The Cardiovascular Therapeutic Market: How Insight-driven Commercial Models Deliver Value


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This ebook from IHS examines the changing role of integrated information and insight for pharmaceutical companies within the cardiovascular therapeutic market.

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The Cardiovascular Therapeutic Market: How Insight-driven Commercial Models Deliver Value

  1. 1. How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? The Source for Critical Information and Insight TM1 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  2. 2. ContentsThe fast-changing dynamics of the pharma industry Function: Market Access .......................................... 6 New commercial models integrating insight-require re-evaluation of analytical models and development processes will be the cornerstonesstreamlining of insight-development processes to Function: Competitive Intelligence / of success ................................................................ 9ensure sustainability .................................................. 3 Strategic Planning ..................................................... 7 Meet the Author ...................................................... 11Stakeholder value expectations are the highest in Function: Research & Development .......................... 8the cardiovascular therapeutic area, where insight The IHS Global Insight Healthcarewill play a vital role in future growth models ............... 4 and Pharmaceuticals Practice ................................. 11Growth Model 2.0: Analytical processes that How can IHS help you? .......................................... 11integrate portfolio management, competitiveintelligence, and stakeholder engagement will becentral to future sustainability. ................................... 5Share this eBook: The Source for Critical Information and Insight TM2 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  3. 3. The fast-changing dynamics of the pharma industry require re-evaluation of analyticalmodels and streamlining of insight-development processes to ensure sustainability.The pharmaceutical industry is going through a So What’s Changed?period of significant change driven by the rise of Over the last 50 years, intrinsic innovation was thegeneric drug markets, payer-centric commercial main driver of industry growth. During this time, “Evolving analyticalmodels, the growth of pharmerging markets, and pharmaceutical companies typically invested models need tooutcomes-based decision making. around 15% of their net revenues in Research andIn 2009, the industry grew at a rate of 7% to $837 Development (R&D), relying heavily on the success harness consolidated of single blockbuster products.billion1, largely because of both horizontal and vertical information sourcesconsolidation. Key growth factors included the Escalating R&D costs, declines in productivity, andincreasing demand for major therapies in emerging failures of many late-stage pipeline assets have raised in order to allowmarkets and the rise of specialist-driven markets. doubts about the traditional blockbuster-dependent approach. Many industry experts foresee a payer- efficient, intelligentThe pharmaceutical industry typically consists of manyindependent, highly concentrated sub-markets aligned centric growth model driven by coordinated insight- decision making.”to therapeutic categories. Companies compete aggres- development processes as the next frontier of success.sively in each category, often using a dual strategy: Although industry growth is expected to continue, the ƒ Market dominance in one particular disease class nature and structure of growth is evolving rapidly. On one hand, there are tremendous opportunities in the emerging ƒ Risk-benefit-based portfolio diversification for the remaining disease classes markets, and on the other hand, there is a tightening com- petitive and regulatory landscape in developed markets. A robust insight-development process relies onMarket leadership in each category is largely effective information compilation and ensures agoverned by a company’s depth of technological What Does It Mean? coordinated flow of information from one businesscapability and the market penetration of its In order for pharmaceutical companies to successfully function to another. It will help pharmaceuticalexisting portfolios. navigate the opportunities and challenges of this evolv- companies increase commercialization efficiency ing landscape, it has become ever more important for by engaging proactively with various stakeholders1 Source: IMS them to optimize their insight-development processes. (payers, regulators, patients, and physicians).3 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  4. 