8 Trends to Watch: In its annual industry outlook report, Pharm Exec examines eight trends that will shape the biopharma industry landscape in 2018

 Industry Forecast, our annual temperature check on the life sciences sector and its outlook for the months and seasons ahead, we decided to try a slightly different approach. We again are highlighting what we feel are, globally, the most important industry-shaping trends, but have singled out eight specific pulse-setters, in particular, for examination-by our staff and correspondents and with insights from

Editorial Advisory Board (EAB) members and other experts. Call it our “8 for ’18,” if you will. We wanted to make sure the topics and events we explored were diverse-covering areas that impact patients, business, the regulatory climate, and science.   

	After all, as most would attest, the inevitable change and sway that grips all major industries is afoot. Just look at the flurry of activity at the end of 2017. In the US, major tax reform legislation was passed under the wire. The significantly lowered corporate tax rate and other changes could boost pharma investment and stop the shift of profits by US companies to affiliates in lower-tax countries. At the same time, however, the new law cuts tax benefits for rare disease R&D. In Europe, Amsterdam won the coveted prize as the new home base for the European Medicines Agency (EMA) come March 30, 2019, when Brexit- loose ends and all-is official.

	Add to the mix a potential upsurge in M&As, the critical testing period ahead for CAR-T and other novel therapies on the commercial stage, and the pricing debate that rages on (amid new findings that healthcare spending on prescription drugs has almost doubled since the 1990s), and it’s clear 2018 is shaping up as must-see viewing.

The ‘Patient’ vs. ‘Consumer’ Conundrum

Should engagement models consider label change?

 Digital Health Summit presented by FT Live, one of the speakers asked the audience to do this: 

“Raise your hand if you consider yourself a patient.” 

“Raise your hand if you consider yourself a consumer.”

	All hundred or so people in the room raised their hand. 

	The point the speaker was trying to get across was multileveled, but in general the exercise was to show that unless someone has a specific condition they are being treated for, a majority of people consider themselves a consumer, not a patient. And if pharmaceutical and healthcare companies want to stay ahead of the Apples and Amazons of the world who are threatening to disrupt the industry, they need to start viewing those who use, or “consume,” their products as consumers, and not just as patients. 

	It would signal a fundamental and psychological change in most ways a business functions. In the pharma space, it wouldn’t necessarily impact the science behind a drug, but, according to experts, could potentially change the way other aspects of business are done. 

	Joshua Newman, chief medical officer at Salesforce, explained how consumer-centric companies think about things differently than pure pharma does.

	“These organizations appeal to us, they are available to us, and they respond to us,” he said at the Summit last fall, adding that there was a time when it was just about the product or just about the customer service. “Now, it’s the entire journey,” he said.

	Using Amazon, Google, and Uber as examples, Newman explained that following this model wasn’t the way these companies started out, but they learned to evolve over time.

	“Things have changed and the reason is not because we (consumers) have demanded it, but because they were sensitive to it,” said Newman. “They were sensitive to what we  needed; they realized to compete, they had to give us a beautiful, easy, and frictionless experience. They take care of us not only when we are buying

 something from them, but from the time before on past the time we have used their product. And they keep reminding us they are around anytime we want to use their products.” 

	In the pharma and healthcare space, some say this is the missing piece of the patient care puzzle-and as patient centricity continues to be a buzzword, and companies dig deeper into what that actually looks like, the consumer aspect is going to come up more and more. 

	“Very few people complain about their drugs, very few people complain about their devices that have been installed, the surgeries, or the actual mechanics of clinical care; but everyone complains about the logistics,” Newman pointed out. “Everyone has a story about the administration, everyone has anxieties, everyone has questions that are unanswered … they don’t know what to do, and that’s what I think the biggest gap is, and it’s also the biggest opportunity.” 

	To think that a patient who is “consuming” drug therapies (e.g., chemotherapy) could one day pick up their mobile phone, open their apps, hop on Amazon, order it, and have it delivered right to their door is far-fetched. But those who believe the pharma industry needs to start thinking of its patients also as consumers will argue that scenario has to be part of the thought process in order to stay relevant, especially as non-traditional companies who excel at the customer experience enter the space. 

	The driving force amplifying this as an industry trend is technology. As technology evolves in other industries, making them more consumer-friendly, patients are going to expect the same level of customer convenience they are getting from other businesses touching their lives. 

	“How do we establish technological platforms, data connections that lower the activation energy and difficulties that people have right now worrying, learning, and engaging in their health and how this technology more effectively empowers consumers to make decisions about their health?” said Lloyd Minor, dean of Stanford School of Medicine. 

	But not everyone is behind this shift in wording.

	Michael Mittelman, vice president, strategic partnerships and patient advocacy, at the American Living Organ Donor Fund, and a three-time kidney transplant recipient with other chronic conditions, challenges the idea of calling patients consumers. 

	“Patients referred to consumers bothers me,” he said. “Patient-centered programs should be designed for patients. Patients are not consumers.”

	Although companies like Google or Amazon might be good at what they do when delivering a consumer experience, it doesn’t necessarily mean they will be good at translating those skills to pharma, citing Google Health and HealthVault as poor performers. 

	One thing is certain-the conversation about patients and consumers will continue to gain attention as more non-traditional companies who are consumer-focused enter, or threaten to enter, the pharma and healthcare space.

	Pricing in the US as a trend for pharma is not new, it just keeps twisting into different forms. Last year, of course, the talk of pricing swirled around President Trump’s negative comments around prescription prices. With a lack of any movement on prices on the federal level, individual states took hold of the reins by instituting their own laws around pricing. Will 2018 be the year that states take full control of the drug pricing issue in the US? At least 176 bills on pharma pricing and payment were introduced in 2017 in 36 states,
	according to the National Conference of State Legislatures. 

In early October, California Gov. Jerry Brown signed a law requiring pharma companies to notify the state and health insurers anytime they plan to raise the price of a medication by 16% or more over two years. And companies will have to provide justification for the increase. Health insurers also were instructed to report what percentage of premium increases are due to drug prices.

