Pharma is in a better position to shoot for its digital transformation goal.

In comparison with other sectors—such as retail, hospitality, banking, and media—pharma is still in its infancy as far as the journey to digital transformation goes. There are many reasons, of course, for the industry’s reticence and risk aversion, not least having to advance against a stronger tide of regulatory restrictions. No doubt pharma would have continued to tread cautiously through this digital infancy in 2020 had it not been for COVID-19. As Arda Ural, EY Americas industry markets leader, health sciences and wellness, observes, “For all the terrible things that COVID unleashed, it also offered a real-life experiment to test some of the hypotheses pharma has been thinking about with regard to digital.”

Ural identifies a number of areas where digital took a stronger foothold in the industry last year. First, not surprisingly, is patient engagement. While the use of telehealth has been increasing for the last few years, the pandemic saw a surge in the rate of older patients using telehealth technology. Ural points to an EY-Parthenon Consumer Health Survey (published August 2020) that tracked 1,400 consumers throughout the patient journey that revealed both a stronger desire to self-manage their care and growing tech savviness among the over-65s. “Telehealth’s moment has arrived,” the report’s authors concluded.

 “And that behavior is going to stick,” adds Ural.

The surge in digital engagement is propelling further advances in dealing with patient data. Pascal Bécache, co-founder of Digital Pharma Lab—which helps European biopharma companies to accelerate and integrate innovations provided by selected startups into their business models—told

 that more than half of the projects his company saw in 2020 were concerned with patient data. “Pharma companies really want to understand what is going on with their patients, how their drugs are accepted into the patient pathway, and how the medical professional is administering them,” he explains. “They need this to add further products and services to their portfolios. Digital technology, digital products, and digital metrics will become more and more embedded in pharma companies as we go forward.”

Concerning pharma’s commercialization activities, during the pandemic, companies began to observe that the virtual environment “is actually productive,” says Ural. He notes that not only were there companies who continued to launch products, but also companies launching their first product in this environment. While the one-to-one sales model has long been “in the pharma industry’s DNA”—the introduction of the tablet a decade ago did not fundamentally change that—Ural says that a shift is happening as we now have “a generation of physicians who grew up with video games and who are more open to consuming content through digital means.” He adds that there’s even data to suggest that physicians will be harder to engage in-person going forward. “As with Netflix and Amazon, we consume things on demand as opposed to watching TV and waiting for shows like we used to,” says Ural. “That same phenomenon is translating to pharma providers.”

“We were all very humbled to see a 10-year vaccine development process crushed into 10 months,” says Ural. “That was a science and innovation victory. But it also showed that a new approach to the clinical trial process could work. We saw that patients can be enrolled and monitored remotely and site audits by pharma companies can be done remotely.” A 

 piece by a trio of Imperial College London professors noted in July that the benefits of virtual trials extend to “patient recruitment, engagement, retention, and data collection with favorable effects on trial duration and costs.” While COVID-19 has resulted in “the greatest global disruption to clinical research since the Second World War,” they wrote, “the widespread implementation of virtual trial designs may mitigate some of the significant challenges ahead.”

 In October, Ashley George, co-founder of the Pistoia Alliance, asserted that the use of virtual trials “will surge in the future and could become the 

 standard for clinical studies,” citing a recent poll by the alliance that found more than half (55%) of life science professionals believed a quarter of all trials would go virtual within one year.

“Apparently, the IPO market is immune from the current pandemic,” wrote lawyer Laura Anthony in October 2020. Of the IPOs that have been completed since March, she observed, all priced their deals at the midpoint or higher of their ranges. She added: “The nearly absolute elimination of face-to-face presentations has not impacted deal pricing.” Not only did US tech and pharma IPOs continue unabated in 2020, their frequency increased when compared to other mid-summer years, especially election years. While there was a steep plunge in economic activity in the second quarter, tech and pharma stocks were “trading at historical premiums, pushing domestic indexes even higher,” Anthony explained.

“Dealmakers are acknowledging that they don’t have to go on the road show. Virtual meetings have shown they can present more information to more people and do it faster,” notes Ural. “Now people who’ve never met in their lives sign off on multi-billion dollar transactions. This is another manifestation of the advance of digitalization.”

Unlike some of the sectors that were badly damaged, biopharma emerged relatively unscathed, overall, from the pandemic. The industry thus retains “enough fire power and balance sheet strength to fund its ongoing digitalization,” says Ural. “If the pharma industry can afford digitalization by the ability to deploy capital against massive capital expenditures, I think this is the time to do it,” he adds. An EY survey of 500 US-based, C-suite executives, published in November, reported that 54% of respondents cited digital investment as a top investment priority going forward.

Loren Garruto, EY global and Americas corporate finance leader, strategy and transactions, commented: “Companies are innovating their capital deployment strategies—from reinvesting divestment proceeds to boosting their digital capabilities through M&A, rather than building resources internally—to stay ahead of current market and economic disruption.”

For Ural, the answer to whether pharma companies should buy in extra digital capabilities or build them “is probably somewhere in between.” He explains, “You don’t want to be competing with people whose day job is technology. You want to own your own business strategy and prioritization, but you need to find the right partners to help you with the digitalization journey.”

Whatever path companies take to achieve full digital transformation, Ural says he is optimistic that the industry is finally reaching the inflection point: “The era of the digitalization of pharma has arrived.”

“COVID-19: What patients are saying and how providers should respond,” www.ey.com, Aug. 10, 2020.

Simon Erridge, Azeem Majeed, and Mikael Sodergren, “Virtual trials: looking beyond COVID-19,” blogs.bmj.com, July 6, 2020.

Prof. Ashley George, “Virtual Clinical Trials Post-COVID-19: Collaboration Will Be Key to Success,” appliedclinicaltrialsonline.com, Oct. 6, 2020.

“A COVID IPO: The Virtual Road Show,” prnewswire.com, Oct. 5, 2020.

US executives rethink corporate strategies in anticipation of post-election legislation, regulation and policy changes, ey.com, Nov. 11, 2020.

PAs and NPs have emerged as key stakeholders in patient support.