4. Stakeholder value expectations are the highest in the cardiovasculartherapeutic area, where insight will play a vital role in future growth models.The cardiovascular therapeutic segment and its What has driven the rise in stakeholder Growth of the Generic Drugs Marketsubsequent disease markets are the leading areas of value expectations? A recent study indicated a higher level of genericgrowth in the pharmaceutical industry. They command availability in cardiovascular markets than brandedthe largest market for prescription drugs and in 2009 Demographic Shifts products due to cost-containment strategies ingenerated $110 billion in sales, accounting for about According to the World Health Organization (WHO), healthcare systems worldwide. This has led to a13.5% 2 of the total market. the high prevalence of cardiovascular disorders is significant pressure on margins for existing players attributed to aging populations, coupled with advances in the category.Over the last 30 years, pharmaceutical companies in diagnostic technologies. The aging population ishave invested heavily in the cardiovascular arena to driving the heightened emphasis on social care in Specialty-focused R&Ddevelop and commercialize molecules for various healthcare systems worldwide.indications. Competition within the field has intensified There is an ongoing trend in cardiovascular towardsas a result of: more specialized therapies, as this approach Payer-centric Solutions ƒ Rise in the level of investment offers greater competitive advantage and ensures There has been a considerable shift in the balance sustainability. This carries significant upward risk ƒ Stakeholder commitment towards deployment of power between payers and pharmaceutical and a higher cost base, but has the potential to of resources companies. Patient solutions have evolved towards deliver far greater value for all stakeholders. ƒ High unmet clinical needs payer-centric approaches that rely on outcome- ƒ Expected greater returns on employed capital and evidence-based decisions. The quality of ƒ Technological advances care, improved patient outcomes, and cost of ƒ Greater disease understanding affordability are the principal areas of controversyThe increased competition has not only led to significant between stakeholders.developments in the treatment landscape, but has alsoaltered the dynamics of the therapeutic category byplacing greater emphasis on the value of cardiac care.2 Source: Adpated from Cowan Report 20094 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  5. 5. Growth Model 2.0: Analytical processes that integrate portfolio management, competitiveintelligence, and stakeholder engagement will be central to future sustainability.Cardiovascular therapeutic markets need a strategic Prioritized Stakeholder Engagementre-focus because of stakeholders’ high value The evolving market dynamics place greater emphasisexpectations. Key future success factors will centre on: on the need for much broader engagement between “The development and various stakeholders.Portfolio Diversity and Optimization commercializationDiversification ensures optimized allocation of finite An effective engagement strategy depends onresources towards projects with greater return on information sharing and processing in order to landscape has shiftedcapital at an acceptable level of risk. The level of make value-driven conclusions.diversification depends on a company’s core strategy to a more value- Opportunities Aheadand its relative position in the market. Successful There are tremendous opportunities for growth within driven framework.”diversification strategies rely on up-to-date market the segment, but the development and commercial-information and agile analytical models. ization landscape has shifted to a more value-drivenDynamic Competitive Intelligence framework. To gain market access, newer therapiesIntegrated intelligence processes act as principal and solutions must exceed existing value expectationslevers of success in a highly competitive environment and increase the total level of cardiac ensuring faster movement of information between In order to achieve future growth, pharmaceuticalmarkets and decision makers. companies will need to effectively monitor information across many verticals and integrate those informationEvidence- and Outcome-based Decision Models paradigms into insight-development processes.Success in the new pharmaceutical landscape willlargely depend on how fast companies implement In the following case studies, we examine theoutcome-driven strategies. Quality and consistency significance of information and insight-developmentof information are core foundations of outcome- practises for three functions within the pharmaceuticalbased models. industry: market access, strategic planning, and R&D.5 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  6. 6. Function: Market AccessMarket access is one of the most important Deciphering the value drivers Conclusionfunctions in the pharmaceutical industry and is ƒ Identify the value drivers for different stakeholders For companies to mitigate all the key challenges anddirectly responsible for late-stage commercialization and potential strategies to overcome reimbursement develop a strategic road map, information processesof a company’s drug pipeline. hurdles play a central role. Timely, consistent, and analytically ƒ Understand the role of clinical variables from a rich information serves as a fundamental building blockMarket access is typically a three-stage process payer’s perspective for an integrated market-access strategy. An integratedcommencing with regulatory approval, reimbursement data source that incorporates different verticals ofor pricing approval, and formulary inclusion. Creating value propositions to fully capitalize information will effectively minimize the time-to-marketTo gain market access for different assets, a pharma- existing Pricing and Reimbursement (P&R) challenges by providing greater insight.ceutical company must develop an evidence-based opportunitiesapproach focused on three fundamental principles: ƒ Identify market-access barriers and model payer ƒ Demonstration of clinical and economic value perception towards different