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Industry experts identify the top trends they expect to shape the industry.
We asked our industry experts to identify the top trends that they expect to shape the industry in the coming year and beyond. Some of their responses may surprise you; others may already be on your radar. You may agree with some and disagree with others. But wherever you come down on a topic, it’s sure to be an exciting year. (Editor’s Note: Predictions are presented in alphabetical order by contributor’s last name.) Specialty Advantages David Avitabile President JFK Communications Inc. “The specialty pharma sector is where real innovation is taking place, and more of these companies are making headlines every day. ” Next year will be one of continued growth for small to midsize specialty pharma and biotech companies; there also will be ongoing challenges for big pharma players. The specialty pharma sector is where real innovation is taking place, and more of these companies are making headlines every day. It is clear now that the model of big pharma companies pursuing blockbuster drugs hasn’t worked, and I think smart companies are now recognizing the strength of a focused, specialized approach, where they can compete and excel in just one or a few therapeutic areas. The proliferation of smaller companies pursuing molecular targets overlooked or unwanted by larger pharmaceutical companies is jumpstarting global R&D. Mergers done for the sake of being the biggest player and achieving economies of scale have not delivered on expectations. Big pharma layoffs made news throughout 2007, and unfortunately there are likely to be more headlines in 2008. In many cases, smaller, healthier specialty companies have profited from the transfer of talent. The symbiotic relationship between larger pharmaceutical companies and the specialty pharma and biotech sectors will continue to grow as big pharma looks to divest drug programs that don’t make strategic sense and specialty pharma and biotech companies look to big pharma for niche opportunities. While the rationalization of big pharma pipelines and infrastructures is a sign of the serious challenges that these companies are facing, the continued growth of smaller to midsize specialty pharma and biotech companies — through their own R&D activities and as a result of strategic investments from big pharma — could signal the next pharma evolution. The pharmaceutical industry as a whole has remained under fire for the last decade, and 2008 will be another challenging year as health outcomes and pricing take center stage on the healthcare front during what is likely to be a changing political environment in Washington, D.C. JFK Communications, Princeton, N.J., provides strategic public relations planning and measurement, product launches, product public relations/marketing communications, media relations, medical congress and data communications, branded and unbranded PR programs, and Web-based communications. For more information, visit jfkhealth.com. Corporate Reputations Michael Ball, Ph.D. VP, Marketing and Product Management InfoMedics “In the harried, confusing, real-life world of medicine in which we live, our industry needs to understand that it’s in the best interests of both pharma’s customers and the industry’s bottom line to clearly explain the value and risks associated with the products it offers.” Barely a week goes by without a high-profile media outlet, medical journal, or member of Congress leveling some form of criticism against the pharmaceutical industry. To read the news, you’d think pharma’s intent was to poison its customers rather than improve their health. Like it or not, it’s a fact that the public is enormously skeptical regarding the value of some of the drugs in the marketplace. Effective selling under these circumstances requires a soft touch; one that explicitly takes into account the mindset of the people — physicians and patients — whose confidence and trust determines pharma’s success. A clear and open disclosure of side effects, for example, rather than an approach that buries the information in DTC fine print or required black box warnings, would go a long way to assuring those outside our industry that we are not shading the truth. While they are not yet getting credit for it, many — if not most — people in the pharmaceutical industry recognize the once-held view that “telling people about side effects only causes them to occur” is outdated and condescending. Today’s — and tomorrow’s — pharma innovators realize that if a patient senses that the drug prescribed is likely to be effective, and she understands the potential side effects and risks involved at the outset, she’s much more likely to continue with the treatment as prescribed and not become one of the more than 50% of patients who fall into the noncompliance zone. In the harried, confusing, real-life world of medicine in which we live, our industry needs to understand that it’s in the best interests of both pharma’s customers and the industry’s bottom line to clearly explain the value and risks associated with the products it offers. InfoMedics Inc., Woburn, Mass., delivers clear, actionable patient feedback to physicians; this feedback is designed to improve patient-physician communications while providing brand insight to pharmaceutical manufacturers. For more information, visit infomedics.com. Healthcare Reform Dan Berman CEO PharmaCentra LLC “There will be a renewed