PharmaTrax

Contributed by:

Carolyn Gretton

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Sales, marketing, And R&D

Trends affecting the healthcare industry

By Carolyn Gretton

Breakthrough Treatments Impact U.S. Healthcare Trend Watch: New medicines launched in the last decade brought transformative treatment ­options to more than 20 million Americans in 2011, even as patients visited their physicians and used ­prescription drugs less often. The IMS Institute for Healthcare Informatics report, The Use of Medicines in the United States: Review of 2011, found the availability of new generic drugs in a number of chronic therapies contributed to a minimal increase in drug expenditures overall. Total healthcare system spending on medicines reached $320 billion in 2011, up 0.5% on a real per capita basis. “The year 2011 was a remarkable year for the volume of drug breakthroughs that became available to millions of Americans,” says Michael Kleinrock, director, research development, at the IMS Institute for Healthcare Informatics. “At the same time, some troubling trends that began in 2009 persisted with many patients appearing to ration their medical care. The implications of fewer doctor visits and lower drug utilization on patients’ health have yet to play out and require further study.” Medicines with new mechanisms of action were launched in greater numbers than in prior years, with many representing significant breakthroughs. Last year, 34 new molecular entities were launched in the United States, the most in a decade. First-time therapies became available to treat several types of cancer, multiple sclerosis, hepatitis C, and cardiovascular conditions. Orphan drugs also saw the most launches in the past 10 years. { For more information, visit theimsinstitute.org. Mobile Health Promises to Revolutionize Health IT Ecosystem Frost & Sullivan’s Analysis of the U.S. Broadband mHealth Applications Market research finds that the mobile health (mHealth) market earned revenue of $230 million in 2010 and estimates the market will reach $392 million in 2015. “From 2008 to 2010, mHealth consistently outpaced forecast growth and revenue,” says Zachary Bujnoch, Frost & Sullivan senior industry analyst. “mHealth apps will continue on a steep growth curve as increasingly sophisticated mobile technology tools disrupt the market.” The mHealth app market is expected to continue expanding as business models and significant value offerings continue to evolve in tandem with the fast-paced world of mobile technologies. { For more information, visit frost.com. Branded Websites Lift Rx Conversion, Adherence Online pharmaceutical marketing continues to have a positive and sizeable impact on brand awareness, favorability, and conversion among patients and prospects, according to comScore’s sixth annual Online Marketing Effectiveness Benchmarks for the Pharmaceutical Industry, conducted with consultant Evolution Road. “Over the years, our benchmarking studies have proven the impact that online marketing continues to have on increasing consumer awareness and favorability toward health brands, ultimately driving treatment,” says John Mangano, VP for comScore Health and Pharmaceutical Solutions. Existing patients of a pharmaceutical brand who visited the brand site increased their refill rate by 14.7% compared with the control group. Prospects who visited a branded site also saw a positive increase of 8.9% in beginning treatment compared with those with no exposure to the site. { For more information, visit comscore.com. Other market insights… Opportunity in Impending Biologics Patent ­Expirations The biosimilars market is in the nascent stage of its life cycle. According to Frost & Sullivan, $100 billion worth of biologics are expected to go off patent by 2020, making it a market likely to hold significant potential. Frost & Sullivan analysts expect collaborations among large pharmaceutical companies with financial capabilities and specialty biotech companies with technical expertise. This integration of marketing and research and development skills is the key to success in the biosimilars market. { For more information, visit frost.com. Global Salesforce Investment Fell in 2011 According to worldwide channel spending figures for 2011 by Cegedim Strategic Data (CSD), worldwide investment on salesforce and other marketing channels declined 3.4% to slightly more than $92 