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Markets Predicted to Grow Unmet need and ballooning incidence are expected to create huge market potential in neuro logical drugs,according to a study by Kalorama Infor mation. The world market stands at $70 billion, but steady growth in demand and product introduction will result in markets in excess of $88 billion by 2010. The study, The World Market for Neurotherapeutic Drugs, revealed that although neuro logical cancer currently presents the largest defined segment of neurotherapeutics, the largest area of opportunity is in periph eral neuropathies, which has been hindered in its develop ment by lack of definition and failure to diagnose. The market potential for pharmaceuticals in the treatment of peripheral neu ropathies represents $15 billion in the seven major world healthcare markets and this market is growing at the compound annual rate of 6.3%. In a separate Kalorama study, applications and revenue are expected to continue to expand for gene amplification technologies. The study found that total revenue for the top 10 amplification technologies will grow by more than 50% from their current levels to surpass $1.6 billion in 2007. The study, Gene Amplification Technologies: End Users, Marketers, and Markets, also found that although the polymerase chain reaction has long been the dominant technology in the field, it is no longer the only onederiving significant revenue. According to the report, several other techniques, including Rubicon Genomics’ OmniPlex,Becton Dickinson’s SDA,Abbott Laboratories’ and ImClone’s LCR, and Digene’s Hybrid Capture, are growing at doubledigit rates and making progress in specific applications. The study also surveyed the attitudes of endusers working with amplification tech niques and found that researchers are beginning to use different technologies for some applications, but the lack of robust technical troubleshooting experience was a major drawback for many nonPCR techniques. DirecttoConsumer Advertising IMPROVES PHYSICIAN/PATIENT RELATIONSHIP Physicians report that directtoconsumer adver tising can be an important and productive part of the office visit, enhancing the quality of physician/patient visits, according to a study spon sored in part by Market Mea sures/Cozint.These new study findings are important because both patients and physicians believe that a strong doctorpatient rela tionship is critical to patient health. The study was funded by Pfizer Inc., and is part of an ongoing research effort into the physicianpatient relation ship. Benefits of DTC advertis ing, according to surveyed doctors, include prompting doctor visits among appropri ate patients, increasing recep tivity to treatment, and leading to more thorough discussions about their healthcare options. The study also revealed that almost 70% of physicians do not feel pressure to prescribe medi cations requested by patients who saw a DTC advertisement. Additionally, the report found that more than 80% of physicians said the drugs dis cussed were appropriate for the patients. The Market Measures/Cozint study is based on more than 400 actual physician/patient visits. Inter views were conducted with primarycare physicians and cardiologists treating highcholesterol condi tions, as well as psychiatrists and primarycare physi cians treating mood/anxiety disorders.By measuring actual behavior, this research gives new support to the benefits of DTC advertising on the physician patient relationship. This study is the first of its kind that addresses the impact of DTC advertising based on actual physicianpatient visits. “ The majority of physicians participating in the study report that patients are more receptive to ther apy — including more likely to be compliant — when they receive a drug they requested,” says Rob Sederman, executive VP of portfolio management and corporate strategy at Market Measures/Cozint. “But are the drugs patients are asking about appro priate? More than 80% of doctors say `yes.’DTC is not only influential in driving patients to discuss their conditions with medical professionals, it also guides them in inquiring about suitable medications — leading to more thorough and valuable discussions.” While some surveyed physicians acknowledge that DTC advertising may have a negative effect on office visits, more than four times as many physicians, or 61% of doctors,consider DTC ads to play a benefi cial role in the physician/patient interaction. When asked to describe the beneficial effects of patient awareness of DTC ads on