines and media reports, coming rather frequently. The Transparency International Report titled “Corruption in the pharmaceutical sector – Transparency International 2016”, discusses the raging issue across the various functions of many drug companies.

Besides pharma and biotech R&D, there are many other critical areas, where leveraging data power with expert application of analytics, pharma players can reap rich harvest in terms of sustainable long-term business growth. However, for that there are some prerequisites, like – an open mind, unbiased approach, a mindset to accept reality as they are, and then neutralize the unfavorable ones with cerebral power. Trying to rationalize what is not working makes the situation worse, more complex, creating stronger headwinds.

Many sources of data capturing, still limited usage:

There are many sources of abundant data availability of various kinds, for pharma players. However, targeted data gathering of scale and appropriate analysis of the same, still remain rather limited in pharma. For example, while marketing their brands, numerous drug players in India don’t venture going beyond limited sources for data capturing for broad analysis. Such data may usually include, syndicated retail and prescription audits, besides internal sales and marketing details together with associated expenses or productivity related statistics. Data mining for dip-stick analysis is done seldom, according to industry sources.

Additionally, there are copious others who operate predominantly on ‘gut feeling’ and hearsay, sans any customer related meaningful and real-time data. When we create hype on patient-centricity, and alongside witness the general outcomes of such approaches, it requires no rocket science to fathom how much intelligent data input has gone behind such strategies.

The present system itself generates an enormous amount of real-time data in various areas, though most are not effectively utilized for weighty payoff, especially in pharma. The ongoing process of data generation also includes, drug innovation initiatives, manufacturing, supply-chain, distributor–wholesaler-retailer activities, digital apps and different websites, besides scores of other sources. But, the information, as stated above, apparently, is hardly analyzed through analytics to obtain targeted strategic inputs. Leave aside, intelligent application of the same to scale newer heights of all-round business success.

Data generation for swimming against the tide of public perception:  

Although, it’s not yielding positive results, I understand, pharma keeps spending a lot, both at the company level or through their trade bodies, to rationalize what they want the stakeholders to believe. For example,’ drug price control limits access to drugs’. Various reports to this effect are made public and used for the aggressive advocacy campaigns, though hardly taken seriously by those who matter.

Any price control, I reckon, may not be supported in ordinary circumstances. However, drug price control has definitely helped India to improve access to drugs without impeding any reasonable growth of the industry. That 5 or 10-year CAGR of the drug industry comes in double digit, despite continuation of drug price control regime for the last 48 years, offers a testimony to this fact. It’s a different issue, though, that Indian public health care system remains in shamble, even in the present regime. The lackadaisical attitude of all governments on public health related areas, is held responsible for this failure.

Conclusion:

The bottom-line is, expensive data generation effort, when gets primarily driven by self-serving motives, becomes increasingly counterproductive, as cited above. More informed stakeholders of date, including patients, probably other than the stock markets, want to see pharma players more in sync with the ground realities, and are acting accordingly. Thus, for sustainable business success, saner senses should prevail to generate adequate amounts of credible and targeted data, analyze them properly through analytics and use these with cerebral power to create a win-win situation in the pharma business.

In my view, any comprehensive ‘Decision Support System’ of an organization should go beyond the generation of mammoth internal business-related data. It should be integrated with the same kind of targeted external data of scale, with the use of modern analytics. This needs to happen – both at the macro level – as an organization, and also at the micro level – with its various functions. The corporate illusion of always ‘operating in a high-margin environment’ in pharma, will not guarantee sustainable business success, any longer.

From this perspective, using well-integrated internal and external data as the bedrock of all strategic decisions in pharma, I reckon, would soon prove to be a ‘magic wand,’ as it were, for pharma business excellence.

By: Tapan J. Ray    

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

A ‘Toxin’ Delaying Success of Biosimilar Drugs

The above comment, although sounds a bit harsh, was made recently by none other than Scott Gottlieb - the Food and Drug Administration Commissioner of the United States. He expressed his anguish while explaining the reasons for a delayed launch of several important biosimilar drugs.

