Healthy Skepticism Library item: 13471
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Pharma needs to sharpen up to get drugs approved first time
Pharma Times 2008 Apr 9
http://www.pharmatimes.com/WorldNews/article.aspx?id=13232&src=EWorldNews
Full text:
Pharmaceutical firms need to adopt a range of corporate strategies to respond to the changing market dynamics, exemplified by generic competition and thin late-stage pipelines, according to a new report by Datamonitor.
It highlights one factor that is responsible for the decreasing number of novel compounds approved each year, namely the increasing pressure that the industry is facing over drug safety. This has been fuelled by several recent high-profile withdrawals and black-box warnings.
In particular, there has been a change in the balance of power between companies and the US Food and Drug Administration, which has given the agency the strength to impose additional safety studies both prior to and post-approval, according to Datamonitor senior pharmaceutical analyst Tijana Ignjatovic. This shift in power has the potential to increase development costs, reduce market penetration and impact approval rates but “may actually be beneficial for certain drugs that would not be approved otherwise”.
The report also notes that despite swifter approval times, the duration between the start of Phase I trials and approval is becoming longer. Consequently, big pharma is facing increasingly expensive drug development, now estimated to be $800 million-$1 billion per product, so each day that a launch is delayed can cost the manufacturer up to $23 million in lost sales in the USA alone, Datamonitor claims and $37,000 per day in additional development costs.
It is therefore vital that companies ensure that sufficient safety and efficacy data are attained before regulatory submission so as not to delay or jeopardise a drug launch, says Dr Ignjatovic. As such, “gaining a timely and first time approval in the USA has therefore never been more important for pharma companies than it is today”.
The report goes on to say that “in cost-conscious times with deal values rocketing, licensing and M&A deals will increasingly become a strategy that fewer players will be able to adopt”. Companies that traditionally have taken that route to solve internal pipeline issues will instead have to turn to more radical strategies, such as readdressing internal R&D processes, according to another Datamonitor analyst Alistair Sinclair.
The report also notes the vast number of recent job cuts across the industry in an effort to cut costs, in response to disappointing financial results driven by patent expiries. Furthermore, price pressure and low reimbursement rates are set to continue in 2008, so the industry is now increasingly moving towards outsourcing strategies.
This strategy not only saves money but “provides a more flexible approach to manufacturing and selling a drug throughout its lifecycle”, says Datamonitor, by allowing companies to increase and decrease the size of their sales force in accordance with demand. In late 2007, Pfizer announced 2,200 job cuts in its sales and marketing departments, a move which “signified the opening of the flood gates for other pharma companies to follow suit”.
Sales and marketing departments will consequently have to adjust and adapt new strategies if they are to maintain performance, Mr Sinclair argues. One option the industry has begun to explore has been communicating with consumers “through new media technology, with e-detailing, social media strategies and the utilisation of podcasts set to become more common place in the evolving pharmaceutical market”, he concluded.