billion at constant local exchange rates compared with 2010. Spending on salesforce activity alone fell by almost 5% worldwide to $55.8 billion mainly due to cuts in the United States and Japan. Detailing now represents a little more than 60% of global marketing investments, according to CSD. { For more information, visit cegedimstrategicdata.com. use your QR?CODE?READER or go to bit.ly/PV0612-PharmaTrax Comparative Effectiveness Research Increasingly Viewed as Important Trend: Healthcare stakeholders indicate cautious optimism about use of comparative e­­ffectiveness research in decision-making. Arecent survey of healthcare stakeholders shows that there is cautious optimism about the impact of comparative effectiveness research (CER) on healthcare decision-making and that recognition is continuing to grow for the Patient-Centered Outcomes Research Institute (PCORI), the agency charged with overseeing this research. The 2012 survey, the second in an annual series conducted by the National Pharmaceutical Council (NPC), examined stakeholder opinion on CER and the current environment for healthcare decision-making. According to NPC President Dan Leonard, the findings reflect a more pragmatic view about how CER will be used and who will be funding it. “It’s clear from this second survey that stakeholders view CER with increasing importance, but they do not believe it has had a significant impact on healthcare decisions to date,” Mr. Leonard says. Despite the growing recognition for PCORI’s role in CER, the Agency for Healthcare Research and Quality (AHRQ) and the National Institutes of Health (NIH) are viewed by surveyed stakeholders as the leading agencies for establishing priorities and for funding and monitoring research. Two-thirds of current respondents also expect PCORI to have an impact on establishing research priorities, and 60% note PCORI’s position in funding and monitoring research. As for who will be doing the actual research, about 88% of respondents believe that job will fall to academics, and 70% believe it will fall to the pharmaceutical industry. Two-thirds of respondents believe the pharma industry also is expected to play a significant role in funding and monitoring research. { For more information, visit npcnow.org. CER Continues to Be Important Allergy Category Leads U.S. OTC Market in 2011 Aided by the launch of Sanofi’s Rx-to-OTC switch brand Allegra and strong growth of private labels, allergy relief products grew 16% in 2011 to become the fastest-growing U.S. OTC category. According to the Nonprescription Drugs USA 2011 report by international consulting and research firm Kline & Company, the U.S. OTC drug market posted a gain of 2.4%, reaching $21.4 billion in 2011 at the manufacturers’ level. Past Rx-to-OTC switch brands continued to perform well, with Johnson & Johnson’s Rogaine and Teva Pharmaceutical’s Plan B seeing strong gains in the hair regrowth products and contraceptives markets, respectively. Johnson & Johnson’s OTC unit continued to experience steep declines as a result of manufacturing issues, with sales down 17% in 2011. But most other major branded OTC companies performed well in 2011. Sanofi’s OTC sales were up more than 100% in 2011, bolstered by the launch of Allegra. Pfizer saw an increase of 5.6% based on strong sales of the Centrum, Advil, and Caltrate lines. Novartis recorded a 4.6% gain, driven by growth of Excedrin, Triaminic, and Maalox. Sales gains from Nyquil, Dayquil, Metamucil, and Align helped lift Procter & Gamble’s OTC sales up 4.5%, while Bayer’s OTC sales enjoyed 4% growth in 2011 based on gains of One-A-Day, Aleve, Bayer Aspirin, and Alka-Seltzer. { For more information, visit klinegroup.com. Other market insights… Government Set to Increase Generic Drug Cost Sharing As more generic manufacturers produce a certain drug, prices of the generic drug fall significantly. The GBI Research report, Pricing and Reimbursement in the US – Non-LIS Beneficiaries Not Covered by Medicare Coverage Gap to Gain from Reduction in Out-of-Pocket Expenditure for Generic Drugs, notes that the retail price index for generic drugs decreased at an average annual rate of 1.1% over the past two years. Discounts on generic drugs are projected to increase from 2011 to 2020 as the generic drug costs paid out-of-pocket by non-low-income subsidy (LIS) beneficiaries in the coverage gap will gradually reduce from 93% in 2011 to 25% in 