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FEBRUARY 2017

WHERE BUSINESS MEETS POLICY

VOLUME 37, NUMBER 2

PARTNERSHIP PERILSRESET AND REPAIR

MARKET ACCESSGLOBAL PERSPECTIVES

PRICING SAGARULE CHANGES LOOM

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RegionIN

Reform?Pharmas Challenging Value Message in Latin America
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From the EditorFEBRUARY 2017 PHARMACEUTICAL EXECUTIVE

LISA HENDERSON

Editor-in-Chief

[email protected]

Follow Lisa on Twitter:

@trialsonline

When You Need Experts, Use ThemSURROUND YOURSELF WITH PEOPLE SMARTER THAN YOU, is attributed to businessman

Russell Simmons. Sometimes, when you are starting a new profession, or prepping for a new

sports team, or maybe if you are a seasoned veteran coming against a new problem, it can

serve you well to seek sound advice. I have a big job filling my predecessors shoes. Though

Im an editorial veteran, this side of pharma is one Ive only watched from afar as Editor for

Applied Clinical Trials. But if there is one thing I know is that you have to surround yourself

with smart people. Ive done that for years at ACT. Our Editorial Advisory Board, as well as

regular contributors and internal colleagues are my go-to experts.

The Editorial Advisory Board is the saving grace of our fine reputation and second to none in providing guidance, leader-ship and insight to our content direction.

The Pharmaceutical Executive Editorial Advisory Board members have been graciously acclimating me to the current and future envi-ronment that shapes this side of pharma. The executives in the C-suite and just below the suite, that need to keep up on pricing and reimburse-ment, market access, technology solutions, strat-egy, portfolio decisions, marketing, launches and so much more. Their expertise is formidable and more than helpful.

In this months Roundtable on Latin Ameri-can access, Christopher Ngai, Global Market Access Lead, Late-Stage Oncology Assets, Bayer, said, I think our industry highlights often its contribution toward advancing science and care for patients and improving lives. Clinical research is the bread and butter of our business model. It takes a significant investment to under-take clinical trials.

On the clinical trials side, organizations have highlighted the need for study participants, and are actively seeking ways to educate physicians and patients on the clinical trials process. On the other hand, the industry as a whole doesnt seem to have a coherent investment or system to bring attention to those contributions in advanc-ing science as Ngai mentioned.

But that seems to be changing as PhRMA announced late in January an advertising and public affairs campaign. Named GOBOLDLY, it will showcase the industrys unsung heroes driving cutting-edge advances in science and highlight the tremendous opportunity that exists to tackle our most complex and devastating health conditions.

While PhRMA has offered previous cam-paigns, most recently From Hope to Cures, featuring positive patient stories, this direct-to-consumer initiative is broader. It includes TV, print, digital, radio and out-of-home advertising, in a three-year campaign, which highlights the following three distinct initiatives:

r 5IF/FX&SBPG.FEJDJOF: An initiative convened by the scientists at Americas biopharmaceutical companies to foster a national dialogue on bold advance-ments in science.

r 5IF7BMVF$PMMBCPSBUJWF An effort to engage stakeholders across the health-care system to advance policy solutions that will enable the private sector to lead the move to a value-driven healthcare system.

r 1VCMJD)FBMUIA public outreach and education campaign around critical pub-lic health issues facing America today.

If nothing else, the members of PhRMA are acknowledging they need an image improvement after the EpiPen and Martin Shkreli public opin-ion disasters of last year. But in reality, pharma has long suffered from a public perception prob-lem. In 1998, the industry scored high in a Har-ris Interactive Poll. But by 2004, that 73% dropped to 44%. In the most recent 2016 Gallup Poll, the pharmaceutical industry was second to last in public opinion, between the healthcare industry and the federal government, with a net positive rating of -23.

Both EA Boards members say the same thingthe driving change in industry now is the patient. Whether its a patient-driven clinical trial; patients using social media and wearables; what outcomes patients want in the drugs they take; what benefit/risk are they willing to accept in a treatment; what regulators are doing about patients; how governments are pressured by patients...the patients...the public...are more than ever in the center of the pharmaceutical dialogue.

Personally, I hope PhRMA succeeds in its public education efforts. There is a lot to be gained by a fair, transparent and accurate dia-logue about healthcare and treatment decisions. But I also hope they did their homework when creating this campaign, and got some real people in the room to test their messaging. Because in this court of public opinion, the people are the experts.
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From the Editor4 WWW.PHARMEXEC.COM FEBRUARY 2017 PHARMACEUTICAL EXECUTIVE

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Murray L. Aitken Senior Vice President, Healthcare Insight,IMS Health

Indranil Bagchi Vice President and Head, Payer Insights and Access,Pfi zer Inc.

Stan Bernard President,Bernard Associates

Frederic Boucheseiche Chief Operating Offi cer,Focus Reports Ltd.

Joanna Breitstein Director, Communications,Global TB Alliance

Bruno Cohen Chairman, Galien Foundation

Rob Dhoble CEO,Adherent Health

Bill Drummy CEO, Heartbeat Ideas

Les Funtleyder Portfolio Manager, Esquared Asset Management

John FureyBioPharma Executive

Steve GirlingPresident, IPSOS Healthcare North America

Matt GrossDirector, Health & Life Sciences Global Practice, SAS

Nicole Hebbert Vice President, Patient Access and Engagement,UBC - an Express Scripts Company

Terry Hisey Vice Chairman, Natl Sector Leader, Life Sciences,Deloitte

Michele Holcomb Head, Strategy & Corporate DevelopmentCardinal Health

Bob Jansen Principal Partner, Zensights LLC

Kenneth Kaitin Director & Professor, Center for the Study of Drug Development, Tufts University

Clifford Kalb President,C. Kalb & Associates

Bernard Lachapelle President,JBL Associates

Julie C. LocklearVice President & Head, Health Economics & Outcomes Research, EMD Serono

Al Reicheg CEO,Sea Change Healthcare

Barbara Ryan Partner, Clermont Partners

Michael RingelSenior Partner, Managing Director, Boston Consulting Group

Sanjiv Sharma Vice President, North America Commercial Operations, HLS Therapeutics

Michael Swanick Global Practice Leader, Pharma-ceuticals and Life Sciences, PwC

Mason Tenaglia Managing Director, The Amundsen Group, an IMS Company

Al Topin President Chicago,HCB Health

Joseph Truitt Senior Vice President and Chief Commercial Offi cer, Achillion Pharmaceuticals

David Verbraska Vice President, Worldwide Public Affairs and Policy, Pfi zer Inc.

Terese Waldron Director, Executive MBA Programs,St. Josephs University

Albert I. Wertheimer Professor & Director,Pharmaceutical Health Services Research, Temple University

Peter Young President,Young & Partners

Pharmaceutical Executives 2017 Editorial Advisory Board is a distinguished group of thought leaders with expertise in various

facets of pharmaceutical research, business, strategy, and marketing. EAB members suggest feature subjects relevant to the

industry, review article manuscripts, participate in and help sponsor events, and answer questions from staff as they arise.

VP OF SALES & GROUP PUBLISHER TEL [732] 346.3016Michael Tessalone [email protected]

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VOLUME 37, NUMBER 2

2011 Neal Award Winner for

Best Commentary
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Table of ContentsFEBRUARY 2017 PHARMACEUTICAL EXECUTIVE

PHARMACEUTICAL EXECUTIVE VOLUME 37, NUMBER 2 (Print ISSN 0279-6570, Digital ISSN: 2150-735X) is published monthly by UBM Advanstar 131 W. First St., Duluth, MN 55802-2065. Subscription rates: $70 (1 year),

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Addresses to: IMEX Global Solutions, P. O. Box 25542, London, ON N6C 6B2, Canada. Printed in the USA.