focus on patient outcomes, driven by managed care and the pharmaceutical industry. ” Social networking and blogs will become a part of the marketing mix, whether pharma actively participates or not. The same way that consumers consult a travel Website for hotel reviews, they’re going to look on the Internet for information on disease states and treatment. Healthcare reform is going to happen. The electorate is asking for it, and as evidenced by the recent strikes at GM and Chrysler, the final straw is that the business community is asking for help. Change in leadership in Washington, D.C., is inevitable, and the impact on the pharmaceutical industry will be dramatic. DTC will play a very different role in the future. Legislation, as well as consumer and healthcare pushback, will mandate change. There will be a renewed focus on patient outcomes, driven by managed care and the pharmaceutical industry. The only effective long-term way to achieve this goal is through more direct, targeted patient communications that improve patient literacy. We will see multiple new channels evolving to service this need. The role of the direct salesforce will evolve from that of high-priced sample delivery people. They will need to be recognized as valuable resources for physicians and medical staff seeking to enhance patient literacy and compliance. This sales approach will provide true value to physician practices in a pay-for-performance environment. And ultimately, the patient will achieve better outcomes, which translates to more revenue for pharma, completing the virtuous cycle. PharmaCentra LLC, Atlanta, is a marketing and services firm that provides customizable healthcare management programs. For more information, visit pharmacentra.com. Clinical Outsourcing Bill Claypool, M.D. CEO Phoenix Data Systems Inc. “Larger companies are outsourcing substantial core services; given the uncertainty of any development portfolio, all indications are for this trend to accelerate.” An industrywide challenge of product patent expiration without adequate revenue replacement leaves many pharmaceutical companies actively seeking new ways to trim costs. Among the interesting trends observed in the last year was an increased adoption of functional outsourcing by progressively larger companies. While this practice had previously been concentrated in small “virtual” pharmas, we are now witnessing larger companies outsourcing substantial core services. Given the uncertainty of any development portfolio, all indications are for this trend to accelerate. Phoenix Data Systems Inc., King of Prussia, Pa., helps clients conduct successful clinical studies, more efficiently and with less risk, by delivering EDC and interactive voice response (IVR) technologies combined with clinical data management services that provide the best total support for global drug development. For more information, visit phoenixdatasystems.net. Real-World Evidence Mark Clein President and Chief Financial Officer United BioSource Corp. “Companies can best position themselves for success in 2008 by developing a strategy to demonstrate real-world evidence to support the claims developed in clinical research and by investing in automation and productivity methodologies, such as adaptive designs.” A shift of marketing dollars from promotional spend to evidence spend. Increased demand — and therefore spending — for real-world safety evidence. Increased demand — and therefore spending — for real-world cost-effectiveness evidence, i.e., proof of value. Adaptive design methodologies will change the clinical-research paradigm. Simulation methodologies will replace traditional modeling in clinical research and cost effectiveness. United BioSource Corp., Bethesda, Md., is a global pharmaceutical services organization that combines deep scientific knowledge with broad execution expertise across the life-cycle continuum. For more information, visit unitedbiosource.com. Investing Wisely Scott D. Cotherman CEO Corbett Accel Healthcare Group Closed-loop marketing initiatives will demonstrate a positive return on investment as deeper customer relationships positively affect brand market share. More companies will invest disproportionately in leadership training and development to recruit and retain talented individuals to remain in pharmaceutical advertising/marketing. Marketing research and customer insight approaches will be considered best practices in accelerating clinical-trial patient recruitment and retention. Pharma companies will explore the potential of copackaging their pharmaceutical products with relevant diagnostic and medical devices. Pharmaceutical point-of-retail packaging will begin to resemble consumer product packaging to improve compliance, drive the brand message, and increase sales. Managed care marketing expertise will be a top concern and focus for pharmaceutical companies and healthcare communications agencies as the pressure builds for access to affordable medicine. Corbett Accel Healthcare Group, Chicago, is a global marketing communications company comprised of five business units. For more information, visit corbettaccel.com. Biopharmaceutical Manufacturing Matt S. Croughan, Ph.D. George B. and Joy Rathmann Professor, Director of the Amgen Bioprocessing Center Keck Graduate Institute “There will be ongoing scale-up challenges for products that transition from disposable bioreactors to large-scale stirred tanks. ” For the production of biopharmaceuticals at rates exceeding 