We know, this new genre of drugs has a potential to be a quick game changer, significantly improving access to affordable biologic medicines for many patients. Unfortunately, much desired accelerated progress in this direction, got considerably retarded in the face of a strong headwind, craftily created by the innovator companies, as is widely believed. There are various ways of creating the same. However, the two major ones can be ascribed to:

  • Getting caught in the labyrinth of complex patent challenge.
  • General apprehensions of many doctors on the efficacy and safety of biosimilars as compared to reference drugs.

This is happening in major markets, including India, in varying degree, though.  In this article, I shall deliberate on this issue, starting with the largest pharma market of the world and then focusing on India.

‘Toxin’ that delays biosimilar drug launch:

“Americans could have saved $ 4.5 billion in 2017, if all of the FDA-approved biosimilars were actually available in the United States, instead of getting delayed because of litigations or other agreements.” The Food and Drug Administration Commissioner of the United States – Scott Gottlieb, reportedly, made this comment on July 18, 2018.

Gottlieb referred to some of these as a “toxin” that have prevented other drug makers from launching biosimilar medicines. He accused the manufacturers of pricey biologic medicines of using “unacceptable” anti-competitive tactics to keep competitors off the market. These cost Americans billions of dollars – the report highlighted.

These tactics, as the US FDA commissioner said, are being deliberately used by the innovator pharma and biotech companies and can be corroborated with several examples. One such is the fact that despite the expiration ofthe ‘composition of the matter’ patent for Humira (adalimumab) in December 2016, its ‘non-composition of the matter’ patent would expire not earlier than 2022. The company has therefore made settlement agreements with Amgen and Samsung Bioepis, delaying the launch of adalimumab biosimilars until January 2023.

Protecting own patents Big Pharma challenging rivals’ patents:

Both these are happening for original biologic and biosimilar equivalents, often by the same manufacturers. For example, the Reuters report of October 02, 2016, titled  ‘Big Pharma vs Big Pharma in court battles over biosimilar drugs’ highlighted, although Novartis and Amgen are at each other’s throats in court over the Swiss drug maker’s Enbrel copy, but the two are still cooperating on a drug for migraines.

“One of the biggest surprises has been the number of innovator Biopharma companies, like Amgen, now developing biosimilars to compete with the products of other innovator companies,” the article observes. It also reports that Sanofi, Merck, Eli Lilly, Pfizer, Johnson & Johnson and Biogen are also embroiled in lawsuits over biosimilars.

This trend vindicates that the line dividing makers of brand-name drugs and copycat medicines is blurring as companies known for innovative treatments queue up to peddle copies of rivals’ complex biological medicines, Reuters noted. Consequently, they are now doing both – protecting their high-price products from biosimilars drugs,while simultaneously challenging rivals’ patent claims.

There is another interesting side to it. Notwithstanding, biosimilars are a cost-effective alternative to biologic drugs that could improve patients’ access to expensive biological medicines, prescribers’ perception of biosimilar medicines are still not quite positive, just yet.

Doctors’ attitude on biosimilar prescription:

To illustrate this point, let me quote from recent research findings in this area. One such is the May 2017 study on “Medical specialists’ attitudes to prescribing biosimilars.” The key points are as follows:

  • Between 54 and 74 percent of the specialists are confident in the safety, efficacy, manufacturing and Pharmacovigilance of biosimilars.
  • 71 percent of specialists agreed that they would prescribe biosimilars for all or some conditions meeting relevant clinical criteria.
  • Specialists are less confident about indication extrapolation and switching patients from an existing biologic.
  • The most common situations that they would not prescribe a biosimilar was where there was a lack of clinical data supporting efficacy (32 percent), or evidence of adverse effects.

Overall, medical specialists held positive attitudes towards biosimilars, but were less confident in indication extrapolation and switching patients from the original biologic. Several experts believe that constantly highlighting the fear factors against biosimilar drugs, such as possible risks of interchangeability with reference product, or immunogenicity related serious consequences, though very rare, are fueling the fire of apprehensions on the wide use of biosimilar medicines.