NEWS & ANALYSISWashington Report

7 Pricing Pressures and Policy ChangesJill Wechsler, Washington

Correspondent

Global Report

9 Obstacles to Europes HTA AmbitionsReflector, Brussels Correspondent

STRATEGY & TACTICSBusiness Strategy

28 How to Fix Struggling Pharma PartnershipsBy Keith Bailey

Risk Management

30 Reducing the Risk of Noncompliance By Maria Gordian and Jason Evers

INSIGHTSFrom the Editor

3 When You Need Experts, Use ThemLisa Henderson, Editor-in-Chief

Back Page

50 Not Your Typical Pharma DatelineLisa Henderson, Editor-in-Chief

Country Report: Singapore

32 The Heart of Asia PacificFocus Reports, Sponsored Supplement

Despite serving as a regional hub for numerous leading global healthcare

and life sciences companieswhile simultaneously straddling the frontier

of biomedical advancement and innovationSingapore is reinventing

itself yet again and spearheading a new model of Asian healthcare.

Market Access

Access: Current and Future StatesJulian Upton, European and Online Editor

With the push toward value-based healthcare to accelerate

in 2017, Takedas global market access head, Mel Formica,

discusses the evolution of this all-important engine for

medical innovation and bottom-line returns.

20

Patient-Access Perils in the US Jill Wechsler, Washington Correspondent

Shrinking healthcare coverage, resulting from Trump-

mandated ACA repeal, to limit patient access to drugs.

22

Market Access: A UK PerspectiveJulian Upton, European and Online Editor

Pharm Exec speaks with Ramita Tandon, executive vice

president, ICON Commercialization & Outcomes, about

the potential impact of UK and European regulators

market access plans for the industry.

23

Price-Setting for SuccessBy Rafael Alencar, Mariana Torgal, and Catarina Costa Pinheiro

Outlining one countrys unique price-setting model for

novel drugsand the resulting pre-launch strategies for

manufacturers.

24

Region in Reform? Latin America RoundtableWilliam Looney

Pharm Exec convenes a panel of biopharma executives

responsible for the Latin America business to discuss

investment, market access, and reimbursement issues in

this key and challengingly diverse growth market for the life

sciences industry.

10

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PHARMACEUTICAL EXECUTIVE FEBRUARY 2017this month on PharmExec.com

Top Stories Online

CEO Snapshot: Beln Garijo January issue online William Looney bit.ly/2k3x7Bq

Boosting Market Access CompetenciesNovember issue online BCG Market Access Roundtable Working Group bit.ly/2fSn29U

2016 Pharm Exec 50June issue online William Looney bit.ly/29gPmmf

Pharm Execs 2017 Pipeline ReportNovember issue online Casey McDonald bit.ly/2gbreDL

Pharm Execs 2017 Industry Forecast January issue online Julian Upton and Casey McDonald bit.ly/2jphowM

Most-read stories online:

Dec. 25, 2016, to Jan. 24, 2017

Pharm Exec Webcasts

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Big Data Innovation

Big datas impact on healthcare and medicine is only just being realized. How should pharma engage with new technologies to ensure the industry optimizes the use of big data in advancing new treatment approaches?

Readers Weigh In

Interesting article we see more and more pharma market research execs who have started to look at HCP social media market research as a new addition to their research portfolio. Its getting more and more common and tackles the issue of getting data immediately.

Anonymous, 12/12/2016

The State of Market Insights in Pharma

bit.ly/2gozKPd

Twitter Talk

Q#Biosimilars may provide patients with access to life-saving therapies while #containingcosts

HID, @thePAexperts, 1/19/2017 Biosimilars Gaining Traction as Regulator Confidence Grows

bit.ly/2gEULlZ

QA great initiative from the EU La Chane de lEspoir to help children from Africa benefit from cardio treatment

Servier CDMO, @ServierCDMO, 1/25/2017 Investing in Africa: How to Do It Right

bit.ly/2hjDdA8

New Trends and Business Models in Biologics Manufacturingbit.ly/2jsZrwy

Pharma-Health System Collaboration Keysbit.ly/2k6JEFl

On-Demand Achieving Success With Value-Based Contractsbit.ly/2iqU2GK

Launching Drugs withCompanion Diagnosticsbit.ly/2ftuICn
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FEBRUARY 2017 PHARMACEUTICAL EXECUTIVE Washington Report

JILL WECHSLER is

Pharmaceutical

Executives

Washington

correspondent. She

can be reached at

jllwechsler7@gmail.

com

There has been no let-up

in the campaign to

curb prescription drug

prices, both for prod-

uct launches and marketed ther-

apies . Whi le payers have

adjusted to high costs for new

hepatitis C cures, they continue

to question expensive cancer

and multiple sclerosis therapies

and new treatments for rare

conditions. Former vice presi-

dent Joe Biden aims to challenge

high prices through his new

organization promoting oncol-

ogy therapies. The latest shocker

is Biogens ultra-orphan Spin-

raza, which launched in January

at a record $750,000 for the

first year of treatment, and

$375,000 thereafter.

Now price-control efforts are

shifting to the legislative stage,

as enthusiasm grows on Capitol

Hill for proposals to permit

Medicare price negotiation and

faster FDA approval of competi-

tive generic drugs. Democrats

tried, and failed, to add drug

pricing provisions to the 21st

Century Cures Act, and they

sought to amend last months

Senate budget resolution with

measures to curb price hikes by

ending tax deductions for drug

advertising expenditures and

brand-generic pay-for-delay

deals. Bipartisan efforts now are

more likely to add pharma pric-

ing provisions to must-pass bills

to reauthorize FDA user fees.

Some pharma CEOs seek to

hold off price regulation by

pledging limits on annual price

hikes. Allergan chief Brent Saun-

ders led the way in September

with a promise to keep price

increases under 10%. Novo Nor-

disk and AbbVie followed suit.

But Allergens recent 9.5% price

hikes raise skepticism about vol-

untary industry efforts.

A prime target of reformers is

the established industry practice

of jacking up prices on older,

off-patent drugs with limited

competition. A December 2016

report from the Senate Special

Committee on Aging documents

four egregious cases of this

hedge fund model of preda-

tory drug pricing, which gener-

ated huge profi ts for the manu-

facturers (Valeant, Turing,

Retrophin, and Rodelis Thera-

peut i c s) wh i l e i mpos i ng

immoral costs on patients and

p a y e r s ( s e e h t t p : / / b i t .

ly/2icHdD6).

The panel offers several

bipartisan proposals for dis-

couraging such practices: tar-

geted prescription drug impor-

tation, more transparency in

negotiated drug prices and

rebates, faster FDA approval of

generic alternatives, and easier

generic company access to drug

samples needed for bioequiva-

lence testing. The senators also

back additional priority review

vouchers for fi rms that develop

needed competitive products

and criticize manufacturers

patient assistance programs for

promoting too-costly therapies.

Savings for MedicareSimilarly, the HHS Offi ce of the

Inspector General (OIG) has

proposed transparency and

price negotiating authority for

Medicare Part D as a way to

stem the steep rise in cata-

strophic coverage for drugs. A

January OIG report documents

a steep rise in Medicare outlays

for catastrophic coverage to $33

billion in 2015, more than three

times the total fi ve years earlier,

led by 10 drugs that cost more

than $1000 a month (see http://

bit.ly/2j8tyta). The OIG is

scheduled to tackle a growing

list of drug pricing issues,

including Part D price increases

for brands, Medicare billing for

topical medicines, and potential

savings from increased distribu-

tion of cancer drugs in single

vials, tying Medicare Part B

rebates to inflation, and pay-

ment changes under the federal

340B program, which requires

manufacturer discounts on

drugs for certain hospitals and

clinics.

