Buck Luce is an insider in an outsider’s field – management consultancy. As global pharmaceutical sector leader, Buck Luce is responsible for overseeing strategy, thought leadership, resourcing, learning, and solutions for E&Y’s life science clients.  In the past several years, she has overseen a series of reports called Progressions that document the turbulence of the external forces buffeting the industry and argues for a radical shift in mindset, away from selling a pill to offering a broader public health solution linked to documented improvement in patient outcomes.  The message is not always welcome in big pharma circles, and it requires an outsider’s dose of moxie to sell it.  Buck Luce alludes to this work as a “conversation” – one that has to take place.

Her selection itself represents something of a departure from the norm, given that most recent awardees have come from the big pharma “C suite” of senior managers with line responsibilities.  In that sense, Buck Luce as WOTY provides further evidence of the importance that pharma now accords to those who can interpret the business to a much broader range of stakeholders.  She enjoys a reputation as a skilled communicator whose signal mission is to impart a sense of urgency to the need for transformation, not only in the formal business model but more importantly in the practical ways that companies must change to maintain ties to customers, and ultimately the patient.  All of us who have dealt with Buck Luce know that her fiercest enemy is complacency – because time is money and the time to change is now.

In addition to her role at Ernst & Young, Buck Luce is co-chair and co-founder of The Talent Innovation Task Force and currently serves on the Mayor’s Commission on Women’s Issues in New York City, where she advises on strategies and programs to make it the best large city for women to live and work. She has also serves on the Board of Directors of the New York Women’s Foundation where she has held a variety of officer positions, most recently as chair.

“Carolyn’s accomplishments span both public and private, profit and not-profit work, and her passions for making a difference in the lives of women and children shine through everything she does,” says New York Senator Kirsten Gillibrand. “At a time when I am calling for women to get off the sidelines and join a national call to action to help this country be all it can be, I am happy to hold up Carolyn as a role model for others.”

In a long-standing partnership with the HBA, Pharmaceutical Executive devotes its cover story every April to honoring the Woman of the Year with a feature highlighting her personal and professional challenges, accomplishments, and advice to others in the industry.  It will appear in our April issue, in advance of the WOTY event on May 3.

To help shape the Woman of the Year’s priorities over the next year, Pharm Exec is interested in our online readers’ take on the following: In what new ways can the HBA drive change and diversity in the industry?  Should the focus be on women or on the broader elements of building the more diverse workforce required in a globalized business?

If you ever wanted to know what health economists might do with a billion dollars, the Obama Administration’s  Patient-Centered Outcomes Research Institute [PCORI] is about to tell all:  not right down to the penny, but good enough.  The congressionally funded – but independent – group has just released a document outlining priorities that will fuel a flood of research grants by mid-year. Application of that research will carry a significant impact on the evidence stream that increasingly determines Big Pharma’s access to providers and patients.
An outgrowth of the 2009 economic stimulus package, PCORI has a key role in implementing Obama’s health reform legislation with a mandate to evaluate the “comparative clinical effectiveness” of a vast array of health interventions, from drugs, diagnostics and devices to structural programs geared to prevention or wellness.  Congress authorized $1.1 billion for this task, a figure that dwarfs what other countries currently spend on all forms of effectiveness research.  It follows that the PCORI priorities will carry influence outside the US.  And there is an even larger effect should PCORI end up enabling  research that industry has traditionally eschewed, such as head-to-head drug comparisons and broad, population-based observational studies.

PCORI’s Draft National Priorities for Research, unveiled on January 23, strikes a tentative tone.  It repeatedly states the document is unfinished, and the sub-head to the title refers to  the proposed research agenda as “version one.”  Much of the text is devoted to how PCORI intends to consult widely with a broad array of stakeholders – led by patients, care-givers and their representatives – prior to final action by the group’s governing Board, probably in April.  PCORI staff will initiate the outreach through private meetings and focus groups, but there is also an all-day, open-to-the-public consultation scheduled for February 27 near the PCORI headquarters in Washington.  The comment period on the draft continues to March 15.

