Medicines, Markets and the Flash Mob: Issues and Implications for Tomorrow’S Biopharma Enterprise
Total Page:16
File Type:pdf, Size:1020Kb
Medicines, Markets and the Flash Mob: Issues and Implications for Tomorrow’s Biopharma Enterprise SLA Pharma Health Tech Meeting Baltimore, MD June 9, 2018 Today’s Messages Medicines Markets …Put a Ring on It …Just Meh The Flash Mob …That “Blue Ocean” Strategy? Forget it! Biopharma Today: Evolution or Revolution? THE CHOICE ? • Health care is messy and institutionalized • Efficiency gains from BIG DATA • High barriers to entry: a risky, public good • Serial disrupter: Amazon is a ”loss leader” taking out retail segments with full price • Innovation: a partnering series of cumulative transparency steps • Will pharma retain its capacity to adapt – at • Exploitable gaps in Rx distribution – mail its own historically leisurely pace? order and cash pay generics • Challenge: health care is built on silo third-party transactions –alignment on incentives? 3 Pharma intelligence | informa Our 2018 Predictions…So Far M&A is Back on the Table Federal Legislation: A Mixed Bag for Pharma Trump’s Pharma Policy: Still No Medicare Price Negotiations Working with a Re-Energized FDA Payers Get Serious: Define and Deliver Value Manage a Controlled Rollout for Advanced Therapies Threats to US Lead in World-Class Drug Innovation Trump’s Teflon Tweets: Pharma Discovers it Doesn’t Stick 4 Pharma intelligence | informa Pharma Faces the Fiscal Cliff: Gross US Federal Debt 2018-2028 DRUG 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 DEBT Trillions $ 21.4 22.5 23.7 24.9 26.2 27.5 28.7 30.0 31.4 32.5 33.9 DEBT % GDP 78.0 79.3 80.9 83.1 85.7 87.9 89.6 91.5 93.1 94.5 96.2 “The federal debt is projected to approach 100 per cent of GDP by 2028 – the percentage would be the largest since 1946 and well more than twice the average over the past five decades, raising the likelihood of a federal fiscal crisis.” Source: CBO, April 2018 5 Pharma intelligence | informa Projected Mandatory Federal Health Outlays 2018-2028 (Billions of $) DRUG 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Medicare 707 776 830 893 996 1032 1062 1181 1267 1358 1521 Medicaid 383 401 417 437 465 493 524 554 587 620 655 “An aging population and rising health costs per beneficiary will push Medicare outlays up by more than 115 per cent to 2028 – but interest payments on the federal debt will grow more quickly than any other component of federal spending between now and then.” Source: CBO, April 2018 6 Pharma intelligence | informa Reputation: Biopharma’s Black Box From the Ridiculous… to the Sublime? …and a Few Wild Cards Social Media and the CEO Brand – it’s Personal 7 Pharma intelligence | informa Top 10 Drugs Involved In US Drug Overdose Deaths Number of deaths, 2014 (‘000) Sources: CDC, Institute for Medicine Innovation 8 Pharma intelligence | informa Compliance: Pharma’s Soft Underbelly Federal and state governments on track to secure $1 billion+ in penalties for false product claims from pharma this year • $17.5 billion in cumulative penalties against the major pharma firms since 2009 Just a “cost of doing business?” • Pharma companies have dominated investigations under the False Claims Act for the past decade • Doubling of penalties for fraud violations enacted by Congress in 2016 Corporate Integrity Agreements (CIA) in place in most of big pharma • CIA gives effective veto power to DOJ and HHS over marketing, promotion and rebate practices Competitive one-upmanship • Sanofi blows whistle against Mylan on EpiPen and takes home $40 million of $465 million penalty New target areas for DOJ • Anti-trust impacts – (Shire vs. Allergan) (Pfizer vs. J&J) • Patient assistance programs and charities that administer them 9 Pharma intelligence | informa False Claims Act Settlements: Pharma Industry 2009 – 2017 COMPANY PENALTY CATEGORY YEAR Pfizer $2.3 B Off-Label/Kickbacks 2009 Eli Lilly $1.4 B Kickbacks 2009 GSK $750 M Adulterated Drugs 2010 Allergan $ 600 M Off-Label 2010 AstraZeneca $520 M Off-Label 2010 Novartis $425 M Off-Label/Kickbacks 2010 GSK $3.0 B Off-Label/Kickbacks * 2012 Abbott $1.5 B Off-Label * 2012 Merck & Co. $963 M Off-Label * 2012 Amgen $762 M False Pricing * 2012 Sanofi/Genzyme $109 M Kickbacks 2012 J&J $2.2 B Off-Label/Kickbacks * 2013 Ranbaxy $508 M Manufacturing 2013 Pfizer (Wyeth) $495 M Off-Label/Illegal Promotion 2013 Novartis $410 M Kickbacks * 2016 Pfizer $785 M Medicaid pricing * 2016 Galena Biopharma $8 M Kickbacks (opioids) 2017 Mylan $465 M Medicaid pricing * 2017 Shire $350 M Kickbacks (med device) 2017 Novo-Nordisk $58 M REMS compliance 2017 *Corporate Integrity Agreement Source: US Department of Justice 10 Pharma intelligence | informa Transition Time: US Drug Patent Expirations, 2017-2020 Brand Name Company Brand Name Company Brand Name Company Alimta Eli Lilly