Ironically, some recommenda-

tions are similar to those pro-

posed, and recently abandoned,

by the Obama administration as

part of a test of new drug pay-

ment models for Medicare Part

B. Last March the Centers for

Medicare and Medicaid Services

(CMS) rolled out a plan to evalu-

ate new methods for reimbursing

physicians that administer drugs

in clinics and offices. Pharma

companies and physicians criti-

cized the demonstration as overly

focused on saving money, as

opposed to improving outcomes,

and CMS cancelled the program

in December, before the Trump

administration could do so.

Pricing Pressures and Policy ChangesCongress is poised to tackle exorbitant drug prices through

health reform and FDA legislation
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PHARMACEUTICAL EXECUTIVE FEBRUARY 2017Washington Report

Meanwhile, new Part B pay-

ment methods for biosimilars

could reduce program spend-

ing, according to a new report

from the Pew Charitable Trusts

(see ht tp: //bit.ly/2i5VXjn).

Current payment and coding

policies provide no incentive

for physicians to use biosimi-

lars, and seniors actually pay

more out-of-pocket for biosim-

ilars under Medicare cata-

strophic coverage. Part B could

reduce annual outlays on five

costly drugs from $5.5 billion

today to $3.5 billion, says Pew,

if CMS bases biosimilar reim-

bursement on a consolidated

payment rate or a least costly

alternative approach; these

methods would encourage

biosimilar use, as would FDA

determination that a product is

interchangeable.

Rebates and genericsMedicaid classi f icat ion of

brands and generics for rebate

purposes also discourages

biosimilar use. The program

considers them single-source

products, which requires manu-

facturers to pay rebates set for

brands, and not the lower rate

allowed generics.

Such decisions are in the

spotlight now following revela-

tions that Medicaid misclassi-

fied Mylans $600 Epi-Pen as a

generic. That saved the com-

pany millions on rebates, but

led to a $465 million payment

to settle the issue in October.

This episode has prompted

Congressional investigations

into the Medicaid classification

process, starting with claims

from Sen. Chuck Grassley

(R-Iowa) that CMS has failed to

take action in at least two other

cases . The i s sue may be

addressed further as part of

broader Medicaid reform efforts

by Congress and the Trump

administration.

The focus on exorbitant

drug price increases also has

hit generic drug companies,

which usually receive kudos for

providing less costly alterna-

tives to brands that save con-

sumers and payers millions.

But huge price hikes on certain

common and inexpensive anti-

biotics and diabetes medicines

have led to investigations and

charges of price fixing and anti-

trust violations. State attorneys

general f i led a lawsuit in

December charging six leading

generics firms for collusion to

fix prices, and the Department

of Justice (DOJ) brought simi-

lar charges against two former

industry executives. Investiga-

tions continue, and more pros-

ecutions are expected.

Now price-control efforts are shifting to the

legislative stage, as enthusiasm grows on Capitol

Hill for proposals to permit Medicare price

negotiation and faster FDA approval of competitive

generic drugs

Sustaining innovation

A larger issue in the drug pricing

debate is whether curbs on

spending for medicines will limit

product development. Pharma

companies justify high launch

prices on the need to recoup

some of the considerable

investment required for the

lengthy drug testing process, and

that a squeeze on prices will shift

investors to other markets with

stronger returns on investment

(ROI). A recent report from

the Deloitte Center for Health

Solutions indicates that ROI from

pharma R&D has declined to

3.7%, creating pressure to further

streamline product development

and to document product value

(see http://bit.ly/2iLZHtol].

A sign of trouble is last years

notable drop in FDA approvals

of novel medicinesonly 22

important new drugs reached

the market in 2016 compared to

a near-record 45 in 2015. Fewer

applications were filed by sponsors

in the first place, and more

submissions were incomplete

or inadequate, leading to more

complete response letters.

The QuintilesIMS Institute is

optimistic that new drug launches

will regain previously high levels

over the next five years, fueled

by major advances in treatments

for cancer, autoimmune disease,

and diabetes (see http://bit.

ly/2hdPiXO). Global spending on

medicines will reach nearly $1.5

trillion by 2021, but expansion

will be moderated by pricing and

market access pressures, more

generics and biosimilars, and

lower economic growth overseas.

Single-digit increases in outlays

for drugs in the U.S. will be more

sustainable for health systems, as

media and political attention and

more price transparency make

it hard to set exorbitant launch

prices or major price increases.
http://WWW.PHARMEXEC.COM/http://bit.ly/2iLZHtol]http://bit

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FEBRUARY 2017 PHARMACEUTICAL EXECUTIVE Global Report

REFLECTOR is

Pharmaceutical

Executives

correspondent in

Brussels

The long-cherished dream

of finding a European

approach to assessing the

value of new medicines

seems to recede further with every

step taken to pursue it. The latest

demonstration of the challenges

comes in a detailed on-the-ground

expos of the differences in how

European countries assess health

technology. No two countries do

it the same way, and the differences

range from what constitutes per-

missible data to how long different

authorities take to reach their sub-

sequent reimbursement decisions

or to the acceptability of indirect

treatment comparisons.

This is no black propaganda by

opponents of the greater collabora-

tion that the EU is trying to pro-

mote. This analysis is instigated by

the federation of European

research-based drug firms, EFPIA,

who are supporters of some har-

monization in health technology

assessment (HTA). They stand to

gain from more standardization of

the approach taken by the EUs 28

member states, because, as they

state in a new position paper, the

fragmentation of requests today

makes it difficult for companies.

For biopharma companies

operating at a global level, the con-

tinuing divergences in national sys-

tems mean, they say, lost opportu-

nities to integrate more harmonized

European data requirements into

global development plans. It is hard

to design pivotal randomized con-

trolled trials that reflect the eviden-

tiary needs of the majority of HTA

authorities across the EU, and

sometimes even additional clinical

trials are needed to satisfy national

HTA requirements. For compa-

nies, the fragmentation means at

the very least duplicative adminis-

trative work. For agencies it gener-

ates uncertainty. And for patients

it can mean delays, says EFPIA.

The catalogue of discrepancies

is long. France, for instance, con-

ducts an HTA review of all medi-

cines at launch, while the UK

examines only a selection of prod-

ucts, while several member states

have their own specific processes

for vaccines or orphan products.

France and Germany focus on the

clinical aspects of HTA to support

their reimbursement decisions, but

others use a full HTAwith the

Netherlands employing sequential

assessments of clinical then eco-

nomic aspects, in contrast to Swe-

den and England where the full

HTA is done in one step.

France requires publication to

support any data that are not

included in the clinical trial reports,

while the UK accepts data on file,

that is not necessarily published.

The Netherlands, Sweden, and UK

permit HTA to start as soon as a

positive opinion emerges from the

European Medicines Agencys sci-

entific committee, but France, Ger-

many, Poland, and Spain demand

that a full marketing authorization

has been granted first.

In terms of the methodologies

used for clinical assessment, the

divergences are often even more

marked, says EFPIA. HTA agen-

cies adopt different approaches to

interpreting the same clinical

dataon aspects including trial

design, relevant endpoints, appro-

priateness of defined patient sub-

groups, and treatment compara-

tors. The industry federation

contrasts the strict validity criteria

for surrogate endpoints that Ger-

manys IQWIG insists on with the

practice in the UKs NICE of fol-

lowing EMA opinions.

The objective of the EFPIA

analysis is not to furnish an exer-

cise in ritual lamentation about

what isnt working. It is to argue

for change, to make a better system

that will work and will improve

decision-making in the future. And

the position paper offers plenty of

possible remedies.