The five priorities set forward in the document are also very broad and will likely be read differently by different stakeholders.  The first, comparative assessment of prevention, diagnosis and treatment options, is arguably the most important. In fact, PCORI intends to devote 40 per cent of its time and resources to this area.  The goal here is research to evaluate alternatives to designate those products and practices that produce superior patient outcomes.  Although cost is not an intended path of inquiry, PCORI does have the right under law to fix priorities that take into account “the effect on national health expenditures associated with a health care treatment.”  Hence there is some risk that activities under this priority, which focuses on new technology and product interventions, could range further afield than clinical aspects alone.

Ranking behind this are two priorities that will take another 40 per cent of the PCORI budget:  improving health care systems; and accelerating patient-centered methodological research.  In the first case, this entails examining changes in health services and infrastructure, including the impact on efficiency of changes in the way these services are delivered, and by whom.  The research in methodologies priority will support work to improve the quality and usefulness of clinical data, as well as developing standards for new forms of research like patient registries, observational studies and meta-analyses.   It is hoped these new standards will promote better decision-making around rare diseases – where, it should be noted, current treatments are quite costly, with drugs leading the way.

Some 20 per cent of resources will be spent around the two final priorities:  investigating health disparities; and communication and dissemination. The disparities agenda is politically popular and focuses on revealing areas of implicit bias in the health system, from gender and race to age and social parameters, where practice patterns differ and outcomes can suffer because of them.  Expect from this an upswing in attention to the social determinants of health.  The latter priority is geared to raising patient compliance rates with treatment, improving patient understanding of options they have in treatment and promoting better patient-clinician communication, and evaluating the promise and success of electronic health records and other new information technologies.

The patient interest is the common thread running through each priority.  Patient representatives will not only be formally consulted as specific projects are developed, they will serve on in-progress review committees and will be asked weigh in on results.

Word to the Wise..
While PCORI has taken pains to consult and to avoid stepping into the minefield of cost and “value,” industry has good reason to be wary as its ambitious work plan moves forward.   The high level of inclusiveness given to the patient community may end up politicizing the process and interfere with the integrity and robustness of the research protocols. Raising this is prudent given the level of aggressiveness that patient advocates show in rallying support for their disease.   Even with a billion dollars to spend, prioritization means that while some will be let in, others will be left out.  The temptation will be for some groups to ask Congress to intercede – few scientists or researchers, of any stripe, want that.

Likewise, PCORI’s interpretative skills will be tested if it proceeds with proposals to  “synthesize” existing studies to “create a more cohesive body of evidence.”  There will invariably be disagreements in rendering judgments from different studies and it entails the risk that important clinical decisions will proceed without acknowledgment of methodological gaps and important disease variations in the populations under study.  In fact, PCORI funding for more meta analyses in place of clinical trials raises questions of encouraging population bias, particularly as the technological capacity to expand the data set to millions of people becomes commonplace.   PCORI’s Methodological Committee has not publicly weighed in on this yet, but when it does the discussion is bound to be controversial.

In a country where mere mention of the word “rationing” spawns howls of protest, PCORI is probably right in framing any document it publishes in the vaguest possible terms.  But this may in time damage its effectiveness in facilitating superior health outcomes.  I ask:  can an organization that calls itself “patient centric” still be scientifically pure and empathy free?  In the messy politics of health care, isn’t that the same as being  tone deaf?

PCORI’s online survey to gauge reaction to the strategy document can be accessed here.

The chief target for those who contest the cost figures cited by industry is the work conducted over three decades by the Tufts Center for the Study of Drug Development.  Its most recent in a series of profiles – based on its own interpretation of data drawn from the leading US-based “big pharma” companies – tagged the average cost of bringing a new compound to market at more than $800 million. Last year, two prominent industry critics, Donald Light and Rebecca Warburton, published a harsh critique of the Tufts study methodology, or, as the authors put it, “mythology.”   Specifically, their paper contends that a key element in the Tufts work – which apportions the expense of investing funds in research against alternative uses of that capital to obtain an equal or higher return – is poor grounds for fixing costs; eliminating this “opportunity cost” pushes down the average cost virtually in half, to only $403 million. Their own anecdotal calculations render that figure even lower. In addition, the 11 per cent interest rate figure used by Tufts in estimating the value derived from that alternative use of funds against the investment in R&D is deemed excessively high; Light and Warburton claimed that three per cent would be more appropriate.

