PMRG 2008 Presentation

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Presentation of the challenges and opportunities for the pharmaceutical industry

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PMRG 2008 Presentation

  1. 1. DAVID S. LESTER, PH.D. SENIOR VP GENE EXPRESS INC. The Pharmaceutical Industry in Transition -- Pharma 2020 March 10, 2008, Phoenix, AZ
  2. 2. Good things about the pharmaceutical industry today: - <ul><li>Still making a lot of money! </li></ul><ul><li>Still earning good margins on products. </li></ul><ul><li>Still providing a significant role in healthcare with existing and emerging product lines, particularly for acute care. </li></ul><ul><li>Still in the spotlight of politics and the media. </li></ul><ul><li>Process still turns out successful products in terms of NDAs. </li></ul>
  3. 3. Bad things about the pharmaceutical industry today <ul><li>Number of NDAs approved continues to decline on a yearly basis. </li></ul><ul><li>Big vs. medium vs. small Pharma. </li></ul><ul><li>The rising challenge of generics. </li></ul><ul><li>Entering the world of generics. </li></ul><ul><li>US vs. non-US pricing. </li></ul><ul><li>Increased regulatory scrutiny. </li></ul><ul><li>The “threat” of Personalized Medicine. </li></ul><ul><li>Demonstrating improved efficacy. </li></ul><ul><li>The broken Pharma R & D process. </li></ul><ul><li>The disconnect between R & D and commercialization. </li></ul><ul><li>The broken healthcare system. </li></ul><ul><li>And so on, and so on, and so on……….. </li></ul>
  4. 4. Improving R & D productivity (a) <ul><li>Changes in R & D have been identified as different fashions, e.g. High Throughput Screening, Combinatorial Chemistry, Genomics, Biomarkers, Adaptive Clinical Trials, etc……………….NONE HAVE WORKED! </li></ul><ul><li>All are incremental. Need disruptive changes. </li></ul><ul><li>May only be possible in small –mid Pharma or biotechs, e.g. Vertex Pharmaceuticals, Genzyme. </li></ul>
  5. 5. Improving R & D productivity (b) <ul><li>Extensive growth and investment in biologics by large Pharma. </li></ul><ul><ul><li>Problems </li></ul></ul><ul><ul><ul><li>Different R & D model required. </li></ul></ul></ul><ul><ul><ul><li>Different and unclear regulatory demands. </li></ul></ul></ul><ul><ul><ul><li>Limited expertise for development. </li></ul></ul></ul><ul><ul><ul><li>Higher risk as unknown arena. </li></ul></ul></ul><ul><ul><ul><li>Amgen went the other way (from biologics to small molecules) and look what is happening to them! </li></ul></ul></ul>
  6. 6. Improving R & D productivity (c) <ul><li>A solution to the R & D process? </li></ul><ul><ul><li>Outsource/license all products (both small molecule and biologics) from biotech type model. </li></ul></ul><ul><ul><li>Development outsourced to CROs (more overseas activity, e.g. India, China, Eastern Europe). </li></ul></ul><ul><ul><li>Pharma focuses on Commercialization of products. </li></ul></ul><ul><ul><li>Develop more of a private equity business model focusing on product lines that are most successful for that company. </li></ul></ul>
  7. 7. ARE THERE DIFFERENT CHALLENGES IN THE US VS. GLOBAL? Where is Healthcare going?
  8. 8. “ Three Things You Can’t Say About Healthcare” <ul><li>The U.S. has the best healthcare system in the world </li></ul><ul><li>New is better </li></ul><ul><li>Healthcare is special </li></ul>J.Grossman, WHIT Congress, Dec. 2007
  9. 9. The Personalization of Healthcare <ul><li>Personalized Medicine – the focus is moving towards diagnosis. </li></ul><ul><li>Movement from acute to chronic care to prevention. </li></ul><ul><li>From population to individual. </li></ul><ul><ul><li>Molecular Diagnostics –genomics, proteomics. </li></ul></ul><ul><ul><li>Multiplex panels. </li></ul></ul><ul><ul><li>Diagnostic algorithms. </li></ul></ul><ul><li>Not just about therapeutics! </li></ul>
  10. 10. The Consumerization of Healthcare <ul><li>The internet is creating the “proactive consumer” in healthcare. </li></ul><ul><li>“ Life science meets lifestyle” (W.Rosenzweig, Physic Ventures) </li></ul><ul><li>Moving from products to “the science of service delivery” (J. Grossman, Harvard Business School). </li></ul>
  11. 11. The Healthcare System of Today: Which iPod do I trust? Regulators Pharmaceutical Companies Payers Providers Suppliers Caregivers Device Manufacturers Employers
  12. 12. The Patient of Today – The iPod: What accessory do I choose? Eastern Medicines/Treatments Generics Pharmaceuticals Supplements Regulated Devices Non-Regulated Devices Nutraceuticals Physical Activities
  13. 13. Factors influencing the patient consumer decision making Internet sites TV Music Food preferences Newspapers/ journals Pharmacist Pharma DTC Health/nutrition stores
  14. 14. Disruptions to Pharma and Healthcare <ul><li>Minute clinics </li></ul><ul><li>Social networking </li></ul><ul><li>Patient Health Records </li></ul><ul><li>Wireless Devices </li></ul>
  15. 15. Conclusions for Pharmaceutical Industry <ul><li>Healthcare begins with diagnosis – diagnosis will provide strategy for pharmaceuticals (not the other way around as it is today). This means personalized medicine, even individual therapies. </li></ul><ul><li>“ Personalized Medicine” improves “value” of compounds on the market, including generics. </li></ul><ul><li>The move from treating sickness to keeping people health or well is very challenging (needs lots of data!). </li></ul><ul><li>Pharmaceuticals will be viewed as one of the “accessories” that will be used in both health and healthcare. </li></ul><ul><li>The pharmaceutical industry will have to create new business models that will integrate with different “silos” in health and healthcare. </li></ul>
  16. 16. DAVID LESTER, PH.D. EMAIL: [email_address] TEL: 973786-1066 THANK YOU!

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