EFPIA contends that solutions

require much more than creating a

community of HTA technicians.

All the agencies involved in sup-

porting decisions on access to

pharmaceuticals should be

involved in European assessment

of relative efficacy at time of

launch, it says. Otherwise, any sys-

tem will run the risk of being dis-

connected from the reality of deci-

sion-making. And where joint

work among member states leads

to technical agreement on a com-

mon HTA approach for a product

or class of products, that approach

has to be adopted nationally by the

member states that took part in the

joint work.

To make any collaborative

approach function, a permanent

system is needed, argues EFPIA.

This needs to provide capacity for

a joint scientific advice process that

involves regulators and HTA bod-

ies, and it needs a permanent struc-

ture, including funding and secre-

tarial and organizational support.

But the chances of a better sys-

tem working in the future depend

on a lot of changes in national

practices and attitudeschanges

that, the EFPIA analysis concludes,

just arent happening now. The

coming months will show how

wide the support is across Europe

for closer cooperation on HTA.

Obstacles to Europes HTA Ambitions

HTA impact

on market

access

capabilities

in the US and

Europe

Page 20
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10WWW.PHARMEXEC.COM

PHARMACEUTICAL EXECUTIVE FEBRUARY 2017Executive Roundtable

A panel of biopharma experts responsible for the Latin America

business discuss investment, market access, and reimbursement issues

in this key regional growth market for the life sciences industry

Despite strong differences among individ-

ual countries in their approaches to

healthcare and development, as a region,

Latin America remains a key market of

interest for the pharmaceutical industry. Local

demographics are favorable to medicines due to a

growing working age population with the dispos-

able income to invest in improved health status.

Most of the regions governments are committed to

the principle of universal health coveragealthough

the details are often obscured by political conflicts

over affordability, transparency, and rule of law.

Latin America also faces pushback against its

longstanding commitment to global integration as

the US and Europe pivot back toward an inward-

looking policy agenda that could frustrate efforts

to upgrade and harmonize national regulatory

Scoping Out the SouthLatin America: Access Pains and Gains for Pharma

Roundtable Participants

Miguel Martin de Bustamante, Latin America Lead, CBPartners

Hermilo Arturo Cabra, Head, Health Economics and Market Access,

J&J Medical Devices

Sandeep Duttagupta, Vice President, CBPartners

Jose Manuel Garnica, Global Payer Lead, Early-Stage Assets, Amgen

Elsa Koutsavakis, Head of Payer Insights and Access,

Latin America, Pfizer

Sean Nagle, Head, Market Access for General Medicine, Latin

America, Novartis

Christopher Ngai, Global Market Access Lead, Late-Stage Oncology

Assets, Bayer

William Looney [moderator], Pharmaceutical Executive

11WWW.PHARMEXEC.COM

FEBRUARY 2017 PHARMACEUTICAL EXECUTIVE Executive Roundtable

standards on issues ranging from drug safety sur-

veillance to intellectual property IP.

To place these larger issues in the proper com-

mercial context, Pharm Exec, with support from

Latin American thought leadership at CBPartners,

recently convened a small group of company mar-

ket access experts to review opportunities and

challenges for this mission-critical function. The

following Q&A covers principal conclusions from

the conversation.

PE: Can each of you on the panel identify whats

top of mind in your job currentlyand how we

might best address it in our meeting today?

HERMILO ARTURO CABRA, J&J Medical Devices:

I manage the health economics and market access

group for J&Js medical devices in the Latin Amer-

ica region. The bulk of my time is spent on five

countries: Brazil, Argentina, Chile, Colombia, and

Mexico. My current issue of concern is how best

to make governments and payers understand the

value that medical devices deliver to patients. What

local institutional arrangements are optimal in

building support for health innovation? In addition,

how do we approach patients in a way that empow-

ers themto understand what our technology can

do in managing their condition and to help them

see what practices and policies are needed to ensure

this technology will continue to be available in their

communities.

One thing I am convinced of is incorporating best

practices from other markets applicable to Latin

America. Our companies are global and, thus, have

broad exposure to ideas that workor dont work.

We have observed a number of mistakes in securing

access to our devices, which gives us a learning curve

to share with colleagues in different countries.

SEAN NAGLE, Novartis Pharmaceuticals: I lead

the patient access function in Latin America and

Canada. I see patient access as the root and branch

of market access, encapsulating activities like P&R,

health outcomes, and economics, as well as the

structured key account management relationships

with payers and providers. Patient access is the

driver of a changed business model for Novartis,

where we are moving from a drug company selling

pills to a disease partner creating solutions. The

focus on solutions forces us to extend ownership of

the process to many other areas of the company,

beyond market access itself. Its an integrated

approach, with the objective to influence how care

is actually delivered to the patient.

The issue that drives me is improving patient

outcomes in the region. How do we do it? How

can we show the results to the stakeholder? Each

country has differing layers of influence and that,

in turn, shapes the practice of healthcare. Right

now, we are a bit aspirational on this goal but equal

to the challenge because Novartis is convinced that

the individual patient must be at the very center of

the transition to an outcomes-based system of

delivery and financing care.

ELSA KOUTSAVAKIS, Pfizer Inc.: I am a member

of the Global Health and Value group at Pfizer,

where I am responsible for coordinating access pri-

orities across the Latin America region. I am also

responsible for optimizing the resources and capa-

bilities of our in-market Health and Value function

in order to address these key priorities. Top of mind

for me in my role today are the impacts of health

technology assessment (HTA) as an access decision

tool; changes in local and regional tendering envi-

ronments; and, critically important, recruiting,

retaining, and developing local talent in the pric-

ing and market access function.

Our function is still in its infancy in Latin

America, so as an industry we continue to focus

on evolving our access capabilities and our engage-

ment in the access environment. The environment

poses a unique and often complex payer environ-

ment requiring a deep understanding of the stake-

FAST FOCUS

While concerns around managing drug costs get a lot of attention in emerging markets, a bigger challenge perhaps for the biopharma industry in Latin America is whether the region can reform its national health sys-tems in time to confront a demographic shift toward an aging population.

Latin America poses an often complex payer environment requiring a deep understanding of the stakeholder landscapeand the need to bol-ster increased innovation internally and through outside partnerships.

In the fourth quarter of 2016, the regional economy in Latin America stabilized, according to experts, marking a shift from 2015, when compa-nies were considering leaving some markets or restructuring their local presence as a purely distribution operation. Spending on pharmaceuticals and vaccines should increase amid a broad commitment to universal healthcare, combined with stronger growth in the private sector. Biosimilar investment could start to thrive along with new innovative device tech-nologies such as robotic surgery.

The application of HTA policies in the region are often unclear or open to interpretation. This lack of transparency can be a significant barrier to patient access to needed medicines. To that end, it has become critical for multinational pharmas to upgrade capabilities in their country market ac-cess functions, stakeholder management, advocacy, and negotiation skills in the regionwith the focus on identifying and engaging the right people and connecting with decision-makers on core issues and interests.

12WWW.PHARMEXEC.COM


holder landscape. Every community is different;

there is no one pathway to success.

A final priority for me is fostering increased

innovation, internally and externally. Id be inter-

ested in learning how the medical device business

raises innovation and whether this might be appli-

cable to the pharmaceutical sector. I see some

opportunity in leveraging other sectors for good

ideas around innovation.

MIGUEL MARTIN DE BUSTAMANTE, CBPartners:

My interest is identifying short- and long-term

steps that companies can take to help governments

achieve sustainability in their respective national

health systems amid the recent political turmoil

and economic recession plaguing much of the

region. The key question is how to bridge the per-

formance and credibility gap among companies

and major institutions of society, so innovative

industries like biopharma can benefit from the

assets they bring to the region.

