Abstract
Despite their diversity, global healthcare systems are increasingly converging
in the need and desire to contain costs of healthcare, and especially those
associated with pharmaceuticals. At the same time, Big Pharma are having to
contend with a dearth of invention, patent expirations, and increased generic
competition, among other factors undermining their profits. In this
environment, the importance of market access strategies, especially in terms
of pricing, reimbursement and parallel trade are rapidly gaining prominence.
Pharmaceutical and Biotech Market Entrance Strategies examines the key issues
that need to be addressed by pharmaceutical and biotechnology companies alike
in order to successfully achieve return on investment. The American, European
and Japanese markets are undergoing constant harmonisation changes, which are
leading to a globalisation of operating procedures and state intervention in
healthcare and drug cost containment. This trend has an important impact on
the overall environment facing the drug and biotechnology industry -- on the
one hand, facilitating access to a wider patient base but, on the other,
raising the stakes of key pricing and reimbursement decisions.
Pricing can no longer be considered separate to reimbursement, while parallel
trade threatens to undermine companies' wider regional efforts to achieve the
best price for their products. Lifecycle management issues increasingly
involve tailor-made medicines, pharmacogenomics and similar disciplines, as
well as greater co- operation within the industry and outside its boundaries.
This report examines these issues in great detail and helps the reader
navigate this increasingly complex field.
Pharmaceutical and Biotech Market Entrance Strategies provides the following:
- An overview of major market access strategies
- In-depth information regarding the pricing environments of the American,
European and Japanese pharmaceutical markets, comparing and contrasting their
major features with a view to securing the best approach
- In-depth information regarding reimbursement environments and market
strategies that are most suitable for a particular market
- Overview of parallel trade, including major responses to the threat by all
relevant players
- Overview of lifecycle management, identifying key factors for successful
product placement over time
- Examination of Latin American experience in terms of pricing strategies
and lessons that can be learned globally
Who should buy this report?
- Companies wishing to examine the most current pricing and regulatory
environments in major global markets, including different cost-containment
strategies used by governments and purse-holders.
- Companies interested in understanding the impact and implications of
parallel trade, with a view to minimising disadvantages to their products.
- Companies interested in understanding the wider opportunities and
challenges in the American, Japanese and European markets.
- Pharmaceutical and biotech companies wishing to identify both the threats
to products in these markets as well as the variety of profit maximisation
strategies outlined in this report.
Table of Contents
1 Executive Summary, Report Objectives and Scope
- 1.1 Executive Summary
- 1.2 Report Objectives and Scope
2 Introduction
- 2.1 Pharmaceutical and Biotechnology Industries: Brothers in Need
- Case Study: Biotech-Biotech Take-Over Deal - Amgen and Immunex
- 2.1.1 Pipeline Problems
- 2.1.2 Big Pharma's Image under Attack
- 2.1.3 The Secret Price of Drugs
- 2.2 Biotechnology as an Equal Partner
- 2.2.1 Risk Management Strategies for Biotech Firms
- 2.2.2 Biotech in Europe
- Case Study: The European Biotechnology Patents Directive
- 2.2.3 The One That Can: Amgen, the Most Successful Biotech Company
3 Key Issues Affecting Global Pharmaceutical and Biotechnology
Industries
- 3.1 Pharmaceuticals: Strength in Numbers
- 3.2 Pharmaceuticals: The Medical Needs/Financial Means Gap
- 3.3 Pharmaceuticals: The Public Voice
- 3.4 Pharmaceuticals: Big Names in Pharma Business
- 3.5 Biotechnology: What's Hot and What's Not
- 3.6 Key Markets: The US, Japan, Europe
- 3.6.1 The Awesome Threesome: The US
- 3.6.2 The Awesome Threesome: Japan
- 3.6.3 The Awesome Threesome: The EU
