NGP EU 8 by GDS International

www.ngpharma.eu.com • Q3 2009

GROWING UP Nycomed stands tall among the industry’s giants (P36)

SOMETHING FISHY Why marine-derived omega-3 oil could be Pronova’s next blockbuster (P70)

NEW BEGINNINGS Chris Viehbacher starts with a clean slate at sanoﬁ-aventis (P74)

POWER

GAMES How will the competition between generics and branded products play out? (P32)

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FROM THE EDITOR 5

Tough competition The rise of generics could mean a new game plan for big pharma.

he battle between generics and branded products has been going on for a long time: the claims and counter claims over aspirin, for example, started in the early 20th century. The patent system, introduced to help bring order to this chaos, allows drug developers a limited-time patent for each innovative product they develop, so they can recoup their initial investment. Similar, unbranded drugs are introduced into the market after the patent expires, bringing lower prices for those not fussy about what it says on the label. For a while, the system seemed to work, but lately things have changed. The pharmaceutical industry as a whole is facing some tough challenges: blockbusters – on which many big companies depend for the majority of their income – have become harder to fi nd, many major diseases already have multiple treatments, pipelines are drying up. Add the

“We must have more competition and less red tape in pharmaceuticals” Neelie Kroes, European Commissioner for Competition (Page 32)

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global recession on top of that, and you can see why many companies are looking to boost their bottom lines in any way they can. One of those ways is playing tougher with their generics-producing counterparts. In the US, where President Obama is trumpeting greater production of generics as a way of cutting healthcare costs, some companies have even taken the step of introducing generic copies of their own drugs, before the patents on the originals have expired. This can help counter the tactic used by certain generics producers, who bring out copycat versions of drugs while their patents are still valid, depending on the slowness of the American legal system to allow them ample time to make a profit. Here in Europe, it is the developers of branded products who have been accused of not playing fair. Last year, the European Commission launched an inquiry into the European pharmaceutical sector, citing as one of its reasons a delay in generic medicines reaching the market. According to the Commission’s

final report, released in early July, manufacturers of branded drugs have been using what it calls ‘delaying strategies’ to block the release of generic products. Who will come out on top? Globalisation may provide the answer. The pharmaceutical industry, whose main source of profits has long been North America and Western Europe, is now increasingly venturing into new markets, where patent protection often doesn’t exist and all drugs must compete on a level playing field. It could be this, more than anything else, that determines the next stage of the game.

“When it comes to creativity, I don’t think there is an advantage of scale – it could actually be a disadvantage of scale” Håkan Björklund, CEO, Nycomed (Page 36)

“We’ve been dancing around a number of issues in this industry and haven’t wanted to face up to them” Chris Viehbacher, CEO, sanoﬁ-aventis (Page 74)

Marie Shields, Editor

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CONTENTS NGP EU8:july09

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CONTENTS 9

36 The small company that grew When Håkan Björklund became CEO of Nycomed in 1999, the company was a relatively minor player in the industry. Now it ranks among the top 40 in the world

In with the new Sanofi-aventis CEO Chris Viehbacher on mergers, mega trends and why he’s optimistic about the pharmaceutical industry’s future

Winner takes all Who will grab the prize as the competition between generics and branded products heats up?

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CONTENTS NGP EU8:july09

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CONTENTS 11

Dipti Amin

Trials and tribulations MANUFACTURING

96 Changing times

42 Joining forces

Wyeth’s Thorir Bjornsson on attrition, mergers and what the future holds for the industry

Bayer’s Edgar Sur explains how Lean and Six Sigma can work together in pharmaceutical manufacturing

56 A limited shelf life? Schering-Plough’s Brent Saunders examines the industry’s move toward OTC switch

100 Bringing drug discovery into focus Anne Phillips looks at transparency, patient benefits and the challenges of global clinical trials MARKETING

70 Economies of scales

108 Personal best

How Pronova’s use of omega-3 has transformed an age-old remedy into a potential blockbuster

Why individual accountability plays a crucial role in sales force effectiveness

RESEARCH & DEVELOPMENT

82 Running the risk GSK’s Ellen Strahlman outlines why a balance of safety and efficacy is essential in clinical trials

90 Trials and tribulations The importance of good decisions for ensuring patient welfare, according to John Smith

ASK THE EXPERTS 86 Richard Lake, Restek Corporation 88 Ayelet Dilion-Mashiah, Do-Coop Technologies Ltd. 93 Dipti Amin, Quintiles 106 Michael Butler, Xceleron 134 Ethan Smith, Metastorm

ROUNDTABLE DISCUSSIONS 47 Lean/Six Sigma With Ian Cox of JMP, Erik Tieleman of R&G Global Consultants, Harry Clark of SI Associates and Steffen Himstedt of Trebing & Himstedt 59 Drug delivery With John Fraher of Eurand and Gerd Paulus of Swiss BioAnalytics AG 113 Marketing With Corbett Accel Healthcare Group’s Scott Cotherman, Grey Healthcare Group’s Michel Dubery, IDEA Pharma’s Mike Rea and Zaicom International’s Graeme Chrystal 123 CRM With Rob Halkes of Van Spaendonck, Vivian Hunt of McKinsey & Company and CDM’s Torben Vogt

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CONTENTS 13

INDUSTRY INSIGHTS

IN THE BACK

54 Philip Fairhurst, Sodexo 66 Martin Svantesson, Geodis Wilson 68 Abhijit Mukherjee, Dr. Reddy’s 104 François Rechenmann and Adrienne Craig-Kennard, Genostar 132 Masao Moriyama, GE Healthcare

EXECUTIVE INTERVIEWS 94 Ralph McDade, Rules-Based Medicine 120 Amanda Smith, Caudex Medical 127 David Swinbanks, Nature Publishing Group

128 Keeping in touch The importance of physician-patient relationships in ensuring adherence to drug

China

136 Travel 138 Events 140 In review 142 Proﬁle 144 Photo ﬁnish

Photo ﬁnish

Economies of scales

104

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UPFRONT LEAD FEATURE

GPO - A - Flu capsules, used to treat the H1N1 virus, at the warehouse of the Government Pharmaceutical Organization in Bangkok, Thailand

IN THE MIDST OF A PANDEMIC In June, the World Health Organization (WHO) raised its worldwide pandemic alert level to phase 6 in response to the ongoing global spread of the novel influenza A (H1N1) virus (also known as swine flu). Phase 6 indicates that a global pandemic is underway. The pandemic alert reflects the fact that there are now ongoing community level outbreaks in

multiple parts of the world. According to the WHO, more than 81 countries are now reporting cases of human infection with novel H1N1 flu, including 40 countries in the WHO European Region, where the number of cases had risen 73 percent between 26 June and 2 July. There were nearly 18,000 confirmed cases in Europe as of mid-July. The WHO stressed that its

decision to raise the pandemic According to the European alert level to phase 6 is a reflection Centre for Disease Prevention of the spread of the virus, and Control, out of the 31 not the severity of EU and EFTA counThere the resulting illness. tries, 30 countries were nearly There is still unhave reported a certainty around total of 17,733 conconďŹ rmed cases how many people firmed cases, inin Europe as of infected with H1N1 cluding 33 deaths as mid-July will develop serious of mid-July. complications or die, beBecause novel H1N1 is cause experience with this virus a new virus, many people may so far is limited and influenza have little or no immunity against is unpredictable. it, and illness may be more severe

18,000

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UPFRONT

LEAD FEATURE chills, fever, cough, fatigue and and widespread as a result. sore throat. There is also currently no vacThe American Centers for cine to protect against it. Disease Control and Prevention In early July, the British (CDC) has issued the following Broadcasting Corporation (BBC) guidelines outlining what to do if reported that the first doses of an you should become infected with H1N1 vaccine had been prothe virus. If you are sick, you may duced in Europe, but that it be ill for a week or longer. You would be several months before should stay at home and avoid any could be distributed. The contact with other people, except vaccine was produced by to seek medical care, but do not Novartis at a plant in Marburg, do so unless you are severly ill. Germany. According to the Be aware that you may be contaBBC, the vaccine was made in gious from one day before cell culture, a much faster you develop symptoms to up method than the traditional way to seven days after you of growing it in eggs. get sick. Children, Novartis has said Because especially younger that although the novel H1N1 is a children, might povaccine is ready, tentially be contathe first batch many people may gious for longer will not be used, have little or no periods. as it was created immunity against it If you are severely using the wild type ill or are at high risk for flu strain of H1N1. complications, you should contact Also in July, the WHO was your healthcare provider or seek informed by health authorities medical care. Your healthcare in Denmark, Japan and Hong provider will determine whether Kong of the appearance of flu testing or treatment is needed. H1N1 viruses that are resistant Antiviral drugs – prescription to the antiviral drug oseltamivir medicines (pills, liquid or an in(known as Tamiflu), based on haler) with activity against influenlaboratory testing. The viruses za viruses – can be given to those were found in three patients who become severely ill. These who did not have severe dismedications must be prescribed by eases and all have recovered. a healthcare professional. Investigations have not found In order to protect yourthe resistant virus in the close selves and your loved ones, it’s contacts of these three people. important to stay informed. The viruses remain sensitive to More information can be found the drug zanamivir (Relenza). at www.cdc.gov/h1n1flu/ or H1N1 is a virus of swine www.who.int/csr/disease/swineorigin that first caused illness in flu/. You should also observe the Mexico and the United States in following precautions. Cover your March and April, 2009. It is benose and mouth with a tissue when lieved to spread through the you cough or sneeze, then dispose coughs and sneezes of affected of the tissue in the trash after you people. It may also be spread by use it. Wash your hands often with touching infected objects and soap and water, especially after you then touching your nose or cough or sneeze, and avoid spreadmouth. H1N1 infection has been ing germs by touching your eyes, reported to cause a range of nose or mouth. symptoms, which include aches,

NEWS IN PICTURES

United Nations Secretary General Ban Ki-moon says developing countries could need more than US$1 billion by the end of this year to ﬁght the H1N1 pandemic

new virus

Researchers at Harvard University have found that those who travel are three times more likely than those who do not to develop venous thromboembolism

Two pharmaceutical companies, Novartis and GSK, began working on the production of an H1N1 vaccine at their laboratories in Germany

Swiss pharmaceutical group Novartis announced it is to purchase the Austrian specialty generics business EBEWE Pharma in a bid to improve the reach of its own generic drug division, Sandoz

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UPFRONT IN MY VIEW

ALEXANDER KAMB Executive Director of Oncology at Amgen

All the investment in research over the last 30 years or so is beginning to pay dividends and we understand a lot about cancer, and so now we can be much more predictive in what we do. We can predict if we inhibit this target and attack this part of the cancer cell, it will die and the patient will survive. What has unfolded in the last few years is actually not as simple as that and in fact the view that cancer might be a simple disease genetically: in some cases that’s true, but it’s a limited number of cases. For the most widespread cases like colorectal cancer, prostate, breast and lung, the disease when you look more closely is actually genetically very complex, with minimally dozens and possibly hundreds of genetic cases. Cancer, as we’ve learned in the last few years, has many muta-

tions that it acquires in its natural history as it develops, and understanding that complexity is very challenging. As we move forward and try to understand it we will employ a lot of these technologies that are emerging. It’s not magic.

on the business side, but I think my view and the view of many of my colleagues is that if you actually treat an unmet medical need, the commercial success will follow. People, societies and individuals will always want to pay for their health.

There’s no quesThe more things we As tion that the can see and moniimportant trends are tor, generally as the technology toward despeaking, the is, the creasing promore we end up ductivity and doing and the is still the companies still more it costs, but biology wanting drugs. hopefully the better They still have the rethe results will be. As imsources to test them, but the portant as the technology is, the supply is diminishing, so that key thing is still the biology. creates an opportunity. It’s an People who can understand the opportunity inside the industry biology have a vision, have ideas; to try to address that and an opthose are the people that are portunity for entrepreneurs and much needed and are arguably other kinds of people who don’t in short supply. necessarily have the taste for big pharmaceutical companies to There is obviously a role for make contributions. business experts and creativity

key thing

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UPFRONT

ALZHEIMER’S DRUG

COMPANY NEWS

CASE RESOLVED

POSSIBLE HEART BLOCKBUSTER

In the UK, the National Institute for Health and Clinical Excellence (NICE) has issued its final technology appraisal for Alzheimer’s medicines. The appraisal was updated following the court case against Eisai and Pfizer, manufacturers and distributors of Aricept (donezepil). NICE has decided to uphold its original decision to ban the reimbursement of Aricept, as well as Exelon (rivastigmine, Novartis) and Reminyl (galantamine, Shire), for patients with early stage Alzheimer’s. NICE had previously refused to release the model it had used to make the decision, which had raised objections from the companies involved. Although some small changes were made to the model following a consultation with stakeholders, NICE’s independent advisory committee decided they would not make enough difference to the cost-effectiveness of the drugs. The guidance is therefore being left unchanged, and the drugs will be available on the National Health Service only to those patients who have the moderate, rather than the mild, form of the disease.

Sanofi-aventis’ atrial fibrillation treatment Multaq (dronedarone) was recently approved by the FDA in the US. The approval means something of a comeback for the drug, which was rejected by the FDA three years ago amid safety concerns. Multaq failed to benefit patients suffering from severe heart failure, and also increased overall mortality in one of its initial clinical trials. After this major setback, sanofi researchers began to look at what had gone wrong. “Based on the Andromeda study, we were able to examine the data and see what sort of patients should not get Multaq, and that was the basis of starting the Athena trial,” said Paul

FAST FACT

Cardiovascular disease causes more than

4.3 million deaths in Europe each year

Chew, Chief Science Officer and Chief Medical Officer for the company’s US operations. Instead of targeting patients experiencing severe heart failure, sanofi decided to examine atrial fibrillation (AF) – an irregular rhythm in the upper chamber of the heart leading to blood clots and potential strokes. Patients with

TWITTER ON Danish pharmaceutical company Novo Nordisk recently launched its branded Twitter site ‘Race with Insulin’ to keep patients up to date with the life of indie racer and diabetic Charlie Kimball. In his tweets, Kimball talks about living with type 1 diabetes and about using Novo Nordisk’s Levemir to treat the disease. Twitter is a system of ‘mini-blogs’ that allows users to put up very short posts – or ‘tweets’ – that are read by ‘followers’. The Novo Nordisk account was apparently created for free just like any other Twitter account, and is updated by Kimball from his iPhone. Such social media tools are not yet in wide use in the pharmaceutical sector, partly because the technology is so new and partly be-

the disease have an increased risk of hypertension, high blood pressure and an associated risk of heart attack. The most commonly used therapy for these patients up to now has been amiodarone, which is not approved for AF, and can have serious effects: pulmonary fibrosis, hyperthyroidism, tremors and severe skin rash.

cause there are as yet no clear guidelines on the type of information pharma companies can post on such sites.

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UPFRONT INTERNATIONAL NEWS

BRAZIL’S INNOVATION

MEDICAL TOURISM

JACKSON DEATH

A new report released from the Pharmaeutical Research and Manufacturers of America (PhRMA) has stated that Brazil has made substantial progress regarding its drug innovation policy and is now able to compete in medical innovation. ‘Innovation in Brazil: Public Policies and Business Strategies,’ is based on several seminars and advises that the region can now attract innovation investments from international players, such as processes, products and services. Patent registration is one of the indicators that measure innovation. According to the report, the Brazilian companies that have registered the most patents are those that operate in the international market. It is believed that until now, Brazil has been missing the opportunity to attract R&D centres of foreign companies.

Not a new phenomenon for South Korea, but the popular destination for medical care is about to get an even greater boost. A revised law going into effect in May will allow hospitals to hire agencies to help lure medical tourists. Previous to this, advertisements to the public were disallowed and medical institutions were unable to hire agencies to seek patients for them or directly target marketing efforts at specific groups. With the help of the new law, South Korea’s Health Ministry hopes to attract 100,000 medical tourists by 2011. South Korea is already a popular destination for Asian women seeking cosmetic surgery and the government now hopes to get patients from all over the world.

Israeli pharmaceutical company, Teva, has recalled thousands of drugs after investigators implied a possible relation to Michael Jackson’s recent death. The pop icon was found dead on June 25 after suffering a cardiac arrest in his Beverly Hills home. The anesthetic was also found in his home. Teva decided to pull vials of the powerful drug Propofol after it found over 40 users who bought the drug in May were suffering fevers and chills, and it was discovered two lots of the distributed drug were contaminated. A Teva Pharmaceuticals spokeswoman, Denise Bradley, told the Associated Press there was no connection between the contaminated drug, which prompted the recall, and Jackson’s death.

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UPFRONT

INTERNATIONAL NEWS

AIDS RESEARCH

PATENT RESTRAINTS

WORKFORCE CUT

A major AIDS conference currently under way in Cape Town has announced global spending on HIV vaccine research is currently in decline, following a fall of 10 percent in 2008, equalling approximately US$93 million. The Working Group, which comprises the United Nations AIDS agency UNAIDS, the International AIDS Vaccine Initiative and other organisations, believe the decline to be attributable to the global economic crisis as well as disappointment at the outcome of the mStep and Phamibili trials. The two international trials of a vaccine developed by drug company Merck were halted after results showed they failed to prevent HIV infections among participants.

A gathering of 12 states in Morocco in July, is due to address the current issue of corporate companies producing generic medicines and the effect this has on developing countries trying to access affordable medicines. The global charity Oxfam has arranged the meeting to bring about a new Anti-Counterfeiting Trade Agreement (ACTA) to draw up new regulation of patents and trademarks. The charity said generic manufacturers could be subject to criminal prosecutions and have their medicines seized on orders from big drug companies under new international laws being discussed. The charity fears the EU is pushing for a deal that will require companies to increase seizures and prosecute companies who produce generic medicines legally. Oxfam said this in turn could lead to big pharmaceuticals having a monopoly on medicines.

Sun Pharmaceutical’s US subsidiary, Caraco Pharma, has pledged to cut its workforce by more than half after the recent clampdown by the US FDA on the company’s manufacturing facilities idled most units. Caraco’s 667 full-time employees are expected to be reduced to approximately 350 personnel, after the FDA pulled up the company for “repeated manufacturing standards violations” last month. On June 25, US Marshals seized drug products manufactured at Caraco’s Michigan facilities in Detroit, Farmington Hills and Wixom. The seizure put an immediate stop to the firm distributing drugs, pending an assurance that it would comply with the FDA’s current manufacturing practices.

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UPFRONT COMPANY NEWS

FLU CASES RISE IN UK Central England still had the GPs in Britain have experienced highest number of cases with 94 a nearly 50 percent increase in per 100,000, with London still repatients fearing that they might maining a hot spot for the virus. have contracted swine flu. The north of England, however, According to BBC News, in the has also witnessed a recent insecond week of July, 40,000 more crease, with cases going up from patients contacted their doc6.6 to 37.16 in one week. tors to report flu-like The swine flu symptoms. In the vaccine is not exWith many second week of July pected to arrive in GPs criticising the UK until the the governmore patients end of August, ment over its contacted their and will only be handling of the doctors to report ﬂulike symptoms administered to pandemic, it has those on the priority emerged that relist, such as people aged six ported cases rose by 46 months to 65 with a condition percent from the previous week, such asthma, diabetes, heart, liver with those aged between five and or kidney disease, or a suppressed 14 at the highest rate with 159.57 immune system. per 100,000 visiting their doctors. The rest of the UK is due to The second highest rate was in receive around 60 million doses of youngsters and babies aged up to the vaccine, enough to cover half four at 114.12 per 100,000. the population, by the end of December. The rest will follow next year. Until then, it is clear that doctor's surgeries will continue to see ever increasing numbers of cases.