JOSE MANUEL GARNICA, Amgen: I am Amgens

global lead on payer relationships in oncology, with

a focus on early stage assets. My company is only

35 years old, yet today we are the worlds number

one biotech in annual sales. My issue of concern

is a constant: to see the future. What will cancer

treatment be in 10 years and what will be the

extent of the regions involvement, in terms of

access to care as well as the progress in R&D? I

am a Venezuelan, so I am acutely aware of the dips

and curves in health status. Only recently, my

country was the third-largest pharmaceutical mar-

ket in Latin American. Today, the health system

is in a total state of collapse.

Our function is relatively new, but not so new

that we cannot tap into some learnings. Because

we have had approximately 15 years to understand

the evolution of market access programs in Latin

America, I am interested in the question of whether

countries are allocating health resources wisely, in

a manner that supports overall economic and social

development.

CHRISTOPHER NGAI, Bayer: I lead an access core

team comprised of functional experts and represen-

tatives of several key markets, including Brazil and

China, for the oncology therapeutic area. The access

core team shares global/local responsibilities for

global outputs to enhance market access for core

brands and pipeline assets. In adopting this model,

we aim to achieve meaningful value differentiation

and practical solutions to expand access to our prod-

ucts in markets like Latin America.

One of my priorities is to explore different

access models for innovative medicines in emerg-

ing markets where we have witnessed a rapid rise

in demands for affordable, cutting edge healthcare

led by a growing middle class. In my view, a com-

mon challenge toward this goal has been a ten-

dency toward policy debates around a narrow band

of issues, too often just on managing drug costs.

A more urgent question is how emerging mar-

kets such as Latin America can reform their

national healthcare system to address a pending

demographic shift toward an aging population. I

would like to understand how we can partner with

governments and other stakeholders to prepare for

this transition, knowing that any change would

have to be flexible and accommodative to emerg-

ing markets unique economic cycles.

PE: Many experts spotlight the importance of

macro-economic trends in shaping the local envi-

ronment for innovation in healthcare delivery and

financingafter all, medicines are entirely depen-

dent on investment, particularly in Latin America,

from the private side. And you cannot increase

investment with a strong positive macro-economic

signal to investors.

SANDEEP DUTTAGUPTA, CBPartners: The

regional economy is currently in a transition phase.

The commodity-induced recession that began in

Brazil in 2015 has spread to a number of other

markets while significant currency fluctuations

have persuaded several major pharmaceutical

developers to write down some of their assets in

the region. The economy in the fourth quarter of

Universal

health coverage

involves a

difficult series

of tradeoffs,

accentuated by the tense

debate in most countries

over public debt and budget

deficits. SANDEEP DUTTAGUPTA, CBPARTNERS

13WWW.PHARMEXEC.COM


2016 has stabilized; we see a good recovery taking

root in 2017. A broad commitment to universal

healthcare, combined with healthier growth in the

private sector, will put spending on pharmaceuti-

cals and vaccines back in the picture. Biosimilar

investment looks especially promising along with

new innovative device technologies like robotic

surgery. The trend marks a dramatic change from

18 months ago, when companies were considering

leaving some markets or restructuring their local

presence as a purely distribution operation.

GARNICA: Economic expansion may raise the

ante on new biopharma investmentbut is the

IP system ready for it? IP has always been a cau-

tionary grey zone for investors.

DUTTAGUPTA: On IP, you have to distinguish

between risk and the type of investment. I dont

see the big biopharma manufacturer avoiding local

new product launches due to fears about losing

control of the patent. Licensing deals remain a

challenge, especially for smaller biotechs that lack

the resources to register their IP and conduct strong

due diligence on a potential local partner. Both

tend to be costly to execute in most Latin American

countries. But conducting thorough due diligence

remains critical.

The most important policy issue in Latin Amer-

ica is the commitment in most countries to univer-

sal health coverage. The debate is moving forward,

but in a piecemeal manner. Little is known about

what a basic benefit package would look like; in

addition to the standard hospital services, would

essential medicines and medical devices be

included? This is not clear.

One thing we do know is that universal health

coverage involves a difficult series of tradeoffs,

accentuated by the tense debate in most countries

over public debt and budget deficits. What percent-

age of the population will actually be covered by

insurance? When medicines and vaccines comprise

upwards of 15% to 20% of total health spending,

will this segment be singled out for the deepest

cuts? Such benchmarking is time-consuming and

threatens future industry investment risks in the

region.

KOUTSAVAKIS: A broad range of perspectives

from private and public stakeholders need to be

included in the dialogue on universal health cover-

age in order to create policies to that meet the needs

of patients and society. Today, not all Latin Amer-

ican countries have inclusive or transparent forums

for public policy.

BUSTAMANTE: Countries also have their own

definitions of what constitutes universal healthcare

coverage, especially when it comes to equality in

access to medicines. On one side, you have institu-

tions similar to Seguro Popular in Mexico or the

recently ratified Cobertura Universal de Salud in

Argentina, which function similar to a safety net

for those unemployed or informally employed but

have arguably less access to innovative therapies.

On the other side, you have countries like

Colombia which has taken steps to equalize access

for all health plans of the EPS, contributory and

subsidized, by making the minimum obligatory

coverage list the same. These different approaches

are often the result of political decisions driven by

an interpretation of constitutional law and without

much consultation with citizens.

KOUTSAVAKIS: The application of HTA policies

in the region, including in Colombia, are not

always clear and are often open to interpretation.

In its best form, HTA is a helpful tool for payers

to make allocation and investment decisions; how-

ever, without transparent and certain process and

principles, HTA can become a cost-containment

method and a barrier to accesscontradicting a

goal of universal health coverage and patient access

to medicines. Industry needs to be a partner to

payers, governments, and stakeholders toward uni-

versal coverage goals.

PE: Universal coverage can only take place if the rel-

evant power centersin this case, the ministries of

health and financeare aligned around a specific

definition of what universal coverage means. Are the

two working together in your respective markets?

The private-

sector is going

to thrive in Latin

America

because its

momentum comes from the

growth of middle-class

entrepreneurialism. JOSE MANUEL GARNICA, AMGEN

14WWW.PHARMEXEC.COM


CABRA: In Colombia, the health and finance

ministries are working in concert to get this com-

mitment done. However, the devil is in the details.

Defining what it actually meant by universal cover-

age is going to require some parsing of the language.

Its not going to be simple or straightforward. Id

say this point applies to other countries as well.

NGAI: In my experience, we dont often see com-

prehensive, coordinated efforts to address economic

and policy constraints that stand in the way of trans-

parent, sustainable, and affordable healthcare sys-

tems. In response, the country market access func-

tion often devotes a significant portion of resources

toward putting out fires than on solutions that

address long-term needs, unfortunately.

NAGLE: There is a benchmark by which Latin

Americans assess the commitment to achieving

universal health coverage: what percent of country

GDP is attributable to public and private health

spending? Increasingly, however, the finance min-

istries are challenging the health ministries on this

score, contending that investments in health are

not leading to higher productivity. In fact, much

of the spend is actually wasted. Money is poured

into an inefficient system that spreads itself thin

trying to answer to the expectations of that uni-

versal average patient. I think the message is real

reform has to come first, before the government

budget people will agree to more investment.

DUTTAGUPTA: The eternal dilemma in health-

care is the limited supply of care coupled with an

unlimited demand for it. There is a need for prec-

edent that can resolve this dilemma. One country

must take a leadership role to take on the challenge

of sustainable reform, and show the rest of the

region it can be done right.

GARNICA: Is this not already being done in the

private sector? There are models we can point to

based on the regions history of melding public and

private resources to serve different stakeholders: the

subsidized rural poor; urban, wage-based manufac-

turing workers; and the rich who pay out-of-pocket.