2020. The majority of cost sharing will be undertaken by the Medicare Part D plan as it will pay 75% of the generic drug costs by 2020, the report forecasts. { For more information, visit gbiresearch.com. Companion Diagnostics Budgets Increasing Industry executives interviewed for a recent Cutting Edge Information study believe personalized medicine will be key to the success of many compounds now in development, which pharmaceutical and biotechnology companies are depending on to refill product pipelines. According to Companion Diagnostics and Biomarker Development: Partnership Strategies and Benchmarks, almost half of drug research companies pay between $1 million and $5 million to develop targeted therapeutic technologies that increase the effectiveness of drugs in development. Another one-third of pharma companies invest between $500,000 and $1 million, and only a few report companion diagnostics budgets under $500,000. “These figures are small, compared with overall drug development costs, but it’s clear that companion diagnostics are fast becoming a fundamental building block of drug commercialization strategy,” says Ryan McGuire, senior analyst at Cutting Edge Information. “While they don’t fit with every drug, companion diagnostics can produce far better efficacy and health outcomes, which in turn leads to better market access and reimbursement.” { For more information, visit cuttingedgeinfo.com. Long Term Care Industry Grows But Faces Challenges The long-term care industry, including nursing homes, assisted living, home care, and hospice care, showed 5.5% revenue growth between 2006 and 2011 and reached $259 billion, which Kalorama Information says reflects positive demographics as well as industry performance. The Kalorama Information report, Long Term Care Market: Nursing Homes, Home Care, Hospice Care, and Assisted Living, found the strongest growth occurred in the hospice and home care segments, while nursing care demonstrated the lowest growth as it is most dependent on government funding. Over the next five years, Kalorama estimates no major expansion of state or federal long-term care benefits will occur, due to ongoing budgetary pressures at both levels. In fact, the report notes that many states are facing severe budget deficits and have begun cutting their Medicaid funding. { For more information, visit kaloramainformation.com. Therapeutic Fast Trax… ALLERGY The allergic rhinitis therapeutics market was worth an estimated $4.41 billion in 2010 in the United States, the United Kingdom, France, Germany, Italy, Spain, and Japan, and is forecast to record a negative compound annual growth rate (CAGR) of 1.3% to reach about $3.98 billion by 2018. The projected decline can be attributed to the expected patent expiries of Astelin, Nasonex, Nasacort AQ, and Rhinocort Aqua. Source: GlobalData, Allergic Rhinitis Therapeutics – Pipeline Assessment and Market Forecasts to 2018. { For more information, visit globaldata.com. ANTIFUNGAL The antifungals market is forecast to record a CAGR of 1.9% from 2010 to 2017 to $10.8 billion. The patent expiries of a number of major drugs have paved the way for the entry of generics into the antifungals market, and their rise has led to a weakened R&D pipeline. The current pipeline contains only 37 projects across three indications, of which candidiasis accounts for about 24%. Source: GBI Research, Antifungals Market to 2017 – Generic Erosion of Major Polyenes, Azoles, Allylamines and Echinocandins to Slow Value Growth. { For more information, visit gbiresearch.com. ANTIVIRAL For the treatment of hepatitis C virus (HCV), the majority of surveyed U.S. physicians who prescribe Vertex’s protease inhibitor Incivek more often than Merck/Roche’s protease inhibitor Victrelis perceive Incivek as offering a short, simple treatment duration and superior efficacy. Similarly, surveyed managed care organizations’ (MCOs) pharmacy directors indicate that Incivek’s efficacy is the key driver of formulary inclusion. Source: Decision Resources, U.S. Physician & Payer Forum report, A New Era in the Treatment of Hepatitis C Virus: What Market Access Hurdles Are U.S. Payers Erecting and How Are Physicians Responding? { For more information, visit decisionresources.com. CANCER With respect to emerging therapies for prostate cancer, physicians look for agents with improved efficacy, but also those with long-term safety data and