scenarios ƒ Number of competitors ƒ Price evolution according to market conditions ƒ Genetics growth rate ƒ Early timetable integrating clinical and economic ƒ Market size Current Market ƒ Positioning of current assets endpoints Scenario ƒ Prive evolution of each asset ƒ Competitor pipelineThe key challenges faced by market access assetsprofessionals: ƒ Clinical trial results ƒ Pipleine monitoring Pipeline Clinical and analysis Dynamics LandscapeUnderstanding the pricing and access landscape ƒ Endpoint data ƒ Interpret and forecast payer behavior for new ƒ Adverse events assessment ƒ Post-marketing trial information products given the current barriers to market entry ƒ Evolution of clinical guidelines ƒ Analyze the impact of current trends on the Regulatory clinical landscape Environment ƒ Country risk assessment ƒ Optimise potential value propositions to gain ƒ Regulatory guidelines ƒ Engagement scenarios faster market access Figure showing the information dimensions of Market Access and the critical information needs.6 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  7. 7. Function: Competitive Intelligence / Strategic PlanningSustainable performance in today’s complex industry Market Landscape Variables ƒ Forecasted market positioningenvironment relies on how quickly companies process ƒ P&R environment in different countries ƒ KOL opinion analysismarket information and develop strategic processes to ƒ Clinical and regulatory policiesgain competitive advantage. Conclusion ƒ Orphan drug designations In order to achieve the efficient level of optimizationCompetitive Intelligence (CI) is one such information- ƒ Post-marketing trial information for intelligence models, insight-development processesharnessing function. High-quality data is the play a central of an efficient intelligence function and Pipeline Monitoring ƒ Endpoints of various trials An integrated data source, together with anensures faster development of insight-driven ƒ Potential new entrants in same sub-therapeutic advanced analytical platform, will help pharmaceuticalsolutions at both the tactical and strategic levels. category companies gain competitive advantage and ensureIntelligence-rich data enable companies to interpret a future sustainability.given situation, e.g., a recent trend or future forecast,and base strategies for future developments on thecurrent situation and knowledge. Awareness and CultureA key challenge for any CI function in the pharmaceuti- I N FO R M AT I O N L A N DSCA PE A successful intelligencecal industry is the optimization of insight-development framework depends onprocesses and implementation methodologies. Communication the three fundamentalTo develop an optimized CI process, companies building blocks of structure and process,need timely data focusing on: awareness and culture, Interpretation Collection and planning andCurrent Competitor Activity implementation. This ƒ Price cuts structure is constantly ƒ Product-labelling updates reinforced through Analysis effective compilation ƒ Major licensing and agreement developments Structure Planning and and and utilization of ƒ Patent expiration information. Process Implementation7 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  8. 8. Function: Research & DevelopmentR&D is one of the most important functions in the Competitor pipeline variablespharmaceutical industry, as it ensures future growth ƒ Indications of various trialsand sustainability. Nevertheless, over the last couple of ƒ Detailed primary and secondary endpointsyears, this function has come under intense pressure Regulatory ƒ Results of completed trialsbecause of declining productivity and rising costs ƒ Number of enrolments in major trialsof introducing new compounds. This situation is ƒ Safety and efficacy informationheightened in the cardiovascular market with its highstakeholder value expectations. Regulatory landscapeMany pharmaceutical companies have started to ƒ Detailed information about registration trialsreorganize their R&D programs by incorporating ƒ Response of regulatory agencies to clinical R&Dmarket variables into the development structure. There results datahas been a growing debate that R&D functions must ƒ Payer behavior towards clinical outcomesnot be isolated from the pricing or reimbursement Conclusionenvironment. A clinical development program must The effectiveness of the R&D function largely dependstake into account the payer’s perspective on the on integrating three main levers of information: Clinical Marketdesign, implementation, and interpretation of Environment Access regulatory landscape, clinical environment, andclinical variables. market-access scenarios.A fully integrated approach needs continuous A fully comprehensive data source will helpmonitoring and analysis of competitive, regulatory, pharmaceutical companies develop a cost-effectiveand payer activity, including: Figure: Stakeholder engagement map and market-responsive R&D strategy by providing for R&D function greater insight on stakeholder perspectives.8 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  9. 