40,000

FROM THE VAULT In the Q4 2008 issue of NGP, KARE SCHULTZ examines the growing global epidemic of diabetes and looks at the exciting new treatments now appearing on the market. Shultz also discusses the ethical debate surrounding human stem cell research. Go to www.ngpharma.eu.com, click on ‘Previous issues’ in the left column, choose ‘Issue 6, November 2008’ and scroll down to ‘Cover stories’ to read about NOVO NORDISK’s efforts to find new treatments for Europe’s 48 million diabetes sufferers.

OLDEST NEW MOTHER DIES

FAST FACT

Iceland has the highest fertility rate in Europe, with

2.07 children per woman

The world’s oldest new mother lived to 101, and she hoped has died, aged 69. Spanish she would also have the exwoman Maria del Carmen tended life span gene. In Bousada de Lara an interview with gave birth at age Associated Press “I think 66 in December television news, 2006 thanks to Bousada said: in vitro fertility “I think everyshould become a treatment and one should bemother at the right time for them” the help of donor come a mother sperm and eggs. at the right time She died in mid-July for them”. Her death of cancer. raises questions about the Bousada had said in inter- safety of in vitro fertilisation in views that her own mother had older women.

everyone

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UPFRONT H1N1 SPECIAL REPORT

FLU OUTLOOK

Reported cumulative confirmed cases of H1N1 in EU and EFTA countries as of 22 July

TOP 10

Cumulative number of confirmed H1N1 cases in EU and EFTA countries as of 22 July 2009 Source: ECDC situation report

Conﬁrmed cases in EU/EFTA countries

1 10 100 1000

10, 000 Source: ECDC situation report

PRIORITY VACCINATIONS NEEDED EU Health Commissioner Androulla Vassiliou has warned that 60 million people in Europe will need priority vaccination against the H1N1 (or ‘swine flu’) virus, saying that “there won't be vaccinations for everyone.” Vassiliou was speaking to Lusa, the Portuguese news agency, after visiting a health centre near the Portuguese town of Estoril. She pointed out that the number of people across the EU most at risk from H1N1 had been estimated at 60 million by experts in Brussels. In October, Health Ministers from the 27 member states of the EU will meet to decide how a vaccination programme against H1N1 will work. The virus had infected nearly 150,000 people worldwide by the end of July, and had resulted in 850 deaths. Most people who contract the virus suffer less severe symptoms than those caused by ordinary seasonal flu. Four cases of a strain of H1N1 resistant to oseltamivir (Tamiflu) have been identified. However, because of the large amounts of the drug being used worldwide, such isolated cases of resistant strains are expected.

Flu vaccine manufacturers have increased production of seasonal flu vaccines and several companies are currently working on a vaccine against the virus, which it is hoped will be ready before the main flu season begins in Europe in the autumn. Although the virus is currently still relatively mild, medical professionals fear that it could mutate and gain strength in the next few months. Germany, France and the UK have already ordered billions of euros worth of vaccine stockpiles.

2 3 4 5

7 8 9 10

10649

Germany

1818

Spain

1486

France

628

Sweden

326

Greece

323

Cyprus

297

Switzerland

272

Italy

258

Netherlands

211

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UPFRONT COMPANY NEWS

HAMILTON UNVEILS BIOLEVITATOR

NEW DEAL

The BioLevitator is the first benchtop 3D cell from Global Cell Solutions. The GEM provides culture system on the market, delivering sig- an optically clear and non-autofluorescent nificant productivity gains to researchers in pipettable substrate for adherent cell lines. The drug discovery, cell-based therapeutics and GEMs contains paramagnetic particles that faregenerative medicine. The BioLevitator cilitate suspension in the LeviTube and media brings the engineering and automation ex- changes. Custom protein coatings are available pertise of Hamilton together with Global Cell to facilitate growth of difficult cell lines and the Solutions’ unique approach to cell GEM’s hydrogel core inhibits ice crysculture for a scalable and autotals during cryopreservation, enThe mated system that reduces suring high survivability and BioLevitator costs whilst improving the cell function. consistency and relevance of Hamilton Company is a traditional peripcultured cells. leading worldwide supplier heral cell culture The BioLevitator elimiof precise liquid handling deinstruments nates traditional peripheral cell vices, laboratory automation culture instruments, such as incuand storage systems, serving cusbators and centrifuges, and minimises manu- tomers in academic and private research labal handling. Each of the BioLevitator’s four oratories, pharmaceutical and clinical hydrophobic, PTFE-filtered 50 mL cell cul- diagnostic companies and governmental inture tubes can produce cell growth equivalent stitutions. Hamilton maintains headquarters to up to ten T75 flasks, depending on the cell in Reno, Nevada and Bonaduz, Switzerland, line. The system features a user-friendly touch both of which house R&D and production fascreen interface with real-time monitoring cilities. Hamilton has subsidiaries for direct and control of environmental temperature sales and service in many countries and works and CO2 levels. with a wide distributor network in other re-

UK-based GlaxoSmithKline has signed a collaboration agreement with three-year-old biotech firm Concert Pharmaceuticals. Under the terms of the deal – which is worth US$35 million up front and up to US$1 billion in additional payments – Concert will develop three of its compounds through agreed-upon clinical trials, and GSK will have an exclusive option to license them worldwide. Concert will also provide versions of three GSK pipeline drugs modified using Concert’s new deuterium technology, which replaces ordinary hydrogen atoms in some existing drug molecules with deuterium (also known as heavy hydrogen), an isotope of hydrogen with a nucleus containing one proton and one neutron Deuterium is easily isolated from seawater, and has twice the atomic mass of ordinary hydrogen, allowing it to bond differently with other elements. For example, it forms a much stronger bond with carbon. Concert has demonstrated that this increased bond strength can be used to improve important drug properties in certain cases, including bioavailability and half life. The resulting novel compound holds the promise of improving tolerability, efficacy and safety. One of the drugs covered by the agreement is Concert’s CTP 518, a protease inhibitor created by substituting deuterium for hydrogen in certain key areas in atanazanavir. CTP 518 maintained full antiviral potency in preclinical studies, with significantly slower metabolism in the liver. Researchers hope that it will be easier to maintain higher blood levels of CTP 518, meaning the drug could become the first protease inhibitor to be used without the need for a booster drug.

eliminates

The BioLevitator utilises the Global Eukaryotic Microcarrier (GEM) technology

gions. Hamilton is a privately held company. For more information, visit www.hamiltoncompany.com

Swiss drug maker Roche has begun cutting staff at Genentech, following its recent US$46.8 billion acquisition of the biotech company. The move is thought to be the first step in a a widely anticipated integration programme. According to a Genentech spokesperson, less than one percent of Genentech’s 8250-person workforce in San Francisco will lose their jobs. No specific figures or timeframe for the cuts were immediately available. The cuts which will be carried out through voluntary contract buyouts, could impact Genentech’s late stage drug development and administrative sections. It is believed that few jobs will be lost in the company’s manufacturing and production operations. Roche’s integration efforts up to now have focused on upper management. Genentech’s CEO, Arthur Levinson, and President of Product Development, Susan DesmondHellmann, have both left the company.

JOB CUTS AT GENENTECH

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UPFRONT COMPANY NEWS

CONFIDENCE IN A CRISIS Today’s defining crisis is in consumer confidence rather than the financial markets. The harsh lesson for businesses is that apparently robust brands become fragile once reputation is undermined. Shares rise and fall, but once trust is lost it’s extremely difficult to recover. While low stock market value can be damaging, lack of faith can be fatal. The pharmaceutical industry has long appreciated the value of trust, but this should not admit complacency. Bad news sells, and with dwindling advertising revenues, some in the media see storm-chasing as a growth market. Though pharma has emerged relatively unscathed from recent events, the wider message is clear: failing to have a strategy to protect and rebuild trust leaves a company’s most precious asset dangerously vulnerable. Effective crisis communication is proactive. Risks should be constantly identified and mitigated, and all media outlets – including new media channels – need to be

monitored to pick up problems before they hit the front page. Even if the crisis breaks, companies need to be ready to influence the right people at the right time, using the right channel with the right message. An appropriate response is as important as a rapid one: implausible denials later retracted will not build trust. Responses should reflect the source of the threat – a traditional press statement will achieve little when the damage is being done on Twitter. Key crisis personnel, including designated spokespeople, should be identified and regularly briefed so they can respond with speed and accuracy. External PR and legal support, bringing additional expertise when needed, should form an integral part of this core crisis team. An effective crisis communication strategy is good business, driving a company to be alert, agile and responsive. These are valuable lessons, because the worst crisis is the one from which a business fails to learn.

Jane Brearley is Head of Waggener Edstrom’s European Healthcare Practice in London

EMOTION – A PART OF CHANGE It’s often been said you should “Emotional intelligence is the prileave your emotions at the door mary source of human energy, when you go to work. I’m sure we authenticity, aspiration and can all relate to this over our many drive.” When we do any kind of years of working, whether it is for a change, whether it be changing company, a charity, or for ourselves. the way we problem solve, imI would like to convey the counter proving the culture of a company, to this old saying by stating that it’s launching products, improving customer satisfaction or seokay to be emotional about curing monies, we work. We have many need to get the challenges in our We have lost our emotion running work that prothrough the orvide us with ganisation and pleasant and intelligence and put the fire in unpleasant expurpose for being our hearts, to periences. We emotional in the work place once again excite often shrug off the the masses. Cooper emotion, saying “It is continues, saying, “By develnot my job to get involved.” We have lost our emotional intelli- oping the emotional quotient gence and purpose for being emo- (EQ), we learn to readily actional in the work place. Driving the knowledge and value core feelemotional passion into our work is ings in ourselves and others.” Once emotional change is about driving purpose behind why we are doing what we do. This kind achieved organisational changes of emotional change is necessary for will take place and the company growth. We need to be emotional can begin the process of moving about what’s happening and be a forward. So maybe it is time for part of driving the emotion back companies to consider this kind of change, which might start a revointo our working lives. In his book, ‘Emotional lution of breakthrough ideas and Intelligence,’ Robert Cooper says, possibilities.

emotional

For more information visit www.3ppartnersdls.com

SHIRE’S US BREAK

FAST FACT Nearly

10% of people of Ashkenazi Jewish descent may carry the gene for Gaucher’s disease

UK-based specialty drug maker Shire Pharmaceuticals may be on the brink of breaking into a US$1.2 billion market sooner than expected after regulators there gave its drug Velaglucerase-alpha a fast-track designation that could see it on the market late next year. Velaglucerase-alpha is currently in the final stage of clinical trials. According to Shire, the original timetable to file for approval

was the end of this year. Fast tracking means the US FDA will allow the company to send information in on a rolling basis. There is no guarantee the drug will be approved more quickly, but the move does suggest the FDA considers it a priority. Velaglucerase-alpha is being developed for the treatment of the rare genetic condition Gaucher’s disease.

We Know the Tools. We Have the Strategies. We Engage People. Let 3P Partners Make a Difference in Your World Whether the help you require is to fill the gaps in the short-term or to engage and empower all levels of your organization, 3P Partners makes a difference by… • Extensive Assessment & Gap Analysis • Working with You the Client to Develop Improvement Plans and Initiatives to Achieve Higher Levels of ROI • Transformation of Culture • Utilization of Lean Six-Sigma Tools to Achieve Sustainable Improvement Throughout Your Organization • Assisting Your Organizations with Restructuring Efforts • Adaptability of Key Technical Solutions

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UPFRONT COMPANY NEWS

VITAL STATISTICS

64% of adults 65 years and over received an influenza vaccination during the past 12 months Between

5-20% of the US population get the flu each year

POSITIVE RESULT IN LUPUS TRIAL Human Genome Sciences and GlaxoSmithKline have announced that Benlysta (belimumab, formerly LymphoStat-B) has met the primary endpoint in BLISS-52, the first of two phase III trials in patients with serologically active systemic lupus erythematosus (SLE). In the placebocontrolled BLISS-52 study, the results showed that belimumab plus standard of care achieved a clinically and statistically significant improvement in patient response rate at week 52, compared with standard of care alone. Study results also showed that belimumab was generally well tolerated, with adverse event rates comparable between belimumab and placebo treatment groups.

“The BLISS-52 results demonstrated that Benlysta has the potential to become the first new approved drug in decades for people living with systemic lupus,” says H. Thomas Watkins, President and Chief Executive Officer, HGS. “Given the limited treatment options currently available, patients would benefit greatly from potential new treatments. Benlysta is an outstanding example of the type of treatment HGS is working to develop and bring to patients. Assuming positive results in November from our second phase III trial of Benlysta, we and GSK plan to submit marketing applications in the United States, Europe and other regions in the first half of 2010.”

Belimumab is an investigational drug and the first in a new class of drugs called BLyS-specific inhibitors. No new drug for lupus has been approved by regulatory authorities in more than 50 years. Belimumab is being developed by HGS and GSK under a co-development and commercialisation agreement entered into in August 2006. “Benlysta is the first medicine being developed specifically for lupus that has reached this late stage of clinical development with positive results,” says Carlo Russo, Senior Vice President, Biopharm Development, GSK. “We look forward to completing the pivotal studies, with the hope of bringing this potentially important therapeutic advance to patients suffering from SLE.”

The CDC has antigenically characterised

1567 seasonal human influenza viruses since October 2008 It has also characterised

84 novel H1N1 viruses

Between October and May, the influenzaassociated hospitalisation rate for children aged 0-4 was

3.85 per 10,000

WEB-BASED LABELLING SYSTEM A special event launching the new web-based version of PRISYM Medica, the world’s only purpose designed labelling management software for FDA regulated environments is being held in Munich on 1st October 2009. PRISYM ID today announced the official launch event for a webbased version of PRISYM Medica, a market leading GMP-based labelling management software for FDA 21 CFR Part 11 regulated environments. Medical device, pharmaceutical manufacturers, clinical trials companies and industry press have been invited to see the product demonstrated live.

PRISYM Medica Web is the first web-based labelling solution to include web-accessed label design and approval routing as well as printing. The web version delivers significant benefits in terms of efficiency, accuracy and compliance in the design and approval of labels. PRISYM Medica offers a collaborative labelling environment with automated processes and prompts for those involved in label design, approval and production whereever they might be located. Manufacturers using PRISYM Medica Web are also able to give trusted suppliers, distributors and

partners secure, print-only access to approved labels in an environment that monitors and records every activity along with electronic signatures in a time and date stamped audit log maintaining a high level of security and FDA compliance. This can deliver major operational and production advantages as product can more easily be switched from one production site or distribution centre to another. This enables manufacturers to capitalise on the labour, tax, shipping or production efficiencies of using a particular site for certain types of products or shipment destinations.

More information on PRISYM Medica web and registration for the launch event is available on PRISYM ID’s website, www.prisymls.com

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UPFRONT COMPANY INDEX

HEALTH TOURISM CRACKDOWN

DON’T MISS...

36 BIG PLANS Håkan Björklund oversees Nycomed’s growth

The UK government is apparently aiming to cut down on so-called health tourism by proposing that visitors to the UK from outside Europe take health insurance, to prevent non-EU nationals from trying to use free NHS services to which they are not entitled. The Department of Health and the UK Border Agency will also examine ways immigration rules might be changed so that

those with large debts for services that should have been paid for upfront could be expelled from the country or refused permission to re-enter. Conversely, access to free healthcare for some non-UK residents would be broadened under different measures recommended by proposals from the Department of Health and the Home Office. This group would include unsuc-

cessful asylum seekers who have officially recognised difficulties returning home, and unaccompanied children. These proposals, which are due to be published later this year, also suggest the possibility of a change in policy for non-UK residents who are HIV-positive. Currently, such people are offered diagnosis and counselling free of charge, but have to pay for treatment.

COMPANY INDEX Q3 2009 Companies in this issue are indexed to the ﬁrst page of the article in which each is mentioned.

56 SWITCHING SIDES Brent Saunders on why OTC makes sense

136 REGIONAL FOCUS China’s emerging pharmaceutical market

3P Partners 26, 27 ActivX 6 Aegis Analytical Corporation 72 Alternatives Technologies 45 Amphora Research Systems 81 Anagnostics IBC AstraZeneca 128 Bayer 42 Biotechnology Industry Organization 32 Boehringer Ingelheim 90 Bürkert 15 Caudex Medical 10, 120, 121 CDM 123, 125 Cisbio Bioassays 99 Corbett Accel Healthcare Group 8, 113, 114 Créapharm 78 Do-Coop Technologies Ltd. 88, 89, OBC Dr. Reddy’s 4, 68, 69 EMD Serono 108 Eurand 61, 62 European Commission 32 Farmak 65 Field Fisher Waterhouse 32

Frost & Sullivan 32 GE Healthcare 132, 133 Genentech 74 Genostar 104, 105 Geodis Wilson 66, 67 Grey Healthcare Group 119 GlaxoSmithKline 74, 82, 100 Hamilton 24, 25 IDEA Pharma Consulting 112, 113 Innovex IFC JMP 47,51 Johnson & Johnson 130 McKinsey & Company 123 Merck 74 Metastorm 12, 134, 135 MPI Research 31 Nature Publishing Group 127 Nycomed 36 Pfizer 74 PricewaterhouseCoopers 56 PRISYM ID 28, 29 Pronova BioPharma 70 Quintiles 93

Restek Corporation 86, 87 Roche 74 R&G Global Consultants 46, 47 Rules-Based Medicine 94, 95 sanofi-aventis 74 Santarus 56 Schering-Plough 56, 74 Shire Pharmaceuticals 32 SI Associates 47, 48 Siemens 59 Sodexo 54, 55 Swiss BioAnalytics AG 60, 61 Trebing & Himstedt 47, 53 Van Spaendonck Group 122, 123 Waggener Edstrom 26, 129 Waters 2 Wyeth 96 Xceleron 106 Zaicom International 113, 116

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COVER STORY

The competition between branded drugs and generic copies has been going on for years, but as generics threaten to take the lead, how will their rivals ďŹ ght back? By Marie Shields 32 www.ngpharma.eu.com

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eavy hitters all over the world are throwing their weight behind the cost-reducing potential of generics. In the US, President Obama has recommended smoothing the pathway to their introduction, as a way of bringing down the cost of treatments for consumers. Governments of EU countries are also keen to ease the way for generic products – understandably, given that in Europe, generic medicines enter the market at a price that is, on average, 25 percent lower than that of their branded equivalents. What effect will this generic focus have on research-based pharmaceutical companies, which have argued for years that extended patents on their products are necessary in order for them to recoup the millions they invest in research and development? Add to that the fact that big pharma companies are facing a host of other pressures at the moment: problematic pipelines, a dearth of new blockbusters, patent expiries – not to mention the global fi nancial crisis – and you have a potentially explosive situation for the industry. According to Barath Shankar, Senior Industry Analyst, Pharmaceucing an ticals and Biotechnology, for Frost & Sullivan, big pharma is facing y’re almost unprecedented amount of competitive pressure. “They’re

“Overall, the idea that profits from branded products are needed to invest in new research is tapering off. Having a comprehensive business model that works in the current situation is more important.” No matter which argument you believe, producers of branded pharmaceuticals are not about to take the onslaught of generics lying down. In the US, ‘copycat’ drugs are often launched on the market before the patents on the original drugs expire, with generics companies depending on the slowness of the American legal process to hold up any resulting litigation. Some drug developers have responded by launching generic copies of their own branded products before the patents have expired.