	A new Maryland law takes aims at price hikes on generics of older off-patent drugs after some companies took massive increases on generic drugs not facing competition from other distributors. 

	In Ohio, a referendum that would have leveled drug prices was defeated and a report said the proposal’s complexity may have been its undoing. It would have prohibited state programs, such as Medicaid and state employee health plans, from paying more than what the Veterans Health Administration pays for a medication. But a nonpartisan office concluded it was unclear how much money the proposed change would save, if any.

	And therein lies the rub: “unclear how much money the proposed change would save, if any.”

	Ed Schoonveld, head of the value and access group for ZS Associates, told 

, “There is a lot of frustration regarding drug pricing in the US, and much of it is political. Absent of an easy fix, politicians say ‘Well, we have to do something’ and this is where we are.” He added, “It’s hard to make sense of list prices. The real concern is where are the rebates going? That’s what we should be looking at.” 

	Schoonveld also emphasized that government and payers need to be careful with what they are requiring. For example, what if a company wasn’t planning on raising its prices anywhere close to 16% over two years. Now, increasing within the guidelines looks like a great option since no penalties will be enforced. 

	And in the case of generics, there again needs to be a balanced discussion. At a World Health Organization (WHO) fair pricing meeting last year, Schoonveld said, “There was a concern over the supply of generics. In effect, they were saying don’t make your tender policies so aggressive that companies will exit, leaving you with only few alternatives.” 

	Another trend in pricing is the shift toward value-based or outcomes-based contracting-which is a much larger topic that will be discussed throughout the year. Suffice to say that Schoonveld believes that there needs to be a focus on long-term outcomes and how to fund those. “Many innovations are coming to the market and affordability is becoming a real issue,” he says. “We need to have a good conversation about the desired outcomes of new treatments and how we pay for it. It’s become a societal issue.”

	While Schoonveld doesn’t suspect the trend with states passing pricing and payment laws will cool off, it also will not resolve anything, he believes. “This is a broader healthcare funding issue. And pharma needs to be a part of the discussion and engage in the dialogue with the insurance industry, medical community, and government.” 

“His leadership and vision at FDA is clearly aggressive and ambitious.”

 “[He is] very proactive, a 21st century thinker.”

“[He] believes in adaptive trial design, improving functioning of FDA.”

“Will this be the year he makes an impact?”

’s Editorial Advisory Board made regarding FDA Commissioner Scott Gottlieb when discussing this year’s industry forecast. Our Washington Correspondent, Jill Wechsler, has covered Gottlieb’s appointment and activities since his official nomination in late March. She reported that on the day Gottlieb was confirmed in May, the FDA Science Board approved a detailed work plan for allotting

 $500 million over nine years provided by the 21st Century Cures Act. 

	Some of the Cures initiatives include qualifying more biomarkers and other drug development tools; modernizing clinical trial design; using more real-world evidence (RWE) to approve new indications and post-marketing studies; expanding the role of patients in assessing new drug risks; and promoting more coordination among FDA centers, particularly for combination products. FDA, under Gottlieb, has already checked off some of those boxes, and made good on his own promises, signals that Gottlieb is aggressively moving the FDA ball forward. 

	On June 29, the commissioner told the Senate Appropriations subcommittee that FDA’s new Orphan Drug Modernization Plan would eliminate a backlog of 200 pending orphan designation requests by mid-September and establish procedures for vetting such requests within 90 days in the future. The backlog for requests older than 120 days was completed on August 28.  

	In the area of biomarkers and diagnostics, November saw the FDA approval of FoundationOne CDx (F1CDx), the first breakthrough-designated, next-generation sequencing (NGS)-based 

 diagnostic (IVD). The test can detect genetic mutations in 324 genes and two genomic signatures in any solid tumor type. At the same time, the Centers for Medicare and Medicaid (CMS) proposed coverage of F1CDx. The test is the second IVD to be approved and covered after overlapping review by FDA and CMS under the parallel review program, which facilitates earlier access to innovative medical technologies for Medicare beneficiaries.

	In recognition of the importance of postmarketing studies, FDA, in mid-December, reported for its fiscal year 2016 that the number of open postmarketing requirements (PMRs) and postmarketing commitment (PMCs) had decreased from 1,636 to 143. Dr. Peter Stein, deputy director, Office of New Drugs, at the Center for Drug Evaluation and Research (CDER), noted that FDA is committed to making sure industry fulfills its PMRs and PMCs and that the postmarketing studies are transparent to the public. Gottlieb, after the announcement, took to Twitter at 

: “Post-approval studies enhance patient safety & public health, can lead to safety labeling changes, support expanded use of drug, alleviate risk concerns.”

	Other comments that Gottlieb has made could come to fruition in 2018 around RWE, biosimilars, and the opioid crisis. Gottlieb has said that clinical trials may not always require randomization, and that faster studies don’t necessarily compromise on safety or undermine the FDA gold standard for assuring medical product efficacy. He has said that RWE won’t replace traditional clinical trial data in many cases; however, he sees opportunity in the pre- and postmarket context to use this data to modernize development, and that FDA will collaborate with all stakeholders to achieve a “more appropriate adoption of RWE as part of the entire life cycle of medical products.”

	As noted elsewhere in our Forecast coverage, the topic of biosimilars in the US, in particular, is in a holding position. During Gottlieb’s confirmation hearing, he specifically said, “I think Congress didn’t envision with Hatch-Waxman that certain drugs would have monopolies in perpetuity, long after their intellectual property has expired, but for the inability of FDA to have a scientific process that can prove interchangeability for those drugs. I think this is an area where we can make a lot of progress. We might need to come back to Congress to talk to them about what additional steps we need to take, but I think there are things FDA could contemplate administratively. This is an area I want to work on. These are literally billions of dollars worth of drugs each year that are sold as branded drugs at high prices, but should be subject to generic competition.” However, as noted, much of the biosimilar activity is tied up in the US legal system. 

	All in all, Gottlieb has started strong and there is no indication he will let up in 2018. In fact, his mid-December 

 foreshadowed upcoming activity. Besides his apparent commitment, Gottlieb’s Twitter game is spot on. 