So who is right here?  Tufts is criticized for relying too much on company data without broad options for disclosure, while Light and Warburton are well-known for their adversarial stance on virtually every policy issue relevant to biopharmaceuticals.  Enter an objective third party, in the form of a new study just published by F. M. Scherer, emeritus Professor at the Kennedy School of Government at Harvard.  Scherer is well-known for his earlier work on drug innovation and pricing which was balanced – if sometimes skeptical – in supporting industry claims.

In R&D Costs and Productivity in Biopharmaceuticals, Scherer makes the following points:

•    There has been over the past 30 years a substantial growth in average R&D costs.  Spending by the industry on R&D rose by an average 7.4 per cent annually between 1970 and 2007, whereas the number of approved new drugs increased by only 2.1 per cent annually over the same period – in other words, with more money spent to obtain a much lower rate of increase in new drug approvals, it is inevitable that the average cost of bringing those medicines to market has tended to rise.

•    Pre-clinical costs for industry have been fairly steady over the period reviewed, largely because of the higher profile and resources of the National Institutes of Health [NIH] in subsidizing basic research.  Industry progress in creating tools for “rational drug design” is another positive factor.  The real growth in costs has taken place at the clinical stage, where industry obligations have soared due to tighter regulatory controls and the complexity of trials.   Trials are bigger, testing requirements on enrollees have become more extensive and complex, while teaching hospitals and other trial sites are charging more to sponsor and participate, seeing their development support work as “profit centers.”

•    The opportunity foregone to invest R&D funds elsewhere is a legitimate calculation in estimating average drug development costs due to the long time lag to secure market access and profits, which is more prominent than in other sectors.  Scherer says the US government evaluated the merits of this approach and endorsed it as far back as 1993, when a federal Office of Technology Assessment report stated that “the practice of capitalizing costs to their present value in the year of market approval is a valid approach to measuring R&D costs.”

•    The argument that estimates of cost should incorporate the implicit value derived by companies from the tax deductibility of R&D outlays is overridden by the difficulty of singling out qualifying activity on both a functional and geographic basis,  a calculation that the corporate tax regime is not set up to do.

•    Scherer also dismisses the Light and Warburton contention that three per cent is a more valid rate of interest in estimating the investment potential of alternative uses of R&D outlays. He calls it “clearly wrong.”   The Tufts study’s 11 per cent rate is well in line with the private sector’s underlying cost of capital over the study period, and is actually “quite conservative” given that the cost of capital in R&D itself is fairly three or more percentage points higher, given the inherent risks of investing in unproven science over a long period of time.

There are also some implicit recommendations on industry positioning worth gleaning from the Scherer paper.  First, he admits that methodologies for calculating the cost of drug development pose inherent challenges.  More progress could be made, with support from industry, in overcoming them.  Stakeholders should work together with Tufts to address misconceptions and enhance public confidence in the survey.  To that end, industry associations like PhRMA might well expand and improve methods of collecting member R&D data, particularly for R&D activity outside the US; while BIO, PhRMA’s biotech partner, might also upgrade its commitment to quantify member R&D spending to support the work of Tufts and other academic institutions – big pharma must not be the sole source.

Second, companies that currently provide the data to these institutions might consider reevaluating the confidentiality standards that bar efforts to openly evaluate and communicate that data to other stakeholders.

Third, journalists and other communicators need as a “matter of good practice” to highlight the opportunity cost element as a factor when reporting the numbers from the Tufts studies. This should no longer be allowed to be treated as a “surprise” wielded by activists to discredit the body of evidence as a whole.

Finally, the regulatory community must better understand how its practices are driving development costs.  It is advised to work more closely with industry in agreeing basic standards for defining,  monitoring and, where appropriate, ameliorating such costs.

The stakes here are high, as it can arguably be said that the three decades of Tufts surveys are the most important body of policy research to bear on the cost of supporting good science.  If there is no agreed line of defense around the basic issue of costs incurred in bringing a medicine to market, then industry is the ultimate loser when it comes to obtaining access and defining a price for that medicine, especially now that payer expectations around “evidence” are becoming more insistent and precise.