Making inquiries

The branded vs generics battle is also hotting up here in Europe. Late last year, the EC launched a sector inquiry into EU pharma markets under EC competition rules. According to the Commission’s website, the inquiry was launched for two reasons: because of a decline in novel medicines reaching the market (average 27 per year in the 2000s compared to 40 per year between 1995 and 1999), and delays in generic market entry, leading to potential extra costs for consumers. The C Commission’s preliminary report, released last Nove November, was viewed by many as a full-on attack losing their pipelines and losing out on their big drugs to on the European pharmaceutical industry. John generic versions that are flooding the market, especially in Cassels, a competition lawyer at Field Fisher The total market for areas like cardiovascular.” Waterhouse, believes that the preliminary medicines in Europe is worth more than Shankar points out that in many European countries, report was too harsh, and indicated that the generics already account for a significant number of the Commission did not truly understand the prescriptions being written, whereas in the US, branded patent law system and how the pharmaceutidrugs still drive price and revenue growth. cal industry operates. “Part of the Commisat retail prices s Worldwide, the encroachment from generics is forcsion’s problem is that it was trying to use the wr ing big pharma companies to change their business models.. wrong tool. There are problems in the pharmaceutic sector, but they’re not necessarily problems Rather than focusing on fi nding blockbuster drugs, they are ceutical increasingly developing their pipelines for the long term, becoming that you can address via the competition rules. It’s widely more flexible, focusing on core specialties, and even producing their recognised, for example, that the way patents are registered could be imown generics. proved, but using the competition rules is not the way to get at them.” Another angle to the situation is provided by what are known as Big investment ‘settlement agreements’: agreements between branded pharmaceutical Producers of branded products point out that they put a lot of manufacturers and generic manufacturers aimed at ending ongoing litimoney into developing their drugs, and if the money that comes from gation in a patent dispute. In some cases, a ‘reverse payment’ is agreed, patent exclusivity is withdrawn, the development process will come to where the generic supplier agrees not to enter the market for a certain a halt. For example, Robert Spiegel, Chief Medical Officer at Scheringnumber of years in exchange for a sum of money . Plough, argues that, “If we say that generics are good enough, that the Such payments can be regarded as a way for big pharma companies current medicines you have today in 2009 are probably good enough to prevent generic copies of their products from entering the market, and we don’t really need any new medicines, 20 years from now we’re thereby keeping the price of drugs unnecessarily high. According to data going to have major issues with an aging population and many diseases from the European Commission, more than 10 percent of settlements that still have major unmet medical needs.” in pharmaceutical litigation cases were reverse payment settlements, Barath Shankar, at least, doesn’t buy it. “I think that argument held amounting to €200 million. true back in the 1990s and probably even the early 2000s,” he stresses. Just how widespread is the practice of reverse payments? The Euro“But if you look at the way innovation is being driven in the current pean Commission said in its initial report that it had identified 200 cases scenario, it’s a global market. Companies need to drive down costs. that it intended to investigate. However, as Cassels points out, unlike There’s a lot of outsourcing happening with regard to clinical trials and their US counterparts, European companies do not have to register contract manufacturing, so companies have to re-look at their business settlement agreements, making them extremely hard to track. models and understand what their core competency is and then look at The Commission’s fi nal report, released in early July, although less areas they should invest in. aggressive in its condemnation of the industry, still highlighted several

€214 billion

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what it called “delaying strategies” used by manufacturers of branded drugs in an attempt to block generics from entering the market. As a result of its inquiry, the EC says it will apply increased scrutiny to companies under EC Treaty antitrust law, as well as keeping a close eye on the use of specific instruments by originator companies to delay generic entry. Defensive patenting strategies that focus on excluding competitors without pursuing innovative efforts will also be discouraged. The Commission recommends that member states be asked to provide an automatic/immediate pricing and reimbursement status for generic medicines that are equal to the original products, and to introduce legislation that facilitates generic uptake, such as prescription by substances rather than brands. “We must have more competition and less red tape in pharmaceuticals,” said Neelie Kroes, European Commissioner for Competition, at the time the fi nal report was released. “The sector is too important to the health and fi nances of Europe’s citizens and governments to accept anything less than the best. The inquiry has told us what is wrong with the sector, and now it is time to act. When it comes to generic entry, every week and month of delay costs money to patients and taxpayers. We will not hesitate to apply the antitrust rules where such delays result from anticompetitive practices. The fi rst antitrust investigations are already under way, and regulatory adjustments are expected to follow, dealing with a range of problems in the sector.”

Time for change If practices such as reverse payments are indeed taking place, they are

UNFAIR TACTICS? Methods used to block generics from entering the market, according to the European Commission’s inquiry into the pharmaceutical sector: • Originator companies ﬁling so-called ‘patent clusters’ – a large number of EU-wide patents and pending patent applications for a single medicine. • Unnecessary patent litigation. According to the EC report, there were nearly 700 cases of reported patent litigation with generic companies, which on average lasted three years. The generic companies ultimately won more than 60 percent of these cases. • ‘Reverse payment’ settlement agreements. The EC report says that originator companies concluded more than 200 settlement agreements with generic companies in the EU. In approximately 50 percent of these, generic entry was restricted. • Originator companies intervening in national procedures for the approval of generic medicines, which on average led to four months of delay for the generic medicine.

a clear indication that manufacturers of branded products are taking the incursion of generics seriously. Rather than trying to get rid of generic competition using questionable methods, in times like these, companies need to stick to their core business – designing the product – and ensure they have a solid supply chain. They may also need to look at other areas, such as vaccines and biologics, in order to provide a steady income flow. Some companies have already been smart enough to move in this direction – the speciality areas where the returns and reimbursement rates are high. One company that has done this very successfully is UK-based Shire Pharmaceuticals. Its Human Genetic Therapies division, for example, focuses exclusively on the rare diseases known as ‘orphan diseases’. As Sylvie Grégoire, President of the division, explains, “Our portfolio of products focuses on the very rare end of orphan diseases – the populations we treat are between 2000 and 3000 worldwide. We are able to gain sufficient revenues and profits even though there’s a rarity of patients by commanding a high price for these products. If they don’t receive these replacement therapies or the drugs that we develop, their quality of life declines and they suffer from a very high morbidity as well as often early mortality.” It’s certainly been a worthwhile strategy for Shire, with six product launches in the past three years, and within Human Growth Therapy, 300 additional staff taken on in 2007, and another 275 in 2008. In addition to focusing on speciality therapeutic areas, many big pharma companies are also investigating the potential of biologics. Europe was the first to introduce guidelines for the approval of biosimilars, through the European Medicines Agency in 2005. Since then, the region has emerged as a testing ground for how the process will work in the rest of the world. In the US, President Obama’s recent budget proposed the development of a faster pathway for generic biologics, and guidelines for their approval have also been issued in Japan. As competition within the industry increases and margins grow smaller, generics producers may also see biologics as their next big opportunity. Despite understandable opposition from big pharma and biotech companies, it seems likely that the development process for generic biologics will be improved. However, there are still hurdles to be overcome. Frost & Sullivan’s Shankar sees the main problem as the lack of a clear idea as to how the regulatory pathway will work. “I believe the FDA will require a stronger proof of bioequivalency and potentially also require some small-scale clinical trials, because the way in which biologics work is completely different to the way small molecules or traditional pharmaceuticals work. “That could create some complications. It could be a situation where companies are following a ‘wait and watch’ policy, but it is defi nitely something that will happen because in the current situation, with the way the pricing of biologics has been moving, this is a way to introduce a competitive marketplace and to encourage companies to compete more and create more opportunities.”

34 www.ngpharma.eu.com

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“We must have more

competition and less red tape in pharmaceuticals” - Neelie Kroes, European Commissioner for Competition

Proof required

Each European citizen spends an average of

As Shankar points out, one potential hurdle in the development of biosimilars may be the US Federal Drug Adminison medicines tration, and whether it decides to require annually proof that biosimilars are equivalent to their branded counterparts. Although the FDA’ss rulings apply to drugs on the market in the US, S, it does tend to set the standard for the rest of the world. If the FDA decides to require proof of bioequivalency, it could make things much more complicated for generics manufacturers; and if it doesn’t, it could result in a situation where consumers don’t trust generic biologic drugs to provide the same benefits as the original versions. Shankar explains that the fi rst concern for the FDA is from the biotech lobbies. “The biotech lobbies are saying this is not going to work because it completely differs from traditional generics. When you’re working with proteins, if you make a small change to the process, you’ll end up with a completely different drug. Whereas with small molecules, it doesn’t matter what process you use, the end product will have the same chemical composition. That’s their argument. Then the generic manufacturers are saying that this is not something they can’t do. It’s been done before.” Both parties have a fairly strong argument, and at some point a decision will need to be made. There is no doubt, however, that the approval timeframe and marketing process for biologics will be different. Generic companies could see this as an opportunity to make more money with less competition, by building core competencies in a particular set of biologics.

€430

For companies whose major market is in the US, the generics vs branded products situation could be complicated even further by a bill that would allow US-licensed pharmacies to import cheaper FDA-approved medicines from outside the country. President Obama himself has proposed allocating a US$5 million to the FDA to “develop policies to allow all Americans to buy drugs approved in other countries.” Barath Shankar says that one potential roadblock to these B plans is the issue of oversight. “The problem is maintaining oversight over the FDA-approved manufacturing plants where these products come from,” he says. “The FDA ran into trouble with some overseas generic manufacturers in the recent past, with safety record and contamination issues. “The lobby that is against importing drugs from other countries could then question whether the FDA has the capability to have oversight over these areas. However, I do know the FDA is moving in that direction, because they’ve established offices in India, which has the second-largest number of FDA-approved manufacturing locations outside of the US.” It seems, in the long run, that companies that develop and manufacture branded products will need all their resources at the their disposal to fight off the generics challenge. They will need to collaborate more, which will enable them to play to their strengths and let their partners take on the work that isn’t essential to their core business. With generics on the rise and the twin threats of dwindling blockbusters and upcoming patent expiries to cope with, the future looks challenging for pharmaceutical and biotech companies. But this is a powerful sector, with a lot of money and experience behind it. Chances are, most will fi nd a way to come through unscathed.

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FEATURE INTERVIEW

THE SMALL COMPANY THAT

grew

Once a minor force in the world pharmaceutical market, Nycomed became a major player following its acquisition of Altana Pharma in 2006. CEO Hรฅkan Bjรถrklund tells Marie Shields how the company is positioned to meet the challenges of its extraordinary growth.

36 www.ngpharma.eu.com

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hen Håkan Björklund became CEO of Nycomed in 1999, it was still a relatively small company based in Denmark. Then in 2007 Nycomed acquired Altana Pharma, and almost overnight the combined company was catapulted into the top 40 in the world. What has it been like to oversee such a huge transformation? “You rapidly forget how it used to be,” Björklund says with a chuckle. “You think that where you are today is the most natural thing on earth. But when I compare the figures, I realise that we are about 12,000 people now, and we were fewer than 2000 people in 1999. And of course we have considerably more subsidiaries as well. What it means is that you need to change your management style from being directly involved in a lot of things to having a more overseeing attitude. “I have many very competent collaborators and experts in every field. There is no need for me to be involved in the details. I look upon myself as more responsible for strategy and for creating the culture in the company, which is absolutely essential, especially when you’ve been through a merger like ours with Altana. You need to create a winning culture where people are proud of being with Nycomed; where they feel empowered and where they are happy to go to the work every morning, and thereby are contributing more and having a good time as well.”

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You can’t institute a big change like the Altana merger without meeting some challenges, however. Björklund says the most obvious of these was the fact that Altana was twice the size of Nycomed – like David buying Goliath. In addition to coping with the size issue, Björklund’s other aims for the new company were to make the culture more open and to change its R&D structure.

“This is not the time to get scared and withdraw; this is the time to take market share” “I think a lot of people in the former Altana organisation were questioning the new strategy,” he says. “They wondered if it would work, and also would whether we do what we said we intended to do. It took a lot of effort in the beginning to convince people that yes, this strategy would work, and that we were very committed. “Our other challenge was that we had to reduce costs significantly, which inevitably means reducing the number of employees, which is never a fun thing to do. It’s always nicer to open a new plant than to close a plant. However, the Altana organisation was aware of the fact that they would have needed to restructure even if they had not been acquired, so there were no surprises when we said we would reduce the number of employees and thus cut spending.”

Merger trend Björklund talks about his career path as “a long and winding road from academia to pharmaceuticals”. He started out as a medical student at the Karolinska Institutet in Stockholm in the mid 1970s. He describes himself at that time as a basic scientist, and his intention was to remain in academia. But in 1984 he saw a job advertised at Pharmacia for a scientist to lead a small biology group focusing on ophthalmology, which is how he got into the pharmaceutical industry. He moved up the ranks of R&D before switching to the commercial side, running Northern Europe for Astra before it became AstraZeneca. From there is was but a short step up to his current position. Having gone through the merger experience with Altana has given Björklund a unique perspective on the recent trend of mega mergers that have swept through the global pharmaceutical industry. “There is a difference between these mergers and the previous mega-mergers,” he emphasises. “This time around, cost-cutting will be absolutely essential in order to make them successful, whereas previously people always talked about how with a bigger R&D organisation, one plus one would equal three. “I don’t think the mergers have anything to do with the current financial situation. They are more about developments in the pharmaceutical industry that have been going on for a number of years. If you look at the 10 biggest companies, they have lost market share as a group over the last five to 10 years. There are exceptions, of course – Roche is one of them. But the idea of ‘the bigger, the better’ no longer applies. “So cost-cutting is important, and if we look outside in the market, the pressure on our industry is totally different than it used to be, and this will also mean that we need to be more cost-effective.”

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It’s a well-known fact that the global pharmaceutical industry is facing some serious challenges in the immediate future, including an upcoming wave of patent expiries and a scarcity of new blockbusters. Björklund says that in order to cope with these issues, the industry needs to shrink. “The industry needs to be more selective in R&D. It used to be that a lot of money was spent developing follow-up compounds and me-too compounds, with a new patent life but with limited medical advantage compared to what was on the market. But you were still fine – you could get a decent price for it and you could take market share. That is no longer the case. The market will go with the generics as long as you don’t have a significant advantage with a new compound. “For instance, to launch a new statin today – or maybe even more difficult, to launch an expensive new protein pump inhibitor – when you have generics out there at a fraction of the original price is going to be very, very difficult. That’s going to change the R&D model, and medical utility will be absolutely essential. If you cannot prove that your new product adds medical benefits, and hopefully also reduces costs for society, you will not be able to convince the payers that they should pay for it. That process has been going on for quite some time here in Europe, and I’m convinced that it will also come to the United States. “So R&D will need to be more focused, and if anything, the R&D part will be reduced. Sales organisations will also be smaller: we’ve seen that happening now for a number of years, and there is still more to come. Access to doctors is becoming more difficult, and it does not pay off to have these huge armies of sales reps any longer, not in the mature market.”

Partnerships Nycomed’s own pipeline strategy is somewhat unusual for a big pharma player. Rather than producing the majority of new compounds internally, it has chosen to create fourfifths of Nycomed’s pipeline growth through in-licensed products. Björklund points out that the biotech industry has grown exponentially over the past two decades, with a huge number of potential new products in different phases of development. “Most biotech companies will not have the resources to bring these products to the finishing line on their own; they need a partner at some stage in development. There is also reason to believe that the biotech industry – which in most cases is small and entrepreneurial – has been more effective in developing new drugs than the big R&D organisations and big pharma companies.

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“When it comes to creativity, I don’t think there is an advantage of scale – it could actually be a disadvantage of scale. If you put together more people in an organisation, they do not necessarily become more creative; maybe it’s the other way around. Because to be creative you have to think outside of the box, and it’s probably easier to do this in a small biotech organisation.” Björklund also explains that when he started at Nycomed in 1999 it was obvious to him that the company did not have the resources to do its own discovery research, which made in-licensing a necessity. After the merger with Altana, Nycomed did gain an R&D organisation, which it intends to maintain, because early stage in-licensing requires the company to have its own R&D capabilities in order to evaluate and work on what it’s bringing in. “When you bring in a pre-clinical project you need to have a lot of these functions yourself,” Björklund says. “And that four-fifths is not written in stone. Whether that’s 60 percent, 70 percent or 80 percent, only the future will tell. Of course we hope that our own discovery research will also be productive, but we don’t depend on it. We assume that the majority of the products will come from the outside,” he continues with a smile, “Although if my own scientists prove me wrong, I’ll be extremely happy.” Pursuing an in-licensing strategy naturally meant having to make changes to Altana’s existing R&D structure. One major impact was the significant reduction of the pre-clinical unit. Nycomed also outsources a lot of its clinical work to avoid having a large fixed cost structure internally. When

an interesting phase III project comes along, the company is able to ramp up clinical trials with the help of external partners. Björklund puts it this way: “I like to have the brain power inside the company, whereas the people doing the clinical trials and monitoring can to a large extent be outsourced.” Nycomed’s strong emphasis on partnerships and external collaboration extends beyond R&D and into marketing. “In R&D, most of our partnerships are earlier stage projects from smaller biotech companies,” Björklund says. “But we also pursue collaboration on the marketing side, where we out-license products. The biggest product we have out-licensed is Pantoprazole to Wyeth in the United States. We’ve also recently completed a deal with Baxter around TachoSil, which they will launch in the US, and we’ll do some of the development for the US market together. “A large part of our product portfolio in Russia is in-licensed. Our biggest partner there is Merck Serono, where we acquired their portfolio and have been very successful in growing it. I always tell my people that partnership, regardless of whether it’s in-licensing or out-licensing, R&D or marketing, is absolutely essential. We’re not big enough to do everything on our own, and we should only do the things in which we can add value, and in many cases someone else can add more value. “Partnership is a skill; you need to be good at it, and you need to approach it with the attitude

ity ping the major er than develo th Ra ’s CH ed OA IP APPR s of Nycom A PARTNERSH ally, four-ﬁfth pounds intern nsed products ce -li in h ug ro of its new com is generated th th ow gr e lin pipe

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of ‘I need my partners.’ It’s never easy with partnerships, because you don’t always get your way. There is a famous quotation by Winston Churchill that I often paraphrase, in which he says that the only thing worse than fighting a war with allies is to fight it without them. Maybe it’s difficult to work with partners, but it’s more difficult to work without them.”

Focus on growth Nycomed has had a strong presence in Russia-CIS since the early 1990s, and even before that under the old Soviet Union. Since 2000, its Russian sales have grown from US$25 million to US$480 million. As Björklund explains, emerging markets are becoming increasingly important for the pharmaceutical industry as a whole. “Growth in the pharma industry is coming from two places: emerging markets and specialist products in the more mature markets. We have been successful in Russia-CIS, and we’ve also got a strong presence in Latin America. We believe in investing in these markets. We’ve also clearly stated that we would like to expand in Asia, where we’re not sufficiently strong. “I always tell people, both internally and externally, that if you’re in the emerging markets you need to be in, you have to be willing to ride the ups and downs. Now we’re seeing an economic crisis, which of course is hitting the emerging markets a little more than the rest of the world. This is not the time to

“When it comes to creativity, I don’t think there is an advantage of scale – it could actually be a disadvantage of scale” get scared and withdraw; this is the time to take market share. For example, in Russia, yes, we have been hit by currencies, but we’re still growing in local currency and we’re taking market share. You have to be resilient and persistent.” Closer to home, Nycomed has two products that are nearly at the marketing stage: Instanyl and Daxas. Instanyl is a nasal spray of fentanyl, the short-acting opioid that has been on the market for some time. The nasal form is new, and is indicated for the treatment of breakthrough pain in terminal cancer patients. These patients normally have a fentanyl patch, which treats the day-to-day pain from which they suffer, but many also experience breakthrough pain. The advantage of fentanyl in a nasal form is that it offers a very quick onset of action because it’s rapidly taken up into the bloodstream, so pain relief begins within five minutes. Fentanyl is also quickly eliminated from the bloodstream. Björklund says Instanyl has seen a lot of interest, both from specialists and from the authorities. Instanyl is a specialist product, to be used primarily in cancer clinics and hospices, and also at home. The second product, Daxas, is a little further away from the market but Björklund says it offers a bigger commercial opportunity. “Daxas is a possible phosphodiesterase-4 inhibitor , so it acts in the inflammatory cascade in patients with COPD – smoker’s disease. These patients are suffering from an inflammation, which in many cases leads to exacerbation of the condition. In some cases, people have to be admitted to the hospital.