Nasonex Merck & Co. Calcijex AbbVie Sandostatin Novartis Apidra Sanofi Simulect Novartis Evista Eli Lilly Caduet Pfizer Afinitor Novartis Geodon Pfizer 2018 [injection] Revlimid Novartis Nplate Amgen Somavert GSK Torisel Pfizer Tykerb GSK 2020 2017 Iressa AstraZeneca Lyrica Pfizer Cubicin Merck & Co. Arcoxia Merck & Co. Humira AbbVie Intelence J&J Relpax Pfizer Brand Name Company Xarelto J&J Cialis Eli Lilly Gilenya Novartis Xeljanz Pfizer Prolia Amgen RotaTeq Merck & Co. Gazyva Roche 2019 Blincyto Amgen Avelox Bayer Brilique AstraZeneca 11 Pharma intelligence | informa Burden of Disease, US, 2017 Obesity Osteoarthritis Respiratory Chronic Pain Back Pain 80 million 70 million 55 million 50 million 45 million Diabetes Coronary Heart Cardiac Depression Incontinence Cancer (type 2) 20 million 20 million Disease 15 million Arrhythmias 25 million 15 million 15 million Peripheral Vascular Stroke Dementia Heart Failure Chronic Wound Renal Disease Disease 5 million 5 million 5 million 4 million 2.5 million 10 million Epilepsy/ Structural Diabetes Aneurysm Movement Deafness Blindness (type 1) Heart Disease 2 million 1 million 1 million 2 million 1.5 million Disorder 1 million Sources: CDC, Jefferies LLC 12 Pharma intelligence | informa Strong Science is Delivering on New Therapies FDA approves 15 novel drugs so far this year vs. 21 in 2017 • Focus continues on high unmet need • Four drugs with Orphan status – rare hematology conditions • Only three specifically indicated for cancer • First in new class of migraine drugs that fight pain before it starts • Newest advanced opioid withdrawal treatment • Two HIV options for hard to treat patients • Better mechanisms of action: greater therapeutic effect at lower doses = fewer side effects Future of innovative drug approvals looks equally strong • NDA’s average more than 13 per month for last 4 years 13 Pharma intelligence | informa 2018 FDA Novel Drug Approvals DRUG COMPANY REVIEW DESIGNATION PRIORITY STATUS Lutathera Advanced Accelerator App. Gastro-enteropancreatic cancer Priority review, Orphan Biktarvy Gilead Sciences HIV first treatment or replacement Symdeko Vertex Pharmaceuticals Cystic fibrosis Accelerated Approval, Orphan Erleada Janssen Pharmaceuticals Prostate cancer Priority review Breakthrough, Fast-Track, Priority Trogarzo TaiMed Biologics HIV for patients with limited options review, Orphan Ilumya Merck & Co. Plaque psoriasis Tavalisse Rigel Pharmaceuticals Chronic immune thrombocytopenia Breakthrough, Orphan, Rare Crysvita Ultragenyx Pharmaceuticals X-linked hypophosphatemia (rickets) Pediatric Voucher Akynzeo Helssin Pharmaceuticals Emotegenic cancer chemotherapy IV Lucemyra US WorldMeds Opioid withdrawal Fast-Track, Priority review Aimovig Amgen Migraine headache Doptelet AkA Rx Chronic liver disease bleeds Priority review Lokelma AstraZeneca Pharmaceuticals Treatment of hyperkalaemia Palynziq BioMarin Pharmaceuticals Rare genetic disease phenylketonuria Olumiant Eli Lilly & Co. Moderate to severe rheumatoid arthritis 14 Pharma intelligence | informa FDA’s Forward Moves on Drug Price and Access • Drug Competition Action Plan Gottlieb’s strategy to cut drug shortages and promote competitive pricing Patient Access is a “public health” (and FDA) priority Guidance on speeding review of complex generics • Backlog of ANDA’s gets smaller – 2017 record year for approvals – 927 • Yes to 80 “first-time” generics for high-profile branded drugs - another record • Accelerated action on Biosimilars – 11 approved to date • Follow-up to joint public hearing on drug competition with FTC November 2017 • Modernization plan for CDER to speed drug time to market 15 Pharma intelligence | informa • REMS program changes to bar its use to delay generic entry Declining Period of Market Exclusivity for New Pharmaceuticals First-in-class Small Molecule Large Molecule approval period (mean length) (mean length) 1998 - 2004 5.5 years 4.0 years 2005 - 2011 2.5 years 2.2 years Time from first-in-class approval to second entrant by molecule size, in 16 therapeutic classes, 1998 to 2004 compared to 2005 to 2011 Source: Tufts Center for the Study of Drug Development, Clinical Pharmacology and Therapeutics, December 2016 16 Pharma intelligence | informa Fake News? Brand net prices increased by 1.9% on average in 2017, now lower than inflation Source: Morgan Stanley 17 Pharma intelligence | informa Drug Costs: The Super Spending Patient • 0.3% of Express Scripts members had annual Rx costs greater than $50k in 2016, a 35% increase from 2014 • Extrapolating to the U.S. population overall, an estimated 870,000 Americans accounted for $80 billion of 2016 U.S. pharmacy spend. ESRX Members with 2016 Rx Spend of $50k or more, by Disease 25.6% (Rx $50k +) 18.3% (Rx $50k +) 11.6% 10.6% (Rx $50k +) (Rx $50k +) Oncology Multiple Sclerosis Inflammatory Hepatitis C 18 Pharma