The Tufts Center is undeterred by the criticism and regards the Scherer paper as a welcome addition to the debate. Center Director Ken Kaitin told PE that a new, equally robust iteration of its research is underway. “We are presently collecting fresh data from companies.  The interpretation of this data is exclusively our own, as has always been the case,” Kaitin told PE.  He noted that the Center is committed to communicating with any interested party on ways to extend the integrity and relevance of this important line of research.

More interesting than the numbers themselves are the implications of this growth. The addition of another billion people over slightly more than a decade requires a 40 percent expansion in the global food chain, another 40 percent spurt in the availability of fresh water, and 50 percent more energy—all just to keep pace with the status quo.  Equally important is the skewed distribution of this new population profile. The sub-Saharan Africa and South Asia regions account for most of the increase, while in the northern climes population totals are set to decline, with key economies like Germany, Italy, Japan, and Russia slated to actually have fewer people in 2025 than today. And many of them will be elderly and female—not additive to the resource mix.  The rise is also disproportionately more urban than rural.  Whereas today there are 10 cities around the globe with a population of 10 million plus people, the UNPF projects that there will be upwards of 21 such cities by 2025.

What do the new numbers really mean for the business model and strategic focus in health care and pharma? Several points come to mind.

First, more people has a hidden upside—it’s called human capital. Leveraging the energy of more young people and women can yield rich dividends in economic growth. Good health is a pre-condition for achieving compensating gains in productivity to alleviate the burden of population on resources.  The health dividend also works in addressing the claims of aging populations, a cohort no longer limited to the “mature” industrialized markets. Poor countries are growing older too.

Second, that “bottom billion” of the customer base that underpins Big Pharma’s new commercial model for developing and emerging markets is going to get larger.  Cracking the “reverse innovation” nut for products and processes in a way that addresses their needs will add significantly to the industry’s success ratio in regions with the most substantial prospects for long-term revenue growth.

Third, accelerated urbanization will create new opportunities for more efficient drug distribution and to link drug therapy more closely to the provision of basic health services. The trend offers the ability to demonstrate how access to essential medicines can drive improvements in primary care and overall health outcomes. This is particularly true in maternal and child health as well as the prevention and management of chronic disease.

Fourth, it follows that drug-makers should devote time and attention to contributing to health system reform, focused on understanding how medicines can more efficiently find their way to all patients who need them, not just the affluent 10 percent at the top.  Applying “cheapening technologies” at the root of the supply chain and learning more about basic consumer preferences is central to this.

Fifth, the relationship between health, disease and the degradation of resources and the environment is likely to see more scrutiny. Interventions, tools, and technologies that help mitigate these effects represent a strong potential growth area for companies active in the health space. Quite simply, it argues for a widening of the product franchise for pharma in the years ahead. Cancer prevention and diagnostics along with nutrition management, food supplements, and control of obesity are research targets that come immediately to mind.

Finally, consider the reputational assets to be found here. One of the most prominent statistics cited by the UNPF in recording Monday’s transition to the seven billion society:  a baby born in the US today has a 50 percent chance of living to the age of 100. It’s the best argument I have heard for awhile of the value from investing in medicines innovation.

William Looney, Editor-in-Chief

If there is one message that big pharma has applied consistently over the years, it is that drug development is very expensive. Big bucks and long-term investment in the institutional know-how and capacity built exclusively through private enterprise are what count in delivering new therapies to patients.  But like everything else in a dog-eared play book written in what might as well be the technological equivalent of the quill pen, that consensus is now being “goosed” — and from within the industry’s own ranks at that.

In a September 27 speech to the Indian pharma association that attracted little notice here in the US, GSK CEO Andrew Witty plucked some of the substance out of that linear defensive policy wall built by the industry over the past two decades, namely, that the high risk of compound failure leads inevitably to high costs and that this in turn justifies big margins on new launch therapies, across the board.  In his remarks, Witty literally turned the argument on its head, declaring that the industry-backed estimate of more than a billion dollars on average to bring a compound forward from discovery to market authorization was “unacceptable.”  The only “evidence”  it provides is for the perpetuation of a 25 year old model of commercialization, one that frames the debate around larger issues of pricing, IP  and access in a manner that serves the interest of neither the patient, society — or the industry.