4 Market Entrance Strategies - General Overview
- Minority equity investment
- Consortium
- Outsourcing
- Partnerships and R&D partnering
- Niche market launches
- New blockbuster therapy
- Me-too drugs
- Not launching or delaying launches
- Marketing and promotion
- Full reimbursement versus lower prices or restrictions on prescribing
- Launching without reimbursement
- Sequence of launch
- Licensing
- Orphan drug status
- Acquisition
- Mergers
- Price corridors
- Generic market entry
- Patent extension, data exclusivity and market protection
- Prescription to OTC switching
- Case Study: Biotechnology Commercialisation Agreement - Innovex and CVT
- Case Study: Launching Without Reimbursement - Aricept
- Case Study: AstraZeneca and Atherogenics Licensing Deal
- Case Study: Aspreva and Rare Disease Research
- Acquisition Case Study: Novartis and Lek
- Case Study: the US - Pfizer and Pharmacia Merger
- Case Study: Europe: Aventis and Sanofi-Synthelabo Merger
- Case Study: Japan: Daiichi and Sankyo Merger
- Case Study: Supplementary Protection Certificates and Data Exclusivity in
Europe
5 An Introduction to Pricing and Reimbursement
- 5.1 The Basics of Pricing
- 5.2 Elements of Pricing
- 5.3 Strategic Pricing
- 5.4 Pharmacogenomics and Pricing Ramifications
- Case Study: Pharmacogenomics in the UK's NHS
6 Pricing/Reimbursement in the US
- 6.1 US Healthcare System - Overview
- 6.2 Medicare
- 6.3 Medicaid
- 6.4 Federal Healthcare Budget
- 6.5 Recent Developments
- 6.6 Pricing in the US
- 6.6.1 Price-Fixing
- 6.6.2 State-Specific Pricing Policies
- 6.6.2.1 Price Controls in Maine
- 6.6.2.2 Florida's Medicaid Drug Rebates
- 6.7 Pricing in the US: Market Entrance Strategies
- 6.8 Reimbursement in the US: Present Climate and Conditions
- 6.9 Reimbursement in the US: Market Entrance Strategies
7 Pricing/Reimbursement in Japan - Overview
- 7.1 Pricing in Japan
- 7.2 Pricing in Japan: Market Entrance Strategies
- 7.3 Reimbursement in Japan: Present Climate and Conditions
- 7.4 Reimbursement in Japan: Market Entrance Strategies
8 Pricing in the EU: Present Climate and Conditions - Overview
- 8.1 Price Controls
- 8.1.1 Supply Side
- 8.1.2 Demand Side
- 8.2 EU Enlargement
- 8.3 Pricing in Europe: Market Entrance Strategies
- 8.4 Reimbursement in the EU: Present Climate and Conditions -
Overview
- 8.5 Reimbursement Strategies
- 8.6 Reimbursement in Europe: Market Entrance Strategies
- 8.7 Pricing/Reimbursement in Select EU Countries
- 8.7.1 Pricing in the UK
- 8.7.2 Reimbursement in the UK
- 8.7.3 Pricing in France
- 8.7.4 Reimbursement in France
- 8.7.5 Pricing in Germany
- 8.7.6 Reimbursement in Germany
- 8.8 Pricing and Reimbursement in Other EU Countries
- 8.8.1 Pricing and Reimbursement - Spain
- 8.8.2 Pricing and Reimbursement - Italy
- 8.8.3 Pricing and Reimbursement - Greece
- 8.8.4 Pricing and Reimbursement - Portugal
- 8.8.5 Pricing and Reimbursement - Poland
- 8.8.6 Pricing and Reimbursement - Hungary
- 8.8.7 Pricing and Reimbursement - The Czech Republic
9 Parallel Trade
- 9.1 Definition
- 9.2 Reasons for Parallel Trade
- 9.2.1 The Cost-Cutting Rationale
- 9.2.2 Principles of Free Trade
- 9.2.3 Disparate Regulatory and Intellectual Property Environments
- 9.3 Who Benefits from Parallel Trade?
10 Parallel Trade in the US: Canadian Re-importation
- 10.1 Re-importation into the US - The Desire to Save
- 10.2 Re-Importation into the US - Patent Rights
- 10.3 Re-Importation into the US - Legislative Support
- 10.4 Reasons for Parallel Trade from Canada
- 10.5 Company Opposition
- 10.6 State Actions
- 10.7 Patients' Involvement
- 10.8 FDA Response
- 10.9 Potential Savings
11 Parallel Trade in Europe
- 11.1 Single Market and Parallel Trade
- 11.2 EU PT Market Figures
- 11.3 EU Enlargement
- 11.4 Parallel Trade and EU Enlargement
- 11.5 Parallel Trade and the Euro
- 11.6 How to Stop Parallel Trade
- 11.7 Legal Examples of Parallel Trade Disputes
- 11.7.1 Pharmaceutical Repackaging: Aventis' Insuman
- 11.7.2 Repackaging: Boehringer Ingelheim & Others v. Swingward and
Dowelhurts
- 11.7.3 Trademarks: Pharmacia & Upjohn SA v. Paranova A/S
- 11.7.4 Market Authorisation Withdrawal: Ferring v. Eurim-Pharm and
Paranova
- 11.7.5 Common Origin: Germany v. Kohlpharma
- 11.7.6 Stock Management: Bayer and Adalat
- 11.8 A Single European Price?