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“COPD is a huge disease worldwide: it’s the fifth largest killer, with many millions of patients are affected. Currently we don’t have any good anti-inflammatory treatment for COPD. Most patients will be treated with inhaled corticosteroids, which were originally developed for asthma and are very effective in countering the inflammation that asthmatics suffer from. But they are considerably less effective in COPD, because the inflammation in COPD is different. Daxas is a once-daily tablet, the first anti-inflammatory that has been specifically designed for COPD.” According to Björklund, clinical trials have shown that Daxas offers a significant reduction in exacerbations and a significant improvement in lung function. When Daxas is added on top of the bronchodilators that most COPD patients are treated with, it gives a further improvement in lung function.

Expiry date The good news around Daxas could not come at a better time: Nycomed desperately needs a new superstar to bolster its product list. The patent on Pantoprazole, the company’s biggest product, expired a couple of months ago in most European markets and is due to expire in the US in 2011. This will inevitably lead to a decline in sales, and Björklund says this was one of the reasons why the cost-cutting exercise was necessary after the Altana acquisition. “We needed to prepare ourselves for a time without patent protection on Pantoprazole,” he emphasises. “Although more than 40 percent of our Pantoprazole sales do come from markets where there is no patent protection or where there has not been a patent protection for a long time, so we’re convinced that we’ll be able to maintain a significant portion of our sales. Even though we will lose sales with the patent expiry, Pantoprazole will remain the largest selling product for us for the next few years. But it’s important that new products are coming along to compensate for the eventual drop in Pantoprazole sales.” Nycomed has taken the unusual step of launching its own generic version of Pantoprazole in partnership with Wyeth in the US, even though the drug’s patent has not yet expired there. In the American market, it is not unheard of for generics manufacturers to create copycat versions of patented drugs, with the assumption that they will be able to invalidate the patent in a court case. In the case of Pantoprazole, Björklund says that the first generics were launched in the US about 18 months ago. Nycomed immediately countered with a lawsuit, but because the American legal system moves quite slowly, the lawsuit is still ongoing and the generic versions are still being sold. “We’re convinced the patent is enforceable and strong,” Björklund underlines, “and that we will eventually prevail in the courts. But the reason we launched the generic was to counteract those that had already been launched, and thereby be able to compete more strongly in the market as it is now.”

In private In contrast to many of its big pharma competitors, particularly in the US, Nycomed is privately owned. Other non-public European based companies tend to be family-controlled, but Nycomed’s main shareholders are two private equity firms, Nordic Capital and DLJ Merchant Banking. Given the current state of the global economy, has private ownership helped insulate the company from market fluctuations? Björklund says it has. “We’ve been privately owned now for 10 years by various groups, and it has served us very well, because it has allowed us to focus on building long-term value in the company. We don’t need to focus on the next quarterly result. It

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rland building in Zurich, Switze Nycomed headquarters

has also aligned the interest of the shareholders and management; everyone has the same ambitions to grow the company and create value. There are no politics. LONG “When it comes to the culture, I think it has also priva TERM VA LUE T tely o been good in the sense that we’ve been able to be conh than w the n ned allo e Zurichsiderably more open in a private equity-owned comh w ext q uarte s it to fo eadquart cus o e rly re pany than if we were a publicly owned company, n bu red ﬁrm sult ilding b long elieves be because I don’t need to worry about following the -term in grow g rules of the stock exchange in terms of what I can and can’t th ra ther communicate. I can tell my people what we think and how things are going, which I could not do in a public company because of the risk of it getting into the public domain and having an impact on the stock price. It’s easier to be open in a private company.” Of course privately owned companies do not have the same requirements with GDPs in the Baltic countries, for example, decreasing by 15 percent around transparency as public companies do, but Björklund explains that the inin the first quarter of this year. formation Nycomed publishes doesn’t differ from that of its public rivals. “If you “That is also affecting peoples’ ability to buy drugs,” Björklund continues. read our annual report, which we publish and which is readily available, you won’t “But it’s not dramatic, and this industry is relatively resilient to downturns. So I’m see any difference in the way we report compared to a public company. not so worried about the financial crisis – at least not in the mid term or long term. “We’re just as transparent and open with everything. You can even find “On the other hand, within the big five EU countries, I think the pharmamy salary in there. We are reporting as a public company, and also preparing ceutical industry will see very little growth, and it will be primarily in specialist for the possibility that in the future that we may go public, which is not out of products and only certain of them. The growth will come from Eastern Europe the question.” Björklund won’t be drawn on when this might happen, saying and from Russia-CIS: emerging markets.” only that the current situation in the financial markets will need to stabilise In the case of his own company, Björklund’s optimism does not seem before the idea is given serious consideration. misplaced. Nycomed, the small company that grew, seems to have its place When asked what the future holds for Nycomed, Björklund’s response among the top 40 pharma players firmly established. And who knows, if is an optimistic one. He doesn’t foresee any restructuring as a consequence it continues to play its cards right, in a few years it could be knocking on of the current recession, provided it doesn’t worsen significantly. He the door of the top 10. points out that the financial crisis has had an impact primarily in emergHåkan Björklund is Chief Executive Ofﬁcer of Nycomed. Before joining Nycomed, Björklund was Regional Director at Astra (now AstraZeneca), and was President of Astra Draco from ing markets in Eastern Europe, because of the weakening of currency that 1991 to 1996. He is a member of the Board of Directors of Atos Medical AB, Coloplast and has taken place there. The economic downturn has also had an impact, Danisco A/S and holds a PhD in neuroscience research from Karolinska Institutet, Sweden.

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MANUFACTURING

JOINING FORCES

The terms Lean and Six Sigma have been used in pharmaceutical manufacturing for a number of years. Now there’s a new concept on the block that melds the two. Bayer’s Edgar Sur ﬁlls us in.

ccording to Edgar Sur, Head of Bayer’s Operational Excellence for North America, Lean Six Sigma is a combination of Lean, which is focused on removing waste, plus the value-added step of Six Sigma, which is all about reducing variation. “Both use the same approach in solving the problems,” he explains. “In Lean, we use the approach of plan, do, check, act; and in Six Sigma, it’s called DMAIC, which is defi ne, measure, analyse, improve and control. It’s about putting rigour in the approach of problem solving with the flexibility of using some Lean tools and some Six Sigma tools.”

The advantage of putting the two together, says Sur, is to prevent people from seeing them as two separate sets of toolboxes, but instead thinking of Lean and Six Sigma as a complement for each other: “In Lean there are a lot of things that you can immediately address and solve. For example, when you’re involved in a project, there may be things that would normally take three to six months. When you go through Lean, you can go to the improve phase in one week, as opposed to in Six Sigma, where you’ll probably get to an improve phase in three months or even less. But certainly, there’s the shorter variation of period in time in addressing these things.”

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Another advantage is increased efficiency. “You increase the cash flow through the reduction of your inventory,” Sur says. “Everything is data driven, so it can be defended when it’s questioned. There is a rigour, again, to the approach of solving the problem, which you don’t get from one phase to the other without completing or having the deliverables on prior phases. “It also forces people to partner, because you can’t do this in a silo; this is more of a cross-functional group of people that need to make things happen. Another advantage is that you focus on the customers – we always ask what is critical to quality for the customer. It’s not a shotgun approach where you try to hit everything. You go through the data to tell you what to do, and you ask the customers what is critical to them, and you go after those things.”

Challenges That doesn’t mean there aren’t challenges involved in implementing Lean Six Sigma in the pharmaceutical sector. “It’s a highly regulated environment,” Sur points out. “There is a mindset and a culture that change cannot happen because it is not allowed. You continually want to challenge these things and ask the right questions, while ensuring that you stay in compliance with what the regulatory agency is asking you to do. “The other big thing that I see in a lot of companies is that because the profit margin is so high, there is really no pain and so there is no motivation to improve until it’s too late. And trying to build a culture that is sustainable is also a challenge. The other piece is also allowing time for people to have closure of the old ways of doing things and embrace the change – the new paradigm of how we approach things. Having the sense of urgency as opposed to taking our time as we did in the past.” Sur says there is also a challenge related to building the credibility and the impact of Lean Six Sigma. In the beginning, he explains, many operational excellence organisations will try to build their credibility by tackling the biggest problem projects that no one has been able to

“There is a mindset and a culture that change cannot happen because it is not allowed” solve, which can obviously take some time. The issue of needing to gain credibility can arise from the fact that people are not always familiar with the process, and there is a certain amount of learning involved. “In Lean Six Sigma, there are also soft skills that you have to learn. It’s a change management piece where you don’t just drive change and hope that everybody will buy into it. It’s what I normally call the wilderness, where you allow people to just wallow and have closure on how they used to do things, so they can embrace the new things that are about to happen. Until they have had the time to have closure, this new approach can’t be effective.” There are also challenges in implementing Lean Six Sigma across different sites or different business units, as Sur explains. “One of these

Definitions of Lean and Six Sigma Lean Lean manufacturing is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, ‘value’ is defined as any action or process that a customer would be willing to pay for. Lean is centred around creating more value with less work. Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System (TPS). It is renowned for its focus on reduction of the original Toyota seven wastes in order to improve overall customer value. Lean is a variation on the theme of efficiency based on optimising flow; it is an example of the recurring human tendency towards increasing efficiency, decreasing waste and using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas.

Six Sigma Six Sigma is a business management strategy, initially implemented by Motorola, that today enjoys widespread application in many sectors of industry. Six Sigma was originally developed as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well. In Six Sigma, a defect is defined as anything that could lead to customer dissatisfaction. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organisation who are experts in these methods, using a system of ‘belts’ similar to that employed in martial arts. Each Six Sigma project carried out within an organisation follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).

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challenges is creating one voice, one roadmap that everyone can follow and measure themselves against to track progress. When you’re deploying Lean Six Sigma in many different sites, some sites will be in different stages of the process or of the deployment. What you need to do is make sure there’s one roadmap that they can follow. It doesn’t really matter what stage of the process they are at in their implementation, they need to know that in the end it will be a similar approach to what everyone has done, so that you have the consistency. Everything’s standardised and it’s one voice, and everyone can share and benchmark off each other.”

Implementation Sur explains that when you’re implementing something like Lean Six Sigma, it’s important to integrate that into an overall operational excellence rollout, again because of the need for consistency. “It’s important to ensure that you’re talking the same language – not reinventing the wheel – and making sure that your goals and objectives are aligned and not conflicting each other. Again, if you don’t have that aligned approach, there is the chance that there may be conflicting goals and objectives that can go against each other, and that would not add any value to the process.” In operational excellence at Bayer, Sur is working to build a culture that is sustainable. “In a way, I’m trying to work myself out of a job, so that the ownership and accountability transitions from the OE organisation to the site because that’s the only way you can have a sustained programme, if the ownership and accountability is back to the site.” Sur has experience in carrying out similar programs in different industries and sectors, including aerospace and IT in a technology environment, and he believes a lot of what is done around operational excellence is transferable from industry to industry. “It’s sometimes difficult when you go to the healthcare sector where

if you don’t have the background around healthcare, normally they’ll say, ‘It’s not applicable, what your skill sets are,’ but that’s where the mistake is in sometimes trying to retain these skill sets. When there’s a process that needs to be addressed, OE has a place for it and whether you use Lean or Six Sigma, it’ll get you to the same end result,” he says.

“It’s important to ensure that you’re talking the same language – not reinventing the wheel – and making sure that your goals and objectives are aligned” He is also keen to point out that Lean Six Sigma is just not used in operations. “We’ve done this in an HR environment. We’ve done this in global supply chain as well as procurement. I’d like to get the message out to all practitioners that this is applicable to just about anything and everything.”

Future The original concepts of Lean and Six Sigma have been around and been developing for a while. How does Sur see them continuing to transform in the future? “I think they will continue to grow and expand,” he confi rms. “There’s always a need for these types of programmes. There’s a need to stay competitive with other companies cost-wise because, going forward, the need for quality and efficacy will be a given in our industry. The opportunities are the increased speed to market, the response to customer needs, and reducing costs so that we can transfer some of these savings to the patients.”

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ROUNDTABLE

Keeping it Lean NGP talks to four industry experts about the applications of Lean and Six Sigma in pharmaceutical manufacturing. What are your deﬁnitions of Lean and Six Sigma? How do they differ from each other? Ian Cox. Both are examples of leveraging a key idea; namely that any system of production has the potential to generate data that can be used to drive improvements to that system. From this perspective, the difference between Lean and Six Sigma is just a difference between the kind of data on which they tend to focus – Lean deals primarily with transactional data (What stuff is where? How long has it been there? Where does it have to go next?), whereas Six Sigma tends to focus on what might be called physical data (What is the stoichiometry? What is the blend time? What is the friability?). Clearly both kinds of data are important. Erik Tieleman. Businesses should not be interested in questions like these. It is not about the methodologies or their differences, but about

impactful business applications – how to create sustainable (fi nancial) results with Lean and/or Six Sigma? Lean and Six Sigma are both great toolkits to pull from when tackling on-time delivery and working capital in supply chain, cycle time reduction and throughput improvement in manufacturing, better milestone attainment in new product introduction, improved quality testing and results in labs, faster process and product validations in engineering.

“An essential element of Lean and Six Sigma is a continuous learning and improvement process” Steffen Himstedt www.ngpharma.eu.com 47

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Drug Development Cycle Time reduced by 25% Process Yield improved by 800% in six months Mean Time Between Failure improved by 1100% OEE of 91% with 1% WIP in a newly-developed process Yield improvement 33% to 93% in five months On-Time In-Full customer service 36% to 93% in three months

In Life Sciences, product development and introduction is the competitive arena of the future. Equip yourselves for success. SI Associates is an international management consulting firm. Our teams in Europe and North America have an outstanding track record of working together with our clients in the Life Sciences sector to help them improve their competitive performance measurably and sustainably. Our expertise is in the processes of product development and commercialisation. It is in helping clients reduce time to market for new drugs or medical devices. In compressing development

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cycle times. In freeing up capacities in development pipelines. In ensuring the smooth transition of products from development through scale-up into manufacture. If you would like to find out more about how we can work together then please check out our website at www.siassociates.com or e-mail us at info@siassociates.com.

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Harry Clark. Both prevent waste. Both design customer-centric ‘quality’ into a product/process. Lean prevents waste across the entire operation. ‘Waste’ is defined in this context as that portion of any activity that is not intrinsic to adding value to the end customer. Six Sigma prevents waste, defined here as variability in products and processes. Products must be fully understood and characterised. Associated manufacturing processes must be understood, capable and in control. Sources of variability must be anticipated. Such risks to product integrity must be identified and mitigated. Six Sigma is associated intrinsically with product quality. Lean eliminates waste across execution activities, such as inventory levels, labour utilisation, capacity planning and layouts, which is critical for, but ancillary to, the delivery of a Six Sigma quality product. Lean can be characterised as execution efficiency. Manufacture of defective product is a key waste. Preventing such waste is the goal of Six Sigma, and describes where Lean and Six Sigma philosophies merge.

“Lean improves efficiency, reduces costs and increases available working capital” Harry Clark Steffen Himstedt. We mainly see Lean and Six Sigma projects as a focus on added value and quality. This generally involves adjustments of organisational structures, as well as reducing the complexity of the decision-making processes. In contrast to a greater number of consultants who primarily focus on such organisational aspects – with minimum IT effort – Trebing & Himstedt regard IT as a key enabler for successful project implementation. An essential element of Lean and Six Sigma is a continuous learning and improvement process. In order to support this process, direct feedback about variations and disruptions in the production process is necessary. Our experience is that display boards and reports that are not generated in real time slow down the learning process. Modern operator cockpits with real-time information from various sources, which are aggregated and visualised in KPI and displayed on mobile devices, such as Blackberries or on production hall displays, achieve much better results. What are the potential advantages and challenges involved in implementing Lean and Six Sigma in pharmaceutical manufacturing? HC. Implementing Six Sigma around a ‘design space’ philosophy is mas-

sively beneficial. Traditional CMC approaches do not sufficiently demonstrate the relationship between product attributes and product quality. Six Sigma approaches will identify, understand, manage and mitigate risk, and ensure the development of product that is genuinely fit for purpose. Six Sigma enables quicker time to market. Submissions reflecting ICH recommendations mean faster NDA approvals. Each increases the commercial window for patented products. Lean improves efficiency, reduces costs and increases available working capital. Margins can be maintained and research levels sustained whilst increasing the affordability/availability of safe and efficacious drugs for new markets. Through, for example, ‘5S’, Lean helps make organisations safer places in which to work and, by unit reduction in energy and material costs, more environmentally friendly. The most meaningful variable in effectively implementing Six Sigma and Lean is the extent of senior-level commitment. IC. The word ‘potential’ is important. The advantages of using data to manage the risk inherent in all production are well understood (faster, cheaper, higher quality, enhanced predictability, greater agility, to name

PANEL

Executed correctly, both can be effective approaches to productivity and improvement. The (over)emphasis on the methodology (doing the things right) should shift to a focus on how to organise for productivity and improvement (doing the right things). Th is has more to do with execution and making things happen, than with a conceptual discussion on methodologies.

Ian Cox works in the JMP Division of SAS as the European Marketing Manager for JMP. He worked for Digital and Motorola in the 1980s and has consulted on how best to use data for more than 20 years. He is co-author of Visual Six Sigma – Making Data Analysis Lean (Wiley, in press).

Harry Clark is the Managing Director of SI Associates. Following his postgraduate degree at Liverpool University, he joined General Motors, spending several years in the automotive and transportation sectors before working with PERA Consulting and subsequently joining SI. R&G Global Consultants’ Erik Tieleman is a seasoned Master Black Belt, and has held operational leadership positions in supply chain, (external) manufacturing and business excellence within General Electric and Johnson & Johnson. Tieleman has made organisations and leaders successful in chemical, pharmaceutical, medical device, healthcare and nutritional businesses. As Founder and Managing Director of Trebing & Himstedt, Steffen Himstedt is an active member of the OPC Foundation, ISPE and the PROFIBUS Organization. In the business area of manufacturing integration, Trebing & Himstedt is implementation partner for SAP manufacturing solutions and provides best practices based on SAP MII.