There’s a reason the term Healthcare Heroes arose during the COVID-19 pandemic. People noticed it wasn’t just physicians rolling up their sleeves to treat those affected by the virus. COVID required all hands on deck, and many healthcare workers’ roles shifted, especially those of advanced practice providers (APPs), which include physician assistants (PAs) and nurse practitioners (NPs). As a result, these dedicated caregivers continue to gain ground as stakeholders in patient support. Now it’s pharma’s turn to recognize their potential.

Currently, APPs can prescribe in all 50 states. In most states, they work under the supervision of a physician though some allow them to practice independently. Due to growing demands on the healthcare system, particularly during COVID, many states granted APPs greater treatment autonomy. The Center for Medicare and Medicaid Services (CMS) also issued a number of waivers last year allowing APPs to handle greater patient management responsibilities.

According to the US Bureau of Labor Statistics, employment of PAs is projected to grow 31% from 2019 to 2029. NPs are in a group that is expected to increase 45% in that same period. The organization ties these numbers in part to states expanding APPs’ practice authority, expanded insurance coverage of PA services, and wider public recognition of NPs as primary care sources.

Part of the push to give APPs more treatment and prescribing authority is due to an anticipated shortage of physicians in the US. The Association of American Medical Colleges estimates a shortfall of between 46,100 and 90,400 physicians by 2025. Meanwhile, the demand for healthcare services continues to increase due to an aging baby-boomer population.

APPs have gained responsibility and are being asked to do more by means of patient care and treatment initiation, yet they are still not targeted for sampling or treatment information. This comeuppance is something the pharma industry should begin to seriously focus on.

“It can be frustrating,” says Richard Zwickel, CEO of POCN, the largest network of NPs and PAs. “We still talk with pharma clients who believe NPs and PAs are a separate audience or who’ve told me that NPs and PAs are not part of their marketing plan for 2021. However, this group is no longer an ancillary group. A target is any APP writing a prescription. We are seeing APPs initiating a significant number of prescriptions.”

Not all prescription data accurately attributes a script to the healthcare professional who wrote it. Sometimes, prescription information can be misleading, as it is attributed to the APPs’ affiliated doctors. But as pharma closely looks at the data, they’ll see that NPs and PAs write more than one billion prescriptions annually, according to POCN in a recent 

“NPs and PAs are the ones who are writing a lot of prescriptions, so making sure that they understand the risks, benefits, and alternatives of those medications is important,” says Sean DeGarmo, director of APRN initiatives at the American Nurses Association (ANA).

Now that APPs have proven they can handle the care load and responsibilities and have instilled confidence in the public, the hope and belief is that the emergency authority they received during COVID will continue.

“We’ve seen a lot of pharmaceutical companies recognize the importance nurses play,” says Carolyn Morgan, president of PRECISIONeffect. “But as we see downward pressure in hospitals and a decline in local community physicians, we’re going to start to see the NPs really step forward. That’s an incredible opportunity and something that has been a long time in the making.”

Though APPs can perform many of the same duties as physicians, their ability to connect with patients is a strong advantage. APPs tend to spend more time with patients, because physicians are simply just too busy. They’re also better trained to engage in patient dialogue and have a more contemporary approach—they are more likely to reach out to patients or caregivers with a text or email.

“We’ve developed an adherence metric, where we feel that the NP or PA is communicating better, which is translating to better adherence as well as better outcomes,” says Zwickel.

As a result of the CMS waivers, many APPs have stepped into telemedicine roles, improving their access to patients and allowing them to interact with more patients in a day than they could normally see. This treatment option may also lead some practitioners to reimagine their work situations, opting for more flexibility and safety through video or phone consults.

“It’s a great opportunity for pharma to come in and be their partner and think through what the next iteration of their career can be,” says Morgan. “There’s so much opportunity when you think about developing that relationship and what that can look like.”

As pharma looks to build long-term relationships with APPs, it needs to invest in the space. PRECISIONeffect suggests using residence programs to communicate with APPs early on and encourages the creation of nurse advisory boards. The American Nurses Credentialing Center, a subsidiary of ANA, has worked collaboratively with medicine and pharmacy on a joint accreditation program, setting standards for organizations that provide team-based education. POCN has built a leadership series to reach its audience at a highly effective local and regional level.

The recent uptick in the consumption of digital information by APPs is not expected to recede any time soon. “We’re going to have to continue online delivery of education,” says Kathy Chappell, senior vice president of accreditation, certification, measurement, and the Institute for Credentialing Research and Quality Management at ANA. “In-person education will come back, but I think we’ll have more hybrid models in the future.”

Social media is one area to watch. It seems APPs are drawn to the organic connections derived from this medium.

“We’ve seen really great results with some of our social campaigns, because they’re not just hearing from our clients,” says Lauren Westberg, EVP and managing director at PRECISIONeffect. “We may be kicking off the conversation, but it’s a conversation between nurses and nurse practitioners and others who are facing similar situations.”

The in-office message is also important. Since NPs and PAs don’t receive much access to pharma during their schooling, companies should take time to explain why their branded product might be better than a more cost-effective option.

“They graduate with a pen and a script, and they go right to work,” says Zwickel. “NPs and PAs used to have to earn their stripes in a clinic, urgent care, or primary care. But now it is not uncommon for APPs to come right out of school and go work in specialties. That’s only going to increase. NPs and PAs need to be better identified based on their patient panel. They need to be understood based on their inferred specialty.”

Quick action on innovation, rethinking trial access and disclosure highlight movement.

According to The Harris Poll, the pharmaceutical industry is at a “once-in-a-generation” inflection point. Currently, the industry sits at a positivity rate of 60% in the eyes of the public, compared to just 32% in January 2020.

 How did this massive jump occur over the course of a global pandemic?

In mid-May, Michael J. Hennessey Jr., President and CEO of MJH Life Sciences, parent company of 

 of pharma CEOs to discuss the industry’s pandemic response. Michael G. Kauffman, MD, PhD, CEO of Karyopharm Therapeutics, highlighted his organization’s testing of its own anti-myeloma drug as a potential COVID-19 therapy. The company’s clinical trial protocol was turned around by 10 different global regulatory bodies in two weeks and was open for patients shortly after. “It really tells you what is possible when most obstacles are eliminated,” said Kauffman. “And this is tenfold faster than we’ve ever done in the past.”

