In this, the first issue of our third year of publication, you’ll note that we’ve added some new names to our stable of writers. Laura Goldman, based in Jerusalem, reports on a conference there organised by former ‘junk bond billionaire’ Michael Milken and his plans to revolutionise healthcare research; and Julie Stauffer offers some tips on dealing with the media. Our own Steve Handley (see HOC People) writes about determining economic value... and regular contributor Mary Gabb has an interesting take on how big pharma can develop new business models in light of changes – dare one say upheaval – in the industry. Our featured HOC People are new additions to the Rx team: Steve Handley and Duncan Dibble.
As always, we welcome your thoughts on this and future issues. All the best for 2008!
David Woods
“Common sense is the best distributed commodity in the world, for every man is
convinced that he is well supplied with it”
Rene Descartes (1596–1650) French philosopher
Is big pharma becoming big biotech?
By Mary Gabb (mary.gabb@rxcomms.com)
Recent reports in the Wall Street Journal and The Economist describe an imminent seismic shift in business models for pharmaceutical companies, as current blockbuster drugs are set to go off-patent and a rapidly dwindling pipeline of new drugs are under development or are being reviewed for approval. The result? Big Pharma may become Big Biotech (or Big Biopharma, as it now refers to itself) as the focus shifts to protein-based biotech products from chemical-based pharma products.
Pfizer, Inc. recently announced the closure of its Ann Arbor, Michigan (USA) laboratories, laying off 2100 employees. Pfizer also announced it will eliminate 10,000 jobs by the end of 2008. But they are not alone. In 2007, Astra-Zeneca reduced employee counts by 7600 and Bristol-Myers Squibb by 4350. Other big pharma companies have reduced their workforces in recent years as well.
Pharma companies appear to be shifting business models, from chemistry-based research for new drugs, to biologics-based research for new treatments using biotechnology. In fact, Pfizer opened a new biologics center in San Francisco in October 2007, and many of the major drug companies have acquired biotechnology companies in the last two years (see table).
Highlights of recent biotech acquisitions by pharma companies
| Pharma company | Biotech firm taken over | Date announced |
| Roche | Ventana Medical Systems | June 2007 |
| Pfizer, Inc. |
Coley Pharmaceutical Group | November 2007 |
| Astra-Zeneca PLC | MedImmune | April 2007 |
| Merck & Co. | Sirna Therapeutics | December 2006 |
| Bristol-Myers Squibb | Adnexus Therapeutics | September 2007 |
In addition, both Wyeth and Eli-Lilly have entered into collaboration agreements with biotechnology companies.
Why such a dramatic shift? More than three dozen drugs will lose patent protection over the next four years. Moreover, the WSJ reports that 43% fewer new chemical-based drugs have been brought to market between 2002 and 2006 compared with the 1990s, despite more than doubling the R&D spending.
This paucity of potential blockbuster drugs, along with advances in diagnostics and data technology (high through-put gene sequencing, genomics, and personal phenotyping), and changes in regulatory processes (particularly at the US Food and Drug Administration), have provided an opportunity for biotechnology to emerge, filling in the healthcare gaps where pharma has been unsuccessful or neglected, namely more acute diseases or those that specific sectors of the population.
How will this affect health economists? As noted by The Economist, cost-benefit analyses will become even more crucial as health care payers consider the long-term benefits of innovative (and expensive) new biologic agents. Consider the decision by Britain’s National Institute for Health and Clinical Excellence to approve the use of Hercepin, a targeted cancer drug with a cost of nearly $50,000 per year, per patient.