What Witty was alluding too is the folly of a message that relates high costs and high prices to what is in essence the burden of low R&D productivity — and the honest way to call that is an “industry failure,”  which he did in his talk.  “We need to fail less, and deliver more,” he said, and directly linked success in restructuring the R&D enterprise to lower development costs in making the best new innovations more affordable, at all income levels, within and across markets.

As usual, Witty raises important and provocative issues that all stakeholders in health ought to take into account.  Just one that comes to mind:  If high prices that lower access are attributable to a flawed R&D development model, is there a readily applicable formula that industry can embrace in delivering better results at lower costs?

From an industry-wide perspective, Witty has accentuated the need for a consensus to promote those “lean management” business tools that can boost productivity and dramatically lower the cost of failure.  Yet to date almost all the evidence accumulated and backed by industry focuses on the inevitability of escalating commitments, whether it be the opportunity cost of sinking scarce funds into early discovery ventures, or the inability to predict with any certainty the response of payers to pricing post-launch.  Overall, the numbers paint a scenario of gloom:  a survey released by the consultant group KPMG last month finds that ROI from in-house investment in R&D among the 30 top drug makers is today half of what it was in 1990.

And while pressure for more affordable pricing is gaining momentum everywhere, due to a demographic and income transition in many emerging markets and the fiscal meltdown in mature countries, new costing commitments placed on the industry are rising too.  How many CEOs are really aware of the multi-million dollar price tag for post-marketing safety studies required by regulators over a time period that often extends beyond the life of the product’s patent?  Funding the demand for post marketing information about how well innovations work in practice is beginning to exceed what is spent to obtain a license to sell in the first place.   Or the endless, “write another check” implications of expanded access programs for yet to be approved drugs, where for ethical reasons there is no end point for giving drugs for free to patients with no other treatment options.

Hard data drives policy — it makes industry positioning credible.  Fresh arguments with verifiable metrics to show the industry actually has a strategy to make its own technology cheaper — and thus suitable for a global market of radically diverse price points — will be vital to the repositioning that Witty seeks.   In other words, the challenge is that while the problem is now defined by the industry itself as an industry responsibility, can industry deliver on the solution?

William Looney, Editor-in-Chief

The path to commercializing a breakthrough discovery is rarely a linear process. The orderly rationale of the scientific method is often overtaken by the random artistry of passion, personality, business culture, and sheer luck. Each plays a significant role in handicapping success or failure in that wending transition from bench to bedside. The story behind drug development is thus as interesting as a dime-store novel, except what is fiction in the second case is truth in the first—and always the developer’s own dime is at stake.

Pfizer’s crizotinib—a new targeted therapy that blocks progression of a genetic alteration in a subset of patients with non-small-cell lung cancer (NSCLC), extending survival well beyond the current standard of treatment—is revealing on two counts. The compound’s extraordinarily fast development timeline shows that improvements in basic science around molecular biology are bringing more order to the process of moving from POC to confirmatory trials that conform to regulatory requirements for an accelerated NDA. At the same time, the path for crizotinib was littered with unforeseen risks, best exemplified by a chancy decision on clinical testing that, instead of yielding a medical breakthrough, could have shut the door on an entire field of investigation and potentially harmed Pfizer’s reputation.

With reference to the speed of the science, several institutional drivers helped pull crizotinib out of the filing cabinet and into active development. First was a seemingly unrelated commitment by Pfizer to expand its research capabilities in Asia to accommodate the region’s demand for data relevant to local clinical conditions. Governments like Korea were committing significant funds to facilitate home-grown research, particularly in oncology where the disease profile bore distinctive variations compared to the US. As a result, Pfizer began looking at how various tumor suppressing therapies based on the ALK and MET gene alterations could be leveraged against additional tumor types, including those prevalent in Asia.