100 kg/yr, fed-batch animal cell culture in large-scaled stirred tanks will continue to be the dominant approach. However, there will be increased use of sensor technology for direct feedback control of critical process parameters. The current bottleneck and high costs associated with the capture column step will be overcome through either new technical approaches, such as precipitation, and/or new operational approaches, such as automated cycling. Disposable bioreactors will continue to be used for low-dose products and will be increasingly used for clinical production and/or inoculum train operations. There will be ongoing scale-up challenges for products that transition from disposable bioreactors to large-scale stirred tanks. Fed-batch cell culture titers will continue to increase well beyond 10 g/L. Increased titers will allow for production of many new products without the need to build new facilities. Keck Graduate Institute, Claremont, Calif., offers an interdisciplinary graduate education through its master of bioscience (MBS) degree program and its Ph.D. program in applied life sciences. For more information, visit kgi.edu. Executive Global Talent Jeff W. Dodson Life Sciences Practice Heidrick & Struggles Demand for healthcare services and products can only continue to increase globally. The global pharmaceutical business will experience continued growth, but at a slower rate, as more low-cost generics become available, government pricing pressures continue, and truly innovative drugs come to market at a slower pace. This should deliver greater pricing power to the industry but may require the sale of larger numbers of lower revenue drugs rather than reliance upon the traditional blockbuster model of selling a few key drugs to large segments of the global population. When assessing a move to outsourcing, biotech companies will need to ensure they are able to access similar talent pools and resources to those they have in their current locations. Existing biotech clusters have the competitive advantage of being located close to many highly respected universities, for example the cluster in Northern California, which has 12 major research universities and laboratories in the region helping to drive innovation. To build the scale of talent needed in markets such as China and India to better serve large local markets, pharmaceutical multinationals will need to play an active role in recruiting and developing people at junior, middle, and senior levels in their organizations. Globally, the life-sciences sector will need to keep working hard to attract the most skilled and committed scientists and researchers, in addition to top-quality senior general management executives capable of leading and driving change across complex global organizations. This will necessitate a global talent search; for graduate-level personnel this search will be centered mainly on the top universities. For more experienced individuals the hunt will be among the world’s fast-growing biotech firms and university labs. As with other high-growth sectors, the recruitment and the retention of talent will be a major headache for the life-sciences sector over the next five years. To address this problem, pharmaceutical companies will need to start looking at recruiting outside of their traditional hiring range. For example, companies will need to be more involved at the high school and college level to generate interest and educate students on the skills needed for the industry. In addition, these companies will need to begin targeting the 60-plus market, which is looking increasingly likely to seek supplemental income after retirement age and may continue to work in the field through reduced work programs. Developing an awareness of these emerging trends and making the recruitment, development, and retention of top talent a strategic imperative is critically important for every life-sciences company competing in the global market. Equally important is the establishment of strong partnerships with world-class agencies capable of recruiting the best talent in key functions in all established and emerging regions. Heidrick & Struggles, Chicago, takes a comprehensive approach to leadership acquisition, assessment, and development to help clients build high-performance, diverse leadership teams. For more information, visit heidrick.com. Convergence Factors Lisa Flaiz VP, Group Director and National Pharma Practice Lead Avenue A | Razorfish “The convergence phenomenon is not just about convergence technology, but also the convergence of marketers and customers on a platform.” The retail clinic concept is growing. These are retail pharmacies being staffed by PAs and NPs. This group will have much more script writing responsibility in the future. Bloggers have become the reporters of our industry. Reputation management will be harder than ever. Pricing pressures and shrinking margins continue. Price shifting will increase the burden on consumers. The expansion of the online healthcare landscape. This will allow distribution to trump destination for pharma marketers. Generic and OTC competition looms large. By 2009, all major cardiovascular drug classes will be genericized, thus potentially commoditizing the largest and most lucrative therapy area. Healthcare/life-sciences organizations need to take a more aggressive stance on understanding customer needs and their expectations for consuming information. Technology will have a huge impact not only on marketing, but