Related articles
| The Economist | Beyond the blockbuster: drug firms are rethinking their business model (28 Jun 2007) Beyond the pill: drug firms are casting about for new business models (25 Oct 2007) |
| The Wall Street Journal | Big pharma faces grim prognosis (6 Dec 2007) Paradigm lost: as drug industry struggles, chemists face layoff wave (11 Dec 2007) |
“When angry, count ten before you speak; if very angry, count to one hundred”
Thomas Jefferson (1743-1826). Third American president
HOC people – meet the team
Rx Communications has expanded its team as the company continues to grow and thrive. To be a successful Rx team member, you need a sense of humour and a certain ‘je ne sais quoi’ often referred to as ‘Rx-ness’, as well as the relevant skills, aptitude and professionalism. Oozing with Rx-ness are new team members Steve Handley, head of global business development, and Duncan Dibble, marketing manager. You may have come across them at last year’s ISPOR European Congress in Dublin – if you didn’t then fear not, as they will be present at the next ISPOR Annual International meeting in Toronto, more than willing to help you with any enquiries you may have about Rx Communications’ services and products. Until then, here is a brief synopsis of their careers so far, so you can get to know them.
Steve Handley has more than 25 years of experience within the pharmaceutical industry. Over this period, he has held senior management positions in business development, manufacturing and technical operations with Evans Medical Ltd, Medevale Pharmaservices Ltd, CCL Pharmaceuticals Ltd and Inyx, Inc. He has extensive experience in project management, joint ventures, mergers and acquisitions and the development and manufacture of a wide range of pharmaceuticals and aerosol products and technologies. He holds a qualified pharmaceutical technician degree, has a diploma in management and is a member of several professional bodies. In his current position of Head of Global Business Development he oversees the management of existing and new customer accounts, thus ensuring a high level of customer service for Rx Communications’ extensive client base.
Duncan Dibble graduated in 2005 with a BA (Hons) in business studies with media studies from the University of Wales. Before joining Rx Communications he was marketing manager for a national house builder. With experience in marketing, marketing strategy, business development and e-marketing, he ensures Rx Communications' profile represents the high quality of work the company undertakes.
‘Junk Bond King’ melds economics and science in special one-day conference
By Laura Goldman
JERUSALEM – Michael Milken, the billionaire financial genius who essentially created the $600 billion junk bond market in the 1980s, is a man in a hurry. The prostate cancer survivor is trying to cure cancer and heart disease in his life time. Milken estimates that eliminating deaths from cancer and heart disease worldwide would add about $200 trillion to the global economy. He is quoting from Economic Value of Research by two prize winning University of Chicago economics professors, Kevin Murphy and Robert Topel.
To achieve that end, he gathered together recently in Jerusalem for a one-day conference many of the top international medical specialists along with the leading investors and financial innovators in the biotech industry to discuss cutting edge issues and conduct a financial innovations lab. The Prostate Cancer Foundation, founded by Milken, spearheaded a new trend in medicine-collaboration. Recipients of their grants must collaborate rather than compete against each other.
Since Israeli citizens have the choice of only four health insurers and most serve in the army which mandates blood tests for recruits, Israel has a unique collection of genetic data on its citizens. Conference participants grappled with the sensitive issue of how to mine that data for the public good but not violate the privacy rights of individuals.
Another hot topic discussed was the difficulty in transferring the high level of research conducted in university laboratories to the marketplace where it can benefit mankind. There is a gap in the available funding between pure research and commercialization. One trustee for a foundation urged more foundations to start funding this gap. For example, his foundation funded houses for laboratory animals.
Biotech research suffers from a dearth of capital. Due to the longer time required to bring pharma products to market; biotech is not suitable to the venture capital financing model. Venture capital investors want to realize quicker returns on their investment.
Several innovative financing methods were presented: Ronit Harel Ben Zeev, Senior Vice President at the Tel Aviv Stock Exchange (TASE) recounted the success of the TASE in listing biotech companies in the R&D stage as a form of public venture capital.
Fred Pashkow MD, chief medical officer of a Hawaiian biotech, presented the state of Hawaii’s innovative 2:1 tax credit program which has jumpstarted the Hawaiian economy – $195 million in tax credits has brought in $1 billion in investment to the biotech industry of Hawaii and also created more than 5,000 new jobs.