However, several reviews, like the one that I am quoting here finds that ‘switching from the reference product to related biosimilar drug is not inherently dangerous.’I discussed this issue, with details in one of my articles, published in this blog on July 31, 2017.

Any therapeutic difference between the original biologic and biosimilars?

As the US-FDA says: “Patients and their physicians can expect that there will be no clinically meaningful differences between taking a reference product and a biosimilar drug when these products are used as intended. All reference products and biosimilar products meet FDA’s rigorous standards for approval for the indications (medical conditions) described in product labeling.”

The key point to take note of is that the US drug regulator categorically reiterates: “Once a biosimilar has been approved by the FDA, patients and health care providers can be assured of the safety and effectiveness of the biosimilar, just as they would for the reference product.”

The invisible barriers to biosimilar drugs in India:

Although, there are no specific data requirements for interchangeability of biosimilar drugs with the reference product, as mentioned in the latest Indian Guidelines on similar biologic, other visible and visible barriers are restricting the rapid growth of drugs belonging to this genre.

An interesting research study finds, like many other drugs, the cost of biosimilars is a major barrier to the rapid growth of the market in India. The Deloitte Report, titled “Winning with biosimilars: Opportunities in global markets” also articulated: “Approximately 70 percent of the country’s population is considered rural and will focus on the cost of therapy – a 20-30 percent discount on originator biologics may not be sufficient.”

Moreover, many patients who are on original biologic drugs, costing higher than related biosimilars and want to switch over to affordable equivalents, are not able to do so. In many cases, doctors’ do not encourage them to do so, for various reasons, including the general assertion that original biologic drugs are more effective. India being considered as the global capital of diabetes, let me cite an example from this disease area, just to drive home the point.

A recent experience on biosimilar drug interchangeability in India:

Just the last week, I received a call from a friend’s wife living in Delhi who wanted to know whether Lantus 100 IU/ml of Sanofi can be replaced with Glaritus 100 IU/ml of Wockhardt, as the latter costs much less. I advised her to consult their doctor and request accordingly. She said, it has already been done and the doctor says Lantus is a better product.

To get a fact-based idea on what she told me, I referred to two circulars of the National Pharmaceutical Pricing Authority (NPPA) – one for Glaritus and the other one for Lantus and found that both are under drug price control and have respective ceiling prices. As both the circulars are of 2009, these may probably be treated as an indicative price difference. NPPA notified price for a 3 ml cartridge of Glaritus reads as Rs.135. 24. Whereas, the same for Lantus was mentioned as Rs.564.84.

Is an original biologic generally superior to Indian biosimilars?

US-FDA has already reiterated, “Once a biosimilar has been approved by the FDA, patients and health care providers can be assured of the safety and effectiveness of the biosimilar, just as they would for the reference product.”

However, to get India-specific, evidence-based information in this area, I checked, whether Lantus has any clinically proven therapeutic superiority over Glaritus. Interestingly, I came across the results of a 12-week study concluding that biosimilar insulin glargine, Glaritus, is comparable to the reference product, Lantus – providing a safe and effective option for patients with T1DM. Nevertheless, the researchers did say that more studies are required in this area.

The core question that needs to be addressed why is the doctor’s perception so different and the reasons for the same?

Conclusion:

In view of all that has been discussed in this article, I find it challenging to fathom that in the absence of any credible and conclusive specific study, how could a doctor possibly infer that higher priced imported original biologic drugs are generally superior to lower priced biosimilar equivalents? More so, when in India, there are no regulatory issues on interchangeability between original biologic and its biosimilar equivalent.

Or for that matter, a branded generic product is superior to all other equivalent generic drugs without a brand name? This can happen, especially when the vested interests actively work on ensuring that such a perception gains ground, boosting the sales revenue and mostly at the cost of patients’ interest.

As one would witness in many other spheres of life that creating a blatantly self-serving, positive target audience perception, by any means, primarily aimed at destroying the same of others, is assuming increasing importance. Are we seeing the reflection of the same, even in the field of evidence based medical science?

I reckon, it raises a flag for all to ponder, particularly after reading the recent candid comments of the US-FDA commissioner, as quoted above.