- Case Study: Single European Price for Merck's Crixivan
12 Regional Lessons for Pharmaceutical Pricing
- 12.1 Regional Pricing: Latin American Examples
13 Conclusion: The Lessons Learnt
- 13.1 Pricing - Global Lessons
- 13.2 Reimbursement - Essential Market Access Factor
- 13.3 R&D - Continued Need for Innovation
- 13.4 Globalisation of the Pharmaceutical Market
- 13.5 Future Considerations
- 13.5.1 Development of New Markets
- Case Study: Bird Flu
- 13.5.2 Discoveries in Technology and Genetics
- 13.5.3 Bioterrorism, New Diagnostics
- 13.5.4 Lifecycle Management
- 13.6 Closing Remarks
Glossary
Tables
- Table 2.1 Total and On-Patent Drug Revenues for Selected
Organisation for Economic Co-Operation and Development (OECD) Countries
- Table 2.2 Total and Off-Patent Drug Revenues for Selected OECD
Countries
- Table 2.3 Key Off-Patent Drugs
- Table 2.4 World's Largest Biotech Companies by Sales, 2005
- Table 2.5 World's Largest Healthcare Companies by Sales of Biotech
Products, 2003
- Table 2.6 Amgen's Financial Statement Figures
- Table 3.1 Big Pharma by Sales
- Table 3.2 Top Products, October 2005
- Table 3.3 Retail Medicine Sales by Main Markets, 12 Months to
November 2005
- Table 3.4 Promotional Expenditure in Select EU Countries, 2003
- Table 4.1 FDA Orphan Drugs - Products Designated as Orphan Drugs,
September 2005 to December 2005
- Table 6.1 OECD Health: Spending and Resources (2003 Figures)
- Table 6.2 US Online Advertising Spending by Major Industry
Category as a % of Total Online Ad Spending
- Table 6.3 Marketing and R&D Costs by Major Pharmaceutical
Companies, 2003
- Table 8.1 Pharmaceutical Sales and Growth by Value
- Table 8.2 European Reference Pricing Situation
- Table 8.3 Overview of Supply-Side Pricing and Reimbursement in the
Old EU
- Table 8.4 Overview of Demand-Side Pricing and Reimbursement in
the Old EU
- Table 8.5 Estimated Pharmaceutical Market Value by Country, 2005
- Table 9.1 Parallel Trade Benefits and Threats
- Table 11.1 Savings Achieved by PT in Select EU Countries
- Table 11.2 Share of Parallel Imports as % of Total Pharmaceutical
Market, 1998, 2000, 2002
- Table 11.3 Share of Parallel Imports as % of Total Pharmaceutical
Market, 1997, 1999
- Table 11.4 National Policies Regarding Parallel Import Drugs in
Europe, 2004
- Table 11.5 Pros and Cons of Single and Decentralised Pricing
Strategies 2002
- Table 12.1 Antiretroviral Therapy Coverage in the Developing
Countries, December 2002
Graphs
- Graph 2.1 Average R&D Expenses of Major Pharmaceutical Companies in
Japan and the US
- Graph 3.1 Geographical Breakdown of Retail Medicine Sales by Main
Markets
- Graph 3.2 Pharmaceutical Sales in the New EU
- Graph 4.1 European Price Corridor Strategy
- Graph 8.1 Main EU Markets, 2004
- Graph 11.1 Average Pharmaceutical Price per Tablet, 19 Leading
Molecules
- Graph 11.2 Shortcomings of a One-Price Policy
- Graph 12.1 Cumulative Number of Reported HIV/AIDS Cases in the WHO
European Region