	The Latin American markets continued to fluctuate in 2017. Recession and public health spending cuts further compromised Brazil’s appeal as an attractive region for multinational investors and widened the gulf between the country and its leading BRIC counterpart, China. Venezuela spiraled further into economic collapse, the country’s gross domestic product (GDP) shrinking by 19% as the catastrophic effects of steeply falling oil prices and a crumbling political system took hold. The weight of Latin American expectation, then, has since shifted to Colombia, described by 

’s October 2017 Country Report as “a bastion of peace, stability, and resilience,” with GDP growth rates of around 2% for 2017 and “thriving domestic consumption set to propel the value of the local pharma market from $5 billion in 2015 to $7.1 billion by 2020.”

	Colombia boasts 108 of the 400 free-trade zones in Latin America, with Focus Reports observing that multinationals “tend to be thrilled by the ‘level playing field’ on offer and the sheer openness of the market.” Colombia has implemented trade agreements with a host of countries, including the US, the EU nations, Canada, Japan, and South Korea, while expanding its trade relations with Latin American neighbors such as Mexico. Similarly, Colombia’s medical device industry is encouraging international companies to the market in a free-trade zone in the capital, Bogotá. The country’s med-tech segment is reaching double-digit growth, with a projected value of $1.8 billon by the end of the decade.

	Rachel Howard, director, emerging markets, at Research Partnership, told 

 that “Colombia has been on our radar as an ‘up-and-coming’ emerging market for some time now, with the end of armed Farc rebel conflict and decline in organized drug crime facilitating a more favorable business environment, and the 

proposed healthcare reforms that accompanied President Juan Manuel Santos’ successful reelection in 2014.” However, Howard explains, “corruption and mismanagement-which have long plagued the country’s healthcare system and resulted in costs spiraling out of control-represent broader national issues that have eroded public confidence in political parties to record lows as of late 2017.” In a June 2017 survey, 20% of Colombians cited healthcare as the main problem that the next president should address.

	Colombia heads to the polls in May, with Mexico and Brazil facing elections later in the year. For Howard, “How the policy debates play out over the next 12 months could have far-reaching implications for the prospects for pharma within the region, at least within the public sector.” However, she notes, “The regional trend toward privatization of healthcare provision looks set to continue regardless.”

Articles

Features

In our annual temperature check on the life sciences sector and its outlook for the months ahead, we explore eight trends that will shape the
biopharma industry landscape in 2018.

Changing Skies: Pharm Exec’s 2018 Industry Forecast

 Bruno Strigini, the outgoing head of Novartis Oncology, talks tradition, new launches, pricing and value-and what he believes is the start of a golden age of innovation in cancer science. 

 partner PharmaBoardroom, whose “Country Report” series is regularly featured in these pages, spoke recently with Bruno Strigini, CEO of Novartis Oncology. They discussed the drug giant’s latest efforts and successes in fighting a disease that remains on the rise globally, and touched on the broader trends and 

innovation that are propelling new hopes in cancer care.     

	Please note that this interview was conducted in October 2017. Strigini has subsequently announced that he will retire from Novartis Oncology in early 2018. During his time at the company, Strigini led the integration of GlaxoSmithKline’s oncology programs acquired in 2015, navigated Novartis through its Gleevec patent expiration a year later, and, in 2017, helped the organization gain the first regulatory approval of a chimeric antigen receptor T-cell (CAR-T) therapy.      

Novartis is notable for being the first of the big pharma firms to assemble a global business unit dedicated solely to developing and launching innovative oncology medicines. Why was it deemed necessary to adopt this sort of corporate structure of a “firm within a firm?” What advantages does it bring?

 Novartis’ first great foray into oncology dates back to 2001 with the launch of Gleevec, which was a truly revolutionary cancer drug and formed part of a pioneering group of targeted treatments designed to attack a specific cancer-causing genetic mutation. With the advent of Gleevec, the outlook for CML (chronic myeloid leukemia) patients changed dramatically, and it is great to hear from patients who have the prospect of a normal life 15 years after starting the treatment.

	Another critical juncture came in 2015 when we acquired GSK’s oncology business, comprising important products such as Revolade, Votrient, Tafinlar, and Mekinist, as part of a broader portfolio swap between the two companies. 

	Our organizational structure, which right from the beginning was set up as a dedicated business unit focused on treatments for cancer, was key to our success. This organizational set-up underscores Novartis’ unwavering commitment to pioneering new generations of oncology therapies, and it also provides a real sense of purpose and focus. The overarching idea was to create a nimble outfit, with speedy decision-making power to accelerate the development and commercialization of our products. One of the aspects that has

 impressed me the most since I joined Novartis has been the sense of purpose of our associates, and I believe that arises partly from having an organization fully focused on oncology. This is a 

 that works, and that’s why we’re now seeing our competitors trying to emulate us in this respect.

	Looking at our productivity in 2017 alone, which includes three new therapy approvals, it is clear that the model we established makes good sense. We launched Rydapt in the US and Europe for two rare, life-threatening indications, including a mutated form of acute myeloid leukemia. Also, [last year] we achieved  both US and European approval of Kisqali for treatment of postmenopausal women with locally advanced or metastatic breast cancer. Finally, in late summer we were the first company to receive approval for our breakthrough CAR-T cell therapy, Kymriah.

How, then, is the unit structured? What are the key functions and areas of priority?

 Novartis Oncology is a global leader in the oncology, hematology, and rare cancer segment, with an unmatched portfolio of products, including more than 20 approved medicines. We also have one of the broadest pipelines in the industry, with over 40 or so new molecular entities in development, including targeted and immuno-oncology compounds.

	Our research is driven by a distinctive scientific and clinical strategy, focusing on unmet medical needs. Having initially established ourselves as one of the foremost companies in the development of small molecules against cancer, we have now additionally assembled one of the largest pipelines in immunotherapy, with 18 different compounds. In addition, we are pioneers in CAR-T cell therapies, a new class of immunocellular therapies.