“During the dose escalation part of the Phase I study of crizotinib in the US and Korea, we observed early responses in patients with advanced NSCLC,” Darrel Cohen, senior director in the Pfizer Oncology Business Unit, tells Pharm Exec. “Given our strong local networks, we were able to connect the dots and apply this knowledge quickly to expand the Phase I clinical trial and initiate a Phase II study of crizotinib in ALK-positive NSCLC. And despite the limited test population evidence, we were able to take the risk of expanding the trial to focus on establishing how crizotinib suppresses tumor growth among those patients with advanced NSCLC harboring ALK rearrangements, a group that represents approximately 3 percent to 5 percent of the entire NSCLC patient population.”

Pfizer contends that crizotinib is not only a potential therapeutic leader, but a benchmark in new ways to facilitate development partnerships across regions and markets. The success of this approach is exemplified by its joint simultaneous filing submissions on crizotinib to the FDA and the Japanese Ministry of Health Labor and Welfare in March of this year.

But there was also real risk in going global. The expanded trial proved more complicated than expected, involving extensive outreach to academic partners and regulatory authorities in Japan and Korea. In both groups there was concern about the generally precarious state of health among the candidate clinical trial population, most of whom were in the late stages of the disease. This was compounded by the cultural and medical practice gaps between the two countries that proved to be a potent challenge in defining and communicating the clinical trial protocol.

In one instance, Pfizer had to make a wrenching choice, says Oncology Business Unit Regional President for Asia, Jorge Puente. “We had a strong test candidate associated with one of our key academic research partners in Japan. The patient was at that point near death but our assessment was that getting him to the trial center in Korea might possibly prolong his survival and enhance the clinical relevance of the data. So we decided to pull out all the stops in registering the patient, including getting the Korean regulatory officials to accept his entry to the country, obtaining approval of the institutional trial review board, ensuring the patient’s informed consent with the government oversight required under Japanese law, and arranging logistics and transport for a subject who by that time was on a respirator.”

Puente notes that there was an acute awareness within Pfizer of the risks involved, but, he says, “by limiting the population to the US and Europe, we decidedly could not have achieved the rich response rate that allowed us to file globally with this early data.” From a societal point of view, the availability of this type of therapy to patients could have been set back years.

As it happened, the 27-year-old patient survived the trip, was administered the drug, and within two days was off the respirator and walking unaided.

In a world where individual accountability has grown opaque, it is still true in science that reputations and livelihoods can be put on the line, often around statistically assumptive outcomes whose interpretation in the clinical setting can deliver life—or death—to thousands of patients.

William Looney, Editor-in-Chief

As the cancer therapeutics space grows more crowded, the task of identifying and building productive relationships with “key influencers” has become vital to a successful launch strategy.  Like everything else in oncology, performing that task is harder today. What was once an inbred club of clinical practitioners has morphed into a complex array of interests that, like an orchestra, has to be managed to filter out the discordant notes that depreciates the distinctive value of the asset.

How to address this challenge was one of the more interesting sidebars to this week’s annual meeting of the American Society of Clinical Oncology [ASCO] in Chicago.  In an exchange hosted by the data analytics vendor Cegedim Relationship Management, three prominent physicians – Peter Harper of St. Guys Hospital in London, Paris-based clinician Alain Hererra, and William Gradishar of Northwestern University – reviewed the climate for shaping opinions of the clinician community active in the treatment of cancers.

The consensus view is that simple peer group awareness remains the best way to determine key players in driving decisions on prescribing.  Documenting influence in the physician community is challenging because the acknowledged experts are often self-nominated.  There is no real metric that can certify such influence; it tends to wax and wane around the clinician’s level of engagement in clinical trials, development of practice guidelines, on line education and other activities that bear directly on treatment.   Organizational affiliation is important as well, with the larger academic/teaching hospital groups reinforcing the ranks of those who are deemed most influential.

In a follow-on discussion led by Cegedim subsidiary SK&A, the three physicians reviewed a data evaluation tool – Physician Connect – that contains information on some 24,000 physicians who as a result of detailed peer survey work have been identified by the profession as being “leadership influencers” in their respective areas of practice.   The survey pool incorporates input from more than 100,000 practicing professionals active in treating seven cancers/tumor types and eight malignancies in nine countries, including the US, Canada, the big five EU and Belgium and the Netherlands.  This exhaustive survey data is ranked, verified and standardized into protocols by a dedicated team of Cegedim staff at a network of research centers.

