Gene therapies... How to capitalize the real value

Gene Therapy:
We all have people living with diabetes and heart ailments in our families getting "treated" with medicines all these days. And when they are getting "treated", in reality, they are being managed of their disorders. For e.g. A diabetic patient is being managed with drugs, diet and exercise so that her blood sugar levels are around the normal levels most of the time. Similarly a heart patient is being managed with drugs, diet and exercise to keep his cholesterol levels, blood pressure, Sodium levels etc. at optimum levels. That's going to change in the years to come... Going forward a patient could be treated with a gene therapy, which would replace/repair a mutant gene thereby slowing or even stopping the progression of the disease.... yes you heard it right! There are technologies being developed successfully now that can stop the progression of a disease, at least those disease that are mapped to a mutant gene or an allele, with just ONE dose of a gene therapy!!!

Understanding Genes:
Genes are made up of DNA, which are blueprints to build enzymes and proteins that make our body work. As far as we know, humans have between 20,000 and 25,000 genes. We typically get two copies of each gene from our parents. They influence everything from the color of our hair to our immune system, but genes aren’t always built correctly. A small adjustment to them can change how our proteins work, which then alter the way we breathe, walk or even digest food. Genes can change as they go through inherited mutations, as they age, or by being altered or damaged by chemicals and radiation.

How Gene therapy works?
As mentioned earlier, gene therapy may be able to help in cases of those disease where it is mapped to a gene mutation. For e.g. Huntington's disease, Spinal Muscular Atrophy, cancers, diabetes, heart disease etc. Gene therapy is the introduction, removal or change in genetic material—specifically DNA or RNA—into the cells of a patient to treat a specific disease. The transferred genetic material changes how a protein—or group of proteins—is produced by the cell.

Now how do we introduce this genetic material in to human body so that they penetrate in to our cells and reach the gene? This new genetic material or working gene is delivered into the cell by using a vector (or a carrier). Typically, viruses are used as vectors because they have evolved to be very good at sneaking into and infecting cells. But in this case, their motive is to insert the new genes into the cell. Some types of viruses being used are typically not known to cause disease and other times the viral genes known to cause disease are removed. Regardless of the type, all viral vectors are tested many times for safety prior to being used.

Currently for many diseases the treatments are limited to only symptomatic treatments using currently available drugs. For e.g. drugs are typically used to manage disease or infection symptoms to relieve pain, inflammation, cognition etc., while gene therapy targets the cause of the disease. It is not provided in the form of a pill, inhalation or surgery, it is provided through an injection or IV.

Economic Implications:
Since these include very high research, development and manufacturing costs, gene therapies are going to be very expensive when compared to the current treatment costs. Novartis launched Zolgensma for Spinal Muscular Atrophy (SMA) in 2018 for a whooping $2.1 million for one dose! Again, you heard it right. Is this sticker shock that bad as it sound? It depends... Let us see what are the options. If not for a gene therapy, an SMA patient would be treated with symptomatic treatments managing the symptoms and the patient would die in a span of 3 - 4 years time since diagnosis. The health care cost during this time would include the symptomatic treatment costs, hospital costs, care giver costs since the patient would soon become dependent as the disease progresses, assisted living costs etc. followed by death in 3-4 years time. Instead, Zolgensma demonstrated slowing of disease progression and life year extension to around 12 years! It is indeed a massive step towards providing advanced care for many under treated, rare and ultra rare diseases.

Gene therapies with such price tags definitely have limitations when it comes to accessibility to patients. Even in the developed markets like the US, EU5 and Japan, where these high value products are initially getting launched, payers / insurance companies are figuring out ways to evaluate the cost benefit analysis for these medications in the proper manner.

According to a latest report by American Biopharmaceutical Companies group,
- there are 5 disease currently treated by cell and gene therapies
- more than 100 disease are being explored for cell and gene therapies
- there are about 300 cell and gene therapies in development
- development led by cancers, neurological disorders and blood disorders

Ongoing excitement is assured in this space as it might transform the way we diagnose, treat, pay and follow-up some of the deadly diseases in the days to come. 