Nir Kossovsky MD and Judith Giordan Phd from Steel City RE at the Milken Institute conference presented an idea to use a debt conduit that would transfer part of the financing from technology investors to include debt investors. Steel City RE helps companies manage their intangible assets.
Prof Shlomo Mor Yosef MD, director general of the Hadassah Medical Organization, observed, “This is the first conference I have ever attended where both economics and science were discussed in one meeting.” It is only a matchmaker of Milken’s stature that could arrange the necessary marriage between finance and research.
Dealing with the media – confidently
By Julie Stauffer (julie.stauffer@rxcomms.com)
The media can be a powerful vehicle for raising your profile, getting your message out and gaining credibility, but not everyone feels comfortable confronting a reporter’s microphone. If the mere thought makes your palms sweat, take heart. The following tips will help you stay calm and in control during your next interview.
Buy yourself time
When a journalist calls, never feel pressured to answer questions on the spot. Find out what publication or program the piece is for, who the audience is, and what the angle will be. Then schedule the interview for a few hours or days later. Even 15 minutes will give you a chance to collect your thoughts.
Focus on key messages
Take that time to decide what key points you want to communicate. Make them clear and snappy and bring them to life with a few telling examples or statistics. Then rehearse everything out loud until it rolls off your tongue smoothly. Practice does make perfect!
During the interview, don’t be afraid to take the initiative. If the reporter’s question isn’t giving you the opening you want, respond briefly and then segue to one of your messages by adding “I think a crucial point to remember is...” or “the real key to this issue is....”
Relax!
A few deep breaths before you begin will reduce muscle tension.
Worried you’ll forget an important fact? For a print or a radio interview, keep a cheat sheet handy. And if you don’t know the answer to a particular question, just say so.
Similarly, if an answer doesn’t come out perfectly, there’s no need to panic. Unless you’re doing live TV or radio, it’s fine to say: “I did a poor job of explaining that. Let’s try it one more time.” If you are live, a good trick is to say “in other words …” and then rephrase your response.
Duck the difficult questions
When a contentious question comes up, avoid it with a smooth segue. Briefly explain why you’re not prepared to respond:
- “That’s outside my area of expertise”
- “I don’t feel comfortable speculating on that”
- “I can’t comment on that because of confidentiality issues”.
Then follow up immediately with a phrase such as “but what I can tell you is...” or “but the point to stress is...” and return to one of your key messages. Voilà – you’re back in control!
The importance of the economic value message
By Steven Handley (steven.handley@rxcomms.com)
The pharmaceutical industry faces the major issue of top selling drugs losing their patent protection, allowing generic products to replace them at much lower prices.
This leads not only to the restructuring of the larger pharmaceutical companies to mitigate financial losses, but the subsequent job losses lead to insecurity and to cutbacks in research, sales, and marketing efforts. This means the important benefits of major drugs are communicated less – or less strongly – thus creating confusion about which drugs actually improve the overall quality of patient life.
Far too often, internal communication of a drug’s economic value fails at the first hurdle because sales and marketing departments don’t understand the economist’s message. This can lead to a mixed message about the products and to misconceptions among consumers about what the best treatment is for them – a generic product or the more expensive brand-name one.
If pharmaceutical companies fail to communicate the key messages about cost-effectiveness, budget impact analysis, burden of disease and the quality of life, their branded products will have a shorter life cycle. This could allow those products to be totally outpaced by cheaper mass generics that may not necessarily provide the most effective therapeutic outcomes.
Abstract submission deadlines
Please note that dates were correct at time of sending this email; HOC cannot be responsible for any amendments.