Could this be one of those ‘Toxins’, which delays success of biosimilar drugs?

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Global New Product Launches: Recent Success Trend Unflattering?

New products are the lifeblood for any company, including the pharmaceutical players. Business performance and sustainable growth of the pharmaceutical industry, as a whole depend on quality of R&D output in terms of ‘New Molecules’, followed by successful development and launch of those new products by the global pharmaceutical innovators.

Post-patent expiry, robust development and ‘just in time’ launch of cheaper generic versions of those innovative products, in a mega scale, usually drive the growth of the generic pharmaceutical industry, globally.

It is worth noting that for the last several years, ‘Patent Cliff’ coupled with progressively drying up R&D pipelines and mostly unflattering new product launches, are taking heavy tolls on the business performance of the global pharmaceutical majors.

The changing dynamics need to be considered:

Echoing this development, a March 2014 report of McKinsey & Company states: “About two-thirds of drug launches don’t meet sales expectations. Improving that record requires pharmaceutical companies to recognize the world has changed and adjust their marketing accordingly.”

To analyze the situation now in perspective, let us start tracking the launches from 2006 and 2007.

10 Big Pharma Sales in 2012 from NMEs approved since 2007 – A comparison

According to a June 2013 report of the ‘FirstWord Pharma’, in 2012 the combined sales of 10 top Big Pharma constituents, as named in the tables below, from the New Molecular Entities (NMEs) approved by the US-FDA since 2007, were US$ 14.8 billion i.e. 4.9 percent of the total revenue of these 10 companies in that year from the patented drugs.

Individual performance of these 10 companies are as follows:

No. Company Sales US$ Million Sales from NMEs US$ Million As % of 2012 Sales
1. Novartis 32153 3445 10.7
2. J&J 25351 2593 10.3
3. BMS 17621 1495 8.5
4. GSK 28518 1282 4.5
5. Merck 35945 1515 4.2
6. Sanofi 30879 1265 4.1
7. Roche 37578 1238 3.3
8. Eli Lilly 20566 457 2.2
9. Pfizer 47496 1040 2.2
10 AstraZeneca 27925 449 1.6

(Source: FirstWord, June 2013)

The success rate: With 2007 as the base year for NMEs

This table shows that Novartis and Johnson & Johnson were the two most successful companies with the launch of such NMEs in 2012, as they generated 10.7 percent and 10.3 percent, respectively, of their total patented drugs sales from these NMEs, as against an average of 4.9 percent, as mentioned above, during that year.

If we now try to analyze the new product launch success rates of the 10 Big Pharma constituents, based on the contribution of these new products (launched since 2007) to their respective total sales in 2012, the following picture emerges:

  • Good:  More than 10 percent - 2 Companies (20 percent)
  • Average: Between 5 and 10 percent - 1 Company (10 percent)
  • Poor: Less than 5 percent - 7 Companies (70 percent)

The success rate: With 2006 as the base year for NMEs

It is interesting to note from this report that by extending the ‘review period’ to NMEs approved by the US-FDA between 2006 and 2012 (i.e. one additional year), revenues generated by these new drugs in 2012 double to US$ 29 billion – or approximately 10 percent (instead of earlier 4.9 percent) of the total combined branded drug sales of the same 10 Big Pharma constituents in the same year, as follows:

No. Company Sales US$ Million Sales from NMEs US$ Million As % of 2012 Sales
1. Merck 35945 7518 20.9
2. Novartis 32153 5843 18.2
3. J&J 25351 3939 15.5
4. BMS 17621 2514 14.3
5. Roche 37578 2818 7.5
6. Pfizer 47496 2946 6.2
7. GSK 28518 1282 4.5
8. Sanofi 30879 1265 4.1
9. Eli Lilly 20566 457 2.2
10 AstraZeneca 27925 449 1.6

(Source: FirstWord, June 2013)

No significant overall qualitative change:

Here also, though some numbers related to the new product launch success rates of the same 10 Big Pharma constituents, based on the contribution of the NMEs launched since 2006 to their respective total sales in 2012 do change, poor to average performance with the new products still remains quite high, as follows:

  • Good: More than 10 percent - 4 Companies (40 percent)
  • Average: Between 5 and 10 percent - 2 Company (20 percent)
  • Poor: Less than 5 percent - 4 Companies (40 percent)

However, at a company level, the broad success trend with new products does not change very significantly. Just two new products approved by the US-FDA in 2006 were off to flying starts. These were:

  • Januvia of Merck: Generated sales of US$ 5.7 billion in 2012
  • Lucentis of Novartis and Roche: Generated combined sales of US$ 4 billion in 2012

Is it practically ‘The End’ of blockbuster drugs era?

While considering the larger picture on the subject, does it mean that Januvia and Lucentis would mark the end of the golden era of global blockbuster drugs…at least for now?

This picture may get clearer with the following table, prompting possibly an affirmative answer:

Best selling NMEs launched since 2006:

No. Product Company Approval Year 2012 Sales in US$ Million
1. Januvia Merck 2006 5745
2. Lucentis Novartis 2006 2398
3. Lucentis Roche 2006 1580
4. Isentress Merck 2007 1515
5. Invega J&J 2006 1346
6. Sutent Pfizer 2006 1236
7. Gilenya Novartis 2010 1195
8. Stelara J&J 2009 1025
9. Sprycel BMS 2006 1019
10 Tasigna Novartis 2007  998

(Source: FirstWord, June 2013)

Successfully launched most recent product is also on a shaky ground:

The new game-changing hepatitis C drug of Gilead Sciences – Sovaldi, has generated a turnover of around US$ 140 million in less than a month’s time from its market launch. Analysts expect an annual turnover of around US$7 billion from this brand.

However, sustaining the current sales momentum for Sovaldi in the years ahead could indeed be challenging for Gilead, as Bristol-Myers Squibb is preparing to obtain FDA approval for its own hepatitis C treatment daclatasvir, which has already been cleared in Europe. In addition, AbbVie is also progressing fast with its novel three-drug fixed dose combination in the same therapy area.

Moreover, Sovaldi’s unusually high price has reportedly created a furore in the western market. It costs US$ 1,000 a pill, raising huge concern among insurers and state funded healthcare providers in the United States. The report states that three Democratic members of the House Energy and Commerce Committee have already demanded that Gilead Sciences must justify the price of Sovaldi.

Categorization of new drugs:

Analyzing the current situation the above McKinsey report categorizes the types of new products that are now being launched, as follows:

  • Roughly one in four launches involves drugs that are strongly differentiated from competing products.
  • More than half of upcoming launches are of moderately differentiated products in well-established disease areas, and the priority is to find a way to stand out from the crowd. This requires innovative approaches to unveil insights into stakeholder needs and behaviors that competitors do not have.
  • For roughly 15 percent of launches, the priority will be to establish unmet needs effectively to ensure access to a well-differentiated treatment for a targeted population. McKinsey call these launches “category creators.” Gardasil, launched in the un-established human papilloma virus market, is an example.
  • 8 percent of launches face the substantial challenge of launching an undifferentiated product in an un-established disease area.

Broad strategic steps prescribed:

To address this challenge effectively the above report underscores the need for a systematic approach for the pharma players as follows:

  • Establish unmet needs in a disease area,
  • Develop deep customer insight as a basis for a truly differentiated positioning
  • Land the products safely in the market
  • Maximize launch uptake
  • Use early experiences in the market to fine-tune ongoing launch activities

Conclusion:

Considering the prevailing scenario of ‘Patent Cliff’, coupled with progressively drying up R&D pipelines and mostly unflattering success with the new product launches, how would a company work out its new product launch strategy, is becoming increasingly a critical question to answer on priority.

To appropriately tune a new product in its long-term sales and profit growth trajectory, it is imperative to ensure that the product exhibits its winning trends as soon as it is fired from its launch pad.