also on the way medicine is practiced, the way patients communicate with physicians, the way patients comply with treatments, and more. The convergence phenomenon is not just about convergence technology, but also the convergence of marketers and customers on a platform. Avenue A | Razorfish, Philadelphia, is an interactive services firm that helps companies use the online channel as a marketing and business tool. For more information, visit avenuea-razorfish.com. Reimbursement Essentials Gina Ford, R.Ph. Executive Director Boston Healthcare Associates Inc. “It will be critical for healthcare organizations to focus on established, loyal customers.” Companies will need to focus on reimbursement essentials, fundamentals, and be flexible and amenable to change. It will be critical for healthcare organizations to focus on established, loyal customers. Tempting as it may be to explore new, untested methods to capture new customers and market share, future shifts in reimbursement policy may mean exhausted resources and lack of traction with little return. Consolidation, blurring lines, and ambiguity are all forcing change in the healthcare industry. Organizations must be deliberate in managing 2008 objectives, as well as ensuring that their practices are able to shift with the market — not behind the market. Boston Healthcare Associates Inc., Boston, combines strategic consulting with a deep understanding of the deal-making, reimbursement, and regulatory environments. For more information, visit bostonhealthcare.com. A Balanced Platform Linda Fox VP, Medical Group Ascend Media Healthcare President Association of Medical Media “In publishing and education, much will be the same as in 2007 but with increased activity on the Web. ” Intense regulatory scrutiny over the safety and efficacy of pharmaceuticals and devices will continue to impact approved products and also hinder the process of drug and device discovery. Increasing acceptance of the Web as a healthcare resource will continue to empower the patient/practitioner relationship in health management. Stricter reimbursement policies as implemented by the federal government will pressure practitioners to increase their particular knowledge of and alignment to practice guidelines and standards of care. The role of the physician as healthcare decision maker will continue to erode with growth of minute-clinics and like facilities. Companies must be prepared to message and “teach” from a balanced multimedia platform with the understanding that people learn differently — some “see” with their ears, others “hear” with their eyes. An increasing ability to track and measure the performance of various media such as print, electronic, personal selling, and events will create a path to success. Ascend Media Healthcare, Princeton, N.J., is a media company in the medical and healthcare industries. For more information, visit ascendmedia.com. The Association of Medical Media, Westfield, N.J., is a nonprofit organization with 20 member organizations representing more than 375 publications. For more information, visit ammonline.org. Communicating the Message Phil Garland Senior VP and Head of the Global Life Sciences Practice BearingPoint Inc. “There will be a growing commitment to health information exchange and recognizing the need to collaborate across healthcare to solve industry issues.” The increasingly dominant role of the U.S. government in healthcare as a funder, regulator, and consumer advocate. Healthcare economic sustainability — focusing on low-cost healthcare alternatives in the absence of compelling comparative evidence for more high-cost solutions. The changing expectations and influence of key healthcare constituents, including providers, funders, payers, and consumers. The demand for greater information transparency within healthcare related to products, services and their value, safety, and impact on outcomes. The growing commitment to health information exchange and recognizing the need to collaborate across healthcare to solve industry issues. BearingPoint Inc., McLean, Va., is a global management and technology consulting company. For more information, visit bearingpoint.com. Five Anti-Infective Trends Nafsika Georgopapadakou, Ph.D. VP, Research NovaBay Pharmaceuticals Inc. “With the paucity of new agents, preserving the effectiveness of old ones is becoming a priority. The finding that almost 100,000 patients die of healthcare-associated infections has given new impetus to rigorous infection control measures.” In the anti-infectives arena, the top trends that will impact the industry in the next five years are: Increased frequency of microbial multiresistance to commonly used antibiotics. This is already happening with antibacterials: methicillin-resistant Staphylococcus aureus (MRSA), vancomycin-resistant Enterococci (VRE), multidrug resistant (MDR) Acinetobacter baumanii, MDR Pseudomonas aeruginosa, and extensively drug resistant (XDR) Mycobacterium tuberculosis. It also is starting to happen with antivirals that are used for extended periods of time, such as antiretrovirals for HIV. The dissemination of multiresistant strains to treatment-naïve patients has tremendous implications for anti-infective therapy. Rapid dissemination of “exotic,” often opportunistic, pathogens. Again, this already is happening with outbreaks of Clostridium difficile, A. baumannii, West Nile Virus (WNV), and very recently Chikungunya virus (the latter two are vector borne). For many