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a few), There are specific nuances in pharmaceutical manufacturing depending on the therapeutic area, technology base, supply chain, competitive situation and so on. Making this potential real has two key aspects. One is that, for powerful and relevant data to be available, we need to measure the right things with the right frequency. The second is that, like it or not, people are ‘part of the system’. So the challenge lies in leveraging both useful data and the contextual scientific, medical and engineering knowledge in people’s heads. Bringing these two ingredients together is the best, even the only, way to promote the data-driven discoveries needed to fuel both Lean and Six Sigma. Overcoming these challenges will be multi-faceted, but an important influencing factor is the persistence of the idea that a validated manufacturing process is sacrosanct, and therefore not legitimately the subject of improvement. SH. In pharmaceutical manufacturing, highly inflexible processes run within regulatory limits.

transparency, focus, priorities, fact-based decision-making, on-time execution, a clear plan, implementation skills and sustainability of results. It is the lack of oxygen (O2) that causes current Lean Six Sigma programs to not make traction. O2 is the respirator of improvement: ‘organisation’ and ‘operating system’. Lean and Six Sigma contain ‘know-how’. O2 contains ‘know-what’. True Lean Six Sigma programmes have both in place. What tools and techniques can pharmaceutical companies use to ensure a smooth roll out of Lean and Six Sigma in their manufacturing operations? ET. Successful organisations have clarity on the Big ‘Y’ and the Big ‘WHY’ (subject of change). Successful leaders are personally involved and attach themselves to this change, empowering people, having daily involvement, setting standards and making people execute against these standards (prerequisite of change). Successful leaders test their thinking with data and challenge their teams on popular beliefs, untested hypotheses and paradigms, and effectively execute on their thinking (window of change). Successful organisations are building improveIan Cox ment capability, the vehicle of change, not only by introducing Lean and Six Sigma, but more importantly by implementing a clear performance architecture (Organisation*Operating system = O2). Organisations and leaders that execute these things well are winners; they work on the right things. Lean and Six Sigma are then great execution methodologies to do the things right the first time.

“We need to understand and embrace Quality by Design principles from product conception onwards”

This costs a lot of money, creates rigid decisionmaking processes, and inhibits innovation. Classic Lean subjects are reduction of material stocks, cycle times and waste. Under ever-increasing cost pressure, companies are forced to strike a balance between compliance and flexibility at a reasonable cost. Lean and Six Sigma, as well as PAT – smartly implemented – can be catalysts for a new structure in pharmaceutical manufacturing. Another field for Lean projects is the integration of production and laboratory processes. In most pharmaceutical companies, elementary value potentials, especially in asset utilisation or yield, are underachieved because of the existing organisational separation of production and laboratory processes. That is why, together with SAP and partners, we started the Perfect Laboratory initiative as part of SAP’s Perfect Plant Initiative, in which we use the optimisation potential of laboratory processes that are highly integrated into the production. The goal is to reduce cycle times of laboratory samples, to integrate laboratory personnel directly into the production and to reduce interfaces and paper workflow through electronically supported processes. ET. There are specifics in pharmaceutical manufacturing (product or process validation, regulatory approval, quality systems, outsourcing) but let’s face it: the challenge is, as in any industry, to apply it right (selective, tailored to the business context), to get leadership truly involved, to accelerate the pace of change. Many senior executives are frustrated that their (Lean, Six Sigma) improvement programs do not gain the necessary speed nor the impact they need, nor do they meet the desired return on investment. Executives face challenges like: how to rally my team around the need for change? (shared view on current reality); are we working on the right things? (focus); how to get there? (roadmap); what organisation do I need? (roles and responsibilities); is my team able to deliver? (execution skills); are we seeing it clearly? (potential) . Lean Six Sigma programs should support these leaders in getting

IC. What ends up in manufacturing is, of course, that which development and scale-up can deliver. So the ultimate, but often inconvenient, answer is that we need to understand and embrace Quality by Design (QbD) principles from product conception onwards. The two challenges mentioned above remain, and the difficulty of meeting them rises by at least an order of magnitude for several reasons. The pragmatic answer for products already in manufacturing is to invest in systems that can be used to store, structure and analyse data in the most streamlined way, and to promote a culture in which all stakeholders can contribute to making discoveries that have business value. An obvious requirement is that the value of such discoveries must more than offset the cost and effort of making them. Typically, transactional systems do not structure data in a way that supports discovery, and users have an understandable resistance to unfriendly or complex analysis soft ware that does not fit their needs, or that makes too many assumptions about their capabilities given they may well be using data in this way for the first time. SH. Well-concerted, purposeful application of IT tools can support Lean and Six Sigma projects significantly. We have designed and built such ‘manufacturing cockpits’ in numerous Lean projects. At a global phar-

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maceutical company aiming to become the ‘Toyota of the pharmaceutical industry’, significant success could be achieved within the scope of a Lean initiative in the packaging division. Large information displays keep workers constantly informed of quality and performance figures. Seamless integration of ERP/MES and LIMS into manufacturing is key. In order to achieve this aim, a lot of information must be gathered from separate IT systems. In numerous Lean projects, we have built up manufacturing cockpits that aggregate the relevant information and provide it in an intuitive way. In this case, the Trebing & Himstedt SAP MII Best Practice solution for overall equipment efficiency (OEE) is also suitable, although many experts do not use OEE as key performance indicators (KPI) for Lean projects in order to avoid an incorrect focus on utilisation optimisation. But more important is the interpretation of the single OEE factors and the analysis of the causes of disruption. Automatically generated KPI can provide full transparency and help to effectively and objectively evaluate possible measures and their effects. In this way, improvement processes can not only be monitored with minimal effort but also implemented much faster, and the respective saving effect can be rendered transparent.

HC. There are three compelling reasons why Lean and Six Sigma will pervade the pharmaceutical sector. In the current economic and political climate insurers and public health bodies/agencies are increasingly focused both on reducing the prices paid for drugs and on increasing their availability. For research-led life sciences companies maintaining profit margins at levels that will sustain their missions to enhance wellbeing and quality of life through innovation, the singular conclusion is an unambiguous need to exorcise waste and cost from their operations. Regulatory approaches will evolve further in this direction. With the currently non-binding recommendations and guidance in ICH Q8, ICH Q9 and ICH Q10 prompting the adoption of best practices in R&D, commercialisation and manufacturing, the deployment of Lean and Six Sigma will simply represent a pragmatic response to this regulatory challenge. Principally, patient safety and wellbeing are paramount. Lean and Six Sigma represent the best available approaches to mitigating product and therefore commercial risk. We live in an increasingly litigious age, with several examples of such failures in our collective memory. A marketed product that cannot be demonstrated to be fully characterised, understood and manufactured to the requisite quality is unacceptable.

HC. Fundamentally, the output of a manufacturing operation is its manufactured product. The quality of that output is only as good as the degree of understanding about that product that has been generated, and IC. The application of Lean or Six Sigma (or both) in manufacturing is a the uses to which that knowledge have been put. necessary and useful band-aid. But as personalised medicine takes root So, in research-led and and the QbD agenda is pursued more aggressively, technology-led manufacturing it will gradually force the convergence of Lean and companies, the place to begin to Six Sigma. Ideas like Design for Six Sigma, Lean apply Six Sigma and Lean is in late Product Introduction and Kansei Engineering will discovery/early development – the be assimilated within QbD, and the means to effi‘design’ phase, where design space ciently explore a complex design space will become definition is commenced. The tools even more important and valuable than it is now. and techniques are typically those Using data this way is a grand challenge to the pharfound in the Design for Six Sigma maceutical industry, and there are many diverse as(DfSS) toolkit, from practices such pects culturally, organisationally and systemically. Erik Tieleman as Functional Analysis, Fault Trees, But we should draw comfort from the fact that the Failure Mode and Effects Analysis semiconductor industry has been working this way and Taguchi/Design of Experiments at the front end to the routine apfor 30 years, and the resulting benefits are many and obvious. plication of process controls such as PAT and Statistical Process Control and the wider Lean toolkit (Kanbans, 5S, SMED and Value Streams) in ET. With eroding gross profits, higher R&D spend to find treatments for commercial volume manufacturing. untreated disease states, regulatory bodies that drive evidence-based Neither Six Sigma nor Lean are principally technical challenges. Sucmedicine and governments and insurance companies that want to contain cessful implementation must understand the nature of the ‘change’ chalhealthcare spend and reimbursements, the case for productivity is clear. lenge that each represents. It becomes imperative to have a comprehensive and integrated operating system to manage productivity on a structural basis. This operating How do you see Lean and Six Sigma developing in the pharmaceutical system is about having transparency about performance, being clear about industry in the future? how you manage performance (process), how you evaluate performance SH. In today’s situation of the general economic downturn and the pres(metrics), how you are organised for managing performance (roles and sure existing in pharmaceutical manufacturing, Lean and Six Sigma responsibilities), and last but not least, how your people are driving performance consistently (behaviour). methods must prove that they are sufficiently flexible to meet these new All work is process and processes are unstable and not well-connectrequirements. Lean and Six Sigma do carry the stigma of not being flexible ed. Leaders need to rethink how to design the operating system, a way of enough. In addition, global collaboration and supply chain processes beworking that makes people more engaged, more effective, more productive tween pharmaceutical companies and their suppliers need to be mapped. and happy. Lean and Six Sigma continue to be important toolkits to tailor This calls for new ways to be established, with the seamless, integrated solutions for pharmaceutical companies. application of IT tools.

“It becomes imperative to have a comprehensive and integrated operating system to manage productivity on a structural basis”

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icated health and safety quality teams accredited to ISO9001:2000 standard to advise on best practice and audit. Their laboratory service solution is designed not to be a one-off but one that can be built into management processes for the future. R&D labs and manufacturing operations alike are constantly being improved and updated to meet rapid advances in technology. As one client explains, “Knowing that a team of competent staff who understand our science, equipment and business are at hand and able to react quickly and appropriately to our issues really helps. This is both in a proactive way for planned services and a highly reactive way for those unplanned downtimes, which really helps us focus on what we do best – the science.” The new process ensures that the lab user spends less time preparing the systems. An onsite labour and parts cache ensures faster response to end-user needs, whether this is glass wash, consumable replenishment, sample despatch, instrument set-up, calibration or repair. Each request is attended to by a technical expert within two hours. For instrument support typically 80 percent of the average laboraThe results speak for themselves: commercial tory equipment is within fours hours by Sodexo savings of 25-40 percent; improved instrument self-delivered technical engineers. uptime from two days to within Sodexo’s expertise in the four hours (fixed); and a comconsolidation of laboratory supplete laboratory solution, from port for its clients comes into play lab auxiliary through technician by reducing customers, overall up to competent engineers fixing management costs, employing its scientific assets. integrated facilities management Sodexo’s heritage is built on tool to streamline administrative the staff it attracts and retains. It resources. Sodexo can identify has successfully managed the and re-deploy existing surplus astransfer of thousands of emsets via Sodexo asset management ployees who continue to thrive teams across the client’s business, and develop in their organisaresulting in reduced capital extion. This brings continued dependiture, sharing capital investvelopment for its people, which ment among various labs. Philip Fairhurst joined Sodexo consequently improves clients Working with its pharmafrom Agilent Technologies in operations. ceutical clients has enabled January 2006, as Business Development Manager for The laboratory services soluSodexo to develop a laboratory Laboratory Services. His responsibilities to the tion managed by a central team service that can be applied to any Pharmaceutical Division focus on comprises dedicated engineers lab operation where chromatogthe engagement of lab support services to the pharmaceutical delivering instrument services raphy, spectroscopy or automaindustry and assisting Sodexo’s clients in achieving their quality within the labs; an administration systems are in use. Sodexo and ﬁnancial goals. tion team and systems to simplihas the expertise to provide a fy and challenge the processes; comprehensive multi-site laboracommercial experts to negotiate the best possible tory service and is keen to continue to identify new terms and meet regulatory compliance; and dedclients that will benefit.

Delivering laboratory service

Philip Fairhurst explains the importance of a single solution for efﬁcient laboratory management.

ith laboratory equipment and scientific resources ranking as the highest value asset to the scientific industry, deploying a responsible and cost-effective management system is proven to deliver significant gains in both cost efficiencies and improved utilisation of equipment by scientists within the laboratory. Traditional solutions tend to be costly, inhibit efficiency and are inherently service fragmented. Seeing the positive benefits in bringing a single solution to its clients, share best practices and deliver innovation, Sodexo launched its Pharmaceutical Division – not simply focused on chromatography repair, it is a solution that has been supplying a range of scientific support services since 2003. Sodexo has built a strong, dedicated team of experts focused on delivering laboratory instrument support and other laboratory service activities. They have applied a fresh approach to a long-term problem. Further innovation of these services allows the group to continue its growth into new areas of scientific support, having a proven and positive impact on its clients’ business.

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MANUFACTURING

aving begun his career in compliance at PricewaterhouseCoopers, Brent Saunders is a noted speaker on risk management issues in the healthcare industry – a useful tool in his current position as Senior Vice President and President of Consumer Healthcare at Schering-Plough. Knowing when the time is right to risk the success of an over-the-counter switch requires a certain element of business savvy, and Saunders certainly seems to be the man for the job. He describes OTC switching as being a very simple process: the switching of an FDA-approved prescription medicine to a non-prescription over-the-counter or OTC status medicine. Saunders explains that OTC switch is becoming more and more prevalent as both drug companies and patients themselves are keen to reap the benefits of this simplified system. “If you have a well-established medicine that is safe and effective and you believe that consumers can self-diagnose and treat with your medicine, then it’s appropriate for OTC or over-the-counter status,” Saunders says. “The reason a company may be interested in doing this is that on the prescription side they may either be losing their patent or they may see their market eroding and recognise that a better place for the medicine may be in the OTC status versus the prescription status.”

A limited shelf life? Schering-Plough’s Brent Saunders tells Natalie Brandweiner how pharmaceutical companies can combat patent expiries by switching branded products to OTC.

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But facilitating the decision as to when a prescription medicine should be switched and what sort of process should be involved requires a variety of factors. Saunders advises that generally, those major switches that have occurred over the last two or three years have been due to patent life, each switch requiring a complex process. “We have to work out with the FDA whereby you need to demonstrate that the drug is fi rst and foremost safe, and then you have to go on to also establish that consumers can self-medicate without harm or concern. “There are different ways of doing this. One of the primary tools we’ll use is label comprehension studies, and surveys. We’ll spend a lot of time analysing how a consumer views a label and their comprehension and understanding of how to use a medicine, as well as understanding if there is any potential for misuse or misdiagnosis. Then we work with the FDA to ensure that labeling is clear and appropriate for each medication in its OTC status,” he explains.

More efﬁcient Saunders believes that the impact of OTC switch on the healthcare system can benefit consumers – providing greater time efficiency. However, he also advises that on the negative side, patients do often have to pay for the medicine in its OTC status. “When people have to pay out-of-pocket for something, they tend to use it only when they need it,” he points out. “As opposed to being completely reimbursed or having the cost passed through, so that it’s in essence free to them. Take a category like upper respiratory infections. A Consumer Healthcare Products of America study (CHPA) showed that moving several treatments to OTC status saved the US healthcare system about US$4.75 billion annually. “What we are seeing around the world is that a lot of governments are becoming more interested in self-medication or OTC status for drugs because it shift s the burden from the public health system to the individual,” he says. In the US, President Obama’s healthcare reform plans have pledged to expand healthcare coverage, but will this mean a lesser need for over

Brent Saunders

the counter, as patients will now be able to receive medication through their insurance? Saunders says that this will depend on the category to which the drug belongs. “For example the PPI category, or the allergy category, most of the prescription drugs, though not all, are moved to a third tier co-pay. The co-pay for some of those medicines can be between US$35 and US$45, so it’s either the same price as the OTC for treatment or it’s more expensive than the OTC treatment itself. In prescription status, that drug may cost US$200 and in an OTC status it may cost US$20, ” he explains.

Patent expiries Often the motivating factor behind an OTC switch is an expiring patent. Governments in many countries are hoping to promote the greater use of generic drugs and allow them to become more available, which will supposedly make medicines cheaper. It remains to be seen how these two issues, patent expiry and generic usage, will run in tandem. “In most instances when you go over-the-counter you do face competition from store brands”, Sanders says. “Generally stores will create their own version of your compound, so it then becomes a brand competition. There are certain people who tend to like brands and there are certain people who are more cost-conscious and tend to trust or look to a private label or store brands,” he says, suggesting OTC switches provide competitive benefits to a drug that is already on the brink of losing its patent. He provides Schering-Plough’s drug Claritin as an example of this. “When the patent life ended, we could have simply walked away from the category, or we could have switched it. By switching it, we’ve generated well over US$2.5 billion of additional sales since the patent expired. That’s a nice lifecycle strategy for a brand. Claritin as a prescription had a fi nite patent life, but now Claritin as a brand should last forever. “Innovation doesn’t end because the patent has expired and the drug has been switched to OTC status. Innovation in the hands of a good consumer healthcare company continues through the entire lifecycle. Th is year we launched a new formulation of Claritin in a liqui-gel format, which was never part of the prescription life of that product. It was something we innovated. We had to fi le with the FDA for a new drug application for that formulation. It took us a couple of years to do it, but we now have Claritin Liqui-gel availble for consumers.”

“A lot of governments are becoming more interested in selfmedication or OTC status for drugs because it shifts the burden from the public health system to the individual”

Strategy OTC switching is certainly a determined strategy for Schering-Plough. Ninety-five percent of the company’s OTC products were once prescription, compared to an industry average of 26 percent, making the company an industry leader in OTC switch. “We’ve had a very solid 30 year track record of doing it, and frankly we do it because it’s a strategic priority for our division,” says Saunders. “We focus on good medicines. We like to say that we provide products that really help consumers with their healthcare. By the time a medicine is a candidate for over the-counter status, you have demonstrated efficacy because you’ve gone through a new drug

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application, you’ve gone through all the clinical testing required to bring an approved drug to patients, and you know the safety profi le is strong. So it’s a really good basis for a successful product.” Schering-Plough recently developed a proprietary switch process. Saunders explains that no two switches are ever exactly the same, and the world of switching is becoming ever more complicated. “A lot of the low-hanging fruit has already been switched,” he says. “Switches in the future will require more thought and more expertise than ever before.”

unique entry into that marketplace.” Despite conducting a huge amount of switches in comparison to other pharma companies, the actual amount of switches carried out by Schering-Plough is around one per year. As Saunders says, “A switch is a big deal. There is not a large pool of drugs that are at the stage of switching.” He notes a successful switch – two and a half years ago Schering-Plough switched a drug called MiraLAX, a medicine used for constipation – and advised to get to that stage of success took a relatively long period of time. The future for switching as an increasing trend does looks promising, however, “Around the world, we see governments more interested in self-medication, which is a positive for OTC switches,” he predicts. “Public policy is moving in the direction to support OTC switches, and a lot of that is the burden that it relieves from healthcare systems fi nancially. “But by that same token there’s some counterbalancing in that the interesting switches that are out are for more chronic ailments. And those are more difficult switches to do: they require longer and more extensive studies to prove the safety case. “Policy is moving in that direction, but the work that has to be done is more complex and difficult. The industry has a bright future, but we need to continue to look at ways to use technology and good marketing practices to help ease some of the concerns of abuses around medicines in the OTC side,” he concludes.

“Innovation doesn’t end simply because the patent has expired and it has been switched to OTC status. Innovation in the hands of a good consumer healthcare company continues through the entire lifecycle” He explains that the company’s tried and tested method to approach a switch is to bring together a small group of experts within Schering-Plough and to leverage outside resources, as appropriate. The emphasis is placed on ensuring a dedicated team is attached to each switch so that it can address the specific needs and requirements of each particular switch. The team must then manage the switch process through the lifecycle to the launch. The approach used by Schering-Plough differs from that of other companies, which often have people either in their market research or their R&D groups who are responsible for switches. The main difference with Schering-Plough is its proven methodology and heavy use of a dedicated and structured team format for switching. Saunders is reluctant to highlight any of the switches that Schering-Plough currently has in its pipeline; the switching business is a highly competitive game. However, he does mention one that is currently in process – Zegerid, a prescription product in the US used for frequent heartburn. “It was fi led by a company called Santarus out of California,” he explains. “They market it as a prescription product today. We have signed a licensing arrangement with them to switch the 20 mg product to OTC status. We are now in the process of working with the FDA to make that happen, and it’s going to be a really

Brent Saunders is Senior Vice President and President of Consumer Healthcare for Schering-Plough Corporation.