  

Emerging Markets – Will it Emerge?

I think mention of emerging markets was more of a corporate agenda to ensure organizations’ strategic thinking and line-of-sight of industry’s future business trends till about 3 - 5 years ago. Today the thoughts and clarity on emerging markets have matured further and pharmaceutical corporations around the world have started their investments to cash-in the business opportunities.

Let us start with some data – MAT Mar 2009 revenue growth of US and Europe (Big 5) pharmaceutical markets is 4.8% and IMS health forecasts the growth to taper down further and start declining by 2010! In other words by 2010 the key markets of yester years – US and Europe, will start eroding the global pharmaceutical market place. Reasons are many for this scenario – both external (economic situation, high and growing healthcare expenditure, demographics of the population, already high healthcare penetration etc.) and internal (lack of new blockbusters, reducing R&D productivity, existing high costs and overheads etc.). We will not dive in to the details of these now.

Let me give you one more piece of data – IMS Health states when US and Europe start declining their pharmaceutical revenue by 2010, emerging markets will be adding 51% of absolute growth to the global pharmaceutical market!!! Voila. This means the major growth is expected to come from the emerging markets from 2010 onwards. Who would not want to ride this wave and cash-in? So if you see the corporate agenda of the big pharmas today, emerging markets is one of the top 3 if not the top one.

Some basic thoughts on Emerging Markets (EM)

EM includes more than 100 countries in 5 regions – Latin America, Eastern Europe, Africa, Asia and Middle East.
One cannot generalize methods, processes, trends etc. for 100 countries and thus EM is a highly heterogeneous classification of markets
The key markets in EM have to be dealt with individually as the differences among these markets are more prominent than common traits. Some of the critical areas where differences are prominent are:
Preferred products, classes
Prescribing points
IP frameworks
Regulatory guidelines
Epidemiology
Sales uptake and downturn trends
Insurance & reimbursements
Healthcare access
Pricing
Affordability
Openness for doing business etc.

· Major EM like BRIC, Mexico, S Korea & Turkey are showing phenomenal business growth and opportunity
· When developed markets like US and Europe grow at low single digits, these markets are pacing at 15 - 20% growth year on year

Big Pharmas are keen at building their presence in EM now and the focus is on building a fitting portfolio to cash-in the opportunity. Companies are following different paths to achieve this – acquisition, alliances, EM-focused R&D etc. Presence can be in various ways to tackle the market opportunity:
· Branded Generics
· INN (plain) generics
· Biosimilars (even though clarity on regulatory guidelines are less even today)
· Manufacturing & R&D support
· Raw material sourcing, etc.

How would tomorrow be?

US clocked pharmaceutical revenues of approximately $250 Bn last year and EM $80 Bn. If EM will grow at a CAGR of 12% (current CAGR is 16%) and US will grow at a CAGR of 1% (current CAGR is 5%), by 2020 both EM and US will have equal pharmaceutical revenues. WILL THIS HAPPEN?

IT MIGHT à
If companies could not bridge the revenue trough anticipated during 2010 – 2016 ($140 Bn). Thanks to the patent cliff.
If companies go for severe cost-cutting in US due to reduced revenue. This would dampen future revenue, brand image, business morale etc.
If the governments in US and Europe gets more aggressive in controlling drug price and healthcare costs
If the trend in number of new products approvals/year remains the same and/or further erode
If the big pharmas start making good additional revenue (to the tune of $3 - $5 bn) in the next 5 years (2015) from EM
If the big pharmas can embrace the new business models in EM and build up their competency in generics and branded generics play with minimal lead time
If the economic revival and investor confidence remain maintained in EM in the coming days
If foreign entrants and local companies can tie-up to synergize the competencies in EM