such pathogens there is no effective treatment and none in sight. Continued paucity of new antibiotic classes. This might have originally precipitated the exit of big pharma from infectious diseases more than 15 years ago. Unfortunately, biotech proved unable to take charge and produce new antibiotic classes or new antibiotics not subject to cross-resistance. With the possible exception of antiretrovirals, all antibiotics currently under development (glyco-/lipo-peptides, ketolides, beta-lactams, antifolates, and echinocandins) originated in big pharma. Increased emphasis on infection control and prophylaxis. With the paucity of new agents, preserving the effectiveness of old ones is becoming a priority. The finding that almost 100,000 patients die of healthcare-associated infections has given new impetus to rigorous infection control measures. The wide use of invasive procedures (central venous catheters, surgery, etc.) and the general state of patient health is likely to give prophylaxis with broad-spectrum anti-infectives equal footing to therapy. Emergence of topical, nonantibiotic antiinfectives. The trend toward topical anti-infectives for decolonization/decontamination of vulnerable sites (eyes, nose, sinuses, ears, urinary bladder, surgical sites, central venus catheter sites) is already happening. In hospitals, mupirocin is routinely used for nasal decolonization, despite having moderate activity spectrum as does the pleuromutilin derivative retapamulin, currently in development. The dicationic antimicrobial chlorhexidine is being routinely used prophylactically in surgery and therapeutically in dentistry despite toxicity concerns. The topical use of such broad-spectrum, nonantibiotic anti-infectives is fueled by the realization that the extensive use of antibiotics erodes their effectiveness and increases the resistance burden, as was starkly shown for beta-lactams — and more recently quinolones — with Neisseria gonorrhea. Hence some biotech companies have taken the realistic approach to discover and develop new topical agents for ophthalmic, sinus, otic, urinary, and skin indications. These agents — mostly prophylactic, but also therapeutic — are not structurally related and are not cross resistant to therapeutic antibiotics. NovaBay, Emeryville, Calif., is focused on developing innovative product candidates targeting the treatment or prevention of a wide range of infections in hospital and community environments. For more information, visit novabaypharma.com. From Paperless to Personalization Michael A. Griffith CEO Aptuit Inc. “Integrated global networks will facilitate 24/7 discovery, development, and manufacturing support.” Creation of a paperless, Web-based, client-accessible data and project management system, including online approval of labels, batch records, and final reports. Rapid developments in India, China, and other Asian markets go from strictly drug manufacturing and development to delivering discovery, innovation, and final products. Integrated global networks to facilitate 24/7 discovery, development, and manufacturing support. Bloom of virtual pharma companies and innovators and a decrease in the notion of creating vast development, manufacturing, and marketing infrastructures around individual drugs. The rising influence of CDOs/CROs/CMOs in the realization of personalized medicine. Aptuit, Greenwich, Conn., focuses on streamlining and supporting the drug development process for biotechnology and pharmaceutical innovators. For more information, visit aptuit.com. Addressing Global Issues Simon Higginbotham VP and Chief Marketing Officer Kendle “Biopharmaceutical companies must be able to access patients on a global scale to best position themselves for future success in clinical development.” Increased demand for late-phase work. Legislation, including PDUFA and MDUFMA, will drive increased demand for late-phase and registries work. As a result, these studies are likely to become more efficient through better study design, and more cost-effective through innovative approaches. Registries are likely to become multisponsor/multiproduct. Continued globalization. Globalization of trials will continue to be the No. 1 issue facing clinical development. As trials become larger and more complex, studies need more patients from a greater number of countries. To that end, there will continue to be a shift in development toward emerging countries, particularly India and China, as well as Central and Eastern Europe and Latin America. According to a PricewaterhouseCoopers survey, a majority of companies in the biopharmaceutical industry believe the center of gravity of the global pharmaceutical market will soon be in Asia rather than North America and Europe. Technology. EDC will play a very large role in future growth opportunities for the industry. Frost & Sullivan estimates EDC is currently used in 30% to 40% of all new clinical trials, but its usage will increase to almost 70% of all new trials by 2012. EDC is essential in making adaptive design feasible as data are captured and analyzed faster than ever before. Ongoing outsourcing growth. There will be continued growth in the percentage of clinical development work outsourced as it becomes more and more evident that true strategic partnerships — those that leverage both the skills and expertise of CROs, in addition to maintaining capacity — result in efficiencies and accelerate time to market. For example, a Tufts Impact Report in 2006 showed that