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ROUNDTABLE

Challenges in drug development and delivery John Fraher of Eurand and Gerd Paulus of Swiss BioAnalytics talk to NGP about common problems in developing successful pharmaceutical products.

Why does drug insolubility poses signiﬁcant challenges during drug development? What can companies do to counteract this? John Fraher. In order for a drug to be an effective oral treatment, it must be able to dissolve and be absorbed by the bloodstream. Permeable yet poorly soluble class II compounds can present challenges such as lack of or reduced levels of absorption or slow solubilisation kinetics that cause a delay in a drug’s onset of action and reduced bioavailability. It may be possible to compensate for low solubility by elevating drug dosage to increase the absorption amount without leading to safety concerns, but in many cases the drug must be developed in an injectible dosage form. Eurand’s proven Biorise technology addresses poor solubility through a novel proprietary process. Biorise breaks down a crystalline drug into nanocrystal and/or amorphous (noncrystalline) form of the drug that is then stabilised in a carrier system to maintain the drug in its activated state. Th is approach creates a greater surface area to volume ratio that increases the intrinsic solubility and dissolu-

tion rate of poorly water-soluble drugs, thereby enhancing the rate and extent of absorption. Gerd Paulus. Insolubility poses problems in formulation development, and in dissolution and release testing. Insoluble drugs cannot be developed as parenteral drugs. Furthermore, the absolute bioavailability will be low, leading to high dosages and therefore higher cost of goods. Companies can try to enhance the solubility by following three major routes. First,

“Line extensions that hinge on new or unique formulations are a key component of lifecycle management” - John Fraher

developments in the formulation can focus on an enhancement of the resorption by using vehicles as PEG400 or using excipients influencing the permeability, like ethoxylated fatty acid derivatives, such as Gelucir. A very specific approach is the development of liquid dispersions. Secondly, modification of the API could be considered, such as the change of the counter ion or the usage of a polymorphism. For the latter example, the future release specifications have to be kept in mind. Finally, the development of a soluble pro-drug would be an option. The effectiveness of a pharmaceutical product can be adversely impacted by patient non-compliance. How common is this problem? What can be done to help alleviate it? GP. It is a common problem that depends on the severity of the illness, the progression of the disease, the dosage form, the subjective impression of the patient and the doctor-patient relationship. An obvious example is noncompliance in antibiotics treatment – taking

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the drug less than the prescribed seven days. Due to this non-compliance, a high rate of resistant bacterial tribes has emerged. Another experience from the past can be found in the area of oral contraceptives, whereby including placebo tablets to achieve a daily regimen decreased the rate of non-compliance. By changing the dosage form or formulation, compliance can be enhanced, such as by changing from a three times a day formulation to a once daily modified-release formulation. JF. Patient compliance is fundamental to the successful medical management of the vast majority of diagnosed disorders. It is estimated that 40 percent of patients are considered

non-compliant. Three key drivers of patient non-adherence are poor taste, difficulty in administration or swallowing, and the inconvenience of multiple doses per day. The extent of the problems can be reduced through the application of sophisticated technologies. Eurand has a range of technologies within its platforms that can be used to address all three issues. Poor taste and difficulty in administration and swallowing can be addressed through the application of AdvaTab and Microcaps technologies. AdvaTab is an advanced orally disintegrating tablet technology that enables rapid disintegration in the mouth without water. Microcaps is a versatile and precise microencapsulation technique that coats individ-

ual drug particles with a polymeric membrane that provides an immediate or customised release profi le with complete taste and odour masking. Used together, AdvaTab and Microcaps create a convenient, patient-friendly orally disintegrating tablet with effective taste masking and a pleasant mouth-feel. Multiple dosing per day can often be dealt with through the development of once-a-day dosage forms. Eurand’s customised release platform contains a number of technologies that can provide for the development of customised release multi-particulate or monolithic (tablet) once-a-day dosage forms.

What techniques or tools can pharmaceutical companies use to turn drug candidates into easy to administer, successful pharmaceutical products? JF. The oral route of administration for drugs remains the most popular delivery vehicle for patients. Techniques aimed at convenient oral dosing and administration, when applied to prescription and over-the-counter (OTC) drug candidates, can produce effective products. Eurand continues to develop a portfolio of successfully commercialised products with its partners, due in large to the breadth and depth of its technology platforms. Our successes John Fraher has been Chief Commercial Ofﬁcer of Eurand since include partnering with August 2006, President of Eurand Incorporated since April 1999, Cephalon to develop Amrix and was Vice President of Eurand (cyclobenzaprine hydroIncorporated from 1995 to April 1999. Previously, Fraher was Production chloride extended-release Manager at American Home Products Corporation’s afﬁliate, Fort Dodge capsules) the fi rst and only Laboratories, located in Ireland, and once-a-day muscle relaxer; has worked at Sterling Drug in Ireland. partnering with Chattem to commercialise UNISOM SleepMelts, and our most recent success – the FDA approval of orally disintegrating tablets, Lamictal ODT (lamotrigine), soon to be launched by GlaxoSmithKline. GP. The development of an easy to administer dosage form, such as tablets or capsules, should be the main goal. To avoid surprises, the strict follow up and implementation of ‘developability’ concepts from early develop-

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ment should be considered. For example, the physico-chemical parameters of a drug candidate should determine the decision for further development – there could be a caveat to develop a BCS class four compound.

“By changing the dosage form or formulation, compliance can be enhanced” - Gerd Paulus In June 2005, Gerd Paulus was appointed General Manager of Swiss BioAnalytics AG. He has worked for pharmaceutical companies in quality control at Bristol Myers and R&D at Ciba-Geigy. As the holder of executive positions in business units and country organisations, Paulus gained in-depth expertise of the general management, as well as experience in the global pharmaceutical industry.

What is the best way to promote innovative and effective life cycle management that can prolong the market life of products? GP. Among multiple options three should be highlighted here: the label extension, a patient -centric approach and a strong brand. Marketed drugs can be explored in neighbouring indication fields. Th is strategy can be observed in the field of oncology. Generally only efficacy studies are needed, as all safety data are available. An example for a strong brand name is Aspirin. Despite heavy competition from generic products, sales figures continue to be high.

Th is situation has been supported by following the patient-centric approach by the introduction of new comfortable formulations, such as granulates, and the creation of combination products.

JF. An interesting industry trend that is developing is the pursuit of the lifecycle management strategies at large pharmaceutical companies, an area once inhabited only by the likes of specialty pharmaceutical companies. Line extensions that hinge on new or unique formulations are a key component of lifecycle management. Incorporating custom release profi les, improved solubility or advanced taste-masking techniques within a

portfolio of existing drug candidates may optimise market share for our pharmaceutical partners, or create an opportunity to expand into emerging geographies. Innovative and effective lifecycle management strategies need to include core elements such as identifying new clinical indications or creating line extensions that incorporate drug delivery technologies, with the goal of creating additional clinical benefits for current drug candidates or addressing patient groups that are currently not addressed by present therapeutic treatments. Additionally, enhancing the intellectual property around the molecule to defend against generic entry is a key element of lifecycle management. New formulation patents as well as technology patents may serve to maintain a drug’s share in the marketplace.

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INDUSTRY INSIGHT

An airfreight-focused logistics solution By Martin Svantesson

eodis Wilson is continuously developing its scope for the distribution of temperature-controlled shipments for airfreight with the ability of securing the correct temperatures and compliance with GDP-approved procedures at all times. This is an ongoing process between pharmaceutical companies, manufacturers of materials and logistics providers when operating a successful supply chain. Pharmaceutical companies require the right type of transport mode and equipment for a specific product, for a specific market and at the right price. Temperature management is a crucial area for the distribution of pharmaceuticals. It is important to be able to monitor the temperature throughout the complete supply chain. Today, the most commonly used solution for ambient transportation between 2° C and 25° C is the shipper-purchase insulated pallet box. The disadvantage is that this way of transportation can become expensive.

The challenge As pharmaceuticals are considered high value goods, they demand a safe, well-monitored and GDP-approved process throughout the complete supply chain. The distribution of pharmaceutical products with a demand for door-to-door consistent 2° C - 25° C ambient transportation versus a competitive price is a huge challenge for many airlines and logistics providers.

ductivity properties of 0.030 W/mk. It has a vapor resistivity of 480 MNs/gm. Due to its enormous flexibility, the G-Box can be used with AMA (main deck containers), AAP (lower deck containers) or even down to AKE units. In addition, we have recently developed the G 2 Box, an independent free standing version of the G-Box, which allows shippers greater freedom of choice of carrier, as the G 2 Box fits directly on to the airline pallet. (Lower deck and main deck versions available). The shipments are loaded in a secure and ambient temperature environment and can be measured by the customer’s temperature monitor or the Geodis Wilson developed temperature monitors throughout the whole door-to-door transportation.

The beneﬁts The solution The Geodis Wilson G-Box was developed to provide stability and protection for 2° C - 25° C ambient shipments. The GBox provides the correct insulation qualities against various temperature variations. The GBox is strong, flexible and water repellent 0.3 percent absorption by volume, with thermal con-

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Martin Svantesson is Vertical Market Director of Geodis Wilson Pharmaceuticals. He has 15 years’ experience in global distribution and holds a Master’s degree in Supply Chain Management. Svantesson’s role is to develop Geodis Wilson’s pharmaceutical distribution solution/proposal for existing and potential pharmaceutical customers.

In developing the G-Box we are able to offer a price competitive solution for ambient cargo. The price competitiveness is based on lower packaging costs on insulated pallet boxes through using the Geodis Wilson Custom Made G-Boxes or G 2 Boxes to airline specifications; less handling charges for the shipper; and cargo optimiza-

tion and freedom to choose any airline due to the high flexibility of the G-Boxes. Our innovative product has successfully been monitored, tested and used by several customers within the pharmaceutical industry. Due to strong relationships with our preferred global operating airlines and local trucking companies, we’re able to utilise direct carriers, reducing trans-shipment points and additional handling and risk to the product. Geodis Wilson is very much focused on clear procedures for changes of transport mode: a thorough route risk analysis is completed to ensure quality compliance, as this has been recognised as one of the challenge areas for a time effective and secured solution. The customer uses Geodis Wilson’s freight monitor and a document management system to locate shipping information, wherever the cargo may be. This doesn’t just provide increased control over the shipping process – it also guarantees that the customer knows exactly when their shipments are going to arrive. n Geodis Wilson makes customers more competitive by delivering its cargo across ﬁve continents by sea and air and by making its supply chain transparent and easy to manage. Geodis Wilson, the freight management division of Geodis Group, has more than 5000 employees in more than 50 countries. The Geodis Group is a global logistics provider with 26,000 employees in a network covering 120 countries. As part of the French railway company SNCF, Geodis offers a wide range of sustainable, innovative and cost saving multimodal solutions.For more information about the G-Box, please send an e-mail to: g-box@hq.geodiswilson.com or visit Geodis Wilson online: www.geodiswilson.com.

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INDUSTRY INSIGHT

Towards more affordable and innovative pharmaceuticals Abhijit Mukherjee explains the current woes facing the pharmaceutical industry.

he last decade of the 20th century could well be termed as both low-cost as well as high-cost medicines therefore has advantages. the golden decade for the pharmaceutical industry, with An interesting and unprecedented fallout of the focus on emerging mega-blockbuster drug launches, growing pipelines and markets has been the blurring of the traditional roles companies play: unmatched profit margins. With the turn of the clock customers and suppliers, innovators and followers. For example, there into the 21st century, this has given way to a decade of have been several recent acquisitions by large pharmaceutical companies challenges. The pharmaceutical industry today fi nds itself in the midst of generic companies, such as sanofi’s acquisitions of Zentiva in central of the perfect storm – R&D productivity is at historic lows, the patent Europe, Kendrick in Mexico and Medley in Brazil. cliff of 2012 looms, and the most profitable market, the US, is due for But perhaps what is most interesting for us is the development of major healthcare reforms and soaring healthcare costs, resulting in unpartnerships and strategic relationships that would have been unthinkprecedented price pressure. able just a year or two ago; partnerships designed to drive innovation, To add to these woes, the current global economic turmoil has left its improve costs and to make better medicines more widely available. mark on our supposedly recession-proof industry. Dr. Reddy’s, for example, traditionally would IMS Health predicts that in 2009 pharmaceutical have been seen as a generic pharmaceutical comsales in the US will decline between one and two pany. Th rough our Custom Pharmaceutical Serpercent, while the global pharmaceutical market vices business, however, we are now an established is expected to now grow by only 2.5 - 3.5 percent. player for providing contract manufacturing What then are some of the main conseand services to innovators, in particular lifecycle quences of this new, unfamiliar and changing management. We actively engage with innovaenvironment? One of the most immediate consetor pharmaceutical companies, using our skills, quences has been the wide ranging reassessment expertise and speed of development in generic and restructuring of the extensive manufacturAPI manufacture and formulation to help in the ing infrastructure within the pharmaceutical development of the next wave of advantaged and industry in a bid to improve utilisation rates and enabling combination therapies. Dr. Reddy’s sustainability. Outsourcing will continue to be also has large global manufacturing capabilities, a critical element of every pharmaceutical commaking us one of the largest suppliers of API to pany’s business strategy and the extent to which the industry. Finally, we have tremendous expericompanies outsource key activities will only ence of operating in emerging markets. Th is has grow. Th is follows a trend already quite common most recently culminated in a strategic alliance in many other industries. with GSK for developing and marketing branded Finally, pharmaceutical companies are generic products and differentiated formulations increasingly looking at emerging markets to across emerging markets outside India. sustain growth. A new world order is apparSo with a changing world we have a changed ent as the IMS-coined ‘pharmerging’ markets pharmaceutical industry. The norms and convenAbhijit Mukherjee is President, Pharma of Brazil, Russia, India, China, South Korea, tions of past decades have all but gone, replaced Services and Active Ingredients for Dr. Reddy’s Laboratories. Mexico and Turkey grow collectively at a 13 – 16 with innovative business models and collaborative percent pace through 2013. However, operating partnerships focused on the most efficient means in emerging markets calls for a complete rethink to innovate and manufacture pharmaceuticals. of the existing business models of large pharma companies. Successful It is such partnerships that will allow for cost-effective innovation to strategies in emerging markets need not incorporate the most innovareturn to the industry and for medication to reach the furthest corners tive medicines. In these regions, most drug spending is out-of-pocket of the globe and usher in a new era of sustainable growth for the pharand there are high levels of income disparity. The ability to provide maceutical industry.

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NEW PRODUCTS

ECONOMIES OF SCALES The beneﬁts of essential fatty acids have long been established, but introducing them into the pharmaceutical sphere is a relatively recent phenomenon. Hilde Steineger explains how Pronova’s use of omega-3 has transformed an age-old remedy into a billion-dollar blockbuster.

orway has traditionally used fish oil as a natural remedy, most notably cod liver oil, but it wasn’t until the late 1970s that a Danish scientist discovered that the large intake of fats by Eskimos did not have the normal correlation of cardiovascular problems that are seen in the Western world. Further analysis of the types of fat uncovered large quantities of omega-3, and the understanding of its cardiovascular properties was born. “There has been a lot of scientific research in Norway on lipids and omega-3s since the late 1980s,” explains Hilde Steineger of Norwegianbased Pronova BioPharma. “Between the late 1980s and early 1990s, Norsk Hydro looked into omega-3 to produce it in a very high concentration, and this is what makes our product different than the supplements from those you can buy in the pharmacy: we have a much higher concentration of omega-3. A normal supplement would be somewhere between 30-50 percent concentration, while our product is above 90 percent concentration of omega-3. “At that time Norsk Hydro, which is a large conglomerate in Norway, fi led patents on this concentration and they started to do clinical trials. When they started they had an open mind about which indication and diseases this could be used towards, and what they observed was that it was quite effective on lowering triglycerides. So that was one of the indications that we ended up with in the clinical trials going forward.” Steineger also notes the work of a large cardiologist group in Italy, the GISSI Group, who began work on the effects of omega-3 at a similar time. They also began studying the effects of omega-6, and whether it would work, as well as if similar results could be produced from Vitamin E.

Clinical trials Following this, the GISSI Group then took the lead with Pronova and began performing large-scale clinical trials, with over 7000 postmyocardial infarction patients. For instance, patients who had previously experienced heart attacks would receive either a placebo drug, omega-3 or Vitamin E to determine the effects. The Vitamin E groups proved to

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Omega-3 Popularly known as fatty acids, omega-3s are a group of unsaturated acids that have a ﬁnal carbon-carbon double bond in common. Awareness of their beneﬁts to health has grown over the last few decades, and as a result, the number of foods enriched in omega-3 fatty acids has increased – such as milk and eggs that can be naturally enriched. They were deemed ‘essential’ when scientists found that they were indispensable to normal growth in young children and animals.

show no effects, whilst the highly concentrated omega-3 groups showed tremendous effects on all-cause mortality, new cardio arrests and heart attacks, as well as on sudden deaths. Most astonishingly, the trials showed a four to five percent relative risk reduction in sudden death groups and a 20 percent reduction in allcause mortality. Steineger notes that these results were responsible for the formation of the basis of post-myocardial infarction in Europe, the other indication present being a lowering of triglycerides. She explains the results of omega-3 on cardiac prevention as being due to a regulation of heart rhythms – electrocardiac signals – in the body. “On cardiac prevention, you must remember the human race has eaten fish for hundreds of thousands of years, so we have the metabolism and the system in place, and fish oil and omega-3 are involved in an extremely high number of different pathways in the body,” says Steineger. “There are many modes of action of this drug; we can’t pinpoint one and say, ‘Th is is one of them. Th is is how it works.’ We can pinpoint several, but which of these modes of action is the most important is difficult to say. However, on the prevention of cardiac events, the scientists and we believe that this is a regulation of heart rhythms, electrocardiac signals. “How would that come to be? Well, it’s believed that every cell membrane of phospholipids has lipids in it, and if you exchange the lipids from saturated or monounsaturated with polyunsaturated, they get more liquid: the membranes get higher fluidity. Because the more saturated fat is, the harder it gets. “If you then go to the other extreme and have a polyunsaturated fatty acid, like omega-3, and you incorporate this into the phospholipid layers it has been shown that the lipid layer will get a higher fluidity. Th is fluidity has an effect on the electrocardiac channels, such as the calcium potassium channels conducting the electric signals between the cells. That’s one change in the phospholipid layer and how that might change electrocardiac signals.

“There is a lot of research that shows there is potential in omega-3, but it all depends on the clinical trials that you do to support your product”

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“After the GISSI-Prevenzione study the GISSI Group also performed a study reported in 2008 called the GISSI Heart Failure study. There they showed the reduction in all-cause mortality to be around nine percent this time, however heart failure patients are quite sick and are on a lot of different drugs, so it was an add-on therapy and not a switch. Th is is the mode of action on the cardiac prevention. “The lowering triglycerides is a bit more complicated in the sense that natural or fatty acids are natural ligands for PPARs. When the fatty acids bind to PPARs, the PPARs then regulate quite a lot of different metabolic pathways, stimulating the uptake of triglycerides in the blood and reducing the body’s own production of triglycerides, and also increasing the metabolism of fatty acids and triglycerides. So it has quite a lot of different modes of action, which all together give a reduction in the very high triglyceride group, because there’s differentiation on how high levels you have with triglycerides. Therefore, in the very high triglyceride we see a 45 percent reduction of triglycerides, which is comparable to Niaspan and Tricor, but without having the same side effect profi le,” explains Steineger.