This is absolutely essential, as it appears from the above study, around one in three launches has been good in meeting the planned expectations. This makes about two-thirds of new product launches falling well short of target.  It is noteworthy that 78 percent of those new products that fell short in their first year target, lagged in their second-year forecasts too. Further, 70 percent of those laggards did not measure up to the organizational expectations even during their third year in the market.

Thus, any inadvertent mistakes in this area could make the grand finale of intense product development and strategizing efforts over a number of years together with expenses of millions of dollars, unflattering, if not catastrophic, both in terms of top and bottom line score-card of the organization, as is happening more frequently during the last several years.

This trend needs to be reversed with the application of innovative minds and charting the uncharted frontiers, sooner the better, for a healthier global pharmaceutical industry, as we move on.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Takes ‘Two to Tango’: Encashing Opportunities with Biologic drugs in India

Despite current ‘Patent Cliff’ ongoing research on biologics is now at the forefront of the Global Pharmaceutical Industry.  The bottom-line impact of a successful new biologic molecule to treat intractable ailments like, cancer, blood disorders, Parkinson’s, Myasthenia Gravis, Multiple Sclerosis, Alzheimer’s diseases, will be huge.

Currently, faster growth of this segment as compared to conventional small molecules is primarily driven by novel technologies and highly targeted approaches, the final outcome of which is being more widely accepted by both physicians and patients.

Lesser generic competition makes it more attractive:

After patent expiry, innovators’ small molecule brands become extremely vulnerable to cut throat generic competition with as much as 90% price erosion.This is mainly because  these small molecules are relatively easy to replicate by many generic manufacturers and the process of getting their regulatory approval is also not as stringent as biosimilar drugs in most of the markets of the world.

On the other hand biologic drugs involve difficult, complex and expensive processes for development. Such resource intensive scientific expertise together with stringent regulatory requirements for obtaining marketing approval, especially in the developed markets of the world like, EU and USA, help creating a significant market entry barrier for many players. That is why even after patent expiry, biologics enjoy significant brand protection from generic competition for quite some time, in many cases.

It is for this reason brands like the following ones are expected to go relatively strong even for some more time, without any significant competition from biosimilar drugs in many of the major markets of the world:

Brand Company Launch date
Rituxan Roche/Biogen idec 1997
Herceptin Roche 1998
Remicade Centocor/J&J 1998
Enbrel Amgen/Pfizer 1998

Global Market:

In 2011 the turnover of Biologic drugs increased to over US$ 175 billion in the total market of US$ 847 billion. The sale of Biosimilar drugs outside USA exceeded US$ 1 billion.

Six biologic drugs featured in the top 10 best selling global brands in 2012 with Humira of AbbVie emerging as the highest-selling biologics during the year.  Roche remained the top company by sales for biologics with anticancer and monoclonal antibodies.

According to IMS Health, by 2015, sales of biosimilars are expected to reach between US$ 1.9 – 2.6 billion, an increase from US$ 378 million for the year to the first half of 2011.

Attractiveness:

The answer to the key question of why do so many companies want to enter into the biotech space of the business, in summary, could lie in the following:

  • Truly innovative small molecule discovery is becoming more and more challenging and expensive with the low hanging fruits already being plucked.
  • More predictable therapeutic activity of biologics with better safety profile.
  • Higher percentage of biologics have turned into blockbuster drugs in the recent past.
  • Market entry barrier for biosimilar drugs, after patent expiry of the original molecule, is much tougher than small molecule generics.
  • A diverse portfolio of both small and large molecules will reduce future business risks.

A 2012 report by PwC titled ‘From Vision to Decision: Pharma 2020’ states that “the next few years may look bleak for pharma, but we’re convinced that the following decade will bring a golden era of renewed productivity and prosperity.”

The document also points out that the global pharmaceutical industry is now focusing its R&D initiatives on biologics for the treatment of cancer and rare diseases. Nearly 30 percent of the 7,891 molecules currently in clinical testing cover cancer and autoimmune conditions.

Another emerging opportunity:

As stated above, unlike commonly used ‘small molecule’ drugs, ‘large molecule’ biologics are developed from living cells using very complex processes.