9. New commercial models integrating insight-development processeswill be the cornerstones of successThe pharmaceutical industry is in a state of flux, A Rapid Evolution The role of information has changed dramatically inand many forces are re-shaping its core structure. With the rise of the information age, the fundamental such a competitive environment. The need to compileHistorically, pharmaceutical companies have elements of success are evolving rapidly. Pharmaceutical information sources is exacerbated with the rise of thesucceeded by discovering, developing, manufacturing, companies are challenged on several fronts, and their payer-centric model and the requirement for economicand then marketing their products, often allocating major areas of concern are centred on: endpoints in decision making.resources in the prioritized manner. ƒ R&D technologies For future growth and success, new commercialThe sequential approach (tunnel innovation) of ƒ Regulatory emphasis and market access models must integrate insight-development processesresource allocation has fuelled the growth of the ƒ Stakeholder engagement in order to actively engage the various cross-functionalblockbuster-dependent commercial model. One disciplines within a company. ƒ E-business and supply chain managementof the principal drawbacks of this approach is the ƒ Marketing and consumer demands Pharmaceutical companies should work towardsperipheral position of information and how it is resolving all the roadblocks in information sharingused in decision-making models. Information was and compilation.disseminated from one discipline to the next, butnot within disciplines, often creating information An integrated information source will help easesilos and masking. many concerns for different stakeholders in the pharmaceutical industry. It should give timely, accurate, and mission-critical information on competitors, regulators, payers, and consumers, thereby providing pharma companies with effective stakeholder engagement points and helping them achieve a sustainable growth strategy.9 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  10. 10. Pharmaceutical Companies Pharmaceutical Figure highlights the evolving Companies Physicians/ commercial models in the Clinical Community pharmaceutical industry and the changing role of information in Patient the decision-making process. Regulatory The blockbuster-dependent Payer Agencies Groups approach relies on information sharing as a collateral function, Information Regulatory depending on communication of Agencies results, whereas the new payer- centric approach requires an integrated and cross-functional utilization of information. Payer Physicians/ Groups Patient Clinical CommunityThe blockbuster-dependent model relies on The payer-centric model works on fundamental principlescyclical flow of information but lacks focus to of information dissemination across disciplines and betweendisseminate information across disciplines, often stakeholders. It links decision-making process throughcreating information silos. uniform distribution of information.10 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  11. 11. More InformationMeet the Author The IHS Global Insight Healthcare How can IHS help you develop effective and Pharmaceuticals Practice portfolio strategies for Cardiovascular Praful Mehta The IHS Global Insight Healthcare and and Metabolic therapeutic areas? Senior Healthcare Analyst, IHS Pharmaceuticals practice provides a portfolio of intelligence solutions to optimize the performance The World Markets Cardiovascular and Metabolic of companies and organizations across the Service is a single integrated source of data and Praful Mehta is a Senior analysis providing a clear, comprehensive view of pharmaceutical, biotech, and generics sectors. Healthcare Analyst at IHS. He the cardiovascular and metabolic prescription drug joined the company in 2010 and Our key focus is to provide actionable insights to markets worldwide. is a practice leader within its support strategic decision making, particularly in the With coverage of over 30 disease areas, the servicetherapeutic area services. Praful has been a long-time fields of market access, pricing and reimbursement provides the critical information and insight thatadvisor to senior teams within the pharmaceutical (P&R), emerging markets, generics strategies, pharmaceutical companies need to:industry on issues of market competitiveness, busi- therapeutic development pathways, and general ƒ More effectively manage pipelines and optimize newness integration and commercialization strategies. competitive intelligence. product launchesPrior to working at IHS, Praful was a Vice President » Find out more about our healthcare and ƒ Develop life-cycle management (LCM) strategies to pharmaceuticals practice maximize profits from existing portfoliosat StrataPro Analytics and Consulting, where hedeveloped the company’s core consulting capability The service helps multiple business functions to develop a unified strategy by bringing together multiplefor developed markets. He also led various project dimensions of data into a single source.teams at GlaxoSmithKline Pharmaceuticals andJohnson & Johnson Pharmaceuticals. Access this unique database, together with same- day analysis of key market news, profiles of diseasesPraful holds an MS degree in International and countries, and quarterly special reports. DataManagement and Corporate Strategy from North coverage includes:Eastern University / Dublin City University. He has Share this eBook: ƒ Corporate Informationa BS with honors in Genetic Engineering and ƒ Drug Disease LandscapeBiotechnology from American University / M-IIT. ƒ Clinical Data ƒ Pricing, Cost, and Sales Information ƒ Regulatory and Reimbursement Information » Learn more about this new service11 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
  12. 12. 12 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.