projects with high CRO usage stay closer to schedule, with high CRO usage projects submitted more than 30 days closer to their projected submission date than low CRO usage projects. Advances in science. We are noting a shift toward the greater use of biologics in clinical development. In fact, analysis by IBM Pharma 2010 shows that greater use of biologics will likewise reduce attrition rates at every stage of development, with clinical-development success rates much higher for biologics than chemical entities. CROs will need to remain at the forefront of these changes and the resulting shift in how trials are conducted. Biopharmaceutical companies must be able to access patients on a global scale to best position themselves for future success in clinical development. By 2010, 60% of patient-access dollars are expected to be spent outside the United States, up from 40% today, according to industry analyst Jefferies & Co. Companies that can focus on their core competencies, while relying on trusted partners to handle the global aspect of development, will be the most successful. Kendle, Cincinnati, is a global clinical research organization that delivers innovative and robust clinical development solutions to biopharmaceutical companies. For more information, visit kendle.com. A Life-Sciences Ecosystem R.T. (Terry) Hisey Vice Chairman and U.S. Life Sciences Leader Deloitte & Touche USA LLP “The business climate also will be greatly influenced by the performance of companies in getting or not getting products to market. Fiscal 2008 will be a year of both challenges and opportunities.” There is a need for improved product innovation and adoption — speeding the process, lowering the cost, and focusing on adoption and commercial success in addition to economic success. The payer landscape will change in terms of purchasing/payment decisions and influence. The emergence of consumer directed healthcare and the role of individuals in their wellness efforts and treatment decisions will continue. There will be increased regulatory scrutiny on product safety and commercial practices. Market access, product development, and product sourcing will become globalized. Life-sciences organizations can best position themselves in 2008 by placing emphasis on three key areas: The first is understanding how the overall life-sciences ecosystem will change. Companies will need to position themselves to deal with the changes in the various stakeholders that influence prescribing and payment decisions. Companies should make certain to have clear, substantiated discussions regarding the clinical and economic benefits of their products. This analysis will be key as people look to make informed decisions on treatment and the costs to treat conditions, whether they are acute or chronic. The second area of focus for companies is to position themselves to transform their development processes to lower costs, speed development, and make certain that they collect, in a transparent way, the information necessary to support both business and regulatory decisions. The third major area of focus is on the operating costs of the business and the moves companies can make to establish a lower cost but sustainable operating model. These three areas will provide improvement in speeding products to market, assuring optimal adoption, and maximizing the EPS performance of these products off an optimal cost model and assets base. The life-sciences industry in 2008 will experience varied performance across a wide number of areas. I look for the industry to continue to improve its level of focus and performance on safety monitoring and information transparency. This will be a key area of performance as consumers, health plans, employers, etc., increase their level of focus in these key areas. The industry continues to strain in terms of its overall R&D productivity and this will put additional stress on the revenue growth that investors look for in these companies. I think the industry will continue to experience margin pressure based on price pressures and patent expiration. This has a short-term EPS impact but, more importantly, raises questions around innovation: to what degree will it be rewarded? Longer term, will the industry suffer from a lack of available capital to invest in innovation and product development? The industry will continue to drive down its overall operating assets position through manufacturing rationalization, a movement to shared services, increased outsourcing on key activities, and a movement to increased levels of contract manufacturing. The key issues that will affect life sciences in the coming year are similar to those that will have a five-year impact, plus a few others. The industry will continue to experience increasing pressure on prices from patients, payers, and so on. The industry also will put a great deal of emphasis on increasing access to, and quality of, healthcare, which will result in growth potential. The industry will continue to experience scrutiny on safety, transparency, and product effectiveness, which will impact share prices and public perception. I think the business climate for life-science companies in FY08 will also include an added dimension in terms of the presidential election and the scrutiny that this will bring on healthcare broadly as well as the cost of drugs, devices, diagnostic testing, etc., and how these contribute to the overall cost of healthcare. The business climate also will be greatly influenced by the