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76 S e p t e m b e r 200 3 PharmaVOICE Johnson & Johnson is TOP PHARMA COMPANY IN LONGTERM CARE Johnson & Johnson has been selected as the best overall pharmaceutical company by longte rm care (LTC) pharmacists participating in Verispan’s spring 2003 Nursing Home PharmacyProvider/Con sultant Promotional Audit. Johnson & Johnson finished first in all four assess ment areas. Even though the company made 25% fewer contacts than in the fall of 2002, J&J remained in first place. Audit panelists singled out J&J for its ability to work with pharma cists as well as its knowledge of the long te rmcare industry. Pfizer ranked second in all categories, despite the company’s lack of a dedicat ed LTC salesforce. The Pfizer field forces that promote geriatric products allocate 5% to 10% of their time to LTC. Novartis, which has the largest dedicat ed LTC salesforce, according to Verispan’s spring 2003 Strategic Advantage study, placed third in all areas except contracting, where it finished fourth. Verispan’s repo rt provides indepth pro files of more than 45 leading U.S. pharmaceutical compa nies’ managed care and LTC salesforces. The profiles detail the size and structure of these sales teams,training,account and product responsibilities, and e mail usage. This audit is based on the responses of pharmacy providers and consultants who represent a majori tyof nursing home and assist edliving beds in the United States. These executives repo rted promo tional act i v i ty by pharmaceutical companies during an eightweek period in the spring of 2003. They rated companies on their ability to meet LTC indus t ry needs in four areas: contracts, valueadded ser vices, knowledgeable reps, and pharmaceutical company strategy. Biotech Companies Need to Adopt STRONGER RISK MANAGEMENT Measures A survey of biotechnology executives has found that 63% believe a riskmanagement program is crit ical to their organizations’ success, and 50% think it is important to their venture capital partners.But many did not think their companies had adopted best practices for managing a variety of potential disasters. The survey of nearly 100 biotechnology compa nies was conducted by the Chubb Group of Insur ance Companies and the Biotechnology Industry Organization (BIO), in conjunction with the Journal of Business and BioLaw. The survey reveals that 66% of biotechnology executives are “very satisfied” with their companies’ risk management programs. One third of respondents, however, note that their com panies lack a strong disaster recovery program, 79% do not believe their organizations are prepared for a product recall, and 73% do not have a cyber risk management plan. “Our research, the first of its kind, offers the biotechnology industry an indepth understanding and a dynamic view of its approach to managing risk,” says Philip Fiscus, a senior VP of Chubb & Son and worldwide manager of the lifesciences division for Chubb Commercial Insurance. “Biotechnology companies have a great understanding of the impor tance of a good riskmanagement program. But by focusing less on disaster preparedness issues, they may face serious consequences.” Political and social unrest, te r rorism, and the challenging global economy are creating new expo sures for biotechnology organiza tions. Mr. Fiscus says mitigating these exposures is critical for biotechnology firms, especially when it comes to securing venture capital funding, successfully com pleting a clinical trial, or profitably manufacturing a drug. Companies also may lack an understanding of international insurance issues. The survey finds that 43% of respondents believe that their firms’ domes tic insurance policy “will always” protect them from lawsuits or losses that occur in a foreign count ry. For the 69%of respondents who conduct clinical trials in a foreign country, this is risky thinking, Chubb researchers say. The best protection for these com panies is a blend of domestic and international insur ance coverages, including both admitted (local) and nonadmitted (foreign) insurance policies. The 2003 Survey of Risk Management and Insur ance Practices for the Biotechnology and Life Sci ence Sector was conducted over the Internet in April 2003 and 95 responses were received from CEOs, chief financial officers, comptrollers, and others who make insurance purchasing decisions. The respon dents answered 29 questions, several with multiple parts and rankings. Respondents represented both publicly traded and privately held companies. Consumers Believe NEW SCIENCE Of fers Significant Opportunity Although nearly 80% of consumers can’t name a biotechnology company or product, the same num PHARMA TRAX SALES, MARKETING, AND R&D TRENDS AFFECTING THE HEALTHCARE INDUSTRY 1 Johnson & Johnson 2 Pfizer 3 Novartis 4 Forest 5 Abbott Labs 6 AstraZeneca 7 Akzo 8 Boehringer Ingelheim 9 TAP Pharma 10 Pharmacia Source:Verispan’s Spring 2003 Nursing Home Pharmacy Provider/Consultant Promotional Audit,Yardley, Pa. For more information, visit verispan.com. BEST OVERALL IN LONGTERMCARE Rank Company The challenge the biotechnology industry faces is that many companies simply may not have a fulltime risk manager or other resources necessary to develop or implement effective risk management practices. These organizations should consider partnering with an expert who knows their industry’s issues to help develop a strong risk management program. Philip Fiscus THE 2003 SURVEY OF RISK MANAGEMENT AND INSURANCE PRACTICES FORTHE BIOTECHNOLOGY AND LIFESCIENCES SECTOR HAS FOUND THAT63%BELIEVE ARISKMANAGEMENT PROGRAM IS CRITCAL TO SUCCESS. 