Like Kauffman, Hervé Hoppenot, president and CEO, Incyte, witnessed the industry’s fast-acting ability. Incyte’s RUXCOVID study protocol was prepared, over a weekend with its partner, Novartis, and submitted to FDA the following Monday morning. “The level of urgency was very clear,” said Hoppenot.

A few of the CEOs credited FDA with how the industry has been able to move at such a great pace despite being in the midst of a global health crisis. Clay B. Siegall, PhD, president and CEO of Seattle Genetics Inc., said, “The FDA has been incredibly collaborative,” in reference to his organization’s approvals during the early part of the pandemic in breast cancer and bladder cancer.

At the forefront of the battle against COVID-19, Pfizer and BioNTech’s mRNA-based vaccine candidate, BNT162b2, began development in January 2020. Just 10 months later, the companies became the first to submit a COVID vaccine application to FDA for emergency use in the US. The pair had expected to manufacture 50 million doses of the vaccine before the calendar turned to 2021.

This timeline, along with the others mentioned, are just a few pieces of evidence that encapsulate the pharma industry’s fast-acting approach to innovation when public health is on the line.

While internal collaboration in pharma has made significant strides in the past year, the public’s eye is still focused on the industry more than ever before.

An increased interest in clinical trials has created a greater demand for accurate information, bringing to light the transparency of trial results. Sometimes viewed as a sore spot for the trial industry, the publication of results has never been more important.

 published results from a study on trial results that found there was a lack of disclosure; of 184 sponsor organizations with at least five clinical trials due as of Sept. 25, 2019, 30 companies, universities, or medical centers never met a single deadline.

Under the most up-to-date World Health Organization (WHO) best practices, results from every clinical trial should be uploaded to their respective local registries no later than 12 months after primary or study completion date.

With the public’s need for accurate health information greater than ever in the middle of a pandemic, now could be the time for increased disclosure of clinical study results. Leading vaccine candidate developers, such as Pfizer-BioNTech and Moderna, have been compliant in regard to the publication of trial results. Led by these actions, increased disclosure of trial results across the board would benefit numerous stakeholders, including regulatory authorities, sponsors, healthcare providers, and the public. This could prevent the duplication of research, promote accurate decision-making, and ensure the public has the most up-to-date information on efforts to combat the global health crisis. All are important factors that could save invaluable time in the race against COVID-19.

In addition the publication of trial results, the COVID-19 pandemic has identified another pain point for the industry: low participation in clinical trials. Pre-COVID, studies often required patients to make face-to-face visits at investigative sites and clinics to participate. This created many barriers for patients such as forcing them to miss time at work, creating greater out-of-pocket expenses, and increasing travel.

The industry responded to the pandemic with the accelerated adoption of decentralized trials—only requiring patients to make in-person visits when absolutely necessary, if at all. In a survey conducted by Informa Pharma Intelligence on behalf of Oracle Health Sciences, released in November, 76% of respondents reported that the pandemic sped their adoption of decentralized trials.

 In a trend that appears almost guaranteed to continue post-COVID, the industry could see an uptick in participation in trials with greater ease-of-access for patients.

When 2020 brought a global health crisis to the table, it is difficult to argue that another industry responded as well as pharma. As the calendar now flips to 2021, it will be interesting to see if the industry can continue to “cross the line” with perhaps more innovation—even with a potential end to the pandemic in sight. 

https://theharrispoll.com/pharma-industry-at-a-once-in-a-generation-inflection-point/

https://www.sciencemag.org/news/2020/01/fda-and-nih-let-clinical-trial-sponsors-keep-results-secret-and-break-law

https://jamanetwork.com/journals/jamaoncology/fullarticle/2769129

https://go.oracle.com/researchacceleratedtrials?elqCampaignId=257896

Real progress sought in efforts to address study underrepresentation.

Running clinical trials that include a diverse population reflective of the people who will eventually take the medicine seems like a no-brainer. But for years, stakeholders haven’t prioritized enrolling a heterogeneous group of participants in studies. Though the issue has been bubbling for years, the combination of COVID and racial concerns in 2020 brought the matter to a boiling point, and 2021 will be an important year for change.

One of the most public moves made by pharma in this area was when Moderna slowed down trials of its COVID vaccine in September specifically to enroll more minorities. According to news reports, CEO Stephane Bancel explained it was an effort by the company to be more representative of the nation’s demographic breakdown. According to the company, 37% of the study’s population is now from minority communities, including more than 6,000 Latinos and 3,000 Blacks.

“The US population is growing increasingly diverse, and ensuring meaningful representation of racial and ethnic minorities in clinical trials for regulated medical products is fundamental not only to the FDA’s regulatory mission but also public health,” says RADM Richardae Araojo, PharmD, MS, associate commissioner for Minority Health and director of the Office of Minority Health and Health Equity at FDA. “The FDA continues to work to increase the participation of racial and ethnic minorities and other diverse populations in clinical trials that test new medical products through hosting public meetings, developing tools, and issuing guidance documents.”

There are many factors contributing to why minority groups have been underrepresented in clinical trials. A lack of trust borne out of past historical abuses is one. The unethical Tuskegee Study, in which Blacks were misled into thinking they were receiving free healthcare to treat their syphilis, created long-term skepticism in healthcare and the government. A number of other experiments also led to systemic distrust. (See our Executive Profile 

Other barriers can vary based on the population companies are seeking to enroll. This might include differences in language, culture, religion, or age. A lack of awareness and knowledge about what a clinical trial is and what it means to participate is also a concern. When potential subjects are handed a consent detailing the purpose of the research, associated risks, and potential benefits, they might not be able to comprehend the complex medical jargon.

“Low health literacy predicts poor health,” says Alekhya Pochiraju, an industry expert in clinical trial execution and a proponent of clinical trial diversity. “A lack of awareness and education about clinical trials as a safe option could lead to not knowing available treatment options or the possibility for clinical trial enrollment.”

Trial design also plays an important role in reaching a target group. Inadequate recruitment and retention efforts, accessibility to the site location, frequency of study visits, time and resource constraints for patients, transportation, and participation may conflict with caregiver or family responsibilities, and may cause time away from jobs and other commitments.