“Physician Connect is able to shed new light for the industry in determining how physicians are treating and managing cancer patients; documenting the dense web of connections that help in selecting nominees for external scientific advisory committees; and – ultimately – who the profession actually relies on in setting new paradigms for practice,” Cegedim vice-president Marcus Bergler told Pharm Exec.  The company has plans to build the data base further into the hematology area and extend survey capabilities to additional country markets, including Japan and ultimately China.  Bergler said interest in Physician Connect is strongest today in Europe, where information on physician influencers is sketchy, disaggregated and under-resourced, despite the growing need of the local industry for better outside sources of support to counter payer pressures on access to oncology meds.

It is also important to filter this data in conjunction with the strong anecdotal input built through ongoing company-specific outreach initiatives.  Leadership status is often a consequence of simple name recognition. Successful leveraging of the Physician Connect tool depends on being able to make it synch with evidence that leaders in the field can spark a genuine change in the treatment paradigm. Determining that depends on supplementing data with practical market savvy and good judgment – horse sense, so to speak.

PBIRG’s 50^th anniversary meeting strikes a note for change—because the alternative is a drift toward organizational irrelevance

It’s easy to be complacent about the harsh competitive challenges facing Big Pharma today. We all know what these challenges are, and the temptation is to address them in the abstract. As if all this complexity can be reduced to the simple format of a Harvard case study.

But I found something else entirely in participating as a discussion moderator at the annual meeting of the Pharmaceutical Business Intelligence and Research Group (PBIRG) in San Antonio, Texas earlier this week. Representing the interests of industry market research and competitive intelligence professionals, PBIRG and the more than 400 registered attendees put the focus squarely on a blunt proposition: that the function must do more to shape and profile the competitive landscape as a way to maintain its relevance to senior management or face the consequences in terms of declining internal clout, lower budgets, and staff redundancies. It entails ending for good the profession’s traditional image as the in-house “data watchdog,” whose principal clients—and occasional antagonist—were the big numbers/analytics vendors like IMS.

Although the program featured two keynote presenters that highlighted the importance of better public awareness of the industry’s value proposition around innovation, the most interesting discussions centered on how the market research profession must cope with market change. Suggestions included looking outward to identify connections from other adjacent industries; avoiding assuming that innovation must by definition embrace technologies that are “cutting edge,” as there is money to be made in the mundane; moving beyond reliance on traditional survey-based data; and realizing that the best research now relies on a “circular model” that is less didactic and educational than participatory and interactive—it’s the quality of the dialogue with “connected communities” that counts.

In fact, what emerged as the dominant theme over two days was the importance of the market research and intelligence function as a tool to build relationships that pay off in terms of a more intimate knowledge of just who the industry’s key customers really are today. It’s an important question to which no one has a precise answer. Surprisingly, repositioning market research as an internal advocate for unconventional strategies to foster external awareness was seen as a liberating move, with many attendees noting their frustration in depending on commercial brand leads to get anything done.

Pharm Exec sponsored a panel discussion featuring six members of our Editorial Advisory Board that focused on what the “C-suite” expects from the function going forward, with one action point being to progress the quality of data and analytics available in emerging country markets. Without this, it is hard to see how the industry can accurately assess where the true potential lies in leveraging the emerging market’s favorable demographics to fuel growth in the most promising therapeutic areas.

PBIRG, which celebrated its 50^th anniversary during the annual meeting, also took a closer look at its own future as an institution. It was noted that there is often overlap between PBIRG and other associations active in promoting pharmaceutical market research. Thus, if PBIRG is to survive as a distinct enterprise, it will need to extend its remit to cover three associated activities: competitive intelligence, forecasting, and strategic planning. Another agreed objective—which should drive the work stream more generally—is to use the best new technologies to promote better information exchange within the group. “It’s year round connectivity that will really take us beyond the confines of the annual meeting,” said past PBIRG president and Pharm Exec Board member Cliff Kalb.