It is virtually impossible to replicate these protein substances, unlike the ‘small molecule’ drugs. One can at best develop a biologically similar molecule with the application of high degree of biotechnological expertise. These drugs are known as ‘Biosimilar Drugs’ and usually cost much less than the original ones.

Biosimilar drugs market is currently fast evolving across the world with varying degree of pace and stages of developments. The U.S currently holds the leadership status in the production of biologics, with around 45 percent of the total share. India’s share, now being at 7 percent is continuously increasing.

Biosimilar Monoclonal Antibodies (mAbs) in the Pipeline:

Company

Location

Biosimilar mAbs

Development Status

BioXpress

Switzerland

16

Preclinical

Gene Techno Science

Japan

6

Preclinical

Zydus Cadilla

India

5

Preclinical

PlantForm

Canada

3

Preclinical

BioCad

Russia

3

Preclinical

Celltrion

South Korea

2

Phase 3

LG Life Sciences

South Korea

2

Preclinical

Gedeon Richter

Hungary

2

Preclinical

Cerbios-Pharma

Switzerland

1

Preclinical

Hanwha Chemical

South Korea

1

Preclinical

PharmaPraxis

Brazil

1

Preclinical

Probiomed

Mexico

1

Phase 3

Samsung BioLogics

South Korea

1

Preclinical

Novartis

Switzerland

1

Phase 2

Teva

Israel

1

Phase 2

Zenotech

India

1

Phase 3

Spectrum

US

1

Preclinical

Biocon/Mylan

India/US

1

Preclinical

(Source: PharmaShare; as of September 10, 2011 from Citeline’s Pipeline database)

Future business potential with cost arbitrage of India:

In 2013, products like, Avonex of Biogen Idec, Humalog of Eli Lilly, Rebif of Merck KgaA, Nupugen of Amgen will go off-patent, paving the way of entry for lower priced biosimilar drugs. The sum total of revenue from all such drugs comes to over U.S$ 15 billion.

The report from the ‘Business Wire’ highlights that, ‘the manufacture and development of a biosimilar molecule requires an investment of about US$ 10 to 20 million in India, as compared to US$ 50 to 100 million in developed countries’, vindicates the emergence of another lucrative business opportunity for India for such drugs with significant cost arbitrage.

Government support in India:

In India, the government seems to have recognized that research on biotechnology has a vast commercial potential for products in human health, including biosimilars, diagnostics and immunobiologicals, among many others.

To give a fillip to the Biotech Industry in India the National Biotechnology Board was set up by the Government under the Ministry of Science and Technology way back in 1982. The Department of Biotechnology (DBT) came into existence in 1986. The DBT currently spends around US$ 300 million annually to develop biotech resources in the country and has been reportedly making reasonably good progress.

The DBT together with the Drug Controller General of India (DCGI) has now prepared ‘Regulatory Guidelines for Biosimilar Drugs’ in conformance to international quality and patient safety standards.

Currently, a number of both financial and non-financial incentives have been announced by the Central and the State Governments to encourage growth of the biotech industry in India, which include tax incentives, exemption from VAT and other fees, grants for biotech start-ups, financial assistance with patents, subsidies on investment from land to utilities and infrastructural support with the development of ten biotech parks through ‘Biotechnology Parks Society of India’.

A commendable DBT initiative:

Towards this direction, the Department of Biotechnology (DBT) of the Government of India has taken a commendable step to encourage the small and medium scale business outfits by setting-up ‘The Small Business Innovation Research Initiative (SBIRI)’. This scheme has been launched to boost ‘Public-Private-Partnership (PPP)’ projects in the country.

SBIRI supports ‘the high-risk pre-proof-of-concept research’ and ‘late stage development’ in small and medium size companies to get them involved in the development of biologics.

Some examples:

Examples of some among many of the PPP initiatives in the healthcare space under SBIRI are as follows:

No.