“Designing trials will require keeping disease burden in mind, as certain diseases have high disease burden among specific racial-ethnic cohorts,” says Pochiraju. “This calls for examining clinical trial design through a patient-centric approach.”

The pharma industry, federal partners, medical professionals, health advocates, and other stakeholders all have a shared interest in advancing diverse participation in clinical trials as it helps researchers find improved treatments and methods to fight illness. It also helps to uncover sex, race, and ethnicity differences that may be important for the safe and effective use of a product.

In support of FDA’s efforts to advance diverse participation, the FDA Office of Minority Health and Health Equity developed the Diversity in Clinical Trials Initiative. This includes an ongoing multimedia public education and outreach campaign to help address some of the barriers preventing diverse groups from participating in clinical trials.

Articles

Features

With a complicated and challenging global picture greeting the new year, driven by the continuing pandemic and historic political and regulatory changes in the US and Europe, we outline eight diverse trends critical to biopharma’s future health and growth.

2021 in Focus: Pharm Exec’s Annual Industry Outlook

Experience suggests that value propositions in the pharmaceutical industry consist of two core elements: price on the one hand; clinical benefit on the other. Price is tied to clinical benefit. I will often conduct market research for manufacturers where the client wants insight into how payers view the value proposition of their Phase II or Phase III assets. Payers can’t address that question, however, because with the agent not on the market, there is no price. Where there is no price, there is no value proposition.

Examples of pharma value propositions might be: this statin has the lowest cost per percent LDL reduction compared to competitors; or this heart failure drug reduces hospital admissions at a lower cost than competitors; or, at the same cost for the same cancer, this treatment demonstrated 5% more patients achieving two-year progression-free survival than its competitor.

One theme developed in the discussion ahead is that with treatments for orphan diseases and rare cancers there is no competition and, by extension, no basis for making value proposition comparisons. In these situations, a vacuum exists. How that vacuum gets filled can impact the market for future breakthrough treatments.

A second theme is that for the growing percentage of breakthrough treatments for small populations at disproportionately high prices, clinical benefit is likely to be partial, with uncertain durability. Consequently, the task for manufacturers will be to develop a value story where value is inherently problematic, and a benefit story where benefit is inherently uncertain.

Both themes speak to challenges the pharmaceutical industry will need to contend with as transformative developments in biopharma advance the standard of care (SOC) for conditions where there is little hope for a favorable outcome. Both themes are also implicated in how payers can be expected to manage the health insurance dollar on which the pharmaceutical industry depends.

The first-half of this discussion provides a framework for understanding pure types of payer value propositions. The second-half makes the case that a new frontier in medical science, led by gene and cell therapy, is still in its infancy and not advanced enough for value proposition development.

The combination of extreme pricing and a value proposition vacuum has the potential to create a legitimacy crisis for the industry. To fill that vacuum, it is suggested that manufacturers build legitimacy into commercialization. Toward that end, a series of action steps are recommended in the conclusion.

Value propositions for pharmaceutical brands are multi-layered and diverse. Where the spotlight shines, and what the decisive message is, can vary considerably. A strong value proposition for diabetes where there are multiple treatment options will differ from a strong value proposition for a rare cancer where there are few options. Unpacking the maze of variables produces a clearer understanding of the different types of value propositions and the shifting contours of value itself.

The suggestion here is that value propositions are created from two angles: composition and driving force. Composition of a value proposition is perhaps best understood as a continuum that starts with efficacy and ends with cost. In between are safety, tolerability, dosing, and route of administration.

Two axioms in the payer space leave their imprint on the continuum between efficacy and cost. First, payers don’t pay for convenience, minimizing the value of attractive dosing and administration. Second, decisions on safety and tolerability are considered the purview of physicians, minimizing judgements about the value payers attribute to these factors. Consequently, from a composition standpoint, there appears to be an underlying rule that payer perception of value will turn on how they weigh efficacy versus cost.

How does the weight of efficacy versus cost get sorted out?Based on my experience conducting pharmaceutical industry market research, it typically revolves around two foundational elements, unmet need and SOC, and gets shaped by how the interaction of those elements position efficacy and cost.

Unmet need covers a range from comparable treatment options available to no other option with life and death in the balance.

SOC covers a range from minimal new gain in efficacy to a clinically significant gain, reflected in valued outcomes.

The matrix illustrated in Figure 1 below describes the interaction between unmet need and SOC governing the priority given to efficacy and cost in payer value propositions. Off to the side, it pictures a new frontier in medical science, discussed further ahead.

Looking at the left side of the Figure 1 matrix, when comparable treatment options are available, competitive conditions force manufacturers to elevate cost over efficacy. This behavior applies not only when a drug’s efficacy does not exceed SOC, but when efficacy does and produces a clinically significant improvement in outcomes.

Reformulated products—line extensions based on the same chemical entity—are perhaps the best example of efficacy not advancing SOC: a drug taken two times a day reformulated for once a day; or a drug administered once a day by self-injection reformulated for once a week. Regardless of improved convenience, the payer value proposition is cost-driven.

Even when conditions are life-threatening and a novel reformulation gives patients valuable new convenience, manufacturers are still forced to have cost drive its value proposition. The introduction of Ultomiris as second-generation replacement for Soliris illustrates this.

Soliris and Ultomiris are both approved to treat paroxysmal nocturnal hemoglobinuria, a rare and life-threatening blood disease. Knowing that a biosimilar for Soliris was in the pipeline, the manufacturer developed a PEGylated version of the original chemical entity, giving it a longer half-life. The latter extended the time between infusions, allowing patients to switch from every two weeks to every eight weeks. Nevertheless, it also determined that to avoid payers adopting a “Soliris-first” policy that would grow share for conversion to a future biosimilar, Ultomiris’ value proposition had to be cost-driven. This was reflected in pricing its maintenance dose roughly 10% below Soliris.

 Moving up the Y axis, even with efficacy exceeding SOC and achieving a clinically significant improvement in outcomes, cost continues to prevail in the pharma value proposition. Direct-acting antivirals, widely seen as having revolutionized hepatitis C treatment, is a case in point.