Emerging markets remain the ace in the card deck for big pharma seeking alternatives to the global slowdown in demand for medicines.  The “pharmerging 17” are dealing a strong hand, with a consensus for continued double-digit growth in drug sales from these markets as their overall economic performance surges at par or even above potential. Suggestions from the International Monetary Fund [IMF] that China may surpass the US to become the world’s largest economy earlier than anticipated – i.e by 2020 – indicates just how profound the potential is for a recalculation of the profit stream for big pharma going forward. 

But as Pharm Exec has noted repeatedly, metrics and numbers don’t always tell the true story – particularly when local governments intervene to shape the market and distort this potential in line with short-term industrial policy objectives.   There is growing evidence of this in the four BRIC countries, all of which are implicitly following a more discriminatory stance on investment linked to performance requirements aimed at foreign-based drug makers.

One of the more interesting case studies on this approach is taking place in Turkey, which is relying on non-tariff barriers [NTBs] to benefit domestic generic companies by slowing local distribution of foreign-made medicines.  Specifically, the government is requiring that all such medicines undergo a separate GMP certification inspection, creating an enormous backlog of applications that has enabled the generic firms to build domestic market share effectively without competition from innovator drugs developed largely by the foreign firms.

According to the Association of R&D-based companies [AFID] in Turkey, 300 applications for the mandated GMP inspection are pending 13 months after the new GMP rule went into force, including 61 novel therapies for CVD, 40 for cancer and 33 anti-infectives.   Despite the backlog, the Ministry of Health has been willing to assign only a handful of multilingual inspectors to certify GMP compliance, a task that can also require visits to sites outside the country and for which few government funds have been allocated.

While these originator products languish in the queue, the average waiting time for a NCE to gain all the registration approvals necessary to go to market in Turkey has stretched to 772 days, or more than two years, an eternity in today’s era of crimped product life cycles.  According to AFID, this compares to about 200 days in the neighboring EU.

The lesson?  Enjoy all that talk about double-digit revenue growth, but also get used to more novelty in the tools emerging market governments use to discriminate. And as this taffy-like thicket of Turkish bureaucracy reveals,  NTBs are one emerging tool for emerging markets interested is helping move that growth curve back to local industry.

Last week brought a small but dedicated group of sales professionals to a CBI conference in San Diego with a clear mandate: to rate the future of the “detail man” — dead or alive?

Surprisingly, the consensus was that the function still retains its value, even as e-detailing and other online technologies are transforming the traditional way the industry interacts with healthcare professionals. One interesting data point is how provider attitudes toward working with sales representatives vary with the nature of the practice: survey research presented at the conference showed that while roughly a quarter of all physicians in the US now ban rep calls, including the bulk of all primary care professionals, 74 percent of specialist physicians still prefer that face-to-face contact.

What matters today is the relevance and quality of the interchange, and what physicians want most is the most current information available on the progress of clinical trial studies. This is no doubt a consequence of pressures from patients, which is why a key element in the curriculum of the new sales rep should be how to  build ties to disease groups and patient advocacy organizations. Another trend is making the rep more engaged in market access support through better awareness of the reimbursement policies and options set forth by payers. As this task of “fighting the insurance companies” takes a good deal of a physician’s time, the ability of the rep to synthesize and explain the rules on P&R can free the physician for the clinical interventions that save or extend lives.

The other topic for debate was the merits of GSK’s new formula for calculating performance bonuses among its US sales teams. It focuses heavily on informal feedback from healthcare professionals as to the quality and breadth of information received from the individual rep, rather than the traditional approach based on hard targets like scrip volume within each rep’s territory. GSK says its compensation plan will significantly reduce the potential for compliance problems, such as when sales reps skirt illegal behavior by promoting off-label prescribing.

That said, participants at the CBI event asked whether customer feedback is sufficient to ensure that the process of awarding bonuses will be objective and transparent. What happens when this subjective assessment of performance is at odds with the sales and revenue numbers? And does any of this really matter when payers are driving the agenda so completely in managing pricing and access?  There were no hard and fast answers, except for the premise that the safest ground is for the rep to link his own performance to the interests of the patient in getting timely access to the right drug at a reasonable price.