those that are easily reimbursed. Only 21% of surveyed physicians have unaided awareness of specific emerging therapies in development, but of those that do, most cite Medivation/Astellas Pharmaceutical’s MDV-3100. About 23% of urologists and 29% of medical oncologists consider Zytiga to be the existing therapy most likely to be replaced by MDV-3100, but the majority of physicians believe that profiled emerging therapies will not replace any current therapy. Source: Bio-Trends Research Group, TreatmentTrends Prostate Cancer. { For more information, visit bio-trends.com. The colorectal cancer drug market in China is expected to grow from $261 million in 2011 to $404 million in 2016. The increased use of targeted therapies is likely to be a key factor driving growth in this market. Source: Decision Resources, Colorectal Cancer in China. { For more information, visit decisionresources.com. Surveyed oncologists from both Brazil and Mexico consider EGFR inhibition to be a more important therapeutic option for non-small-cell lung cancer and colorectal cancer than for breast cancer. This perception is likely based on the availability of several other effective treatment options for breast cancer and due to the fact that just one-fifth of breast cancer patients are eligible for HER2-targeted therapy. Source: Decision Resources, Emerging Markets Physician & Payer Forum report, The Market Access Landscape for EGFR Inhibitors in Brazil and Mexico: Physician and Payer Perspectives. { For more information, visit decisionresources.com. CENTRAL NERVOUS SYSTEM Current therapeutics options for obsessive-compulsive disorder (OCD) leave a lot to be desired. Although several approved options are relatively safe and effective when used over time, all available drugs show high relapse rates of OCD after treatment is discontinued. The global OCD therapeutics market showed a low CAGR growth of 1.1% from 2006 to 2011, reaching a value of $317 million. The market is expected to pick up steam in coming years, recording a CAGR of 4.8%, to reach $461 million by 2019. Source: GlobalData, Obsessive Compulsive Disorder (OCD) Therapeutics – Pipeline Assessment and Market Forecasts to 2019. { For more information, visit globaldata.com. DIABETES The global diabetes market is growing rapidly due to the increasing diabetes population in the developed countries of the United States, the United Kingdom, and Germany. In 2010, the global diabetes market was estimated at $29.3 billion, representing a CAGR of 10% between 2003 and 2010. By 2017, the global diabetes therapeutics market is forecast to record $47.2 billion, for a CAGR of 7.1% between 2010 and 2017. The type 1 diabetes market is expected to account for $13.2 billion, and the type 2 diabetes market is expected to account for $34 billion in 2017. Source: GBI Research, Diabetes Therapeutics Market to 2017 – Better Glycemic Control and Reduced Potential Risk of Hypoglycemia to Increase the Market Share of DPP-IV Inhibitors and GLP-1 Agonists. { For more information, visit gbiresearch.com. During the 2010-to-2018 period, the type 1 diabetes market is expected to record a CAGR of 8.7%, to reach $4.5 billion, due to the anticipated launch of drugs with novel mechanisms of action and newer formulations of existing products. Consequently, this will increase patient compliance through convenience of administration. Source: GlobalData, Type 1 Diabetes Therapeutics – Pipeline Assessment and Market Forecasts to 2018. { For more information, visit globaldata.com. ENDOCRINOLOGY The overall global endocrinology market for the four major indications was valued at $6 billion in 2010, resulting in a CAGR of 6.9% for the 2004-2010 period. The market is expected to witness comparatively moderate CAGR of 8% between 2010 and 2018, and is estimated to reach $11.2 billion in 2018. Patent expiries of blockbuster drugs such as Sandostatin LAR and Norditropin will restrict the growth of the market during the period. Source: GBI Research, Endocrinology Market to 2018 – Advanced Injection Devices for Growth Hormone and Somatostatin will Improve Ease of Use for Patients. { For more information, visit gbiresearch.com. HYPERTENSION The overall global antihypertensive market for two indications, hypertension and pulmonary arterial hypertension (PAH), was valued at an estimated $29.9 billion in 2010, posting a CAGR of 5.8% for the period 2002-2010. But the market is