their interaction with patients, doctors reported that DTC ads inform andeducate patients and increase patients’receptiv ity to discussing treatments. Physicians also reported that DTC often leads to more thorough discussions on subjects such as suit able products, efficacy, and side effects. PHARMA TRAX SALES, MARKETING, AND R&D TRENDS AFFECTING THE HEALTHCARE INDUSTRY THEWORLD NEUROLOGICAL DRUG MARKET STANDS AT $70 BILLION,BUT STEADY GROWTH IN DEMAND AND PRODUCT INTRODUCTIONSWILL RESULT IN MARKETS IN EXCESS OF $88 BILLION BY 2010. “DTC advertising can go beyond fostering more productive physician/patient interactions in the office to improving actual treatment outcomes,” says Rob Sederman. According to a survey, sponsored by Pfizer Inc.,physicians responded positively to DTC advertising. 72% of physicians treating high cholesterol conditions and 76% of physicians treating mood/anxiety disorders find the drug inquiry in which advertising was mentioned to be a valuable part of the office visit. 85% of physicians treating high cholesterol conditions and 83% of physicians treating mood/anxiety disorders report that the drug discussed was appropriate for the patient. Almost 70% of physicians treating both high cholesterol conditions and mood/anxiety disorders feel little or no pressure to prescribe a product that was requested. 54% of physicians treating high cholesterol conditions and 55% of physicians treating mood/anxiety disorders agree that the ad was influential in getting the patient to discuss their condition with a medical professional. For both high cholesterol conditions and mood/anxiety disorders, 80% or more of physicians were satisfied with the outcome of office visits where ads were mentioned. PHYSICIANS DISCUSS BENEFITS OF DTC PharmaVOICE PHARMA trax Biotech Companies Continue to be STANDARD BEARERS FOR INNOVATION The biotechnology industry, which has doubled in size during the past decade, is expected to experi ence faster progress following the initial sequencing of the complete human genome and the move to the new frontiers of proteomics. A Scrip Reports study found that the U.S. biotech market is the world leader, with revenue of $22.4 bil lion in 2000. In comparison, the European biotech market is currently valued at $8.2 billion. According to the market research study, more than 137 biopharmaceuticals already have been launched worldwide and more than 400 biophar maceutical medicines are in clinical trials that address more than 200 diseases, such as AIDS, car diovascular disease, diabetes, arthritis, and various types of cancer. Although biotech companies have become less reliant on big pharma, the study finds that the rela tionship between the two still is strong. In a separate study by Scrip Reports, enabling technologies are viewed to be the key way to address bottlenecks in the drugdiscovery process.The report notes that the pharmaceutical industry is information rich and compound poor.This difficulty in translating R&Dinvestment into marketable, clinically useful drugs affects the finances of the industry. The report predicts that enabling technologies, including genomics, proteomics, bioinformatics, chemoinfor matics, and highthroughput screening, may be able to deliver the number of new drug candidates that the industry will need to remain profitable. This case is supported by the fact that the num ber of new drugs entering clinical trials is decreasing, while the average cost of bringing a new drug to market has risen to more than $800 million, and that only three drugs were approved in the first five months of 2002. Reports Reveal MOSTESTEEMED COMPANY,Views on the INTERNET, and DISCOUNT DRUGPROGRAMS Physician assistants, nurse practition ers, and pharmacists have named Pfizer Inc. the mostesteemed pharmaceutical firm,according to the new Pharmaceuti cal Company Image 2002 study by Verispan. Pfizer also was the company most esteemed by physicians, reports the biennial study. Second place among physician assistants and nurse practitioners was earned by GlaxoSmithKline, which ranked above Merck in each category. Scher ingPlough, Aventis, and Novartis moved into or within the top 10 for physician assistants, while Aventis, AstraZeneca, and Novartis did so for nurse practitioners. Among pharmacists, Merck placed second, Eli Lilly third, and GlaxoSmithKline fourth. Abbott Labo ratories improved its standing with pharmacists, ris ing from 14th in 2000 to seventh. The Pharmaceutical Company Image 2002 study also found that while the pharmaceutical industry is using the Internet