Harvoni was the first in the therapeutic class to secure regulatory approval and, despite its extremely high price, quickly gained traction. Harvoni’s approval was followed two months later by Viekira Pak. While comparable from an indication standpoint, for multiple reasons, the market viewed Harvoni more favorably.

Significantly, however, a prominent payer moved quickly to contract with the lower-cost Viekira Pak, excluding Harvonifrom formulary. During that period, other payers signaled they would act similarly. Harvoni’s manufacturer saw first-hand the consequences of subordinating cost in its value proposition. Within months, Harvoni reversed value proposition priorities and went on to enjoy considerable success.

Unmet need: No other option with life and death in the balance

The relationship between cost and efficacy in the payer value proposition flips when unmet need shifts to no other treatment option with life and death in the balance. Under these conditions, competition does not exist. Here, the two boxes on the right in the Figure 1 matrix come into play.

Where unmet need is anywhere near having life and death consequences and the outcome is limited perhaps to a biomarker score with no other treatment option, efficacy supersedes cost in the value proposition. An example would be enzyme replacement for Gaucher disease. A senior clinical pharmacist in a market research study explained the logic this way:

“There is no true outcome from replacing the enzyme. It is a biomarker-based outcome. It’s not, ‘You were deficient. Now you have the enzyme and you’re reversing the symptoms that came from the enzyme not being there.’ Biomarker-based outcomes are not especially attractive to health plans, but often they are the only thing available for a disease. With ultra-orphan conditions where there’s nothing else, you pay hundreds of thousands of dollars because patients have no other option.”

The operative principle is that even with limited benefit and cost to the extreme, if there is no other option, payers defer to the efficacy available. Introduce competition, and if the incumbent does not switch priorities in its value proposition, payers have the option of switching the product they cover. Action along these lines will likely escalate as biosimilar competition emerges.

 With one exception, Scenario C is the same as this one—the exception being that treatment achieves a clinically significant improvement in outcomes and advances SOC. In both cases, absence of competition enables efficacy to trump cost in the value proposition. Where payers see incongruence between extreme pricing and benefit in Scenario C, extreme pricing registers differently in Scenario D.

Gleevec, first to market in the tyrosine kinase inhibitor class, is an older example of a novel cancer product that made a huge contribution to advancing SOC. More recently, Trikafta, a triple-combination therapy that helps a defective protein work more effectively in the treatment of cystic fibrosis, is a second example. Both agents can be considered breakthroughs and the efficacy each introduced allowed them to secure optimal access despite extreme pricing.

Once comparable options emerge, however, competition can take hold and efficacy is no longer the defining factor in the value proposition. As one respondent in a market research study put it when describing contracting opportunities in the oncology space: “An ideal situation is where there are multiple agents to treat the same indication with a similar mechanism of action. So PARP inhibitors for ovarian cancer and the CD4/6 inhibitors for breast cancer come to mind.”

The impact of this structural dynamic in Scenario D appears likely to grow along two different paths. First, products enjoying market autonomy can expect to eventually face competition, prompting the need to adapt their value proposition accordingly.

As shown by the arrow pointing left in Figure 1 above, many breakthrough products facing competition could be forced to transition from the efficacy leverage they enjoyed under Scenario D to the cost leverage payers enjoy under Scenario B. Under these circumstances, contracting becomes a key function for incumbent brands.

The second path flowing out of Scenario D represents an entirely new scenario driven by the emergence of a new frontier in medical science. Gene and cell therapies operate on this second path. Unlike the first path, because of the complexities involved and the science being in its infancy, consensus standards that gauge the advance in SOC are early in their evolution.

In addition, many of the disease states gene and cell therapies target are associated with little or no hope. It is here where we can expect to see the decline of the pharma value proposition.

The discussion so far assumes pharma R&D will continue to generate breakthroughs that start with efficacy-driven value propositions, face competition, and pivot to cost-driven value propositions. Where the market can anticipate a decline in pharma value propositions flows from a slice of R&D that generates products distinguished by a unique set of factors carving out a new frontier in biopharma science. These factors are noted in Figure 2 below.

The decline of the pharma value proposition is driven by a new frontier in medical science where efficacy introduced is inherently variable and price exceedingly expensive.

For breakthrough treatments emanating from this new frontier, there can’t be an efficacy-driven value proposition because the science is still in its infancy. And there can’t be a cost-driven value proposition because there is no competition. The combination of these two factors creates a vacuum for how to view the balance between efficacy and cost. How that vacuum is filled could have a major impact on investment capital for R&D focused narrowly on transformational gains in medical science.

One way to fill the value proposition vacuum is through cost-effectiveness—developing a dollar amount for cost per quality-adjusted life year (QALY) gained and cost per life year gained (LYG), then, drawing comparisons to determine whether treatment meets “a reasonable cost-effectiveness threshold.”

Cost-effectiveness analysis is well-established, sophisticated, and has sought to accommodate the human element in evaluating treatment prices for rare, life-threatening diseases.

The difficulty with cost-effectiveness is that the new frontier of gene and cell therapies and other transformational treatments are not ready for mature economics. At various stages in their lifecycle, the underlying economics will shift. Early on, though, there is no equilibrium between cost, price, efficacy, and market share. Just as the science is new, the economics is as well.

What results is extreme pricing for rare diseases in super small markets. The problem for payers is the potential for a budget crisis. The problem for manufacturers is the potential for a legitimacy crisis.

Until the new frontier of biopharma science begins to mature, the pharmaceutical industry will face growing questions about its legitimacy as a profit-making enterprise serving the public good.

The suggestion here is that if legitimacy is built into commercialization of breakthrough treatments early in their lifecycle, the industry will produce greater trust in its pricing.

The points noted in Table 1, found on the left, offer a multi-level framework for pharma to incorporate legitimacy into commercialization. Most of these points already exist in current practice. By building legitimacy into commercialization, manufacturers marry the idealism they bring to scientific discovery with value-driven standards they bring to business.

Rather than ceding the value proposition vacuum to cost effectiveness, legitimacy should fill that space instead. Better for biopharma pricing to establish legitimacy before cost-effectiveness shapes coverage and reimbursement. Better for an industry predicated on deploying capital at high risk to treat extremely complex diseases; and better for patients needing still-to-be developed miracles.