expected to witness comparatively slow growth, with a CAGR of 1.2% between 2010 and 2017, to reach $32.6 billion in 2017, due to patent expiries of major blockbusters. The launch of novel molecules with disease-modifying characteristics and better safety and efficacy will help offset these patent expirations during the forecast period. Source: GBI Research, Anti-Hypertensives Market to 2017 – Patent Expiries of Blockbusters such as Diovan, Micardis, Avapro and Atacand to Accelerate Erosion. { For more information, visit gbiresearch.com. GOUT Twelve months post-launch of Savient’s Krystexxa, 29% of surveyed rheumatologists report that they have initiated the brand in at least one chronic refractory gout patient and are relatively satisfied with the product. In addition, rheumatologists estimate that 17% of their severe gout patients are eligible candidates for Krystexxa. While still listed as the No. 1 disadvantage of Krystexxa by half of respondents, concerns regarding anaphylaxis/infusion reactions have stabilized. Source: BioTrends Research Group, LaunchTrends: Krystexxa report series. { For more information, visit bio-trends.com. MULTIPLE SCLEROSIS Limited awareness about the disease and its overall occurrence and progression among end-users is hampering the European multiple sclerosis (MS) market, exacerbated by the limited availability of accurate diagnostic tools. The market earned revenue of about $3.2 billion in 2010 and is estimated to reach about $5.38 billion in 2017, for a CAGR of 7.2%. Source: Frost & Sullivan, Analysis of the European Multiple Sclerosis Market. { For more information, visit pharma.frost.com. NEUROMETABOLIC The neurometabolic disorders market value was estimated at $1.6 billion in 2010, and is expected to reach $3.3 billion by 2017, for a CAGR of 11%. Gaucher’s disease, Fabry disease, and Pompe disease account for 91.6% of the total market. The launch of new drugs in the Gaucher’s disease and Fabry disease markets, coupled with increased awareness among patients and physicians, is expected to increase revenue over the forecast period. Source: GBI Research, Neurometabolic Disorders Market to 2017 – Novel Therapies for Rare Diseases such as Gaucher’s and Niemann-Pick Poised to Supersede Existing Therapies. { For more information, visit gbiresearch.com. OPHTHALMIC The world market for ophthalmic drugs is forecast to reach $18.7 billion for 2012. From 2012 to 2022, the pharmaceutical industry is expected to improve treatment of ocular disorders and increase revenue from those products, stimulated by increasing prevalence of eye disorders among aging populations worldwide. Source: visiongain, Ophthalmic Drugs: World Market Prospects 2012-2022. { For more information, visit visiongain.com. UROLOGIC The global urological disorders market is growing rapidly with the increasing benign prostatic hyperplasia (BPH) and urinary tract infection (UTI) diseased populations. In 2010, the global urological disorders market was estimated to be worth $8.1 billion, for a CAGR of 7.9% between 2002 and 2010. By 2017, the global urological disorders market is forecast to be worth $10.3 billion, representing a CAGR of 3.4% between 2010 and 2017. BPH is expected to remain the largest market in the urological disorders segment, with projected sales of $5.7 billion in 2017. Source: GBI Research, Urological Disorders Therapeutics to 2017 – Large Number of Licensing Deals for Approved Products Reflects a Pessimistic R&D Future. { For more information, visit gbiresearch.com. VACCINES The global influenza vaccines market was valued at an estimated $3.5 billion in 2011 and is forecast to post a CAGR of 5.8% to reach $5.2 billion in 2018. The moderate growth is due to increasing awareness about the importance of vaccination and the approval of new vaccines. Source: GlobalData, Influenza Vaccines Therapeutics – Pipeline Assessment and Market Forecasts to 2018. { For more information, visit globaldata.com. Last year, the world vaccine market was worth an estimated $25.3 billion, with influenza as one of the major growth segments for the market. This year’s flu season is weaker than last year’s, with reports of influenza cases down, according to the Centers for Disease Control. But the dynamics of vaccine sales means the weakness of the season will likely not affect sales, as purchasers often place their orders well in advance of the beginning of flu season. Source: Kalorama Information, Vaccines 2011-15: World Market Analysis, Key Players, and Critical Trends in a Fast-Changing Industry. { For more information, visit kaloramainformation.com. Therapeutic Fast Trax… GOUT Twelve months post-launch of Savient’s Krystexxa, 29% of surveyed rheumatologists report that they have initiated the brand in at least one chronic refractory gout patient and are relatively satisfied with the product. In addition, rheumatologists estimate that 17% of their severe gout patients are eligible candidates for Krystexxa. While still listed as the No. 1 disadvantage of Krystexxa by half of respondents, concerns regarding anaphylaxis/infusion reactions have stabilized. Source: BioTrends Research Group, LaunchTrends: Krystexxa report series. { For more information, visit bio-trends.com. MULTIPLE SCLEROSIS Limited awareness about the disease and its overall occurrence and progression among end-users is hampering the European multiple sclerosis (MS) market, exacerbated by the limited availability of accurate diagnostic tools. The market earned revenue of about $3.2 billion in 2010 and is estimated to reach about $5.38 billion in 2017, for a CAGR of 7.2%. Source: Frost & Sullivan, Analysis of the European Multiple Sclerosis Market. { For more information, visit pharma.frost.com. NEUROMETABOLIC The neurometabolic disorders market value was estimated at $1.6 billion in 2010, and is expected to reach $3.3 billion by 2017, for a CAGR of 11%. Gaucher’s disease, Fabry disease, and Pompe disease account for 91.6% of the total market. The launch of new drugs in the Gaucher’s disease and Fabry disease markets, coupled with increased awareness among patients and physicians, is expected to increase revenue over the forecast period. Source: GBI Research, Neurometabolic Disorders Market to 2017 – Novel Therapies for Rare Diseases such as Gaucher’s and Niemann-Pick Poised to Supersede Existing Therapies. { For more information, visit gbiresearch.com. OPHTHALMIC The world market for ophthalmic drugs is forecast to reach $18.7 billion for 2012. From 2012 to 2022, the pharmaceutical industry is expected to improve treatment of ocular disorders and increase revenue from those products, stimulated by increasing prevalence of eye disorders among aging populations worldwide. Source: visiongain, Ophthalmic Drugs: World Market Prospects 2012-2022. { For more information, visit visiongain.com. UROLOGIC The global urological disorders market is growing rapidly with the increasing benign prostatic hyperplasia (BPH) and urinary tract infection (UTI) diseased populations. In 2010, the global urological disorders market was estimated to be worth $8.1 billion, for a CAGR of 7.9% between 2002 and 2010. By 2017, the global urological disorders market is forecast to be worth $10.3 billion, representing a CAGR of 3.4% between 2010 and 2017. BPH is expected to remain the largest market in the urological disorders segment, with projected sales of $5.7 billion in 2017. Source: GBI Research, Urological Disorders Therapeutics to 2017 – Large Number of Licensing Deals for Approved Products Reflects a Pessimistic R&D Future. { For more information, visit gbiresearch.com. VACCINES The global influenza vaccines market was valued at an estimated $3.5 billion in 2011 and is forecast to post a CAGR of 5.8% to reach $5.2 billion in 2018. The moderate growth is due to increasing awareness about the importance of vaccination and the approval of new vaccines. Source: GlobalData, Influenza Vaccines Therapeutics – Pipeline Assessment and Market Forecasts to 2018. { For more information, visit globaldata.com. Last year, the world vaccine market was worth an estimated $25.3 billion, with influenza as one of the major growth segments for the market. This year’s flu season is weaker than last year’s, with reports of influenza cases down, according to the Centers for Disease Control. But the dynamics of vaccine sales means the weakness of the season will likely not affect sales, as purchasers often place their orders well in advance of the beginning of flu season. Source: Kalorama Information, Vaccines 2011-15: World Market Analysis, Key Players, and Critical Trends in a Fast-Changing Industry. { For more information, visit kaloramainformation.com. Allergy Category Leads U.S. OTC Market in 2011 Aided by the launch of Sanofi’s Rx-to-OTC switch brand Allegra and strong growth of private