	Strategically, we have prioritized five therapeutic areas: breast, blood, and lung cancer as well as melanoma and renal cell carcinoma. This does not mean we are not doing anything in other areas, for example, our R&D groups are active in colon and bladder cancer, but it does help us retain focus in areas where we have depth and breadth of experience. In a highly competitive environment where 40% of the industry’s investment is in oncology drug development, we must keep to our core strengths.

	In terms of our scope and reach, there are more than 10,000 associates fully dedicated to oncology spread across 85 countries, including eight R&D centers. With this level of experience, knowledge, and investment behind us, we find ourselves equipped and ready to transform cancer care by bringing more breakthrough products to patients and society.

Tell us about the significance of the CAR-T milestone with Kymriah and how it relates to the positioning of Novartis’ oncology business today?

 We were very proud indeed to see Kymriah, the first immunocellular therapy approved in the US for the treatment of children and young adults up to 25 years of age with B-cell precursor acute lymphoblastic leukemia that is refractory or in second or later relapse. This is a truly game-changing and revolutionary product that responds to an unmet need that is clearly established. Trial results have demonstrated a high level overall remission rate in this patient population with limited treatment options and historically poor outcomes.

	The CAR-T journey started five years ago when we began collaborating with the University of Pennsylvania and invested in bringing-what we believed would be-a paradigm-changing therapy to cancer patients in dire need. Basically, it is a highly personalized therapy in which T cells are drawn from a patient’s blood and reprogrammed in our cell processing facility. These genetically coded T cells are infused back into the patient to potentially “hunt” the patient’s cancer cells. This represents an entirely new approach for treatment. Our hope is now to be able to progress this “new wave” of CAR-T therapies in a host of hematologic and potentially other cancer types.

	Overall, our R&D portfolio is made up of two core segments: “targeted therapy,” including our small molecule technology and monoclonal antibodies; and “immunotherapy,” comprising our immuno-oncology pipeline. As CAR-T is an immunocellular therapy, it fits perfectly into our overall strategy to attack cancer in a modality-agnostic way.

PB: Kisqali was approved in Europe one week prior to Kymriah. What were the comparative experiences of the market access teams for the EU and US with regards to these two scientific advances in oncology?

 The strategies for getting these two different therapies to market had to be thoroughly different. Kymriah needs to be administered in specialized treatment centers and is an individualized approach to modifying a patient’s own cells to fight cancer that brings all sorts of additional complexities in terms of manufacturing, handling, and logistics. To address the unique aspects of the therapy, we had to go and develop custom-made patient access programs to support safe and timely delivery. Kisqali, on the other hand, is about a classic small molecule, and our focus was and is to differentiate our offering from competition.

	The dynamics of the two markets are also very different. In the US, the market is a mix of private insurance providers, Medicare, and Medicaid. In Europe, you are largely talking about healthcare systems with universal coverage and country-by-country access and pricing negotiations. Our approach in all instances, however, is consistent-and that is to emphasize the principles of value and outcome of our medicines.

Kymriah comes in at a hefty price tag at $475,000, putting it as one of the most expensive drugs of all time. How did Novartis come to this figure and go about its pricing strategy, especially considering the current cost-cutting climate and potential political and reputational ramifications?

 We put a great deal of thought into how to price Kymriah. We conducted our own detailed health economics analysis, looked into standard-of-care pricing such as bone marrow transplant, and took into account independent evaluations such as those of NICE (National Institute for Health and Care Excellence), which estimated a cost-effective price of between $600,000 and $700,000. 

	Let’s not forget either, that Kymriah is delivered to each patient just once because this is intended to be a one-time, highly effective treatment. When considering this altogether, the value of what we are proposing becomes more readily apparent.

	Importantly, we have also announced a collaboration with the US Centers for Medicare and Medicaid Services (CMS), which represents a first-of-a-kind arrangement in the US. This includes an outcome-based approach and indication-based pricing. 

How do you reply to those who argue that the extent of current public expenditure on oncology drugs is disproportionately high and does not necessarily represent optimum value for money spent vis-à-vis competing claims (such as for antibiotics)?

 Cancer is clearly on the rise. Right now, cancer causes one in eight deaths globally and, in Europe, it is even outpacing cardiovascular disease in terms of prevalence. The World Health Organization (WHO) is now estimating that global cancer rates will be close to 22 million new cases per annum by 2030.

	A recent study involving the EU’s five biggest markets demonstrated that cancer affects mostly people in their prime in terms of ability to be productive. The societal cost to those five countries was estimated at €50 billion just in terms of lost productivity. 

	At the same time, science and medicine are progressing very rapidly, and cancer treatments are becoming more effective. This allows for the right drug to be employed at the right time for the right patient.

	Clearly, industry and the rest of the life sciences community have to work alongside healthcare providers, payers, and policymakers in rendering cutting-edge oncology drugs accessible and affordable to all patients. We believe an outcomes and value-based approach will help in achieving this objective.

What steps, then, are you taking to make pioneering oncology drugs more accessible to patients in lower-income countries?

 We have different programs to facilitate access to our cancer drugs. One that I would like to highlight is our collaboration with the Max Foundation, a global, patient-focused, non-governmental organization. In September, Novartis announced a new collaboration with the Max Foundation to support continued access to treatment at no cost for nearly 34,000 current patients with CML, gastrointestinal tumors, and other rare cancers. 

	We have been longtime collaborators in providing access to care for patients in lower-income countries through the Gleevec International Patient Assistance Program (GIPAP), one of the most innovative patient assistance programs ever implemented on a global scale. The new collaboration, called CML Path to Care, is an evolution from GIPAP. Under the new initiative, the Max Foundation will assume from Novartis the responsibility for delivering our CML treatments to these patients, including supply chain management, and Novartis will provide the funding and drug donation support.

Novartis has formulated its very own definition of value. Tell us more about this.

 For us, the value of our products includes four components. First, there is clinical value. Second, there is value to the patient in terms of quality of life. Third, impact on the total healthcare budget; for example, if a new drug avoids expensive hospitalization, then the cost saving being generated needs to be taken into account. Finally, there is the societal value of getting the patient back to being a productive member of the economy. 