as a promotional tool more often, physicians and other healthcare practitioners say they still prefer more traditional sources of informa tion. Results indicate that physicians continue to find medical conferences/symposia and articles in medi cal journals to be the best sources of information on pharmaceutical products. Sales reps also remain an important source of information for doctors. Conferences and symposia sponsored by medi cal organizations were noted by physician assistants and nurse practitioners as their favorite sources of drug information. However, pharmacists are more likely than other audiences to use medical reference books and the Internet for drug information. The study also examined drugdiscount card programs and found that the programs are popular with all of the audiences who were asked about them, although respondents were not overwhelm ingly impressed with the pharmaceutical compa nies’ efforts in this area. Biopharmaceutical Companies Face THREE CHALLENGES TOUNLOCKTHE R&D POTENTIAL OF INFORMATICS Spending on informatics for research in the bio pharmaceutical industry is expanding overall indus try R&D spend ing, but to capture the potential value of this spend ing, companies must address three interrelat ed managerial challenges — develop an explicit R&D s t r a t e g y , address the key challenges of technology management, and com prehend the complex challenges of organizational adaptation and change. “We estimate that informatics spending repre sents approximately 7% of the total biopharmaceu tical R&D budget, and it is growing at a compound annual growth rate faster than R&D spending as whole,”says CharlesAndre Brouwers, VP and director of The Boston Con sulting Group’s New York office. “ The challenge will be to manage these R&D dollars in a way that improves research productivity.” The first of the three interrelated managerial challenges is to develop an explicit R&D strategy — one that includes informatics. “Pharmaceutical companies must carefully choose their areas of research focus, decide the role of informatics in those areas, know how to manage the risks, and take a portfolio approach to managing their informatics investments,” Mr. Brouwers says. Secondly, Mr. Brouwers says, In the long term, the transformation of the dynamics of biopharmaceutical R&D will require consistent attention from senior management, including greater coordination and cooperation between the head of R&D and the CIO. In the long term, the transformation of the dynamics of biopharmaceutical R&D will require consistent attention from senior management, including greater coordination and cooperation between the head of R&D and the CIO. NUMBEROF LAUNCHEDBIOPHARMACEUTICALS 91 100 119 114 132 137 1995 1996 1997 1998 1999 2000 150 100 50 0 Source: Pharmaprojects,May 2001. Remains the same 44% Somewhat positively 35% Positively 15% Negatively 2% Somewhat negatively 4% Source:Verispan, Pharmaceutical Company Image 2002 Study THE INFLUENCE DRUGDISCOUNTCARDPROGRAMS HAVE ONHOWPHYSICIANS,PHARMACISTS,NURSE PRACTITIONERS,PHYSICIAN ASSISTANTS,ANDCONSUMERS VIEWTHE PROGRAM SPONSORS CharlesAndre BrouwersPharmaVOICE PHARMA trax companies at the same time must address the key challenges of technology management, this includes developing the ability to continually assess the maturity of fastevolving technologies and to know when it’s time to shift from experimentation to implementation. According to Mr. Brouwers, the third challenge pharmaceutical companies face is the complex chal lenge of organizational adaptationand change,which means rethinking basic decisionmaking processes in the R&D organization, providing new incentives for information capture and sharing,and integrating new kinds of expertise into the traditional R&D skill sets. PATIENT BENEFITS DRIVE GROWTH in ComputerAssisted Surgery Growth in the market for devices and systems related to computeraided surgery (CAS) is being driven in part by the gains realized in patient benefits, according to the August 2002 issue of MedMarkets. “Gains in this $600 million market are expected to be substantial,and the market will likely reach $2.6 billion by 2010,” says Patrick J. Driscoll, publisher of MedMarkets. “CAS is directly driving procedure growth,especially for minimally invasive procedures, and is driving growth in the market for virtual reality training systems and preoperative planning, as well as for intraoperative visualization.” The largest CAS segment, which also is growing, is for systems and equipment related to medical imaging and computeraided