2019 payer interview. PARB inhibitor brands are: Lynparza, Rubraca, Talzenna, and Zejula. CD4/6 inhibitor brands are: Ibrance, Kisqali, and Verzenio. Also, Zytiga and Xtandi (prostate cancer space) represent another example of competing cancer agents noted for having to contract to ensure market access.Instructive here is that while they share the same indication, payers will contract with one and disadvantage the other despite each having a different mechanism of action (Xtandi – androgen receptor inhibitor; Zytiga – CYP17 inhibitor).

See, for example, “What are some of the challenges gene and cell therapies face?” From the American Society of Gene & Cell Therapy, 

https://www.asgct.org/education/more-resources/gene-and-cell-therapy-faqs

See, for example, executive summary p 40:​ 

http://icerorg.wpengine.com/wp-content/uploads/2020/10/ICER_SMA_Final_Evidence_Report_110220.pdf

A 2019 Gallup Poll measured how Americans viewed 25 industries. In that poll, the pharmaceutical industry scored last, well below the airline industry; 

https://news.gallup.com/poll/266060/big-pharma-sinks-bottom-industry-rankings.aspx

. While the public’s view of pharma has improved due to the quest for vaccines and treatment for COVID-19, a Gallup poll conducted between July 30 and Aug. 12, 2020 has the pharma industry next to last, ranking only above the federal government; 

https://news.gallup.com/poll/319256/farming-rises-sports-tumbles-industry-ratings.aspx

President, Stellar Managed Care Consulting

How biopharma manufacturers can address extreme pricing of novel rare disease medicines and build legitimacy into commercialization to avoid  an industrywide crisis.

‘Breakthrough’ Balancing Act: The Decline of the Value Proposition

The Advisory Committee on Immunization Policy (ACIP) to the US Centers for Disease Control (CDC) knew it. Data from multiple sources showed it. Mitigation of the global pandemic will require “high coverage” with COVID-19 vaccines driven by a well-orchestrated public health response that educates the public on their safety and efficacy and eradicates vaccine hesitancy.

Data suggest that physician prescribers are just as hesitant as patients when it comes to COVID-19 vaccine safety, distribution, logistics, and rollouts. Data sourced by InCrowd from Oct. 22–26, 2020 show that just half of US infectious disease specialists feel highly confident in prescribing an FDA-approved COVID-19 vaccine. With these physicians estimating that 40% of their patients will be vaccine-hesitant, findings suggest physicians are only slightly more confident in the vaccines than patients.

ID specialists, at the time of the study, also had little faith in governmental entities and their approach to the pandemic. Just one-quarter of respondents feel confident in Federal policies about vaccine rollout (21%), vaccine distribution, and logistics (22%), and vaccine safety (26%). Few respondents feel better about state and local government efforts. Only one-third feel confident in local and state policies about vaccine rollout (32%), vaccine distribution and logistics (35%), and vaccine safety (36%).

Primary care physicians (PCPs), pediatricians, and emergency medicine/critical care doctors on the front lines of treating COVID-19 share similar concerns and have throughout the pandemic. In data sourced Sept. 6–9, 2020, 53% of frontline treaters said they felt confident in prescribing a COVID-19 vaccine. As the pandemic evolved, these physicians have given increasingly lower marks to governmental preparedness. By June, only 13% of frontline treaters said they had confidence in the US government’s preparedness for handling the COVID-19 crisis, down from a starting level of 35% in January 2020.

In a seven-nation global study of PCPs by SurveyHealthcareGlobus (SHG) on Sept. 5–9, 2020, US PCPs had the lowest confidence in government policies about vaccine safety and vaccine rollout, with less than a third expressing confidence. In contrast, German confidence levels ranked 21% to 25% higher.

Left unmitigated, prescriber hesitancy represents “a risk for overall vaccine confidence,” as the ACIP said in its “Vaccinate with Confidence” framework,

 shared in a CDC forum in late October. The program outlined a national strategy in part to “build trust in the vaccine, the vaccinator, and the system.”

The trust-building is urgently needed. Just 63% of healthcare workers expect to obtain a vaccine themselves, according to a CDC survey presented in a late November ACIP meeting. Yet infectious disease physicians in InCrowd’s October 2020 survey estimated that, on average, 71% of the US population will need to be inoculated in order to achieve herd immunity. The sizable eight-point gap between the herd immunity target and the plans of the healthcare community itself highlights the challenge.

Exactly how prescriber hesitancy translates to prescriber behavior in recommending the vaccine for patients and their own vaccination plans is not fully clear. Yet physicians’ verbatim remarks highlight the need for data on safety and efficacy, in the face of a vaccine development effort that compressed a typically multi-year process into less than a year, among other factors.

“They have to be proven safe and gone through the full vetting process in order to make the public believe the vaccine is safe,” cautioned an ID specialist from PA.

“I personally would not be able to push as hard [for the COVID vaccine] as I would for the flu, due to the lack of data,” said an ID specialist from TX.

As early vaccine trial data has been positive, forthcoming reports may bring data that reflect a brightened outlook. Yet as rising incidence and mortality rates in the US highlights what’s at stake, heeding the voice of the prescriber community will be essential to moving from talk and planning about a COVID-19 vaccination program, toward an effective, life-saving response.

https://www.cdc.gov/vaccines/acip/meetings/downloads/slides-2020-10/COVID-Cohn.pdf

CEO of Apollo Intelligence, parent company of InCrowd and SurveyHealthcareGlobus

Back Page

Data suggests physicians just as hesitant as patients, but recent successes could turn the tide.

Prescriber Hesitancy on COVID Vaccines

One of several industry predictions made at the end of last year by Lloyd Adams, managing director of global IT company SAP, was that pharma would become increasingly “comfortable” with the cloud. Until just a couple of years ago, there was significant concern within pharma about the security risks associated with cloud-based solutions. For example, noted Adams, companies such as Bristol Myers Squibb “were very anti-cloud and concerned about enterprise resource planning (ERP) outside secure server walls.” Today, however, BMS “has moved everything to the cloud, as solutions have become more secure and as companies need remote access to real-time data to stay competitive.”

