2. Our Recommendation
• Short term (July 2011 – Dec 2012)
- Promote Tasigna as first line drug in the treatment of
CML
- Position it as the drug with fastest response rate to
CML
- Gain market access by adopting payment by
performance model
- Region based marketing strategy
- Create and implement market access strategy for drugs
in pipeline
• Long term (Jan 2013 and beyond)
- Consolidate Tasigna’s position in the CML value chain
- Push pipeline products as 2nd line treatment
3. How is Spain’s pharmaceutical industry organized?
Central Government Health Administration
- Basic Legislation & Budget Allocation
- General Coordination of the Spanish National Health
System (SNS)
- Pharmaceutical Policy
17 Autonomous Community Health Administrations
- Regional Health Legislation
- Health Insurance
- Health Service Planning, Management & Provision
- Decentralization Policies
Health Areas (provincial and municipality)
- Max. Population: 200,000-250,000
- Sanitation provision
- Direct Management of Public Health and Community Services
The legislation changes to the statutory SNS in 2009, have handed greater autonomy
and importance to the role of the 17 autonomous communities (AC’s)
4. Short term strategy
• Sell Tasigna as – “Achieve deeper response- faster” Vs.
Glivec – “Prolong life with continuous therapy”
• Efficacy, safety and cost centric promotion of Tasigna
• Influence KOLs to promote Tasigna
• Aggressively target early adopters to switch from Glivec
to Tasigna
• Conduct trials to determine switching time from Glivec
to Tasigna as a better alternative to Aemulus in 2nd
generation TKI
• Pricing & reimbursement strategy
• Restructure sales team
Start processes to establish Tasigna as a first line drug and to capture Aemulus’s 2nd
line market share
5. Long term strategy
• Glivec- make it the story of the past
• Conslidate Tasigna’s position as the first line
treatment of CML
• Engage KOL’s in clinical trials of pipeline drugs
• Social Media marketing to position Novartis’s
CML portfolio to be the best
• Initiate vaccine creation for disease
prevention than cure
c
6. Value
Product and
Market demonstration Performance
Indication
Assessment and monitoring
assessment
Communication
7. Road map of implementation
Payer KOL’s
• Reimbursement plan finalization- We • Short term- Aggressive marketing to
recommend payment by performance KOL’s by Medical Liaisons team through
model medical conferences, medical
• Build on Glivec trust factor journals, research data publications and
• Educate them about pipeline drugs and direct contact
Novartis’ commitment to Oncology • Long term- Educate them about pipeline
portfolio drugs
Hospitals/Physicians Patient
• Short term- Identification and urgent • Social Media Marketing
targeting of early adopters • Patient Advocacy Groups
• First contact through Medical Liaison • Cancer Centers
team
• Long term- Target late adopters and
laggards through mix of sales and
c
medical liaison team
8. Notes for implementation
Region
Capitalize on differences in
first to market access are
advantage becoming
Sales Team important so
training through
aggressive we
marketing recommend
Build on restructuring*
Glivec’s and a
Brand regionalized
marketing
Market strategy to go
share of forward
Aemulus is
strong in
2nd line
* Recommended Restructuring to be discussed in following slides
9. Comparison of available drugs- Efficacy
Key results:
•1 year MMR 4% higher than Glivec and 11 percent higher than Aemulus
• Estimated rate of overall survival 99.3% (highest among all)
• Lowest rate of AP/BC progression
• CML related of deaths - 38% lower than Aemulus and 50% lower than Glivec
The number one driver for choice of drug in Spain is efficacy & this should be
showcased in Novartis’s interaction with stakeholders.