	In short, we look at value holistically. The comparative value of a drug should be calculated against how well it performs with respect to each of these four criteria.

Do you see the concept of value-based pricing gaining traction with governments?

 Yes. The arrangement that we struck with CMS in the US demonstrates that healthcare systems are seeing the potential benefits and are prepared to engage. In Europe, we also witness progress being made on health technology assessment and willingness to start the dialogue on outcome-based approaches. 

Where do you see the emerging trends right now?

 There is a huge amount of innovation in the science of cancer. Digital disruption is also shifting the paradigm; this is clearly the case at Novartis. Big data, predictive modeling, and advanced analytics are changing the way we work in all aspects of our business: research, development, and commercialization. For 

example, in research, it is helping us to shorten the time between finding a target and proof of concept. Also, the use of real-world evidence could transform the way we approach the development and regulatory processes for a drug. 

	In short, a golden age of innovation is upon us and convergence is occurring across different areas of science, technology, biology, and IT. The onus is on the pharma industry to embrace this change and leverage it. These are all highly positive steps that bring stakeholders together to the benefit of the patient.

Do you have a few words to conclude on Switzerland-Novartis’ global base-and its role in the life sciences?

 Switzerland is the home of two of the top global pharmaceuticals players. It possesses a vibrant and flourishing life sciences industry and is also notable for having one of the best functioning healthcare systems. Part of this no doubt derives from a historical tradition of innovation and engineering, and I believe the country’s openness and collaborative spirit contributes greatly to this success. 

is the UK-based, independent publisher of 

Bruno Strigini, CEO of Novartis Oncology, talks about the company’s pioneering path in cancer-starting with Gleveec and continuing with last year’s approval of the first-ever CAR-T cell therapy-touching on the related broader issues such as pricing and value and new innovations in cancer science.


Q&A: From Gleevec to CAR-T

	The pharmaceutical industry faces a tumultuous year in Washington, as policymakers continue to press for curbs on too-high drug prices, and tax and budget reforms may threaten resources and initiatives for the FDA, the National Institutes of Health, and public health programs. Inaction by Congress and the White House will prompt more states to propose price transparency and negotiating strategies (see sidebar below), measures that

 industry fears will dampen investment in innovative research. Federal agencies will strive to rein in the deadly opioid epidemic, in the process generating more investigations and lawsuits citing manufacturers. These issues will shape the November mid-term Congressional elections, which already are heating up as Republicans seek to maintain control of the House and Senate amid continuing debate over government funding for healthcare and drug regulatory policies. 

	Efforts to scale back the Affordable Care Act (ACA) and state Medicaid and children’s health programs will further limit drug coverage and reimbursement. Pharma companies backed the ACA and agreed to pay millions in taxes to expand pharmacy benefits. Now higher out-of-pocket costs for consumers will squeeze drug utilization and ignite further efforts to rein in pharma prices. The Centers for Medicare and Medicaid Services (CMS) recently revised Medicare Part B drug reimbursement policies and has proposed measures to facilitate Medicare coverage of biosimilars and generic drugs. CMS also has floated a proposal for Part D drug plans to share with patients the rebates and 

discounts negotiated with manufacturers and pharmacy benefit managers (PBMs). A battle over 340B drug discounts pits pharma against certain hospitals, while the push for more transparency in drug prices and discounts could erode revenues for PBMs and further escalate the finger-pointing by manufacturers, insurers, and PBMs over who’s most to blame for costly medicines.

	These trends will heighten interest in value-based pricing strategies that link drug coverage to patient response to treatment. CMS and insurers also eye arrangements to spread reimbursement over several years for one-time breakthrough therapies. Sponsors will need credible data to convince the Institute for Clinical and Economic Review (ICER) and other third-party analysts that the benefits of a new medicine justify costs.

	These financial and regulatory pressures will spur pharma companies to seek new partnership and investment arrangements to support the R&D needed to maintain robust development pipelines, particularly involving gene editing and other “disruptive” technologies. The proposed CVS Health purchase of Aetna signals major changes ahead for drug distribution, coverage, and industry organization. 

	US patent policy and market exclusivity provisions similarly are crucial for maintaining an inviting climate for biotech investment, but current protections face challenges from evidence of innovator firms using patents to block competition. Patent battles are keeping most new biosimilars from the market, and a move to extend protections by transferring patents to a Native American tribe has generated a strong backlash. These actions fuel questions about over-extended exclusivities for new therapies, as seen in Republican efforts to curb the orphan drug tax credit and challenges to FDA priority review vouchers. The Supreme Court will weigh related issues as it considers an important case this year that could revise the current US Patent Office process for reviewing patent challenges. 

	While FDA generally avoids involvement in pricing issues, Commissioner Scott Gottlieb looks to enhance consumer access to medicines through greater market competition. His main strategy is to speed the development and approval of biosimilars and generic drugs, particularly complex therapies and combination
	products and drugs in classes dominated by one or two brands. Gottlieb also wants to prevent brands from

 blocking generics makers from obtaining supplies needed for bioequivalence testing and other tactics to delay market entry. 

	More pharma competition also derives from more efficient new drug development and timely FDA review and approval of new medicines, especially promising gene and cellular cures. The agency will continue to implement the 21st Century Cures Act and reauthorized user fee programs to encourage more streamlined clinical research, wider use of digital technology, flexibility on evidence standards, and updated information systems. 

	Perhaps the top priority for the nation’s healthcare system is to halt the deadly opioid epidemic, which is taking thousands of lives and driving up costs on every level. The challenge for health authorities is to ensure access to treatment for patients suffering from pain, while also curbing excessive prescribing and distribution of drugs subject to abuse and misuse. Congress and the White House have rolled out policies and plans to limit opioid use, while looking to expand treatment for addicts and access to opioid overdose rescue drugs, but limited funding may undermine such efforts. 