Agreements announced during 2020 indicated that much of big pharma reflects BMS’s improved confidence in cloud technology. In February, Pfizer joined with clinical analytics company Saama Technologies to develop an AI-powered solution to reduce its clinical study challenges. Pfizer’s Demetris Zambas said that, historically, pharma has been “limited to manual, inefficient data review processes to validate data from our clinical trials.” By using Saama’s Life Science Analytics Cloud (LSAC) platform to aggregate, analyze, model, and predict clinical data queries, Pfizer was looking to improve processes and experiences for its clinical research partners.

In March, GlaxoSmithKline said it was standardizing how it engages online with consumers and HCPs through a cloud-based platform. 

 reported that the drugmaker had signed a contract with Infosys to create a shared service, Global Digital Services (GDS). Recognizing that its customers and suppliers increasingly communicate online, GSK is looking to GDS to provide globally standard processes and advanced analytics to support “more efficient engagement with these external audiences.”

June saw Sanofi report that it was collaborating with Google on a virtual innovation lab. The companies said they intend to tap into “emerging data technologies” to help Sanofi transform its healthcare services; part of the agreement involved Sanofi migrating some key applications to Google Cloud. In October, both Roche and AstraZeneca announced they had selected cloud-based solutions from Veeva Systems. Roche said it will use Veeva Development Cloud applications to streamline clinical, regulatory, and quality processes. AZ also opted to combine quality management and content on a single cloud platform.

October also saw a new five-year strategic agreement between Takeda, Accenture, and Amazon Web Services (AWS). The collaboration aims to modernize Takeda’s platforms, accelerate its data services, establish an internal engine for innovation, and equip Takeda’s employees with new skills. Takeda president and CEO Christophe Weber laid out a bold vision: “[In] less than 10 years, every Takeda employee will be empowered by an AI assistant to help make better decisions, enabling us to deliver transformative therapies and better experiences to patients, physicians, and payers faster than previously possible,” he said. By moving 80% of its applications to the cloud, Takeda will remove non-differentiating technology, reduce its internal data center footprint, and decrease capital expenditures.

Mrunal Chokshi observed in December that cloud technology had finally “piqued the sector’s interest,” noting that 65% of healthcare companies intend to grow their investment into cloud computing within the next 12–18 months (

, December 2). When the cloud’s “computational might” is combined with AI, it better facilitates the application of AI’s data-analysis insights, he explained. It fosters better collaboration of R&D teams, enabling them to work together from anywhere in the world. And when big data and AI are “fortified” with cloud computing, their power can realize the potential of genomics.

While SAP’s Adams says pharma is becoming more comfortable with the cloud, Chokshi says it is a necessity for any company that wants “to flourish in the current environment.” Many firms showed in 2020 that they are getting on board with this technology. Those who are still not sure about taking the leap may need to step a little outside their comfort zones.

is Pharm Exec’s European and Online Editor. He can be reached at

Technology

Industry’s tardy shift to cloud-based solutions looks set to gather pace in 2021.

More Cloud on the Horizon for Pharma

There are many ways that 2021 can be better than 2020, and biopharma will play a critical role making it so.This year will be better if we can extend recent spectacular R&D accomplishments into a successful global deployment of vaccines, diagnostics, and therapeutics to control the pandemic. This year will be better if innovative corporate and public-private collaborations can mature into sustainable business models bolstering our social license to operate. This year will be better if biopharma companies can accelerate implementation of their environmental and social impact goals by integrating them into core business strategy.

As the New Year starts, I hope biopharma executives and board members will resolve to step up their sustainability game as they pursue these objectives, addressing them as an integral part of their value creation strategy. Achieving them will require long-term vision and wide perspective to identify opportunities as well as risks, and to navigate through the chop. What are the governance challenges ahead?

Governance is a foundational requirement for every company.From a biopharma business and investor perspective, high priority sustainability governance topics include the board’s environmental, social, and governance (ESG) oversight process, the process and structure of ESG management and communications, and reflecting ESG performance in executive pay. These priorities are from the 

Biopharma Investor ESG Communications Guidance

, published last April by the Biopharma Sustainability Roundtable (BSRT) after a two-year collaborative development. Diversity and inclusion are also rising priorities for 2021, both within companies, and in trial design, commercial and access programs, and board composition.

Complicating matters, as I’ve discussed here before, there’s a wave of ESG-related regulation and disclosure requirements in development, including near-term efforts to facilitate pandemic response, and longer-term changes to drive the UN sustainable development goals (SDGs). Both will deeply affect biopharma companies, and addressing them demands an active reassessment of older ESG governance models.

The coming year will also put a spotlight on board-level oversight, communications, and accountability for ESG performance. High Meadows Institute, a think tank and policy institute focused on strengthening the role of business leadership in creating a sustainable society, observed recently that “all the leading ESG standards and frameworks reviewed have clear expectations for boards to oversee ESG issues ...,” and “the world’s largest investors expect corporate boards to pay attention to ESG issues and many have issued board-specific guidance ….” This is an important convergence among leading sustainability frameworks and standards—including the Global Reporting Initiative (GRI), World Economic Forum, Task Force on Climate-related Disclosures, Principles for Responsible Investment, and the Sustainability Accounting Standards Board (SASB)—and key biopharma sector investors, including BlackRock, State Street, and Vanguard. If ESG disclosures are streamlined and comparability improved, a company’s ESG score may ultimately become as fundamental as its credit rating.

Convergence of sustainability-related expectations is also driving collaboration and consolidation among framework and standards organizations. Last September, GRI, the International Integrated Reporting Council, SASB, the Carbon Disclosure Project, and the Climate Disclosure Standards Board announced their collaboration on a comprehensive sustainability reporting model to complement the generally accepted accounting principles for financial reporting.

The International Financial Reporting Standards Foundation went further, starting a consultation process aimed at an overarching global Sustainability Standards Board. They hope to simplify the disclosure landscape (eventually), creating a “comprehensive corporate reporting” model going beyond financial and material ESG topics to include significant future positive or negative impacts on people, the environment, and the economy.

