The document discusses the evolving pharmaceutical landscape and the importance of innovation in the industry, emphasizing the need for companies to understand customer definitions of brand value to achieve market access. It outlines the clinical development process, the rising costs and time associated with drug development, and the necessity for clear value demonstration to payers. Additionally, it highlights changing regulatory conditions and market dynamics that impact the commercialization of new pharmaceutical products.

1. W COMMUNICATION AGENCY

2. Specialists in international B2B communications since 1998
Three sectors with a specific need to translate product features
into brand benefits
INDUSTRY
Alfa Laval
Duni
Ecophon
Inwido
NSK
Microbas
Sandvik Mining
Perstorp
Tetra Pak
Thorn Lighting
Trelleborg
TECHNOLOGY
Baldwin
Cliniclands
Comsys
SCAN COIN
Sovplym
Sydantenn
Wayne
LIFE SCIENCE
Grünenthal
Lundbeck
Norgine
Novo Nordisk
UCB
Airsonett

3. W COMMUNICATION AGENCY
WHAT DO WE MEAN BY INNOVATION IN THE PHARMACEUTICAL INDUSTRY?
INNOVATION IN THE RESEARCH ENVIRONMENT
SUNIL RAMKALI, ACCOUNT DIRECTOR,
W COMMUNICATION AGENCY
3RD MARCH 2016

4. CLINICAL DEVELOPMENT PROCESS:
QUALITY, SAFETY AND EFFICACY ARE REQUIRED FOR REGULATORY APPROVAL
4
Phase 2Phase 1
First human dose
50–100 volunteers
Dosage and side effects
First efficacy dose
100–1,000 patients
Long-term effects,
optimal dose and efficacy
Phase 3
Confirmatory trials
Up to 9,000 patients
Safety and efficacy
X years

5. CLINICAL DEVELOPMENT / REGULATORY PROCESS
5
Phase 4Initiation Phase 1 Phase 2 Phase 3a Phase 3b
RESEARCH DEVELOPMENT COMMERCIALISATION
Manufacturing
Product up-scaling formulation
Non-clinical testing
Safety and tolerability
Clinical trials
Proof of clinical concept, safety and efficacy
Product registration
Global regulatory requirements
and product labelling Preparing for launch
Product communication and
market access
Research
Discovery and validation of
clinical proof of principle
Reaching the market
Product expands treatment options
for people with chronic conditions
Initiation: Average industry time to develop a new molecular entity in R&D = 10 – 15 years at an estimated cost of around $1 billion
Source: innovation.org - Drug Discovery and Development: Understanding the R&D Process, Feb 2007.

6. TRADITIONAL ‘ROAD MAP’ FOR BRINGING A
PHARMACEUTICAL PRODUCT TO THE MARKET
Need for the
product
Identify the
product
Develop the
product
Study the
product
Approve the
product
Reimburse
the product
Sell the
product

7. 3000 raw ideas
300 ideas worked
125 Concepts
9 Projects
2 Commercially ready
1 Commercial Success
THE PIPELINE – FOOD FOR THOUGHT!
Source: Dow Chemical Company

8. Innovation =
Brand value

9. HOW DO WE DEFINE INNOVATION?
General definition
• Innovation is the application of new solutions that meet new requirements, inarticulate
needs, or existing market needs (source: www.wikipedia.com)
Business definition
• The process of translating an idea or invention into a good or service that creates
value or for which customers will pay (source: www.businessdictionary.com)
Healthcare definition?
• Scientific breakthrough in basic research or discovery and transforming them into
marketable products that can be successfully launched into highly regulated markets.

10. HOW DO WE DEFINE INNOVATION?
General definition
• Innovation is the application of new solutions that meet new requirements, inarticulate
needs, or existing market needs (source: www.wikipedia.com)
Business definition
• The process of translating an idea or invention into a good or service that creates
value or for which customers will pay (source: www.businessdictionary.com)
Healthcare definition?
• Scientific breakthrough in basic research or discovery and transforming them into
marketable products that can be successfully launched into highly regulated markets.

11. OBJECTIVES OF TODAY
The pharmaceutical landscape is rapidly changing and the
pharmaceutical industry needs to adapt
Understanding the customer definition of brand value (innovation)
is critical for achieving access to the market
The cost of delivering brand value (innovation) to the
pharmaceutical industry

12. OBJECTIVES OF TODAY
The pharmaceutical landscape is rapidly changing and the
pharmaceutical industry needs to adapt

13. To every action there is always
opposed an equal reaction.
Sir Isaac Newton, Physicist

14. 1
4
ACTION – GLOBAL TRENDS ARE RESHAPING THE
PHARMACEUTICAL MARKET PLACE*
• Increasing demand for health care
services – cost containment
• Priority to serious diseases
• Increasing requirement that
products prove:
• Incremental clinical benefits vs.
SoC
• Cost-effectiveness
• Affordable / BI analysis
*PWC report (2008): Pharma 2020: Marketing the future. Which path will you take?
• The burden of chronic disease is soaring
• Increasing influence of policy makers/payers on
prescribing decisions
• Increase in pay-for-performance
• Increased focus on prevention rather than treatment
• The regulators are becoming more risk-adverse