IT MIGHT NOT à
If big pharmas could not manage the heterogeneity in EM and could not cash-in the market opportunity at the right time
If governments and authorities in EM show a closed approach to the foreign investments coming in from big pharmas in to the markets
If the macroeconomic situations in major markets of EM deteriorates in the coming days
If some NCEs (say about 8-10) are able to reach blockbuster status (revenues >$ 1bn) in the coming years in the US

The above reasons, which I am sure is not an exhaustive one, gives a feel of how tomorrow’s pharmaceutical market would be. I am sure of one thing – sharpen your knowledge and exposure in EM, better would be your career prospects for the next at least 10 years in the pharmaceutical industry.

Please put your comments and opinions to this topic, as your views would certainly enlighten my understanding and of many others.

Thanks. Cheers.

Relationship OR Brand Building: What is your customer strategy?

Last time when you went for shopping, you picked up PearsTM bathing soap and MaggiTM tomato ketch up without much thought or research. Was it because of your perception on the respective brands or because of your relationships with Unilever and Nestle? Of course, this would not be exactly the same when it comes to pharmaceuticals and buying drugs. I agree. Still I think a thought on this from the Indian pharma scene is worth it.
In India we have been focusing (more than needed) only on physician all these years. A company launches a product, decides the promotional plan and promotes it to physician for generating prescriptions. Hardly any focus or thought is given on the patients’ side (this is another issue, which we will ponder later). Companies are busy building relationships with physicians rather than building brand! But one cannot complain on this, as the industry set up was not conducive for a brand building exercise. Asking me why? OK. Here it is… Take an example of an antibiotic drug. If a company is launching a latest cephalosporin (pre 1995 registered) in the market, the company is very sure that there will be at least 5 players in the market in the first month itself and more in the months to follow at different price points, trade offers, campaigns etc. In such a scenario what would bring the business? Is it the company’s relationship with the doctors or the brand image one would build on the product, which is exactly the same as all the other competitors’? The features, benefits, scientific data etc. of the product are all downloaded and talked by all the companies. The English might change but this might not build a brand very often. So in a branded generic market with lot of competitors fighting for the same mind share, relationship marketing is more important and sensible than brand building. I would say it is 90% relationship and 10% brand building.
But times are changing. Think about a company launching an antihypertensive drug (with market exclusivity as it is registered post 1995) in the market. Company is sure that there is no generic competition here and it is only one player in the market promoting the drug. Now the competition is other molecules targeted at the same condition and the differentiator is the key scientific data and benefits of the product over the competitor products. Now here is a scenario, where doctors will not prescribe just on relationships. They need to know the value of the product, the benefits the product will offer to his patients, how the product compares with other products for the same indication etc. In short company needs to build a brand, which pulls the physician to prescribe the product. The equation would change to 90% brand building and 10% relationship.
The MNC’s who have come to India with a new focus, in the current product patent era, are all focusing on building their brands in India rather than just goody relationships with the physicians. Even the Indian companies, who launch exclusive products through licensing, acquisitions etc. should also follow this path to build their excusive assets. As a pharmaceutical marketing professional, I see this market evolution with lot of interest and hope that brings in lot of challenges and value-based ethics to the profession and industry as a whole.
Cheers!!!