This model is actually a good one for countries with

an expanding middle class, as there is a lot of choice

for the consumer. China, for example, has an inflex-

ible health system, with no widespread source of

private insurance. Patients are still largely dependent

on cash payments for care.

I think Latin America does better than that.

The private sector is going to thrive here because

its momentum comes from the growth of middle-

class entrepreneurialism.

CABRA: Private health is certainly a viable alter-

native to the inefficiencies that characterize public

delivery. The problem is that access tends to be

restricted to people with the ability to pay, which

makes it harder to convince some quarters that the

private sector can be a driver of innovation every-

where in the health system.

GARNICA: We have to be realistic about what

universal access means in Latin America compared

to Europe. Its fanciful that countries here can

approach that level of access. Nevertheless, private

sector care delivery is well established. It has served

a good portion of the population relatively well. Its

a valuable part of the healthcare mix and has poten-

tial in advancing innovation in the system overall.

DUTTAGUPTA: The value of the private sector

healthcare is the opportunity it presents for part-

nership with the industry around a more innovative

delivery model. Consider what has been done in

China, with Roche joining with Swiss Re, the rein-

surance giant, to support the establishment of pri-

vate insurance coverage for patients with cancer.

Similar efforts are underway now in Brazil as

United Healthcare and Aetna take steps to enter

the insurance market. This is precisely what these

markets needmore choice for patients.

PE: If the will is there, are national regulatory sys-

tems prepared to incentivize and support the part-

nering model?

DUTTAGUPTA: Unfortunately, no. There is a

huge time lag for a new innovation to move from

discovery to the patient. Consider that a curative

drug like Gileads Sovaldi for hepatitis C, with a

The country

market access

function often

devotes a

significant

portion of resources toward

putting out fires than on

solutions that address long-

term needs. CHRISTOPHER NGAI, BAYER

15WWW.PHARMEXEC.COM


90% plus efficacy rate, is still not available in some

Latin American countries despite being on the mar-

ket in the US and Europe for three years. In fact,

the median time from regulatory approval to actual

funding for a new product is also three years in the

Latin American region. It takes that long just to

find out if a product will be reimbursed. Thats

demoralizing no matter how wonderful working

with a local partner can be.

NGAI: In this case, the issue may be a lack of

courage and vision. The potential budgetary

impact has stood in the way of access to a life-

saving and potentially cost-saving treatment.

Emerging markets will continue to struggle with

funding and making available breakthrough ther-

apies without significantly increased contributions

from its middle class, which is not popular. No one

wants to abandon the promise of a universal

healthcare. However, enabling differential access

in a marketthat pricing and reimbursement

adjusts to affordabilityis worth considering,

albeit a difficult choice.

KOUTSAVAKIS: Given the reimbursement sys-

tems in most Latin American markets, government

and the public health community is critical to our

success in the region. The private healthcare sector

is also an important area for our function, par-

ticularly in terms of partnership opportunities and

innovative access pathways. The challenge of over-

coming institutional inertia and limited transpar-

ency adds to the complexity of achieving access.

NAGLE: According to our local trade associa-

tions, the success rate in obtaining a new public

procurement contract listing averages in the single

digits6%.

DUTTAGUPTA: Governments are raising the ante

on cost-effectiveness. In Brazil, ANVISAs deci-

sions involving public sector pricing invariably

trickle down to the private side. HTA is well-estab-

lished in most markets, and the agencies are talk-

ing more frequently and sharing information.

PE: What is the response of big Pharma manufac-

turers to the slow integration of pricing and cost-

effectiveness tools throughout the region? How do

you protect against blowback from one market to

another?

DUTTAGUPTA: This is coming up in Colombia,

which has launched international reference pricing

and is moving to a more formalized approach to

HTA. Will the low price you accept in another,

larger market that you can make up through higher

volume end up pushing your prices further down

in Colombia? Good intelligence and strong data

capabilities are vital to the assessment of what to

do. Each company also has to begin with a frank

assessment of their product portfolio. A diversified

set of high quality products, in key therapeutic

areas relevant to public health, confers advantage

over those with more limited prospects.

PE: Are decisions of the HTA authorities grounded

in institutional reality? Is HTA seen as a need to

have construct or just nice to have?

CABRA: The reality is a confusing mix of differ-

ent approaches as well as sporadic follow-through

that often leaves companies guessing what the rel-

evant factors are behind a decision. Decisions in

HTA range from positive to highly restrictive. In

medical devices, the HTA process is complicated.

You must make your case first to one national

agency, which then has to be ratified in practice by

any number of local regulators that dont neces-

sarily have to take the first decision into account.

NAGLE: HTA is definitely need to have, and

this will become truer in the future. But it often

doesnt end with a clear decision. Its just one stage

in a long process. Cost or comparative effective-

ness may have the endorsement of regulators, but

as the concepts work in practice, they are poorly

defined. Its not the trigger point for resolution. Its

a starting point.

PE: Can we establish consensus on the elements

of a sustainable healthcare system conducive to

innovation in the delivery and financing of medi-

Given the

reimbursement

systems in

most Latin

American

markets, government and

the public health

community is critical to our

success in the region. ELSA KOUTSAVAKIS, PFIZER

16WWW.PHARMEXEC.COM


cines? Is there a Latin America market example or

best practice that should be endorsed as an indus-

try standard or metric of performance?

CABRA: Our target ought to be the identifica-

tion of waste in the health system and how GDP

expenditure on healthcare can be better spent. Is

the funding devoted to system administration

yielding better patient outcomes? If not, where can

we partner to change the dynamic?

GARNICA: Industry starts the conversation on

the premise that market access means access to

drugs. Wrong. The first step is access to healthcare,

founded on primary care infrastructure and the

concept of preventive population health. This is

where drug companies should engage. Instead of

a pill, the strategy and the messagemust center

on the services and networks that bind us closer to

the patient where he is.

NAGLE: Andrew Dillon, the former CEO of the

UK National Institute of Health and Care Excel-

lence (NICE), spoke recently to heads of Latin

Americas HTAs. The group asked him what the

single success of NICE has been since its inception

two decades ago. Interestingly, Dillon pointed to

the development of formal clinical guidelines to

standardize the way care is delivered and assessed

as its biggest achievement. He never mentioned

pricing at all. This thinking ought to drive industry

positions as well. Instead of a race to the bottom

on prices, with bulk tendering and reference pric-

ing, we must advocate for a system that recognizes

the holistic value of a medicine to patients, in the

context of multiple health interventions that can

all be tracked and measured through independent

evidence.

NGAI: I would offer a complementary approach.

We need to upgrade the capability of our country

market access function in stakeholder management

and advocacy that in some situations are more

effective in building access to breakthrough thera-

pies. Part of the access core teams focus at Bayer

is on training country teams in negotiation skills,

not just being able to adapt an economic model or

develop a local submission dossier.

How to identify and engage the right people,

connect with decision-makers on core issues and

interests is equally important as health technology

assessment that we neglect at our peril.

KOUTSAVAKIS: Decisions on the reimbursement

of medicines are made within a political context

in most cases in Latin America. Market access

leadership must keep this in mind when advancing

objectives. For example, in Mexico, the community

of decision-makers has undergone changes, and so

in addition to developing meaningful access strat-

egies and leveraging technical expertise, we must

also engage and understand the needs of the polit-

ical and government decision-makers and internal-

ize these insights into our approach. HTA in gen-

eral in Latin America is a good example. Its layered

on to the top of pre-existing-decision machinery,

and so our strategies must be multi-faceted in

nature.