Company Name with Collaborator

Title of the Project Supported

1. IcubedG Ideas Private Limited, New Delhi Risk based Process Design for large scale Manufacturing of male injectable contraceptive
(Phase I)
2. Incozen Therapeutics Pvt. Ltd., Hyderabad Discovery and Development of Novel, Selective and Potent Dihydroorotate Dehydrogenase Inhibitors in Inflammatory Bowel diseases.
(Phase I)
3. Mediclone Biotech Private Limited, Chennai Commercial Production of Monoclonal Antibodies as an import substitute with special reference to Red Blood Cell Phenotyping (Phase II)
4. Orchid Chemicals & Pharmaceuticals Ltd., Chennai in collaboration with AU-KBC Research Center, Chennai Development and validation of a cell-tissue co-culture model for aiding liver specific studies and drug discovery applications. (Phase I)
5. Reliance Life Sciences Pvt. Ltd., Navi Mumbai An open label, multicenter, prospective clinical study to evaluate the safety and efficacy of tissue engineered R-STE-001 in patients with symptomatic cartilage defect of femoral condyle (Phase II)
6. USV Limited, Mumbai Development of a Vaccine capable for eliciting immunological memory for the prevention of Typhoid (Phase II)
7. Virchow Biotech Private Limited, Hyderabad Development of commercialization of a recombinant uricase for the prevention and treatment of tumor lysis syndrome associated with leukemia, lymphoma & solid tumor malignancies (Phase II)
8. Virchow Biotech Private Limited, Hyderabad Indigenous development of a recombinant Fuzeon for the treatment of AIDS (Phase II)
9. Zenotech Laboratories Limited., Hyderabad Development of humanized monoclonal antibodies against human epidermal growth factor receptor (Phase I)
10. Advanced Neuro-Science Allies Pvt. Ltd, Bangalore in collaboration with Vittal Mallya Scientific Research Foundation, Bangalore Pre-clinical studies of Human mesenchymal stem cells (MSCs) isolated and characterized from different sources in autoimmune disease, namely rheumatoid arthritis (RA) and type 1 diabetes (TIDM)(Phase I)
11. Avesthagen Ltd., Bangalore Hepatocyte-like cells generated from human embryonic stem cells (hESC) for hepatotoxicity screening of xenobiotics in the drug discovery process(Phase I)
12. Avesthagen Limited, Bangalore Scale-up and evaluation of high-value biosimilar product (Etanercept) aimed at providing cost-effective healthcare solutions to the emerging markets(Phase II)
13. Bharat Serum and Vaccines Limited, Mumbai Expression of recombinant proteins for development of synthetic pulmonary surfactant for Respiratory Distress Syndrome(Phase I)
14. Cadila Pharmaceuticals Ltd., Ahmedabad Development of Mycobacterium was an adjuvant for anti – rabies vaccine(Phase I)

Besides, Indian pharmaceutical majors like Dr. Reddy’s Laboratories (DRL), Reliance Life Science, Shantha Biotech, Ranbaxy, Biocon, Wockhardt and Glenmark have made good investments in biotech drugs manufacturing facilities keeping an eye on the emerging opportunities with Biosimilar drugs in the developed markets of the world.

Funding remains a critical issue:

That said, many industry experts do feel that R&D funding for the Biotech sector in the country is grossly inadequate. Currently, there are not many ‘Venture Capital’ funds for this sector and ‘Angel Investments’ almost being non-existent, Indian biotech companies are, by and large, dependent on Government funding.

Making India a global hub for biosimilar manufacturing:

However, with around 40 percent cost arbitrage, adequate government support and without compromising on the required stringent international regulatory standards, the domestic ‘biologic’ players should be able to establish India as one of the most preferred manufacturing destinations to meet the global requirements for particularly ‘biosimilar drugs’.

Experience in conforming to stringent US FDA manufacturing standards, having largest number of US FDA approved plants outside USA, India has already acquired a clear advantage in manufacturing high technology chemical based pharmaceutical products in India. Significant improvement in conformance to Good Clinical Practices (GCP) standards will offer additional advantages.

Conclusion:

With increasing support from the government and fueled by creative, scientific and technological inputs from various experts and entrepreneurs in the country, India has the potential to emerge as one of Asia’s best powerhouses in the field of biosimilars drugs by the end of this decade. It will take ‘two to tango’.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.