Regional attitudes Pronova’s omega-3 product, known as Omacor in Europe and Asia and Lovaza in North America, is the first and only EU- and FDA approved omega-3 derived prescription drug. It is indicated in Europe for lowering all forms of triglycerides, as well as for use in post-myocardial infarction patients; whereas in the US it is indicated only for lowering very high triglycerides. However, the US market is expanding, following a recent re-launch. Reliant Pharmaceuticals launched Lovaza in 2005, and when GSK bought Reliant in 2007, a different sales team was put together, the sales force was doubled and the product was re-launched three months later – creating a bigger market. However, Steineger believes the pick-up rate to be the same at home as it is abroad, regardless of the long tradition of omega-3 use in Norway. In fact, the greatest market currently for Pronova is the Mediterranean. “They already eat a lot of fish there, so you would think that they wouldn’t need extra fish oil or extra omega-3, but the perception that fish oil and omega-3 are good for you is easier to penetrate there than in the more northern European countries,” says Steineger. Although there is no scientific proof, she alludes to the fact that in a region where the intake of fish oil is already high, having extra is considered even more beneficial. It is this approach towards omega-3 that has received tremendous attention within the US, and she explains GSK is promoting the product, “very well and very professionally, it’s one of the growth drivers for GSK for the moment.” So how is this steering the future of Pronova? Steineger explains that this area is due for even more growth, and there is certain to be a greater market in the future for these marine-derived omega-3 products. “We have just scratched the surface of the potential, but it will of course be dependent on clinical trials and what we can prove. Omega3 has been coupled up with CNS diseases, like depression, Alzheimer’s

“The human race has eaten fish for hundreds of thousands of years, so we have the metabolism in place to process omega-3” and also dementia, as well as having shown to have anti-inflammatory effects. There’s a lot of research that shows there’s potential in omega3, but of course, it all depends on the clinical trials you do to support your product. We have a business model whereby we don’t perform large clinical trials ourselves; it’s our partners that perform the clinical trials,” explains Steineger. The timeframe for looking into such other potential applications is still uncertain. She notes that there is still a lot to do on cardiac prevention and on the lowering of triglycerides, in the sense of harvesting all the potential. There is also a large clinical trial, known as ORIGIN and driven by sanofi-aventis, which includes Pronova’s product in two of the arms, and involves 12,000 pre-diabetic patients. The remainder of 2009 looks promising for Pronova, and with March end-user sales hitting US$1.1 billion, the company is aiming for blockbuster status for Omacor/Lovaza, and as Steineger says, “There are not many products that can do that.” Hilde Steineger has served as Head of Investor Relations at Pronova BioPharma since 2007. Before that, Steineger was Senior Associate at NeoMed Management from 2006 to 2007, Business Development Consultant at Maxﬁeld/Amino from 2003 to 2006 and Senior Financial Analyst at Nordea Securities from 2001 to 2003. She graduated with a PhD in medical biochemistry from the University of Oslo in 2000.

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FEATURE INTERVIEW

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When Chris Viehbacher arrived to take up the reins as CEO of sanoﬁ-aventis at the end of last year, he found a company with an image problem that had forgotten how to communicate. Now he plans to change all that, as Marie Shields ﬁnds out.

CLOCKWISE: Denis Félix/Corbis BOTTOM LEFT: Didier Robcis/Interlinks Image

Viehbacher ed:13July

ou could say Chris Viehbacher has been around. He started his working life at PriceWaterhouseCoopers, then in 1988 moved into the pharmaceutical industry with GlaxoWellcome, which later became GSK. He holds both Canadian and German passports, and has lived and worked in the US and Canada, as well as Germany, France and the UK. But it’s his latest move that is big news. Last December he left his position as President of GSK’s Pharmaceutical Operations North America – after being passed over for the top job in favor of Andrew Witty – to become CEO of its French rival, sanofi-aventis. The move caused shock waves throughout the industry – the previous CEO, Gerard le Fur, had been in the position for only 18 months. Although, with hindsight, the change did not come as a complete surprise. Sanofi’s share prices had dropped in 2008, following the rejection in the US of its Acomplia obesity drug, once the company’s most promising product. Last July, sanofi and partner Oxford BioMedica said their TroVax medicine had failed to meet the target of a kidney cancer study, and development of Multaq, a heart drug, was delayed after US regulators rejected it. When Viehbacher’s appointment was announced, he was seen by many as being a kind of saviour, brought in to turn around a troubled company. Immediately after the announcement, sanofi’s shares rose by 6.8 percent, their biggest gain in more than two years. While he admits that his new company has suffered from a bit of an image problem, Viehbacher insists he has a strong foundation to build on. “I had two months between leaving GSK and starting at sanofi, and as part of the analysis I carried out during that period I found a number of strengths that I would not have know about coming into the company. When we presented our fourth quarter results, where we talked a bit about the strategy, even people in France who’ve known the company for a long, long time discovered new things. “The first was that we have a leadership position globally. We’re often perceived as being a company that is very franco francais, very French, but actually this is the company that’s got the number one position outside the US and Europe. It was one of the first companies into China, it has a major position in India, big positions in Latin America, and a major position in Africa.

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“When you think that in the future more than 50 percent of a global pharmaceutical market growth is going to come from outside of traditional markets, sanofi is positioned with not just the market share, but also with the people, resources, local market knowledge, government contacts to benefit from this period of growth. “We’re also a lot more diversified than people realise. We’ve obviously got a leadership position in vaccines, and a position in OTC that I don’t think anybody realised we had, either inside or outside the company. It provides a basis on which one can build. We have fledgling operations in generics, which we have since reinforced, and we have quite a significant older product range that continues to grow, and that really supports the business globally.”

Let’s talk What then, was the problem? Viehbacher feels that one of sanofi’s mistakes in the past has been the lack of effort put into communicating with investors and the general public. “Sanofi is a company that experienced significant success for many years, and didn’t pay attention to the need to communicate. It’s when you run into difficulty that you suddenly realise you’ve got to explain where your strategy is and where the strengths of the company are,” he says. “Management didn’t focus enough attention on it, and we never expressed a vision about where we wanted to go. We had the building blocks lying on the ground, but there was no plan to make the house and no real explanation of what house we were going to build. There’s been some work needed on architecture and construction. But at least the fundamentals were there; it’s just a question of now building upon those and turning them into something.” There also needs to be increased emphasis on external growth, Viehbacher explains. He would like to see the company open up more to the outside world. “We were a company that was focused internally; a company that lived within its own walls. We were looking principally inside in our own research for new product opportunities, and we weren’t spending a lot of time communicating with the outside world. “One aspect of my plan is to bring the outside world into the company and open it up to what’s out there. We have just carried out a pipeline review within our research and development organisation, and we examined it not just from the traditional point of view of safety and efficacy, but we also looked at the value to customers. Cutting 14 out of our 65 projects was a strong signal that we’re only going to progress those medicines that are not only safe and efficacious, but also add value to patients. So there is a need to change the culture.” Viehbacher has also been looking at R&D structure. He says it’s important to keep in mind that there is a lot of fantastic science going on outside the company. “The model – if there is such a thing – is to say you’re going to be doing some research inside, but you’re also going to be doing a lot of research through collaboration. To a degree, outside research is still seen as adding to internal efforts, and to that I say, ‘There are plenty of companies outside and they’re doing plenty of things. Why replicate that?’” Companies still need to do enough of their own research to be able to understand the research being carried out externally, and big pharma will always have some depth of expertise that smaller companies don’t. Viehbacher stresses, however, that for him, the discovery research model is very much one of osmosis, and not so much about creating smaller units

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and organising the structure. He believes in moving money and resources across a range of projects and teams, some of which may be internal and some of which may be external.

Time to collaborate It’s for this reason that Viehbacher is willing to allocate up to 50 percent of his research resources to outside collaborations. He gives the following example: “When we put forward a proposal to build a biotechnology factory in France, I said I’d like to make sure that this factory is also available to other biotech companies who might want to use the facility. That’s in an interest for us because we might be able to partner with some of those companies. Another factor in this equation is Viehbacher’s view, based on his 20 years of experience in the industry, that you can never have enough pipeline. “There isn’t a company in this industry that has enough pipeline,” he emphasises, “and enhancing that and working collaboratively outside has got to be a way of life – and a constant way of life, not just something you do on an ad hoc basis to supplement your own. The model we must move away from is this notion of ‘We’re going to keep throwing money at a black box’ – which is the way I often perceived research and development in the past– and hope that we can do everything from A to Z, from discovery through to commercialisation.”

“We had the building blocks lying on the ground, but there was no to make the house and

plan

no real

explanation of what house we were going to build” With external collaboration, there’s obviously a process of competition that doesn’t occur with internal projects. It’s through this competitive process that some of the best ideas emerge, and weaker projects often get weeded out. Companies don’t always put the same level of due diligence behind the choice of internal projects, because they’re committed to sites and committed to teams. “This might mean we need to bring a lot more rigour in deciding which are the best ideas to invest in,” Viehbacher says. “Then we need to get behind them, make sure the teams have passion and conviction, and give them the latitude to decide. The construct of a team may differ from one therapeutic area to another, but at the end of the day we are betting on teams and their ideas. It’s a question of how do you identify those, encourage them and put some stress on the testing of those ideas? “You have to let them run and try to keep as little process and bureaucracy as you can from impeding those efforts. Then after three or four years, you see what results they have come up with. That’s also something that in our industry we haven’t been good enough at – looking for the results early on. As an industry, we do development pretty well; it’s the discovery research piece that we’ve got to go back and look at from a people point of view. “You’ve got to be able to voice a problem before you can solve it. To a degree, we’ve been dancing around a number of issues in this industry and haven’t

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wanted to face up to them. We do need to acknowledge, for example, that we don’t have enough new products to replace the ones we’re going to lose. And we have not been realising an appropriate return on the money we’ve been spending on research and development.”

Diagnosis merger

Since becoming CEO, one of Viehbacher’s constant refrains has been that he aims to turn sanofi-aventis into a diversified healthcare company with a more global reach. What exactly does this mean? “If you think about strategy you essentially start off with a certain number of things,” he says. The first is: where is there an attractive market, and you come down to that by looking at what are some of the mega trends amongst consumers? What are some of the disease areas of unmet need? What’s the evolution in the marketplace in terms of payers and insurance companies and regulations? And you try to then marry that with where you’ve got some sort of capability, presence or experience, and try to focus in on those market areas that are the most attractive. “On the pharma side, we’ve gone too long where we start with a medicine and go look for a customer. If you look at the fundamentals of the healthcare market, it’s huge. There is going to be economic growth at some point. Even with the economic crisis, quite a number of markets are still growing; for example, countries like China that suddenly decide they need to significantly increase the level of investment they have behind healthcare. “If you look at the ageing population as a mega trend, if you’re looking at obesity, you’re looking at a trend for wellbeing, you’re looking at time compression, you’re looking at urbanisation of populations. You’re suddenly seeing that there is going to be a focus on healthcare, but on a certain type of healthcare, and that our style of living is creating new healthcare issues. To me, healthcare – especially if you don’t define it too narrowly – is fundamentally a strong area. And you’ve also got major diseases that still are not well treated, such as diabetes, oncology and Alzheimer’s disease.

Didier Robcis/Interlinks Image

The pharmaceutical industry has recently seen a spate of mega mergers – Pfizer/Wyeth, Roche/Genentech, Merck/Schering-Plough. What does Viehbacher think of this trend, and is it one he’s considering buying into himself? “One way or another, we all have to think about where we’re going to get sustainable growth from, and everybody starts off with a different set of cards.” he explains. “You have some companies that have become almost purely small molecule-based in Europe and the US, and when you’re facing a patent cliff and you don’t have an awful lot of other things in your hand, you pretty much have to do something to continue to survive. Pfizer has said, ‘We need to be more diversified. We need more biologicals and vaccines, for example, and OTCs,’ which they didn’t have, and so it was a way of getting that. “Everybody starts with a different position. We’ve got a lot of elements upon which we can grow; I don’t necessarily need to do a big deal to seek that out. If you’re trying to get away from dependence on blockbusters, you want to focus on those businesses that have different competitive profiles and different barriers to entry. And they’re not necessarily going to be easy businesses either, but they’re going to have a different longevity and a different perspective in terms of growth. “My first objective is to continue to build on this notion of a global healthcare company as opposed to a pharmaceutical company based in the US and Europe, and therefore have an acquisition strategy that builds upon those things where we already have a strong presence. Like vaccines, like emerging markets, like OTCs and generics, where we’ve been weak but where we can strengthen ourselves. I don’t think the size of the acquisition necessarily matters. It’s a question of we are all looking to strengthen our companies as we face patent expiries, and some of us, like sanofi, have things upon which we can build internally; some of us have to seek more externally.” Viehbacher says that the big question, whether you’re buying big, medium or small, is still going to be around innovation. He believes most companies are struggling with the question of how to come up with an innovation model that is sustainable. He doesn’t think anyone has found the solution, but he stresses that innovation is something that needs to worked hard at, and that you can’t let merger and acquisition activity completely dominate that.

Diversify and multiply

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“Therapeutically you’ve got some very interesting areas, but then of course not everybody can afford the same level of healthcare. We’re seeing an increased presence of government regulation trying to go after some of the private sector in terms of over-the-counter, or in countries where there’s no real social security or health insurance today – which is true of most countries in Asia – and you have to ask, can you get into more services, OTCs, generics and some devices? There are all kinds of growth opportunities out there, and our strategy is to go after those, versus just saying well, we’re a pharmaceutical company.” One constant lament within the industry is the lack of new blockbusters. but Viehbacher points out that blockbusters are unlikely to disappear completely. “The model that didn’t work was betting on the blockbusters; relying upon them for your success. There’s no better business in terms of profitability, with low levels of resources needed, than when you’ve got a blockbuster. If you’ve got one you’re in a great place, but you can’t always count on them in terms of timing.”

Increasing productivity Another area that Viehbacher feels the industry should be looking at is the strength of its R&D. With this in mind, sanofi recently carried out a portfolio review. “Our intention was to do what a lot of other companies had already recognised, and that is that you can’t develop a new medicine unless it adds value to patients,” he explains. “In so doing we’ve established new processes where the market is represented at the decision table as to when we advance a product – nothing revolutionary there. The next step is to ask five questions of R&D. The first two we’ve already answered: do our products add value, and who needs to be at the table when we make decisions? “The third, fourth and fifth questions are: how do we restore creativity and productivity back into our organisations? How do we make sure our organisation is as interested in seeking science outside the company as inside? And, what are the new technologies and areas for investment that we want to be in? Science is moving on – where do we want to place our bets? “I’m not going to define all those; we do know we have some issues. I’m meeting with some of our scientists right at the bottom of the company: we have anywhere from nine to 10 hierarchical levels between the head of R&D and the scientist. That means a lot of our best people have become managers, and you get a promotion in the company by becoming a manager, not by being a great scientist. We’re not doing enough to recognise innovation. We’ve got some great people, but it’s very hard sometimes to get a project advanced if you really believe in something, because you’ve got to go through so many steps. “We’re trying to go back and have a very basic look from a human point of view at who are the people who can succeed, how do we test whether they’re going to succeed, and how do we give them a chance in our organisation and give them enough latitude? We’ve become quite risk-averse as companies. “One of the reasons we’re having difficulty in discovery is that we’re still pursuing a lot of the same targets, and at some point you have to branch out and go after some non-validated targets, some new frontiers of science. We haven’t allowed enough of a risk profile at that level of the organisation to branch out into new areas. If you look at the targets in oncology, in metabolic disease and in CNS, and you compare how many companies are going after the same target, it’s incredible.”

Recession-proof? It is unlikely that any industry will emerge completely unscathed from the current recession, and recent rounds of job cuts among pharmaceutical

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companies are an indication that they too are feeling its effects. The Pfizer/Wyeth merger resulted in the loss of nearly 20,000 jobs. GSK eliminated 800 research positions late last year, and recently announced it could shed up to 6000 more jobs across its global operations. AstraZeneca also said in February that it would cut its workforce by about 6000 positions. In late 2008 Sanofi-aventis cut nearly 1000 sales jobs in France and several hundred more in the US, and at the end of June the company announced an overhaul of its R&D operations, but said this would be accomplished through what it called “voluntary staff departures.” When asked about the possibility of further job reductions as part of cost-cutting measures under his leadership, Viehbacher refuses to be drawn. “We will certainly go through a process of looking at how we can reallocate and reorient our resources, and that may end up in fewer resources. But nobody’s going to invest in this company because we cut costs. One of the lessons I’ve learned in the last 20 years is if you want to provide shareholder return you have to present a company that’s got a sustainable growth prospect. If you go through endless rounds of cost cutting you end up with an organisation that becomes very distracted and demotivated. “We’re becoming more of a global company. We’re going to focus a lot more of our growth into emerging markets and places like vaccines and OTC. Those all have ripple effects within a company; if you’re suddenly in generics, the manufacturing organisation has got to be able to support 100 launches a year versus 15 – a launch being the launch of an SKU, not a new molecule. And so you’re going to have to have a different organisational model. “We’ve got the lowest SG&A ratio in the pharmaceutical industry. Sanofi has never stood up and beat its chest and said, ‘We’re going to eliminate all these jobs.’ It has just quietly and effectively managed its costs. To me, cost management is just part of good management. We’ll continue to do that, and there are certainly opportunities to take some costs out of the business. “An endless round of cost cutting is not necessarily helpful, and it doesn’t create value in the longer term. It has to be to get the company growing on its feet again.”

Optimistic outlook Despite the challenges his company and the entire industry are facing, Viehbacher is optimistic about the future. In his opinion, there is too much focus on the patent cliff, when the future is in healthcare. “In our company we’ve got a lot of talented people and we’ve got a lot of financial resources. There are a lot of patients out there, and we’ve got the medicines and vaccines to help them. “We’re going to be a company that grows well on into the next decade. We need to get past the blockbuster phase, but the base business that we have and our ability to partner and do acquisitions gives me an awful lot of excitement for the future. “Healthcare is still something that matters more than anything else – there is huge unmet need out there. It’s a massive marketplace, and if we’re a little bit creative and a little bit flexible in how we go after it there are big opportunities.” Despite the initial controversy surrounding his appointment, Viehbacher seems to be settling nicely into his new role. As he looks forward to the rest of his family joining him in Paris later this summer, perhaps this ‘man on the move’ will decide to stay put for a while.

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CLINICAL SAFETY

RUNNING THE RISK Ellen Strahlman, Chief Medical Ofﬁcer for GlaxoSmithKline, explains why a balance of safety and efﬁcacy is essential in clinical trials.

s CMO for GlaxoSmithKline (GSK), Ellen Strahlman is primarily responsible for ensuring the safety of medicines and patient care. It may be a tough job, but Strahlman is certainly not lacking in passion. As a physician, her medical training began in general surgery and ophthalmology, which she admits to have initially given her that “flavour of things,” and the desire to influence patients’ lives through the pharmaceutical sphere. She explains her time spent in epidemiology and public health as that which prompted her to the move into the pharma industry. “I was pretty uncertain at first; the first part of my career was at Merck, and I found that actually inventing a drug and bringing medicines to patients through that

route was not only a very fascinating and complicated process, but also a way to change the lives of millions of patients at a time,” she explains. “For me to see that GSK considers safety and potential risks, even in the design of the molecules and the drugs at the front end is an important statement about the values that the company has. Then wanting to use all the data at our disposal and inventing technology to do that, whilst being willing to share it, displays this even more.”