PE: If Dillon believes in the importance of clinical

guidelines as a policy fundamental, shouldnt indus-

try highlight its contribution to raising the quality

and scope of local clinical trials and post-marketing

approval activities, including the supporting infra-

structure?

NGAI: I think our industry highlights often its

contribution towards advancing science and care

for patients and improving lives. Clinical research

is the bread and butter of our business model. It

takes a significant investment to undertake clinical

trials. And, our investments in countries extend

further out from this, including employment, phy-

sician education, investigator-initiated studies,

manufacturing, distribution, and other facilities.

Therefore, we expect a fair reward on new, mean-

ingful, and innovative medicines which benefit

patients and society. When a country is challenged

to deliver this, it affects investment at all levels.

GARNICA: Governments in the region are aware

of the importance of underpinning support for

innovation with infrastructure. Many countries

are making at least some effort: technology cor-

Physicians

need to be

sensitized to

cooperate in

making the

supply chain of drugs more

efficient. They are critical to

system change. HERMILO ARTURO CABRA, J&J

17WWW.PHARMEXEC.COM


ridors that provide incentives for the location of

physical plant are an example. Brazil negotiates

directly for technology transfer commitments as

an element in marketing approval and pricing. That

said, few people are predicting Latin America will

be the destination of choice for drug R&D.

NGAI: Maybe not as many but there are world-

class hospitals and academic centers that are very

competitive in conducting top-notch research in

Latin America.

PE: What about potential allieslike patients? What

are the positives and pitfalls in relations with this

crucial stakeholder?

GARNICA: Patient advocacy is critical. Their

only protection is the voice that carries. As the

middle class grows and becomes more vocal on

health, organized patients are poised to become

the vehicle for change. We must do more to put the

patient at the front of our effort on access.

KOUTSAVAKIS: Today, the role of the patient

differs by market. In Brazil, patient groups have a

visible and engaged position in the decision-making

arena. However, in general, patient groups and the

range of their activities are less advanced com-

pared to counterparts in the US and Europe. In

some markets, the voice of patient groups in the

reimbursement of medicines is under developed

due to policy or political frameworks or norms.

NAGLE: Social media is having a positive impact

on patient group influence, if only because it allows

for more interaction. Information about specific

diseases is available to fuel local advocacy cam-

paigns. Governments are responding with special

funds or outlays to finance the cost of medicines

for diseases that attract social media attention.

Patient group cross-talk between markets has

driven much of the interest in joint regional pro-

curement of vaccines, for example.

PE: How is market access in Latin America being

deployed, from an organizational point of view?

How are your companies set up in this important

functional area?

DUTTAGUPTA: The leading edge of the market

access funciton in Latin America has traditionally

focused on government relations. The rationale?

Better access to the national medicines chest is

predicated on strong relationships with govern-

ment and regulatory stakeholders, as well as the

industry trade association. Increasingly, however,

the trend favors a more expansive strategy focused

on stakeholder management covering a diverse

array of interests.

KOUTSAVAKIS: Building close synergy between

market access and the corporate affairs is critical

for success in the region. We seek talented col-

leagues who are adept at both the technical aspects

of the function and have the abilities to positively

shape the evolution of the environment.

NAGLE: Our companies are all on board with

the idea that new voices must be incorporated in

healthcare decision-making. There is room to nego-

tiate common ground with many stakeholders on

issues like defining value or fine-tuning the HTA

process. We are imperfect, but we are not the same

industry we were 20 years ago. Id say that applies

to the major institutions responsible for public

health, too. One step at a time, our actions are

putting us in position to bring these new voices

into the process.

DUTTAGUPTA: A good example is how, even at

smaller companies, patients are being consulted

about what they want and expect from a companys

next oncology or hemophilia product. The feed-

back chain works particularly well in rare diseases,

where patients are highly motivated and easy to

locate.

BUSTAMANTE: There is still the obstacle course

imposed by the poor transparency on the regula-

tory and HTA decisions. While methodologies

might be laid out, the actual procedures in the

decision-making process are often not transparent

to the industry, which leads to lack of clarity in the

decision rationale. Additionally, most manufactur-

ers dream of a more transparent, inclusive process,

Instead of a

race to the

bottom on

prices, with bulk

tendering and

reference pricing, we must

advocate for a system that

recognizes the holistic value

of a medicine to patients. SEAN NAGLE, NOVARTIS

18WWW.PHARMEXEC.COM


which includes within the process an opportunity

to weigh in the patient point of view along with

the providers and industrys perspective, along

with the robust evidence that is often generated by

manufacturers.

A question arises on how to develop a transpar-

ent process that is sensitive to the bias of these

other players: the patient wants everything and the

manufacturer is only too happy to give it to them.

The challenge in a multiple stakeholder environ-

ment is how to give these separate voices equal

weight. And to do that in a transparent manner.

A challenge not so easily solved.

DUTTAGUPTA: Stakeholders, including some in

industry, are trying to mobilize patients to counter

government controls by asserting a constitutional

right to accessthat its illegal to deny coverage

when universal healthcare is a principle mandated

by the law

PE: Can this strategy be seen as an attack on physi-

cian autonomy?

CABRA: When such tactics suit the larger ther-

apeutic interests of the patient, the answer is no.

Alternatively, we can see instances where physi-

cians are motivated by the desire to be able to apply

the full catalog of expensive drugs, whenever they

wish, and sometimes for personal gain. Physicians

need to be sensitized to cooperate in making the

supply chain of drugs more efficient. They are crit-

ical to system change.

NAGLE: One way to improve the relationship

with physicians is to continue emphasizing our

value beyond the pill, with support services to

patients that free the physician to focus on deliver-

ing care. The potential is for us to serve as an inter-

mediary between physician and the patient.

NGAI: We must be mindful of how the pharma

industry is perceived by patients and physicians in

emerging markets like Latin America, especially

when discussing economic aspects of market access

in conversations. In developed markets, there is a

general perception of big Pharma that can be coun-

terproductive when we want to engage in a value

conversation. Given the regions aspiration/com-

mitment toward affordable universal healthcare, I

am cautious of the approach that pits patients

against their government. This can lead to the

opposite, where we are on the defense.

GARNICA: My experience is we face difficulty

in communicating our concept of value. It fails to

resonate in middle-income markets experiencing

significant budget shortfalls. Affordability neces-

sarily dominates discussion about medicine. This

is compounded by the emphasis of the public sec-

tor on primary care interventions rather than acute

care conditions like cancer, where the drugs bill is

a disproportionate contributor to the overall cost

of treatment.

NGAI: Thats precisely the problem, a large por-

tion of our pipeline investments is in expensive

specialty medicines. Our priorities are not easily

aligned with the affordability challenge.

PE: Perhaps the heart of the challenge is whether

Latin American governments really want to make

healthcare a national priority. Is it?

DUTTAGUPTA: The answer to that question is,

in my opinion, no. Brazil and Mexico have a seri-

ousyet preventablepublic health problem: epi-

demic rates of obesity, where the two nations lead

the world among children. Compare this to the fact

that millions of consumers in Brazil and Mexico

willingly pay the worlds highest prices nearly

$1,000 per unit for Apples iPhone 6. There is

money to spend, but its not going to healthcare.

PE: As market access specialists, are you happy

with the way the function has evolved? Is market

access fully integrated to the decision model at the

executive c suite level?

NAGLE: For years, there was a lot of mystery

attached to market access. No one knew what we

did. The function has a high profile at Novartis

today because management recognizes its impor-

tance to commercial success, from launch to loss

The challenge

in a multiple

stakeholder

environment is

how to give

these separate voices equal

weight. And to do that in a

transparent manner. MIGUEL MARTIN DE BUSTAMANTE,

CBPARTNERS

19WWW.PHARMEXEC.COM


of exclusivity and even beyond. In Latin America,

Novartis is on a mission of redefinition. We are

transitioning from market access to patient access.