10. Comparison of available drugs- Safety
Nonhaematologic Grade 3/4 adverse side effects low in all three drugs
Haematologic Grade 3/4 adverse side effects were observed in 50% less cases
administered with Tasigna than Aemulus
Conclusion from trials:
•Tasigna is superior to Glivec and Aemulus in both the primary end point (MMR)
and key secondary end point (CCyR)
•Disease progression to AP/BC was significantly lower in Tasigna than the other two
•Tasigna has better side-effects profile and better compliance
11. 300.0
Projected Sales
250.0
Revenues (in million Euros)
200.0
Others
150.0
Tasigna
100.0 Glivec
50.0
0.0
2010 2011 2012 2013 2014 2015 2016 2017
New Entrants Gleevec Generics Introduced
2017 Picture
Expected share of Tasigna expected sales:
Glivec Sales Glivec expected
Aemulus, generics and 227 Million
Heavily revenues: 0.8
new entrants: 7.7% Euros, CAGR from 2010
cannibalized Million Euros
market share 149.5%
12. Stakeholder management
Stakeholder Relevance Relevance How to approach
(Current) future trend
Payer/ government High Very High Key account managers
KOLs High Slight Medical Liaisons
decrease
Hospital management Moderate Constant Sales & Marketing
to High Representatives
Physicians Low to Slight Sales & Marketing
Moderate Increase Representatives
Patient Low Slight Patient Advocacy Group/ Social
Increase Media/ Cancer Centers
Private Moderate Slight Sales & Marketing
Insurance/Hospitals decrease Representatives
13. Resource Allocation
Region Autonomous Population
Communities
North-Western Galicia, Asturias, 9,213,100
Cantabria, Castilla
Leon, Basque
Country
North-Eastern La Rioja, Navarre, 9,850,900
Aragon, Catalonia
Eastern Valencia, Murcia, 8,702,600
Castilla La Mancha
Southern Extremadura, 9,694,300
Andalucia, Ceuta,
Melilla
Capital Region Madrid, Canary 9,729,600
& Islands Island, Balearic
Island
We propose to assign 3 sales and marketing representatives (SMR) and one medical
science liaison (MSL) for every region. This would imply additionally hiring 1 SMR and
1 MSL this year.
14. Risk assessment and Contingency Plan
Description Explanation Mitigation Plan
Post Launch Post launch trial results show that Tasigna Expedite development of pipeline
R&D failure does not cure CML completely or CML drugs (LBH 589 & Bcr-Abl
remerges after stopping dosage. Inhibitors)
Industry CML drugs introduced by competitors in Position Novartis as a trusted
Competition the next five years show better efficacy brand through Tasigna among the
results as first line such as Pfizer's physicians before replacement
Bosutinib and Bristol-Myers Squibb's drugs are available in market,
Dasatinib Expedite pipeline drugs.
Regulation Budget cap by Payer on Pharmaceutical Urgently work to increase the
change expenditures demand and supply for Tasigna so
that future price cutting does not
harm
Spanish Delayed Reimbursement receivables from Make the payment terms strict.
Economy Risk government Since this risk is uncontrollable
manage finances efficiently and if
possible work with payer to design
new payment terms.
The Spanish health system underwent revolutionary changes after modifications in 2009. The health-related competences were devolved to the regional level (autonomous communities). It provided the 17 health ministries with primary jurisdiction over the organization and delivery of health services. It also gave the regions greater financial autonomy in terms of spending and in revenue generation.The Central governments role was confined to providing allocation of budgets to AC’s, making guideline legislations, and general coordination of the Spanish National Health system.The 17 Autonomous Community Health Administrations were given the jurisdiction of deciding the decentralization of health services, specific regional health legislations, and the payment and reimbursement policies.Each Autonomous community has its health areas. The size of these areas is limited by the population that each area serves (200,000 – 250,000).They are given basic responsibilities such as the provision of sanitation and the direct management of Public Health and Community Services.The legislation changes to the statutory SNS in 2009, have handed greater autonomy and importance to the role of the 17 autonomous communities (AC’s) than ever before, which will be critical to the targeting of key stakeholders for our marketing strategy.
Our strategy is to establish Tasigna as a drug which suppresses CML by promoting its efficacy results. We recommend that Novartis initiate a robust clinical trial program evaluating the possibility of treatment-free remission in CML.We recommend Novartis to use a combination of expert opinions, medical conferences and journal reports by using a barrage of media outlets to create stakeholder interest.An example of this would be to quote Mr Timothy P Hughes in social media & medical conferences. (“Tasigna should be considered as a leading option for frontline therapy becauseit allows many patients to achieve deeper responses earlier, which we have associated with improved long-term outcomes”)In spite of these initiatives other than the early adopters there would still be a lot of physicians who would continue to administer Glivec as the first line drug. So for these physicians who prefer Glivec as first line, we recommend that Novartis market Tasigna as second line over Aemulus by identifying through thorough research and trials an approximate time period during patient’s therapy when a switch to Tasigna would provide optimum result. Educate those physicians to prefer Tasigna as 2nd line in such cases and thus increase it’s second line share as well. Also to gain confidence of the regulatory bodies, payers and physicians we will follow a reimbursement strategy of pay for performance and use different communication channels to target the different stakeholders.