77 PharmaVOICE S e p t e mb e r 2003 PHARMA trax ber believe biotechnology will treat cancer, replace or repair damaged tissue, and be the primary source of new medicines during the next 20 years, accord ing to a survey conducted by KRC Research, a divi sion of Weber Shandwick. “The American public has great faith in science, and people are open to biotechnology as an exten sion of that faith,”says Jack Leslie, chairman of Weber Shandwick.“As our study found,most consumers are not familiar with biotech companies or products — 58% don’t even feel comfo rtable with the term.Yet one in two believe biotech will make major medical and health science breakthroughs.” Because of this, he says the biotech industry faces a challenge despite the great visibility in the media over the past few years. KRC Research conducted the survey in May among a nationally representative sample of 500 U.S. adults by phone interviews and 169 online interviews with midtosenior level professionals in policyrelated jobs,classified as Washington insiders. CROs are RECRUITING GLOBALLY for Clinical Trials As patient recruitment has become more diffi cult in the United States, contract research organiza tions (CROs) increasingly are recruiting patients from outside the count ry for clinical studies in connection with new drug development.This is the finding of a recent analysis by the Tu fts Center for the Study of Drug Development. Eastern and Western Europe, Japan, and other parts of the world are seen as offering better access to trial participants in certain therapeutic areas. “Patient populations outside major industrialized countries offer attractive pools of clinicaltrial prospects, since potential subjects often are not tak ing other medications that would exclude them from the clinical study,” says Tufts Center Director Kenneth I Kaitin. About 1,000 CROs account for about $6 billion to $7 billion, or 10%,of worldwide annual spending on new drug research and development by sponsoring drug companies,according to the Tufts Center.CROs also are involved in the majority of clinical develop ment programs. CRO participation in new drug development projects has grown steadily. BIOTECHNOLOGY INDUSTRY ORGANIZATION,Washington,D.C., represents more than 1,000 biotechnology companies,academic institutions, state biotechnology centers and related organizations in all 50 U.S. states and 33 other nations.For more information, visit bio.org. CHUBBGROUPOF INSURANCE COS., Warren,N.J., provides property and casualtyinsurance for personal and commercial customers through 8,000 independent agents and brokers. For more information, visit chubb.com. KRC RESEARCH,Washington,D.C., is a fullservice opinion and marketing research division within Weber Shandwick,a unit of The Interpublic Group of Companies.For more information, visit webershandwick.com. Follow up TUFTS CENTER FORTHE STUDYOF DRUGDEVELOPMENT,Boston, is affiliated with Tu fts University and provides strategic information to help drug developers, regulators, and policy makers improve the quality and efficiency of pharmaceutical development, review, and use.The center conducts a wide range of indepth analyses.For more information, visit csdd.tufts.edu. VERISPAN,Yardley,Pa., is a healthcare informatics joint venture of Quintiles Transnational Corp.and McKesson Corp. and is one of the nation’s leading providers of patientlevel longitudinal data, with more than 2 billion annual deidentified pharmacyand medical transactions spanning virtually every pharmacy in the country.For more information, visit verispan.com. ABOUT EIGHT OUTOF 10 CONSUMERS surveyed believe that biotechnology is somewhat likely, with about half saying ve ry likely, to provide ways to repair human tissue, lead to treatments for cancer, and be the most important source of new medicines during the next 20 years. THE PUBLIC KNOWSVERY LITTLE ABOUT THE BIOTECHNOLOGY INDUSTRY. Four out of five consumers (82%) can’t name a company they would consider part of the biotechnology industry, and 80% can’t name a productcreated through biotechnology. AMAJORITY OF CONSUMERS (58%) say they are not comfortable or familiar with the word “biotechnology”; a majority of Washington insiders (66%) say they are. HALF OFBOTHCONSUMERS (49%) AND WASHINGTON INSIDERS (46%) say they have at least some concerns about biotechnology. BIOTECHNOLOGY IS NOTA FAMILIAR PART OFCONSUMERS’LIVES.Fewer than half of both the public and Washington insiders think they have used a product created through biotechnology. ONE IN FIVE CONSUMERS (20%) think they have used a product created through biotechnology,while more than twice as many (49%) do not believe that they have. ONE IN THREE (37%) Washington insiders believe they have used a product created through biotechnology,while nearly half are unsure (47%) and one in five (16%) do not believe that they have ever used a product created by biotechnology. Source: KRCResearch,Washington,D.C.For more information,visit webershandwick.com. KEY FINDINGS OFKRC’S SURVEY CROSPREFERTORECRUITTRIAL SUBJECTS FROMDOCTORS’PRIVATEPRACTICES instead of recruiting them through academic medical centers, site management organizations, HMOs,or other organizations. Institutional patient access policies and sponsor willingness to increase the number of study sites, and not budgets,are the MOST CRITICAL DETERMINANTSOF ENROLLMENT SUCCESS. Nearly 50% of CROs saw projects cancelled due to corporate restructuring among the drug companies that outsource to CROs, 90% faced projectdelays,and 70% experienced a change in projectscope. Source:Tu fts Center for the Study of Drug Development, Boston. For more information,visit csdd.tufts.edu. KEY FINDINGS FROM THETUFTS CENTER ANALYSIS