diagnosis. The companies involved in this industry are myr iad, including Analyze Direct, Bioluminate, Bonecraft, BrainLAB, CASurgica, CARCAS Group, Cedera, Given Imaging,The Interventional Centre, Intuitive Surgical, Invivo Research, Interactive Visualization Systems, Karl Storz, Khoral Research,MISON, Motion Analysis, Olympus America, Stryker, Vasamedics, Vista Medical Technologies,Vaytek, and Volume Interactions. Related market segments are growing as well, including image processing and display, robotics and instrument guiding systems, surgical simulation and education, computerassisted therapy, and operating room management and telemedicine. Testing for Disease Susceptibility Plays Part in POSTGENOMIC DIAGNOSTIC REVENUE Disease susceptibility testing will account for one third of the total postgenomics diagnostics revenue for 2002, according to a report from Decision Resources Inc.The study, PostGenomics Diagnostics, has found that combined sales of postgenomics dis ease susceptibility, prognosis, and monitoring assays will account for 90% of the 2002 total market. Additional ly, the report finds that the use of pharmacogenomic and diagnostic assays are project ed to grow quickly, and by 2007 they are expected to account for 53% of the mar ket. “The push to commercial ization is relatively strong con sidering the immaturity of the postgenomics diagnostics field; in fact, few products are currently marketed,”says Tracy DeGregorio, director of DR Reports at Decision Resources. “If technologybased compa nies hope to generate operat ing revenue in the next five years, they will have to climb the value chain.” The report also revealed that genomic sequence and mapping information from the Human Genome Project and Genome Era tech nologies has facilitated the emergence of post genomics diagnostics. DNA microarrays were found to occu py a prominent position among these technologies and have yielded new approaches to dis ease diagnosis because they compare both patterns of gene expression and genotypes in healthy versus diseased individu als. These expression studies promise to deliver new diagnos tic markers in much greater abundance and with much bet ter quality than was possible in the pregenomic era, in addition to yielding a host of new target molecules for drug discovery. Major segments of the post genomics diagnostics industry include diagnostic assays, disease prognosis and monitoring assays, drug response prediction testing, disease susceptibility testing, and genetic screening for polygenic disorders. THEBOSTONCONSULTING GROUP, Boston, is a general management consulting firm that is a global leader in business strategy. For more information, visit DECISION RESOURCES INC.,Waltham, Mass., is a leader in research publications, advisory services, and consulting services for the international pharmaceutical and healthcare industries. For more information,visit KALORAMA INFORMATION LLC, New York, a unit of, supplies market research for the lifesciences industry. For more information,visit MARKETMEASURES/COZINT,East Hanover,N.J., is a supplier of indepth U.S. market and disease state analyses and an NOPWorld Health company, the healthfocused arm of NOPWorld,which is a leading supplier of primary research to the global healthcare community.For more information,visit MEDMARKETDILIGENCE LLC, Foothill Ranch,Calif.,provides tactical decisionmaking solutions for medical products and investment executives regarding new medical technology.The company publishes MedMarkets,an emerging source for analysis and insight on new medical technology markets.For more information,visit SCRIP REPORTS,Surrey,U.K., is a unit of PBJ Publications Ltd. and the publisher of indepth business reports for the global pharmaceutical industry. For more information,visit VERISPAN,Newtown,Pa., is a healthcare informatics joint venture of Quintiles Transnational Corp. and McKesson Corp. that provides patientlevel,longitudinal data, with deidentified data from about 1.4 billion U.S. pharmacy transactions and about 275 million electronic medical transactions annually.Verispan includes three of the top names in the care information market:ScottLevin and SMGMarketing Group from Quintiles and Kelly/Waldron from McKesson.For more information,visit Follow up According to Tracy DeGregorio, director of DR Reports at Decision Resources, the genomics market has become more exciting as scientists are finding ways to determine, based on the genetic makeup of a person, disease susceptiblity.

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