In sum, a multilayered sustainability strategy and governance challenge is facing biopharma in the coming year, as we seek to achieve a successful global pandemic response, institutionalize new collaborative business models, and make progress on the UN SDGs. Many companies have started re-examining their ESG strategies and governance processes, and several have recently appointed new ESG leadership as they move towards more comprehensive corporate performance models.

Director, Meridian Management Consultants, and Co-Founder of the Biopharma Sustainability Roundtable. He can be reached at

Sustainability

Biopharma sustainability resolutions for a better 2021.

A New Year for Sustainable Governance

Ted W. Love, MD, loves a good story. Whether the president and CEO of Global Blood Therapeutics (GBT) is sharing an anecdote to make a point or simply explaining something, he knows how to connect with people. This not only makes Love a well-liked leader and colleague but helps him reach out to patients suffering from sickle cell disease (SCD), an inherited blood disorder that affects nearly 8% of African Americans, and people of Latino, Middle Eastern, and South Asian descent. By taking the time to understand the unique journey of individuals impacted by SCD, Love creates trust that translates into hope.

Love’s empathetic side has been strengthened throughout his years in pharma, but it’s nothing new. Even in his youth, he picked up on the injustices of the world and wanted to be part of the solution. When he reached a point where he could make a difference, he felt a social responsibility to do so—even if it meant coming out of retirement to lead the GBT fight against SCD.

As a child growing up in Alabama, Love watched his parents struggle. He saw his father, who probably made less than $10,000 a year, wake up every morning and drive 30 miles to an uninspiring job because he had to put food on the table. He also witnessed his father getting pulled over by a policeman without clear cause and talked to condescendingly. Though Love didn’t fully understand the challenges his family faced as a youngster, he easily recognizes them today.

“I watched my parents go through all of this,” says Love. “I never went to work with my dad, but I can guarantee you, a Black man with a fourth-grade education working in [an Army storage facility] is experiencing a lot of discrimination and a lot of condescension.”

As a student at Haverford College outside Philadelphia, Love recalls thinking about that situation with tears in his eyes. “I thought to myself, I’m really going to try to be in a position where I have a job and am excited to be there,” he says. “I’m not going there just to put food on the table. I want to be excited to be there because of what we’re doing and the role that I can play in doing it. That was part of me becoming a physician.”

After earning his BA in molecular biology at Haverford, Love attended medical school at Yale University, followed by postgraduate training at Harvard University and Massachusetts General Hospital. He subsequently joined the faculty at Harvard before considering a transition to industry.

Love’s first invitation to pharma was when his mentor at Harvard was recruited by Bristol Myers Squibb and asked him to join. Though he turned down that opportunity and another from Merck, Love ultimately signed on with Genentech.

“I thought a lot about the best environment for me to learn and explore a new industry. Ultimately, I went to Genentech because I believed an intimate and small team led by experienced leaders was the best environment for me to start in,” says Love. “I learned pretty quickly and had quite a lot of success.”

Despite his accomplishments, Love looks at his career path with humility and knows the importance of being prepared from his days as a “very cocky medical student.” So in order to best prepare himself for a bigger role in pharma, Love left Genentech for the upstart environment of Advanced Medicine (now Theravance). There he strengthened his skills and learned how to build a company from scratch, including how to assemble a board and management team, and how to raise money.

When the opportunity to become CEO of Hyseq arose, he jumped at the chance to further enrich his leadership skills by working alongside biotech trailblazer George Rathmann, founding CEO of Amgen.

“I felt like learning how to be a CEO from arguably one of the best CEOs ever would be a great training ground,” says Love. “I didn’t think the company was very good, but I said with a great leader, a great mentor, who knows, maybe we’ll turn it around.”

Hyseq nearly collapsed and reorganized as Nuvelo, but one thing Love learned from Rathmann during the most difficult moments was to ride out the highs and lows.

“He told me you shouldn’t get too low when things are tough because they will get better,” says Love. “But by the same token, when things are going great, don’t get full of yourself, because they’re going to get tough again. You’ve got to stay level and you’ve got to lead from a place of perspective for the future rather than the moment. I thought that was very good advice.”

When Love moved on from Nuvelo, he became head of R&D for Onyx Pharmaceuticals, then eventually decided to focus on his work as a board member for various pharma companies.

“GBT came about after I’d retired,” says Love. “But it was impossible for me to turn down because of the sickle cell mission, because of all of the historical disparities in sickle cell disease—extensions of the broader inequities that Black and other patients of color experience in the US healthcare system. As an African American, these things were very personal to me.”

Though SCD is not in his family, Love developed a connection with these patients as a medical student at Yale. Most people don’t realize that SCD causes significant complications including severe pain that is unmeasurable. As a med student, Love experienced the stigma associated with SCD. He would see many poor, young African Americans come in for treatment and hear people quickly judge them as drug seekers.

“These patients, as terrible as their situation is, routinely shower, dress up, put on makeup before they go to the hospital, because they know they’re going to encounter all this stigma,” says Love. “It just didn’t feel right, and I knew it wasn’t right, but I couldn’t do anything about it. I was a young medical student with little decision-making authority.”

This bias is something SCD patients deal with their whole lives, and Love has seen them highly stigmatized throughout his career. Thus, when the opportunity to work to develop novel therapies for SCD presented itself, Love jumped at the chance to make an impact for patients.

“We really hadn’t done anything in SCD of the nature that was getting done in CF (cystic fibrosis),” says Love. “GBT wanted to bring that kind of scientific integrity, that kind of sophistication to try to solve this problem. That, to me, was exciting intellectually. But it was also exciting emotionally, to try to help people that were so desperately in need of help.”

Love realizes the confluence of SCD, health disparities, and racial injustice is a problem that won’t be easily fixed as it is so ingrained in society. What he believes can be done to better the situation is to transform the disease through innovation, as has been done with HIV and CF.

“If we could make the disease essentially inactive, then we could get in front of it, and people won’t be going to hospital with pain episodes or organ damage,” says Love. “I actually think we’re going to get there. Oxbryta is a very big step in that direction.”

Deeply shaped by the experiences of his parents and an early charge to help drive social change, Global Blood Therapeutics’ Ted Love comes at sickle cell disease from a place of caring and urges pharma to follow suit to bring justice to all.

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