Submit |
Meeting |
Abbrev. |
Therapeutic |
Meeting date |
|---|---|---|---|---|
| 13 Jan 08 | European Stroke Conference – Stroke Nice, France www.eurostroke.org |
ESC | Cardiovascular system | 13–16 May 08 |
| 14 Jan 08 | International Meeting of the Society on Vascular Biology Sydney, Australia www.ivbm2008.com/Default.htm |
VBM | Cardiovascular system | 1–8 Jun 08 |
| 15 Jan 08 | Annual Meeting of the Endocrine Society San Fransisco, CA, USA www.endo-society.org/endo/ |
ENDO | Metabolic | 15 –18 Jun 08 |
| 16 Jan 08 | European Academy of Allergology and Clinical Immunology |
EAACI | Immunology | 7–11 Jun 08 |
| 31 Jan 08 | Meeting of the European Neurological Society |
ENS | Central nervous system | 7–11 Jun 08 |
| 31 Jan 08 | Annual Congress of the European League against Rheumatism, Paris, France www.nice.org.uk |
EULAR | Musculo- skeletal |
11–14 Jun 08 |
| 1 Feb 08 | World Congress of the IUA Athens, Greece www.iua2008-athens,com |
IUA | Cardiovascular |
21–25 Jun 08 |
| 1 Feb 08 | Annual Meeting of Health Technology Assessment International
Montreal , Canada www.htai2008.org/en_home.phtml |
HTAi | Health economics | 6–9 Jul 08 |
| 1 Feb 08 | World Conference of Clinical Pharmacology and Therapeutics Quebec , Canada www.cpt2008.com/ |
IUPHAR | General | 27 Jul– 1 Aug 08 |
| 14 Feb 08 | European Society of Cardiology Munich , Germany www.escardio.org |
ESC | Cardiovascular system |
30 Aug– 3 Sep 08 |
| 15 Feb 08 | International Congress for Infectious Disease Kuala Lumpur , Malaysia www.isid.org |
ICID | Anti- infectives |
19–22 Jun 08 |
| 15 Feb 08 | International Conference on Pharmacoepidemiology Copenhagen , Denmark www.pharmacoepi.org |
ISPE | Health economics | 17–20 Aug 08 |
| 15 Feb 08 | International Epidemiological Association Porto Alegre , Brazil www.epi2008.com/ |
IEA (World) | Health economics | 20–24 Sep 08 |
| 15 Feb 08 | International Symposium on Supportive Care in Cancer Houston, TX, USA www.mascc.org |
MASCC/ ISOO | Oncology | 26–28 Jun 08 |
How would you like your Health Economics? Health Economics just got a bit more digestible. Rx Communications has produced a series of booklets aimed at communicating Health Economics to audiences including medical students, medical writers, marketing & sales staff, physicians & clinicians and patient & focus groups. You can buy them as they stand, or Rx can customise them, either by amending the content, branding them for a specific company or delivering them on an interactive CD ROM or via the internet and company intranet. To receive the HE booklets media pack, contact Steve Handley on +00 44 1352 706193,
|
Next month
Watch out for our February issue, with our usual mixture of interesting and stimulating articles for HOC’s growing number of your colleagues.
If you have missed any of our earlier issues, email duncan.dibble@ rxcomms.com for a copy. See the HOC page on the Rx website for a full list of previous articles.
HOC is available for print in pdf format – free
You can of course print this e-newsletter straight from your inbox (for best results select landscape in your printer’s print set up), but HOC is also available as a professional 4-page A4 newsletter in pdf format for you to print and keep for reference. Simply email duncan.dibble@ rxcomms.com for past copies. If you would like to be sent a pdf version each month let us know and we’ll send one as soon as it is available.
Healthcare Outcomes Communicator is designed to help you explain and enhance your role and value as healthcare economists and outcomes researchers. But we need input from you – the professionals working "in the trenches". So we encourage you to give us your feedback about how we're doing – to communicate with us so that we can better communicate with you.
Yours sincerely
David Woods and the Rx Communications team
This material is published in good faith and is subject to editorial scrutiny before publication, however no warranty or guarantee of its accuracy is expressed or implied. No liability will be accepted by Rx Communications for any loss resulting from use of this resource. Our regular readership are assured that their details will not be passed on or used in any other promotional activity without permission.
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