labels, allergy relief products grew 16% in 2011 to become the fastest-growing U.S. OTC category. According to the Nonprescription Drugs USA 2011 report by international consulting and research firm Kline & Company, the U.S. OTC drug market posted a gain of 2.4%, reaching $21.4 billion in 2011 at the manufacturers’ level. Past Rx-to-OTC switch brands continued to perform well, with Johnson & Johnson’s Rogaine and Teva Pharmaceutical’s Plan B seeing strong gains in the hair regrowth products and contraceptives markets, respectively. Johnson & Johnson’s OTC unit continued to experience steep declines as a result of manufacturing issues, with sales down 17% in 2011. But most other major branded OTC companies performed well in 2011. Sanofi’s OTC sales were up more than 100% in 2011, bolstered by the launch of Allegra. Pfizer saw an increase of 5.6% based on strong sales of the Centrum, Advil, and Caltrate lines. Novartis recorded a 4.6% gain, driven by growth of Excedrin, Triaminic, and Maalox. Sales gains from Nyquil, Dayquil, Metamucil, and Align helped lift Procter & Gamble’s OTC sales up 4.5%, while Bayer’s OTC sales enjoyed 4% growth in 2011 based on gains of One-A-Day, Aleve, Bayer Aspirin, and Alka-Seltzer. { For more information, visit klinegroup.com. Other market insights… Government Set to Increase Generic Drug Cost Sharing As more generic manufacturers produce a certain drug, prices of the generic drug fall significantly. The GBI Research report, Pricing and Reimbursement in the US – Non-LIS Beneficiaries Not Covered by Medicare Coverage Gap to Gain from Reduction in Out-of-Pocket Expenditure for Generic Drugs, notes that the retail price index for generic drugs decreased at an average annual rate of 1.1% over the past two years. Discounts on generic drugs are projected to increase from 2011 to 2020 as the generic drug costs paid out-of-pocket by non-low-income subsidy (LIS) beneficiaries in the coverage gap will gradually reduce from 93% in 2011 to 25% in 2020. The majority of cost sharing will be undertaken by the Medicare Part D plan as it will pay 75% of the generic drug costs by 2020, the report forecasts. { For more information, visit gbiresearch.com. Companion Diagnostics Budgets Increasing Industry executives interviewed for a recent Cutting Edge Information study believe personalized medicine will be key to the success of many compounds now in development, which pharmaceutical and biotechnology companies are depending on to refill product pipelines. According to Companion Diagnostics and Biomarker Development: Partnership Strategies and Benchmarks, almost half of drug research companies pay between $1 million and $5 million to develop targeted therapeutic technologies that increase the effectiveness of drugs in development. Another one-third of pharma companies invest between $500,000 and $1 million, and only a few report companion diagnostics budgets under $500,000. “These figures are small, compared with overall drug development costs, but it’s clear that companion diagnostics are fast becoming a fundamental building block of drug commercialization strategy,” says Ryan McGuire, senior analyst at Cutting Edge Information. “While they don’t fit with every drug, companion diagnostics can produce far better efficacy and health outcomes, which in turn leads to better market access and reimbursement.” { For more information, visit cuttingedgeinfo.com. Long Term Care Industry Grows But Faces Challenges The long-term care industry, including nursing homes, assisted living, home care, and hospice care, showed 5.5% revenue growth between 2006 and 2011 and reached $259 billion, which Kalorama Information says reflects positive demographics as well as industry performance. The Kalorama Information report, Long Term Care Market: Nursing Homes, Home Care, Hospice Care, and Assisted Living, found the strongest growth occurred in the hospice and home care segments, while nursing care demonstrated the lowest growth as it is most dependent on government funding. Over the next five years, Kalorama estimates no major expansion of state or federal long-term care benefits will occur, due to ongoing budgetary pressures at both levels. In fact, the report notes that many states are facing severe budget deficits and have begun cutting their Medicaid funding. { For more information, visit kaloramainformation.com.

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