	FDA has increased its direct involvement in tackling opioid abuse by encouraging research on new non-opioid pain therapies and more effective medicines to prevent and treat addiction. It also seeks to facilitate development of low-cost generic abuse deterrent formulations (ADFs) and overdose treatments and to devise more secure packaging and distribution strategies for pain medicines. 

	Meanwhile, federal and state prosecutors are ramping up criminal investigations and lawsuits against opioid producers for deceptive marketing and promotional practices alleged to spur inappropriate opioid prescribing. While settlements are likely for many of these suits, industry’s role in fomenting this deadly wave of drug abuse will undermine its stature for promoting public health through biomedical discovery. 

	On the international front, FDA is collaborating with other regulatory authorities to combat the import of falsified/substandard medicines, including dangerous pain remedies. The expansion of drug sourcing and production overseas and continued disease outbreaks around the world will raise a range of global regulatory issues. International harmonization of regulatory standards and mutual recognition agreements will advance as authorities look for efficiencies in ensuring drug quality, in managing product lifecycles, and in blocking illegal product trafficking. Brexit will bring further changes to drug oversight and marketing, as the European Medicines Agency moves to Amsterdam. 

’s Washington Correspondent. She can be reached at 

Columns

States will continue to press for price controls, while FDA will tackle opioids and promote innovation.

Prices and Competition to Shape the Year Ahead

	for 2018 Trends, both Editorial Advisory Boards (

) named CAR-T and gene therapy. Ultimately, we chose eight trends to explore in this year’s industry outlook, and CAR-T was not on that list. We felt that 2018 is only the beginning of CAR-T therapy development, and the challenges around that will exist for a few years. Those challenges include clinical trials, pricing, and market acceptance. To provide first-hand insight, we were fortunate to have our editorial partner PharmaBoardroom

 interview Bruno Strigini, the departing CEO of Novartis Oncology, in October. That 

 describes the path to bringing the first FDA-approved immunocellular therapy with Kymriah, for B-cell precursor ALL, to market.

	As noted in the annual pipeline report in November, both Kymriah and Kite’s Yescarta for NHL were approved by the FDA in 2017. But also that CAR-T is a powerful and risky therapy and drug companies are responding to some of the more worrisome side effects. The FDA recently approved Genentech’s tocilizumab (Actemra) to treat severe cytokine release syndrome (CRS), a potentially deadly side effect to CAR-T therapies. 

	In fact, as Aaron Mitchell, a managing principal at ZS Associates, noted in an email to me, CRS is “the most common adverse event patients are facing in the trials, with 81% of patients in Novartis studies B2202 and B2205J experiencing some form of CRS, with about 45% experiencing Grade 3 or 4.” Mitchell said that CRS symptoms can be quite severe and extensive, especially in patients with a high tumor burden. He added that to prevent and manage CRS in CAR-T patients, “companies have implemented rigorous CRS management protocols. For example, Novartis worked with the University of Pennsylvania on its algorithm, which includes multiple lines of treatment to resolve CRS once it appears.”

	Because clinical trials are designed to test a completely new treatment paradigm (genetically modified autologous immunocellular therapy), it is significantly different from typical pharmaceutical therapies. For that reason, Mitchell says that many of the standard processes around currently established manufacturing, fulfillment, and treatment have been redesigned to support CAR-T development.

	Mitchell said, “The manufacturing process itself is quite complicated in that you are dealing with a highly variable input from each patient and you need to develop a consistent final product. This makes developing a reproducible manufacturing process quite difficult. For Novartis, they have made significant investment in a single site in Morris Plains, NJ, for nearly all their patients in pivotal trials.”

	Strigini says in his interview that Novartis put a lot of thought into pricing Kymriah, using standard of care pricing of a bone marrow transplant, as well as independent evaluations, including those from NICE. Kymriah is priced at $475,000 for a one-time treatment, and Novartis is offering value-based pricing, whereby insurers will only pay for patients who go into remission within three months of receiving the therapy.  Yescarta is priced at $373,000, offers financial help for patients, but does not offer a value-based pricing scheme.

	In December, Cardinal Health released the results of a survey of 200 oncologists conducted to “better understand their perceptions about CAR-T and the potential barriers to adoption (view 

).” The results found that the top three barriers to prescribing CAR-T cell therapy were as follows: logistics of administering and following patients are cumbersome (59%); cost of therapy (44%); and toxicity is too high (35%).  

	Since CAR-T cell therapies must be administered in the hospital or at an accredited center, gaining community oncologist support is crucial, as illustrated in the Cardinal report, which noted that 31% of oncologists were referring AML patients to academic centers for treatment.

	ICON addressed these concerns in an article that appeared in December and provides a list of key factors to help ensure market access. These include continuing to follow patients after the trial closes; engage treatment centers early in the process; develop and share data on the burden of disease; and more. 

	As these new therapies enter the “traditional” world of pharma, trials, pricing, and acceptance will evolve with time and experience. As Mitchell noted: “Over time, further standardization will happen, allowing these trials to happen more quickly and efficiently and at a global scale. In the meantime, strong partnerships between sponsors, sites/investigators, and regulators is needed to support these trials as well as develop the necessary processes and capabilities.”

From the Editor

The advent of immunocellular therapies marks a major milestone in pharma, but the path for these treatments in transforming patient care is still forming as they face challenges in clinical trials, pricing, and market acceptance,  

CAR-T Concerns for Continued Success

Five predictions on the evolution of data and predictive insights that could be critical for pharma go-to-market strategies

	
	With 2018 off to a roaring start, now is the time to reflect on the journey the life sciences industry has taken over the last 12 months and chart the trends we see on the horizon for 2018-especially those on big data and predictive insights.

	The healthcare data landscape is more complex than ever, with exponential growth in the sources and types of data available. Extracting insights-the right insights, at the right time-from the available data is crucial to the kind of personalization that is now required for commercial success. At the heart of these insights, however, is the data-as is the ability to connect, link, and interrogate big data, little data, and disparate data, ensuring that the insights are multifaceted and multidimensional. 