Marketing Excellence – Some of the Key Factors to Focus…

Even though pharmaceutical companies like to boast about their R&D costs as the biggest spend in business, marketing and promotions takes out much bigger chunk of cash every year from pharmaceutical companies. A report from PLOS medicine “The Cost of Pushing Pills” estimates the total annual pharmaceutical promotional spend in the United States as $57.5 bn against the total R&D spend of $29.6 bn in 2004.
In any business scenario, it is common sense to ensure excellence in areas of higher spends and business impact. Like many industries, sales & marketing (which majorly constitute the promotional spending) is one of the most critical functions in building up top line and bottom line in a business. We have heard lot of noise about sales force excellence in terms of effectiveness and efficiency. Most of the companies have many programs to increase sales force excellence and the current technological and analytical tools help these in many ways.
But have we heard enough on Marketing Excellence??? Don’t we think there are gaps for improvements in performing brand/therapy building exercises? Do we really believe that we are seeing through all aspects in getting a better bang for the buck?
I am trying to bring up some of the key factors that can reduce efficiency bleeding and financial leakages while performing brand/therapy promotion in a pharmaceutical company.
1) Communication Strategy: Needless to point that deciding and designing the communication strategy is one of the key functions in marketing a brand. Even though companies focus a lot on creating the target indication, positioning in terms of usage of the brand, place of the brand in the treatment algorithm, comparative analysis, treatment regimens etc., the focus on monthly or quarterly roll-out of communication and the impact analysis of the such rolled out communication warrants more attention. The communication planned should always attract the target customer, be simple to deliver and comprehend, address the key concerns in the minds of customers and in-line with the overall brand strategy. This also has its effect on the sales representative’s effectiveness in delivering the planned message and influence scripts. The data on impact should be recorded, as these historic data will further strengthen the analysis of the impact of communication types in the future. Competitive intelligence and market feedback are very critical in designing and planning the communication roll-outs for a brand. The brand manager should critically analyze the quality and effectiveness of the communication in terms of the competitor communications, physician response from the market, scripts volume (nRx and Trx) etc.
Another important aspect is internal communication to allied functions like sales, manufacturing, R&D, supply chain, finance etc. A brand manager should make it mandatory in his monthly plan to communicate key information and plans to the relevant allied functions in a timely manner. The major source of business information in a company is marketing and sales departments. So timely information and communication to all the concerned stake holders not only brings everyone up to speed but also brings in easy and early buy-ins for new initiatives and plans.
2) Business Analysis: Every move in marketing costs dollars and hence business analysis and validation in every step is very important. This involves both internal and external data analysis. Today a brand manager or a pharmaceutical company do not have dearth for market data. The challenges are in identifying the relevant data and analyze the data in terms of the key performance indicators (KPIs) so that the analysis throws up the right diagnosis of the situation and direction for the action. The KPIs would differ for different brands and therapies. For eg. One of the KPIs for a mature brand would be market share whereas for a new brand would be nRx (new scripts). If the KPIs for every brand and portfolio can be identified, the business analysis would mean a lot different and thus the investments made of promotion would be far more effective and efficient.
3) Multi-channel Promotion: Historically pharmaceutical promotion has been majorly through sales representatives. Today the scenario is changing – a sales rep costs about $200,000 per annum in the US, about 70% of the physicians cancel the sales rep appointments, 60-70% of the physicians do not consider sales reps as a reliable source of information, the average time spent by a sales rep in a physician’s office is 90 seconds to 2 minutes! In such an environment, it’s high time to pursue alternate channels, which can be for more cost effective, customer friendly and innovative in nature. There are various channels that have come up recently like e-detailing, blogs, KOL communication portals, virtual CMEs, call centers, direct mailers etc. Identifying and experimenting new channels is a great way to bring in innovation and create interest both at internal and external customer levels.
4) Resource Allocation: Resources are always limited when it comes to any kinds of investments. I am sure all of us agree that “endless resources do not mean any business sense”. S o the crux is how well the available resources (dollars, people, time, good will etc.) can be utilized so that the bang for the buck is the maximum possible. We talked about multi-channel promotion above. If the brand manager does not know the performance dynamics of every channel, she would not know which channels need what kind of investments. Every channel will have an optimal investment range that gives the maximum returns. This depends on various dynamics like customer acceptance, impact of the interactions, repeatability, penetration, cost etc. Similarly the brand manager should also know the optimal resource requirements for every brand and market segments. Hence the brand manager needs to be on top of all these to decide the annual promotional budget and the optimal allocation to the budget to get the best possible returns for every dollar.
5) Economies of Scale: We most often feel economies of scale is only for manufacturing and supply chain folks. Not at all. Economies of scale can be utilized in marketing in areas like purchase of branding services and goods (gifts, give-aways). Let us think a bit about the brand management services. Brand managers deal with a lot of vendors for various branding services like advertising agencies, medical writers, event managers, public relations agencies, literature designers etc. This aspect is not very transparent today in most of the global pharmaceutical houses, as the brand managers seldom discuss or share the information about their branding vendors to their peers. There is hardly any process to know which are the vendors available or short-listed in the company for different kinds of services, how are they evaluated by peers, how do they figure in terms of cost, quality, time-lines etc. in their earlier assignments in the company so on and so forth. This lack of transparency prevents utilizing the economies of scale in negotiating good prices, service level agreements, and quality commitments etc. from vendors.
These are some of the key points on top of my mind when thinking about pharmaceutical marketing excellence. I am sure there are much more concerns and challenges to discuss under all of these topics. However, if you feel I have grossly missed out mentioning any key issue here or if you have a different opinion on any of my views, please put across your valuable comments.
Cheers!!!