In the long run we recommend that:Novartis cannibalizeGlivec and replace it with Tasigna as the first line treatment.Novartis engage the KOL’s who promoted Tasigna as first line drug be involved in clinical trials of pipeline drugs.Novartis aggressively promote the results of clinical trials in social media & scientific journals.Novartis comes up with an investment strategy to access the best market entry route for drugs in Phase 2 or Phase 3 of development.Novartis establish a patient profile through efficacy studies to see if the pipeline drugs should be promoted to a large group or a small sub-segment.It is also very important that Novartis examine the changing Payer dynamics. The main underlying goal with all these recommendations is to enhanceNovartis’s CML brand image. Meanwhile we should also keep an eye on competitors and think about preventive measures(vaccines) rather than reactivedrugs.
To gain market access Novartis can adopt three different reimbursement strategies. First strategy would be to bear the cost of the therapy by agreeing to waive off a certain percentage of the price. Another option would be to share risk through which Novartis convinces the payer that it is confident about the durable response of the drug. A plan under such a scheme could be to agree on a deal where in Novartis would cover 50% of the cost in case the disease progresses after the first cycle of treatment. The third option would be to opt for a payment by performance mechanism where Novartis would take care of the entire cost of the medication in case the disease progresses after the first cycle of treatment. On the basis of better CCyR response(87% in 24 months).On the basis of the clinical report we are being bullish and we recommend Novartis to go with the third option. Also with other drugs we have seen that even with the reimbursement mechanism in place the revenue generated by drug has increased rather than decrease. Thus reimbursement schemes are being used more & more by pharmaceutical companies as a way to gain market access.Based on the current report we predict that Tasigna will be the market leader in the CML portfolio & will continue to remain in that position for a few years(just like Glivec). So we recommend that Novartis slowly cannibalize Glivec. In the unfortunate situation that the results on the ongoing tests are unfavorable & Tasigna cannot completely cure Glivec Novartis would be moot. In such a scenario with host of companies coming with CML drugs market it would be a very tough market to compete. On top of that the changes in regulations by the Spanish Government with regards to Generics would bring down the prices further & it would become very tough to generate profit over the operating cost.
Considering an incidence rate of 1/100000, Assumptions:1These financials assume that Tasigna is established as a cure for CML after the trial results are made available in 2014.2The average price of other competitors' CML drugs (Pfizer, Ariad Pharmaceuticals, etc.) are same as that of Aemulus.3Spanish CML sales fluctuations shall be the same as those for the world.4Proportion of Glivec to Tasigna sales in 2010 and 2011 shall be in the same proportion as those for the group.550% price reduction of Glivec after introduction of generics in the Spanish market in 2017.6CML market grows at 2% per annum after 2015.7CMLDrug prices are assumed to be constant over the time period under consideration.
In the current pharmaceutical market in Spain it is very important that Novartis establish firm relationship with Payer/Government through Key Account Managers. The reason Payer/Government is very important is that with a lot of money being spent on healthcare, regulatory bodies are becoming more & more cost centric. The KOLs play an important role in spreading the news on the efficacy & potency of the drug and it is very important that we keep them involved though medical liaisons. But in future with Government tightening its purse cost might be the single most important factor , may be to an extent that it becomes more important than efficacy results. In the current structure the physicians importance is a little lower than it used to be but we recommend that Novartis constantly engage the physicians through their field force. We can do this by constantly sending them reports on the trials, educating them about the benefits of Tasigna over other drugs and asking for their inputs on the drug performance & CML in general. We will approach them through medical conferences, publishing in medical journals, sending drug comparative efficacy reports. Also when the sales person interacts with the physicians he or she should provide detailed dossiers & educational material on the drug. It is also very important that the Sales Rep & medical liaisons hightlight the side effects of other drug and how it could adversely affect the quality of life and compliance to treatment. Also in the current system patient relevance is very low but we should change our strategy on patients by focusing on patient preference rather than just understanding patient perception through patient groups.
Resource Allocation for CML has been based on two factors:1. Every sales and marketing representative should have nearly the same number of health areas and medical professionals under his jurisdiction.2. The medical science liaisons shall be specific to a region.Since health areas are divided by population, the regional division has also been conducted on the basis of population served.For logistical and operational simplicity, regionally proximal clusters of autonomous communities with similar populations has been considered.