15. ‘ACTION’ – PHARMACEUTICAL LANDSCAPE
Aging population leading to increase drug spending
Devolution of budgets from national to regional healthcare organisations, leading to cost containment
at a local level
Significant increase in the influence of health technology assessment bodies
Increased use & enforcement of prescribing guidelines / drug listings
Increased focus on drug development in niche therapy areas / non-trivial diseases
Increased use of generics = 2nd/3rd/ 4th line positioning for ‘new’ & branded products

16. ‘REACTION’ – PHARMACEUTICAL LANDSCAPE
Reduced access to healthcare professionals
New customer groups to address – payers / healthcare technology assessment bodies
Down sizing of sales forces
Increased joint drug development between different companies – ‘reduced risk
Increased focus on drug development for more serious conditions
New drugs being positioned as ‘add-on’ (after generics)
Need for tailored marketing communications – specific value story for payers

17. INNOVATIVE BRANDS MUST FOCUS ON VALUE
DEMONSTRATION!
Value demonstration
• Delivering brand communications that are compelling, meaningful and relevant is
mandatory.
Differentiation vs. the competition
• Communicating the incremental clinical benefit/s & value for money of your brand is
critical.
Strategic & creative execution
• Executing brand communications via creative, relevant and motivating channels is a
must, if we are to change prescribing behaviours (& funding decisions).

18. OBJECTIVES OF TODAY
Understanding the customer definition of innovation is critical for
achieving access to the market

19. UNDERSTANDING STAKEHOLDER NEEDS IS CRITICAL
FOR COMMERCIAL SUCCESS
Budget
impact /
affordability
Quality Safety Efficacy P & R
Regulatory assessment
Marketing authorisation
Payer assessment
Value demonstration
‘4th hurdle’ ‘5th hurdle’
Prescribers
All parameters are critical for market penetration
Adapted from Paul & Trueman (2001), Fouth hurdle reviews , NICE, and database applications, Pharmacoepidemiology and Safety, 10 (5), 429 - 438

20. Industry
perspective
Innovation based on “novel“
pre-clinical capabilities “new mode of action“
“first in class“
“highly selective …“
Payer perspective Innovation based on “improves compliance“
potential and benefit for “health consequence of side effects“
patient management “improves health status“
“clinical important to the patient”
“reduced treatment costs“
Definition Attributes
Payers need to be convinced of the value for money
of the product
“INNOVATION” FOR THE PHARMACEUTICAL INDUSTRY
AND EXTERNAL STAKEHOLDERS ARE VERY DIFFERENT

21. TYPE OF EVIDENCE FOR TREATMENT INTERVENTIONS
Efficacy
Does it work in clinical
trials?
Effectiveness
Does it work in clinical
practice?
Efficiency
Does it contribute to
more efficient use of
resources?
Expert Rev Pharmacoeconomics Outcomes Res 2007

22. OVERVIEW OF AUTHORITY FEEDBACK TO
REIMBURSEMENT APPLICATIONS FOR BRAND X
22
Country
Lack of
comparative data
Lack of long-term
data
Modest effect
Lack of data
in subgroups
No real life data
Country A X X X
Country B X X X X
Country C X X X X X
Country D X X X
Country E X X X X
Country F X
In addition to these points, the budget impact was frequently mentioned

23. INCREASING NEED TO DEMONSTRATE ‘ADDED VALUE’
DURING P&R NEGOTIATIONS
“We don’t simply expect to have more medicines, but rather to have medicines that heal better,
or at the very least as well as the ones that are already available”
- Xavier Bertrand, Minister for Work, Employment and Health, France (June 2011)
AMNOG healthcare reform, Germany (1st Jan 2011) – ‘early benefit assessment’
• Clinical benefit - quantification of the incremental clinical benefits vs. current German
standard of care
The NHS (England & Wales) is considering ‘Value Based Pricing’ (VBP) model
• The reimbursed price of a new product will be determined based upon its incremental
value vs. the relevant comparator

24. THE INDUSTRY IS ADAPTING TO THE CHANGING
LANDSCAPE (GSK)
Andrew Witty was quoted to have said to his senior R&D Managers
2
4
Andrew Witty,
CEO of GlaxoSmithKline
“you will receive your bonuses,
not on how products are approved by the regulators,
but on how many products are reimbursed by the payers”

25. OBJECTIVES OF TODAY
The cost of innovation to the pharmaceutical industry

26. Sources: Drug Discovery and Development: Understanding the R&D Process,
www.innovation.org;
CBO, Research and Development in the Pharmaceutical Industry, 2006.
DRUG DEVELOPMENT TAKES LONGER
Developing a new medicine takes an average of 10–15 years; the
Congressional Budget Office reports that “relatively few drugs survive
the clinical trial process”