e-Detailing Portals: Do they really work?

e-Detailing has been a buzz in the pharmaceutical industry since early 2000's as an innovative way to promote / communicate the marketing messages to the physicians. I agree on the advantages if electronic media is utilized for detailing the products using a Tablet PC, laptop or a PDA (with fairly good screen size) by a sales representative. This will help the reps to use visual technology like animation to explain complex medical things more emphatically and interestingly, e-signatures to record physican's feedbacks and queries, collect market / customer information on real-time etc.. But if portals are used for e-Detailing, then I have my questions -

1. What propels the physician to visit these sites? I have read about financial incentives for visiting the sites. Then how do the companies ensure that the physician reads/ goes through the messages in these sites?
2. How ready and open are the physicians to enter the details and follow-up requests in these sites?
3. How do pharma companies ensure that the e-Detailing portal is not just an "advertising portal" of the company towards the physicians?
4. Is it realistic to imagine that every physician will remember about 5 (if not more) log-ins and passwords for every company's e-Detailing portal? How do companies manage this?

As I have written above, I totally agree with having e-Detailing built-in on the sales reps' laptop or Tablet PC, so that an effective transfer of information (targeted to the specific customer needs) can happen on a visit. But my above questions are about the band of e-Detailing portals that have come up recently.

It would be great, if I can recieve your thoughts on this.

Cheers.