	Historically, the task of connecting and analyzing data fell on humans such as analysts and consultants. Now, the body and diversity of the data is so significant that it’s necessary to utilize computed analytics and machine learning to manage and link the data for timely and actionable insights. Artificial intelligence, and in particular machine learning, will be a core underpinning of any winning big data or digital transformation strategy in 2018. 

	Another important step in the digital transformation journey is breaking through the data silos that exist between business units and technology teams, and gain efficiencies from the data being created and purchased. 

	2. The customer journey gets ‘digitized’

	Life sciences companies are increasingly looking at ways to build value “beyond the medicine” and offer complementary services and value-added, integrated care solutions. Frequently these include service centers, where patient-reported outcomes and other feedback create insights into the care continuum and all that it entails, from pricing to delivery. 

	These data points-patient experience, disease progression, treatment, disease management, preventive measures, and beyond-are crucial to commercial initiatives, as a growing number of payers are asking for the comprehensive impact of medicines on patients or mandating that companies track the patient journey. Capturing this data, and integrating it back into the company’s strategic go-to-market approach, however, is not so simple. Each point of engagement creates “digital exhaust.” Just as a wisp of exhaust trails a car’s tailpipe, new data elements generate an important digital trail that can be used to create a more personalized approach to commercialization and customer engagement. 

	3. Predictive insights  become programmatic

	Our personal consumer experience with technology is setting the standard for technology with ease of use and intuitive, relevant delivery of information and insights. Companies like Google, Facebook, and Amazon collect enormous amounts of data to analyze our historic activity and predict our future preferences. They position recommendations, in the form of products or advertisements, in a highly targeted way, wrapped in a seamless user experience. We are served with what we need next, before we even know we need it.

	This is the north star for life sciences companies; as they implement more comprehensive go-to-market strategies to address pressures in the healthcare ecosystem, they also need to reexamine the technology platforms and applications their commercial organizations are using, and provide a powerful, “programmatic” delivery of the customer journey to sales and marketing teams.  

	It is now critical to engage with, and influence, a broader group of decision-makers to successfully create access to, and adoption of, a medicine or therapy therapeutic. Additionally, it’s important to understand where “customers”-providers, payers, patients-are within the buying cycle and treatment journey. This extensive and complex go-to-market approach demands that life sciences companies make better use of a broader body of data and use predictive, programmatic insights from this data to guide their strategy. For 2018, it will be a business imperative to connect more disparate data sources, process and analyze them, and operationalize these with programmatic recommendations to deliver an experience akin to Amazon’s product recommendations. 

	4. Customer relationship networks gain influence 

	Leading life sciences companies are taking steps to analyze and leverage networks within the healthcare landscape to maximize the impact of their commercial efforts and ensure improved returns on their investment in go-to-market initiatives.

	The number of stakeholders shaping the decision-making for appropriate treatment and intervention continues to grow, and the relationship between these players-prescribers, physicians, payers, organizations-influences these decisions, positioning network-based decision-making as the new normal.

	Whether with structured networks, like integrated systems of hospitals, physician practices,  health clinics, and provider networks, or unstructured networks, it has been difficult for life sciences companies to develop a commercial approach that can successfully navigate these networks. In fact, these relationship networks can be defined and connected by subtle factors, such as physicians being co-authors on publications or guidelines, co-investigators on key clinical trials, common education or residency at medical schools, or shared patient management due to referral or management of multiple comorbidities.

	Effectively understanding these networks of influence requires a sophisticated approach that goes beyond information captured from field personnel and taps into the multiple, external data sources that can collectively populate any gaps. In a recent survey of more than 110 biopharma leaders in sales and marketing roles, 71% said they believe that the behavior of a healthcare provider (HCP) or organization (HCO) is heavily influenced by their relationships with other HCPs/HCOs, but less than 30% of them are using, or are even able to analyze these relationships. In 2018, organizations that leverage technology to identify and analyze these relationship networks, and integrate the resulting insights in their go-to-market approach, will see their competitive advantage accelerate. 

	5. Multichannel marketing goes ‘artificial’ 

	The life sciences industry is highly skilled at understanding the return on investment for discrete engagement initiatives targeted at a specific stakeholder group, such as non-personal promotion to physicians or direct-to-consumer campaigns focused on specific geographies and demographics. Today, marketing leaders must optimize the channel mix, investment, and messaging across multiple stakeholders and networks. 

	A data-driven go-to-market strategy requires broader use of derived insights to determine the best multichannel strategy, spanning both sales and marketing. For 2018, improved personalization of both content and delivery channels will be top of mind for biopharma marketing leaders. This means they need more dynamic, real-time feedback data from these same channels-field force and non-personal.

	Additionally, companies need to coordinate, measure, and enhance activities across multiple internal customer engagement teams. This includes market access teams targeting pharmacy benefit managers or health insurance companies, national account teams interacting with integrated delivery networks, sales representatives detailing physicians, and all the complex interactions that span across these networks. At the campaign or product level, this translates to additional complexity for sales and marketing programs that span field activity and multichannel marketing.

	Just as machine learning is paramount to connecting the multitude of data sources that underpin these efforts, augmented (or artificial) intelligence will support the increasingly dynamic, data-driven evolution in multichannel go-to-market. 

	While 2017 gave us a glimpse of the potential for technology to integrate broader data and extract deeper insights, 2018 will be the year when leading life sciences companies take the next, most crucial step in digital transformation, and put data and predictive analytics at the forefront of their go-to-market strategies. 

Five predictions on evolution of data and predictive insights that could be critical for pharma go-to-market strategies.

New Year, Next Steps in Digital Transformation

	When Susan Bratton, founder and CEO of Savor Health, started approaching pharmaceutical companies four years ago with the idea that nutrition and customized recipes should play a part in disease treatment, she did not immediately receive a warm welcome. 

	But Bratton was persistent. She had seen firsthand how difficult getting the correct nutrition was for patients, particularly after a life-altering diagnosis-and especially if the disease or its side effects impacted the patient’s ability to eat, drink, or cook. 

	Fast forward to 2017. That’s when Bratton’s company struck a partnership with Merck & Co. around its new program, 

, an awareness campaign focused on helping people with cancer and their loved ones tackle their emotional, nutritional, and communication needs. 