27. Sources: 1J. DiMasi and H. Grabowski, "The Cost of Biopharmaceutical R&D: Is Biotech Different?, " Managerial and Decision Economics, 2007; J. DiMasi et al.,
“The Price of Innovation: New Estimates of Drug Development Costs,” Journal of Health Economics, 2003.
THE COST OF DEVELOPING A NEW DRUG HAS
INCREASED
$100M
$300M
$800M
$1.3B
1979 1991 2000 2005
Cost to Develop One New Drug1
Billions(ConstantDollars,Year
2000)

28. NME VS. R&D COSTS (FDA 1992 - 2006)
2
8

29. CONSEQUENCES OF GETTING WRONG!
• More than half of the costs are on clinical development, especially on multinational phase III trials.
• Failure of a drug during phase III is a significant expense to the industry.
• Pfizer is discontinuing a Phase III trial evaluating the investigational compound inotuzumab
ozogamicin – the drug just isn't working as well as they hoped it would in this situation
• Eli Lilly reported that solanezumab had failed both primary endpoints in a large Phase III study for
Alzheimer's.
29

30. ADDRESSING THESE ISSUES
- HOW DOES THE FDA ENCOURAGE INNOVATION?
• The FDA uses a classification process for NMEs for ‘fast tracking’ innovative products.
• Products are categorised:
• Priority Review
• Fast Track
• Accelerated Approval
• Priority Review – has the potentially provide a significant advance in medical care - review within 6
months, instead of the standard 10 months.
• Fast track – the product treats an unmet medical need.
• Accelerate approval – treats a serious or life-threatening illness that offers a benefit over current
treatments.
3
0
2012

31. GROWTH OF ORPHAN DRUGS
Source: Orphan Drug Report 2013, EvaluatePharma

32. HOW DO WE INCREASE THE COMMERCIAL
SUCCESS OF PHARMACEUTICAL BRAND?
- UNDERSTAND WHAT CUSTOMERS MEAN
BY BRAND VALUE

33. GENERATE THE ‘RIGHT’ CLINICAL AND ECONOMIC
EVIDENCE FOR ACHIEVING MARKET ACCESS /
REIMBURSEMENT
3
4

34. “FOREWARNED, FOREARMED - TO BE PREPARED IS
HALF THE VICTORY”*
*Miguel De Cervantes – Spanish Poet

35. HOW TO DEFINE BRAND VALUE IN HEALTHCARE?
3
6
Brand value

36. HOW TO DEFINE BRAND VALUE IN HEALTHCARE?
3
7
Brand value
= offers a clinical benefit / addresses a clinical need

37. HOW TO DEFINE BRAND VALUE IN HEALTHCARE?
3
8
Brand value
= offers a clinical benefit / addresses a clinical need
+ differentiation from standard of care

38. HOW TO DEFINE BRAND VALUE IN HEALTHCARE?
3
9
Brand value
= offers a clinical benefit / addresses a clinical need
+ differentiation from standard of care
+ meaningful target population

39. HOW TO DEFINE BRAND VALUE IN HEALTHCARE?
4
0
Brand value
= offers a clinical benefit / addresses a clinical need
+ differentiation from standard of care
+ meaningful target population
+ competitive price

40. CASE EXAMPLE

41. COMPANY CONFIDENTIAL – FOR INTERNAL USE ONLY.
GRAZAX®
THE INNOVATION IN ALLERGY TREATMENT
• Administration advantages:
• GRAZAX is a tablet-based immunotherapy
• GRAZAX is taken once-daily and without up-dosing
• GRAZAX allows home administration

42. COMPANY CONFIDENTIAL – FOR INTERNAL USE ONLY.
GRAZAX®
THE INNOVATION IN ALLERGY TREATMENT
• Formulation advantages:
• GRAZAX dissolves under the tongue within seconds
• GRAZAX provides optimal exposure of allergens
• GRAZAX can be stored at room temperature
GRAZAX® provides a convenient and safe immunotherapy
treatment for home administration

43. COMPANY CONFIDENTIAL – FOR INTERNAL USE ONLY.
GRAZAX®
THE INNOVATION IN ALLERGY TREATMENT
• Patients benefits:
• GRAZAX is a convenient and easy-to-use immunotherapy
• GRAZAX induces immunological tolerance to grass
• GRAZAX improves the quality of life of patients
GRAZAX® allows many more patients suffering from grass
allergy to benefit from immunotherapy

44. SUMMARY
The pharmaceutical landscape is rapidly changing and the
pharmaceutical industry needs to adapt
Understanding the customer’s definition of innovation is critical
for achieving access to the market!
R&D functions need to consider markets needs earlier the
drug development process

45. W COMMUNICATION AGENCY
LILLA TORG 3, 211 34 MALMÖ, SWEDEN
PHONE: +46 40 665 66 90
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