Changing Pharma Sales Pitches

It is well known that the uniqueness in pharmaceutical selling is its high direct selling dependence and the influence or decision-making disparity between customer (physician) and consumer (patient). Hence pharma selling has been always focused around the sales reps meeting customers and the associated measures to achieve business objectives.
Till the early 2000’s, companies were mainly focused on customer coverage (number and frequency) and hence the sales force size and penetration. The mantra was larger the sales force, more potential to generate prescriptions! The US had about 100,000 medical sales representatives meeting about 800,000 physicians in 2002-03. It sounded sensible to have more feet on the ground, as the scenario had more new products getting launched in the market and more gaps existed in the treatment and therapies to make at least some of these new products block busters.
Things have changed now and pharmaceutical industry is facing challenges from many fronts – drying pipelines, generic competition, price erosion, increasing sales and promotion costs, evolution of various customer sets, changing customer influences among prescribers, payers, managed care organizations, governments, patients etc. The future growth is expected to come from niche segments like cancer, chronic conditions, and vaccines etc., where high value biotech products, personalized medicine etc. would play major roles. In this changing scenario, companies have realized that increasing the efficiency and effectiveness of sales reps is the key and not adding more numbers (on an average a sales rep costs about $200,000 per annum in the US). Hence the focus is shifting to niche, highly focused and competency driven task forces in place of large sales forces.
Employing a task force calls for a change in focus and I am trying to list down some of the major concerns and areas to consider here.
1) Customer segmentation becomes critical: Task force does not have the luxury of meeting all the prospective customers. Hence segmenting the customer and imparting differential focus on the segments is critical. This would help identify the target customer segments and their numbers, which in turn would facilitate the task force size and spread.
2) Territory alignment: Since no one would want the task force to spend more time on transit driving from one physician call to another, territory alignment is also very important to charter a task force member territory. The territory will be mostly larger than that of a usual sales rep territory and hence the customer plotting and territory assignment for every task force member is important, as this directly affects his/her productivity.
3) Product basket: Usually a product basket for a sales team is decided on the therapy area / disease area the team represents like Hypertension, Diabetes, and Cancer etc. Since a task force is more driven by the competency they have, the product basket selection decision should involve factors like core competency of task force (biotech, antibodies, vaccines, medical devices etc.), organizational core competency, corporate strategic focus, organizational value addition etc. Bundling value added services (Eg. Diagnosis, patient education, physician information, care-giver information etc.) with products is also a new trend followed by the industry now, which increases the value of the brand and organization.
4) Personalized customer message: One size fits all is out of scope. During early days, sales reps were given scripts to “puppet” the detailing talk and other information to the physicians (this is followed in most countries even now). A task force should be empowered to analyze each customer’s needs and profile and deliver customized marketing messages to address the customer’s needs. There should be a real-time two-way communication channel between the task force and the brand teams so that each of them share their findings and tailor their strategies in the light of customer feedback and analysis. One solution for this is a concept called “Closed Loop Marketing”, where data can be easily exchanged between the task force and brand teams and customers can be tracked through the suspect-to-sales continuum.
5) Competency levels: The ideal benchmark of a task force member is to be a partner of the physician in diagnosing, treating and managing the target disease / condition. He should be well informed and highly knowledgeable about the product, its uses, the target disease area, the scientific developments and best practices in the target disease / condition etc. Pharmaceutical companies should take utmost care in periodic evaluation, tracking and mapping the training needs of the task forces and conduct necessary training on an ongoing basis. E-Learning modules are becoming popular nowadays, where periodic evaluation, identification of training needs, training modules, exams etc. happen automatically with features like user based access controls, animation, certification, report generations etc.
6) Complementary channels: A visit by a task force member to a physician is not the end of it. The visit should be complemented using various channels like web, mail, kiosks, conferences, journals etc. Even though these media for promotion is utilized even now, the method of usage needs to be relooked. The selection of the alternate channel/s and the specific communication for a specific doctor should be based on the call feedback / response of the doctor, prescription adoption level, patient profile, interest areas etc. Using “Closed Loop Marketing” this can be automatically facilitated from the call / campaign feedback collected by the task force member during a call.
7) Investment track: The financial rationale for using a task force is not just from the less number of people on the ground, but from the excellence and competence a task force would bring-in in sales processes, campaign execution, customer relationship management etc. Hence it is critical to track and follow up the financial equations in a timely manner. There should be strong processes to track each and every internal and external investment the task force makes and the returns it fetches in the prescribed timelines. After all any initiative or innovation is successful only if it impacts the key performance indicators of a business in the prescribed timeline.
8) Team morale: Any new move always come with a steep learning curve and one of the success factors is how fast the team rides through this learning frontier. One way is to share success stories and best practices etc. among the organization to celebrate early successes. It is also important to clarify how the task force is important for the organization as change agents and as the corporate-face in front of the customers and competitors. An open culture and team spirit should be encouraged inside the team, which would make the transition of the task force from beginners to performers faster.
These are some of the major points came to my mind when I thought of the changes happening in the sales front in global pharmaceutical industry. I thought of sharing these humble thoughts to all of you. I look forward to receiving your corrections, responses, thoughts, opinions etc.
Thank you. Happy blogging!!!

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