	In the past, the pharma industry generally didn’t consider this type of nutritional intervention a priority, Bratton says. Yet, as she explains to 

, a secondary problem to arise after a cancer diagnosis can often be malnutrition. In that context, it makes total sense.  

	Take head and neck cancer, for example, which was the first disease that Merck focused on when it launched 

 with the help of NFL Hall of Fame quarterback Jim Kelly, a head and neck cancer survivor. This condition describes a number of different tumors that develop in or around the throat, larynx, nose, sinuses, and mouth. According to Merck, many people with head and neck cancer face unique challenges as a result of surgeries and/or treatments that impact a person’s appearance, speech, smell, taste, ability to swallow, and sight. 

	This is where Savor Health comes in. The company not only creates recipes with balanced nutrition so that a patient’s body has the nutrients it needs to fight disease, but Savor Health also takes into consideration disease-specific problems that might arise for the patient. For instance, an individual who has head and neck cancer may have a hard time swallowing. Savor Health offers recipes that provide the specific nutrition required, but can also be prepared in a way that makes it easier for the patient to eat. 

	“Making sure your body gets the nutritional support it needs may help to keep your strength up through a treatment course,” says Bratton. “Adapting and managing meals is important for people living with head and neck cancer, and we’ve developed helpful tips and recipes that are designed with this in mind.”

	Besides medical research to back up Bratton’s nutritional claims, the executive has also witnessed the toll of cancer on a personal level. Her friend, Eric, was diagnosed and later passed away from glioblastoma, a rapidly spreading cancer that begins in the brain. His experience was her inspiration for starting Savor Health.

	“He was just a lovely human being,” recalls Bratton. “All of his friends adored him. He had a personality that was bigger than life. [After his diagnosis] he lost so much weight, because he was unable to eat.”

 and recognizing that there are many factors besides the drug itself that can influence a patient’s success when it comes to their treatment. And, although this program is not specifically attached to any value-based reimbursement, it doesn’t mean that it couldn’t be in the future. 

	According to Merck, many people living with head and neck cancer may experience different physical and emotional hurdles than those with other forms of cancer. To help address these challenges, 

 provides support and resources, including tips from Kelly, the former Buffalo Bill, on how to remain positive, and healthy recipes for those with the disease.

	In addition to Savor Health, Merck also partners with the Head and Neck Cancer Alliance (HNCA) and Support for People with Oral and Head and Neck Cancer (SPOHNC). The organizations have supported the head and neck cancer community for nearly six decades combined. HNCA provides patients with resources that can help them manage their emotional needs at every stage of their journey, while SPOHNC offers guidance for patients in communicating with family and friends and expressing themselves in an effective way. 

 takes a holistic approach to the treatment of head and neck cancers by truly going “beyond the pill” to support those afflicted in all areas of their life. 

’s Senior Editor. She can be reached at 

Program puts a new-and very real-spin on patient nutrition.


Food for Thought in Cancer Fight

Is getting more clarity on Brexit ramifications for pharma and European public health really at the top of new-year to-do lists?

	The year ended, for European pharma, as it had begun-with deep anxieties that the industry’s operations would be seriously jeopardized by the widening fissure of the English Channel. Things are still not much clearer, even now, about the likely consequences of ripping one of the largest and most profitable drug markets out of the finely-tuned structures of the European Union. Barring a miracle (or a popular revolution), the UK will cease to be a member state at midnight on March 30, 2019, and stands to lose all the rights and privileges that go with that status, including free movement of medicines and ingredients into and out of the other 27 EU members. 

	Nine business associations representing the European and British life sciences industry have just launched a joint cry of alarm about the potential impact on their businesses-and expressed the pious, if delusory, hope that medicines will be made a special case in the talks that are due to start this year on the future relationship between the EU and the UK. John Brennan, secretary general of the European Association for Bioindustries, candidly admitted that “no matter how fast the biotech industry and European drug approval authorities work together, we cannot succeed in adapting all drug approvals and all drug supply lines in time and by March 29th [2019].”

	 Transitional arrangements after March of next year will be critical, industry bodies argued, to allow companies to change their marketing authorizations and supply chains. This would require “close cooperation in the regulation of medicines, including mutual recognition of regulatory activities and quality testing,” and ensuring “that medicines are able to continue to move between both regions.” They also put in a bid for alignment of intellectual property frameworks “in order to avoid uncertainties for industry.”

	A report from OHE Consulting on the implications of the UK exiting the EU’s single market warns that if the UK fails to negotiate continued participation in public health activities or a free trade agreement, medicines safety and crisis response to public health threats and the drug supply chain will be hit in Europe and the UK. The sharing of drug safety and adverse events information could face a five-month delay, and management of crises such as the Zika virus could be at risk. And with 82 million patient packs traveling between the UK and EU each month, drug shortages could arise from the extra administrative burden, customs delays, and tariff measures, says the industry. Vaccines and advanced therapies that use human blood/plasma would face particular obstacles, as these are disproportionately manufactured or imported via the UK.

	 Senior figures lined up to deliver their special pleading. Hubertus Cranz, director general of the Association of the European Self-Medication Industry, urged “an open minded, pragmatic approach.” Mike Thompson, CEO of the Association of the British Pharmaceutical Industry, called for “a cooperation agreement between the UK and the EU on medicines.” Warwick Smith, director general of the British associations of generic and biosimilars manufacturers, wanted “clarity” for the pharma sector. Steve Bates, CEO of the UK BioIndustry Association, demanded that “the complex issues surrounding medicines regulation and supply chain need to be front and center in the second phase of talks.” 

Pharmaceutical Executive-01-01-2018

Changing Skies: Pharm Exec’s 2018 Industry Forecast

Q&A: From Gleevec to CAR-T

Prices and Competition to Shape the Year Ahead

CAR-T Concerns for Continued Success

New Year, Next Steps in Digital Transformation

Food for Thought in Cancer Fight

Parting Arrangements

Country Report: Switzerland

Pharmaceutical Executive, January 2018 Issue (PDF)