The scope is more holistic, and key management

teams are closely engaged in building the refreshed

remit internally. People are evaluated less on trans-

action and sales indices, and more on establishing

partnerships, or co-creating value, inside and

outside the organization. We just completed a

training course in patient access for all of our sales

associates in the region, over 750 people, with the

aim of getting them more involved in access strat-

egy development and execution.

The idea is no part of a colleagues work respon-

sibilities should be exempt from exposure to the

patient perspective. For example, we may have a

key hospital account that is having problems keep-

ing good nurses on staff. We will bring in one of

our HR talent retention specialists to help out,

along with someone from IT to ease the workflow

for nurses through better data applications.

GARNICA: Amgen is committed to market

access as a key strategic function. In my role

working with early-stage oncology assets, we rely

on this skill set to engage with payers directly in

shaping our value proposition to regulators and

payers.

Latin America is also a market that is hard to

forecast 10 years out, but we are finding that the

focus around market access is helping to clarify

the bets we want to wager in anticipating future

growth for the portfolio.

KOUTSAVAKIS: Pfizer has a rich legacy of pric-

ing and market access experience and we aim to

build on this foundation through new partnerships

with our key stakeholders. These partnerships are

critical to build trust, which is the building block

to improved reputation.

A better reputation for the industry in Latin

America would carry benefits in the way our inno-

vations are perceived and help facilitate patients

access to the medicines they need.

WILLIAM LOONEY is

Pharm Execs former

Editor-in-Chief

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20WWW.PHARMEXEC.COM

PHARMACEUTICAL EXECUTIVE FEBRUARY 2017Market Access

Mel Formica, Takedas vice president of global market access

With the push toward value-based

heathcare set to accelerate even

more in 2017, Takedas market access

head discusses the evolution of this

all-important engine for medical

innovation and bottom-line returns

By Julian Upton

Pharm Exec recently spoke with Mel Formica,

vice president of global market access with

Japanese drug giant Takeda, about what

he sees as the challenges and opportunities

for the market access function in 2017, and how he

envisions the industrys capabilities in this area

evolving.

PE: What, for you, will be the key market access devel-

opments in 2017?

FORMICA: I think the biggest focus in the next 12

months, predominantly on the US and European side,

is going to be around the issue of affordability. Com-

plicating the US side, the new Trump administration

will potentially create some uncertainty in that envi-

ronment, as we know. So there will be a need to

evaluate the policies his administration may enact.

Trump has indicated that he wants to go after pric-

ing, but will it be just select companies and select

pricing events that he wants to showcase?

One of the subtle differences between the US the

Europe in terms of affordability is that the EU is going

to start to address more aggressively combination

therapies, where you have multiple high-price drugs

coming together, particularly in the oncology space.

PE: Are we likely to see more HTA harmonization or more

fragmentation in Europe?

FORMICA: It depends how we think of harmoni-

zation. I dont see a central HTA (health technology

assessment) being established in Europe within the

next one to two years. There will be continued dis-

cussion and movement toward the value of a harmo-

nized relative-effectiveness body, and the smaller

member states have a lot of benefit to gain from that.

But the larger member statesGermany, France

are not that willing to give up their value frameworks

and decision-making processes to a central body.

What may move quicker is joint procurement, and

this is already where were starting to see clusters of

member statesfor example, around Benelux and

the southern borders of Italy, Spain, and Greece

wanting to get together and look at increasing their

purchasing power.

PE: What are your thoughts on Brexit from a market

access perspective?

FORMICA: Im not envisioning a major detrimental

impact to the UK because of Brexit, largely because I

imagine NICE (National Institute for Health and Care

Excellence) will continue to be completely independent

of the EU, and will drive its agenda and policies. A

bigger issue is that Brexit could lead to fundamental

changes to market regulation, increased costs, and

additional complexity. One risk area is if the UK is no

longer part of the EMA (European Medicines Agency)

regulatory process. A parallel regulatory process with

different requirements could increase cost and com-

plexity of gaining approval in the UK, or could cause

companies to deprioritize the UK as a launch market.

PE: NICE has also influenced the USs Institute for Clini-

cal and Economic Review (ICER). Do you see that institute

making headway in the US this year?

Market Access: Current and Future States

21WWW.PHARMEXEC.COM

FEBRUARY 2017 PHARMACEUTICAL EXECUTIVE Market Access

FORMICA: I think it will create opportunities for

industry. But there were already health technology

assessments in many of the larger US health plans, of

course, and it is unlikely that we will see more central-

ized technology assessment in the US in the near future.

Groups like ICER will continue to carve out their

space, and health plans and payers will continue to use

this information as negotiating tools. Where I see

opportunities for industry in the US is in a greater drive

toward value-based healthcare. With that comes the

onus of measuring outcomes, creating payment mod-

els for those outcomes, and creating quality standards.

The accountable care organizations will also con-

tinue to drive more innovation. They are taking a

pathways approach to how they think about manag-

ing their budgets, their diseases, and their populations.

This is an opportunity for industry to innovate because

it will see industry as more of a solution provider, help-

ing the care organizations see a longer-term perspec-

tive around the pathway of the patients journey.

PE: Will the lack of a cohesive HTA structure continue to

be a barrier to market access in the emerging markets?

FORMICA: I see emerging markets essentially in

three tiers. There is a tier of markets that I wouldnt

call developingBrazil, Mexico, China, etc. Theyre

probably as developed as some of the peripheral mar-

kets in Europe. You then have a tierthe Philippines,

Thailand, Indiawhere the ability to pay even for

more general medicines can be a struggle, and where

paying for specialty medicines is extremely difficult.

If you are serious about wanting to bring innovation

into those markets, then the issue is how do you equi-

tably help people where the vast majority of the coun-

try could never access those medicines or be able to

afford them? The third tier requires a more philan-

thropic approach with access to medicine initiatives.

If we look at that first tier, Brazil, for example,

has an HTA and it is relatively sophisticated. Brazil

may not have the local expertise to fully make deci-

sions based on the HTA, but it looks at the evaluation

and uses it more as a negotiating rather than a deci-

sion-making tool. There is still an element of advo-

cacy that plays in markets like Brazil: relationship

building, knowing the different stakeholders. Those

are the capabilities you need to be successful in those

markets, along with some technical capabilities.

PE: Would you say there is a current shortage of market

access competencies across the pharma industry?

FORMICA: Yes, my biggest hurdle is the recruit-

ment of appropriate talent. I can find good technical

people, good pricing people, good healthcare out-

comes researchers. There is always room for more

talent in access with leadership behaviors and busi-

ness acumen. The ability to engage different functions

internally, and external stakeholders, is still key.

PE: How do you see the market access function evolv-

ing? Is market access even the right term for it?

FORMICA: I dont believe market access, or what-

ever we end up calling it in the future, is a function,

per se. I think it is an organizational capability. If you

truly want to be successful at getting your product

to the patient and contributing to a sustainable,

affordable healthcare system, you have to have

throughout your organization a certain mindset, a

certain DNA. The function within the company that

drives that thinking will evolve significantly from

market access as we define it today.

I see market access as two sides of one coin. On

side is the organizations ability to address national

or quasi-national payer decision-making. This effec-

tively means how you think about creating the value

proposition for the payer early in a products life

cycle, how you develop the evidence base, how you

think of pricing models for that value and how you

communicate that at a national level. The second side

of that equation is more to do with commercial

access. When youve got past the national system,

there is a fragmentation of loc

region - ubmimages2.advanstar.com/pixelmags/pharma-executive/pdf/2017-02.pdf · lem. in 1998, the...

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