Safety and efﬁcacy In a recent presentation to the Harvard Medical School, Strahlman notes the impossibility of separating safety from efficacy in clinical trials

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in determining whether a drug is beneficial or not for patients. The two cannot be separated, as a decision such as this is a benefit/risk decision, which is made between a patient and a physician. Strahlman argues that from a scientific point of view, efficacy endpoints are established and safety parameters are prescribed, and the interpretation of the two must always be placed into consideration together, which forms the foundations of a benefit/risk assessment. “For example, an adverse event in this situation where a patient has a life-threatening illness is taken in a different consideration than if it’s a medicine people would take every single day for the rest of their lives. So, if you’re an oncology patient and you take a medication and you have a severe stomach upset, but it’s part of your chemotherapy or part of your regimen to save your life, you may tolerate that. If you have to take a medicine every day for arthritis and you constantly have a stomach upset, that would be a very different situation,” Strahlman explains. She also notes comparative effectiveness research within the presentation as being a major part of how GSK operates – from the test tube to the clinical trial, the company retains its emphasis on discerning how a medicine compares to other medicines that are currently available for patients. As she puts it: “Quite simply, comparative effectiveness of treatment means comparing two or more treatments for a given condition. “In our view we do this all the time, even in the daily work of bringing medicines to patients and developing drugs. Of course, comparative effectiveness research now has a larger context, especially in the current debate, in the US and all over the world. We support this when its intent and focus is to improve the health of patients. We believe these comparisons should mainly be medical, assessing the benefits of a medicine versus the safety risks it may have, and then comparing among two or more treatments to determine which one is best for the individual patient. “Central to this is the health and wellbeing of the patient and the input of his or her healthcare provider. People want to know if their medicines work, and how well they work compared to others, and that’s really where we think comparative effectiveness research has its greatest value,” she explains. The intent and focus on improving the health of patients is very much at the forefront of current debate, but there are often other focuses that are placed on comparative effectiveness research. Strahlman explains how GSK implements this in regard to the medical and clinical aspects of comparing treatments for patients. There is also comparative effectiveness research that examines cost – it being a major part of the analysis after the medical benefit is determined. Strahlman once again provides an example, this time focusing on Phenylketonuria, a condition often referred to as PKU and an enzyme deficiency. “In the US all babies are screened for this,” she says. “It’s a very rare condition, but if you have it the babies universally die; it’s fatal. It happens very rarely, so it’s not an inexpensive thing to do this for the entire population. But if it’s caught within the fi rst few days of birth, it can be treated and the babies grow up to have completely normal lives.

“So society indirectly made a decision that a very extensive screening programme would be tremendously beneficial for their pediatric and their newborn population. What was realised is that there was a tremendous benefit to doing something in this situation, and then the cost decisions were made by the values of this to society aft erwards. One of the things that is important to us is that the medical benefits, in comparisons of treatment, be front and centre and that doctors make those decisions for their patients. “However, an emphasis on costs, as we have seen in other parts of the world, we don’t think will be as productive. We want to bring medicines to patients to improve their health and wellbeing, to treat diseases and meet unmet medical needs. We believe this is of tremendous value to society, so if cost becomes the front and centre issue there’s defi nitely a feeling that we might lose some of the important benefit and value to society conversations.” Strahlman explains that the elements important to comparative effective research proposals should therefore include an understanding of benefits and risk, as well as an understanding of populations that respond differently. She describes that some of the ways that comparative effectiveness research can be conducted may be through randomised trials or observational data within the context of the real world, both elements being applicable to CER.

“People want to know if their medicines work, and how well they work compared to other things, and that’s where comparative effectiveness research has its greatest value”

Real world data “You need both types of information to understand the benefits and the risks of a medicine. Randomised trials are the ultimate experiment – the testing conditions are right, you actually test the benefit and the safety versus either the standard of care or sometimes the placebo, and in the purest sense, it gives you the most unbiased view of the effectiveness and the safety of a treatment. “The downside of randomised trials is that because the populations are selected, and everything is very well-controlled, sometimes when things happen in the real world they don’t exactly go according to those criteria. For example, our population of diabetics would be in a clinical trial, a uniform population, to ensure that the experiment works well. But in fact, diabetics have a wide range of medical conditions. So in the real world, that may be different. “Therefore, clinical trials can’t always answer the questions about what happens to an entire range of people in the population. That’s the first thing. The second thing is, because of their usually limited size, if you have between 3000 to 5000 patients who have been in randomised trials, and an adverse event happens one in 100,000 or one in 500,000, you may not be able to detect that. So, there are size limitations based on the rarity of events that may occur.

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“So randomised clinical trials are absolutely essential to establishing the foundation of the science for the benefit and the safety of a medicine. What it doesn’t address is the generalisation to the population and it doesn’t provide the capture for even more rare safety events. And that’s where real world data comes in. The observational data that companies and regulators use have to do with the adverse events reporting systems, capturing that information. So you do need both,” she explains. Th is is certainly the case within the US. Insurers there now have access to patient data through electronic databases, allowing them to view information in regard to safety – a tool valued as extremely beneficial. It is the usage of these tools by pharma companies that contributes to the industry as a whole; drug fi rms have the expertise to analyse the information and make it available to others, not just for themselves. Strahlman notes the tools GSK has developed specifically to enhance the pharmacovigilance process: “The regulations require that we analyse information, and I’m very proud of the fact that GSK goes beyond what’s required and in terms of what the regulations say, because we’re very interested in understanding the full range of benefit and risk for our medicines,” she says.

Innovation Ellen Strahlman is Chief “One way we look at things is something called Medical Ofﬁcer at the online signal management, or the OSM tools. GlaxoSmithKline. She joined GSK from Pﬁzer Inc. where Th is is spontaneous data, adverse events reports that she was Vice President of Licensing and Worldwide doctors and healthcare providers supply to regulaBusiness Development. tory agencies in general for all medicines. In the past, this was done more on an ad-hoc basis, and collected into a large, stacked database by the FDA. GSK developed an online signal management tool to proactively identify, capture and make connections in a more streamlined fashion, and integrate the information back into where it needed to belong in terms of which drugs were being accounted for. “The system is so good that the FDA and the European Medicines Agency (EMEA) use it: the regulators now use the technology that GSK invented. As we were developing it, we brought them into the discussion so they had some input – it was a real partnership in terms of making that development – and then the company made the investment in the soft ware and the tool, which it now makes available to regulatory agencies all over the world that want to use it. We’re extremely proud of that, and that’s our most salient example.” Strahlman explains GSK’s focus on CER as being “from test tube to the patient,” and what the benefit and risk could be for the company’s medicines. In addition, online signal management is used to evaluate adverse events for drugs that are currently on the market. GSK has an innovative tool to support this called Safety Works – she notes its recent win at the 2009 Bio-IT Innovation Prize. “Th is technology actually looks for benefit and safety information mining electronic claims health records, and we’re piloting it in a number of dimensions,” she says. “We are working with a third-party vendor called ProSanos. GSK has invented this technology and developed it along with ProSanos, and we’re making the licenses available to anyone who would like to use it – regulators, payers, academic institutions and so on. There’s no profit for GSK involved; it’s a break-even

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“What better way as a physician with all this experience to be able to contribute to a company, to try to be the medical voice, the voice of science for the patients, and also for their care, safety and well being”

endeavor for us. But we think this is going to be a very valuable tool to further leverage observational data, by being able to look at claims data and electronic health records. It’s a very new invention.” GSK also has another program molecular clinical safety intelligence system (MCSI), which is responsible for taking safety information for compounds that are already in development or on the market. It is then fed back to the company’s discovery organisation so they can choose which chemical entity to pursue. The process integrates toxicology as well as clinical data into that decision, which helps determine which molecules they will then pursue once the target is understood. “We’re integrating safety information into the decision for making a drug – we’re very proud of this tool as well, we also share this with our academic partners in particular, and also anybody who wants to use it,” she says.

Collaboration GSK’s commitment to immersing itself in partnerships is demonstrated through Project Protect, an initiative that shares technology for both public and private partnerships. It is made up of 12 pharmaceutical companies, four academic centres and also certain patent

organisations; the Innovative Medicines Inititative (IMI) sponsors the initiative. In Europe, GSK participates in various programs for its Innovative Medicines Initative, which it co-chairs with the EMEA, strengthening the monitoring of benefit/risk medicines in the region. Th is is reliant on the range of technologies and innovative methods that enhance early detection and assessments of adverse reactions. As a pharmacovigilance project, GSK will be partnering with the EMEA and other academic institutions that are interested in understanding proactively the early detection of safety information in the company’s medicines. The IMI’s role is to provide the grant money: several billion euros have been set aside to create these public/private partnerships for the advancements of science and technology. The regulatory agencies will also be providing expertise at the initiative, whilst the academic centres and patient organisations will be providing staff and questions to advance the project. GSK’s commitment to fi nding ways to solve the problems of unmet medical needs is the reason that attracted Strahlman to the company. The responsibility is not viewed as a chore but as an opportunity to ensure the safety of patients, as well as ensuring compliance is met within the various regulatory, medical and safety groups within the company. “What better way as a physician with all this experience to be able to contribute to a company, to try to be the medical voice, the voice of science for the patients, and also for their care, safety and wellbeing,” she says.

Swine ﬂu Although her tenure at the company has been for under a year, Strahlman has certainly experienced the ups with the downs, as US healthcare policy becomes repeatedly under strain and attracts global attention. She explains the weeks so far of the H1N1 crisis have been tumultuous, since the disease has reached a level 6 pandemic status from the World Health Organisation, but asserts that working for an organisation with the ability to provide a solution brings an overwhelming sense of satisfaction. “GSK is a company that has medicines for flu and also makes vaccines. The response of the company to the WHO, to the CDC and to government is remarkable; we may be able to provide medications and services that would save millions of lives. It’s just a tremendous thing to be able to be a part of,” she concludes.

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ASK THE EXPERT

Strategic choices to reduce acetonitrile dependence

By Richard Lake

n todayâ&#x20AC;&#x2122;s economic climate, laboraformance and method parameters). Larger ditory productivity is an increasingly ameter columns require higher flow rates, and important key to bringing new drugs thus larger volumes of mobile phase, to reach to market efficiently, and the current the desired linear velocity. Reducing column acetonitrile shortage has created a significant inner diameter is a simple way to decrease the challenge to productivity for many labs. volume of acetonitrile used, while maintainAcetonitrile is the most widely used ing equivalent method performance. organic solvent in the Switching to an alterpharmaceutical industry, nate solvent system is also and suppliers have indioften cited as a short-term cated that rationing and/ solution. While viable, or cost increases should be this fix is not as simple expected until at least the as it may appear. With end of the year. While the alternate solvent systems, duration of this shortage the chemical properties is unknown, it presents an often differ and prior to opportunity to review laboimplementation several ratory practices and make points must be considered, strategic changes. This including: mode of separaRichard Lake is the Pharmaceutical Market article presents both shorttion, detector issues (such Development Manager at term solutions for reducing as UV cutoff) and analyte Restek Corporation. He is responsible for overseeing the costs by cutting current compatibility. Revalidadevelopment and application of chromatographic products consumption levels and tion is usually necessary for the pharmaceutical long-term method developwhen an alternate solvent industry. He has over 13 years of experience including positions ment tactics for reducing is used, thus, using smaller as lead chemist, LC and GC method developer, stability overall dependence. diameter columns is genmanagerand study director for Using smaller columns erally the easiest, most pharmaceutical studies. is one of the most comimmediate way to reduce monly recommended ways acetonitrile use. Details on to reduce acetonitrile consumption over the implementing both strategies are available at short term. By decreasing the internal diamwww.restek.com/acetonitrile. eter of the analytical column, a 52-80 percent Another way to reduce solvent consumpreduction in solvent consumption can easily tion is by implementing fast LC through be achieved (values vary based on system perultra high-pressure liquid chromatography

(UHPLC). UHPLC, due to greater efficiency and linear velocity, can reduce analysis time by as much as 5-10 fold. UHPLC is a viable short-term solution for labs that have already adopted this technology. However, UHPLC equipment can require a substantial capital expenditure, and labs that have not invested in these systems yet may be reluctant to do so in the current economic climate. Labs interested in the benefits and practical applications of UHPLC can find more information at www.restek.com/uhplc. While there are several short-term solutions available, these techniques are not always optimal over the long term. In order to reduce dependence on acetonitrile over the long term, labs must focus on developing methods on columns that perform better with other solvents. While C18 columns are the most commonly used phase in drug development, other phases can give better performance with alternate mobile phases. For example, phenyl columns are more retentive and provide alternate selectivity when using methanol instead of acetonitrile. Restek has developed a Biphenyl phase, which is comparable to C18 and other phenyl columns when used with acetonitrile, but provides much greater retention and selectivity than other phases when used with methanol. This versatility makes them ideal for method development with either solvent. For more information on the practical use of Biphenyl columns, visit www.restek.com/biphenyl. Over the long term, method development strategies that optimise chromatographic column properties can make laboratories less vulnerable to solvent supply f luctuations. While short-term solutions can solve immediate needs, long-term strategies that invest in versatile column chemistries will be necessary in order to maintain development timelines and overall laboratory productivity. Restek is committed to helping chromatographers through trustworthy and sound technical advice. For help selecting and implementing a solvent-reducing strategy, contact us at 800-356-1688 ext. 4 or at support@restek.com. Â&#x201E; References 1 M. Yang, S. Fazio, D. Munch, P. Drumm, J. Chromatogr. A. 1097 (2005) 124.

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ASK THE EXPERT

Utilising cutting-edge water-based nanotechnology By Ayelet Dilion-Mashiah

of two hydrogen atoms and one oxygen atom – the same basic chemistry as bulk water. The key difference is that the water molecules are organised in clusters and therefore feature different properties. Its key feature is the clusters’ very large surface area; this enhanced surface area is achieved by introducing nanoparticles to the water via a proprietary process. Neowater’s post-production composition is distinct from regular water in that the CO2 concentration is 10- to 100-fold higher, and the enlarged surface area, due to the nanoparticles, provides structure in the liquid phase. These characteristics result in an enhanced ability to disperse hydrophobic and hydrophilic compounds whilst simultaneously heightening bioavailability and stability. The Neowater vehicle facilitates delivery of drugs by leveraging the surface effect. This differentiates the Neowater system from any other delivery system. However, as Neowater is a natural, general solution, it provides the same vehicle

ringing a new drug to market is one of the most expensive procedures in the business world. As the costs of new drug development currently weigh in at approximately $500 million, late-stage failure is a disaster for the company’s finances. Traditionally, the early-stage focus has been on toxicity, with the question of efficacy relegated to the later stages of the drug trials. This old paradigm – toxicity first, formulation later – has proven to be an enormous boondoggle, wasting the time and money of companies that utilise it. Studying dose response translation only in the late stages of phase III opens the door to disaster, as it is impossible to predict how a compound may impact the disease entity. As a result, efficacy has finally become an integral part of early-stage drug development. However, it is still the standard operating procedure to use different vehicles at different stages of the research process. This can lead to unpredictable dose responses in human subjects, sometimes leading to catastrophic late-stage failures – precisely what the change in paradigm was designed to avoid. The industry therefore needs to recognise that an early-stage focus on the delivery system is not only fiscally responsible, but experimentally prudent. DMSO has long been the vehicle of choice for solubilising hydrophobic and hydrophilic compounds. However, the use of DMSO

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and the sole focus on solubility has led us down the path of false assumption, leading to an in“The industry needs to creased potential for the dreaded late-stage failure. recognise that an early-stage Although it is possible to formulate virtually any drug into solubility in vitro; the focus must focus on the delivery system shift to bioavailability in vivo. This requires the is experimentally prudent” identification of a medium ideal for both solubility and delivery, ensuring that it can both be delivered to the desired site and extracted to reach structure for many drug compounds, and rethe targeted points on the cells. quires only minimal customisation. The key issue regarding drug vehicles is hyNow that there is a shift toward examining drophilic versus hydrophobic properties. Delivery both toxicity and efficacy during the first stage of via bodily fluids demands that compounds be inidrug development in order to avoid the lack of tially hydrophilic, and this becomes a problem at predictability in later stages, use of standardised the cell membrane site, which is composed of hyaqua-vehicle systems must be considered as the drophobic lipids. logical next stage in the process. A great deal of attention By leveraging Neowater, has therefore been focused on companies can now streamline using lipids to deliver drugs, the drug development process, such as liposomal vesicles. moving from in vitro developOne key pitfall of these sysment to in vivo delivery, and tems is that they are not inert, from early laboratory experiand contain other materials ments to late-stage studies in for the upload and release of humans, with the same vehicle the payload drug. system. This eliminates the risk A safer, natural and more of needing to change the vehicost-effective solution has cle after all results are in, prebeen found in Neowater. A venting the widely varying unique form of water strucreliability that can result in Ayelet Dilion-Mashiah is the VP of tured similarly to intracellular late-stage failure, and the loss Business Development and CFO of Do-Coop Technologies Ltd. water, Neowater is composed of significant capital. n

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CLINICAL TRIALS

Trials and tribulations Boehringer Ingelheim’s John Smith tells NGP about the importance of accountability in the pharmaceutical industry and the responsibilities for behaviour when a trial doesn’t go exactly to plan.

linical research has now standardised as a macro operation. Globalisation’s emergence since the breakdown of international borders in the 1950s has steadily increased, making it mandate for research to be conducted from various centres. However, this does not come without its challenges. John Smith, VP of Clinical Research at Boehringer Ingelheim, explains the approach his company has used to combat the challenges found in multi-centre trials. “We have a structure of international research where our different operating units have ownership of a particular trial allocated from our central clinical research in Ingelheim – the corporate clinical research centre,” he explains. “By an operating unit taking ownership, they are responsible for coordinating the operations and allocation of the trial throughout the world. It is a challenge. “Many trials, particularly in some of the larger indications – for example, cardiovascular and diabetes – you need to do over 30 or 40 operating units, each with slightly different regulatory requirements, and standard of care may be a little bit different in each of the countries.

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“We want to be sure that we have a product that is investigated under a broad range of conditions, but that we can actually pool that data into a registration file that can be used throughout the world. We do it in a different way than other companies, and where most of the research is centralised out of a single unit we do this in a more decentralised approach, and it has worked for us.”

Emerging markets As Western Europe and North America continue to increase the regulations surrounding clinical trials, Boehringer is approaching the emerging markets, seizing upon the opportunity to gain clinical experience in countries that were not previously used for clinical research. However, Smith is aware of the need for caution with such an approach. He explains that in order to do so, Boehringer has set up regional centres in Eastern Europe for South America, Latin America and the Far East, and those regional centres then are responsible for coordinating the clinical trials in those areas. Through knowledge of local regulations and an understanding of quali-

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ty and monitoring, Smith explains that these centres are becoming increasingly important to the contribution of Boehringer’s clinical trials. Boehringer is essentially a science-based company with a long-term R&D focus, ensuring a constant chain of products in the pipeline and implementing complete sustainability. But Smith expounds that the company is not completely internally focused, ensuring that snap decisions cannot alter the overall company goal. “We have made some selected partnerships with companies along the path, and we continue to look for things that would complement the portfolio. We’re active in looking at licensing and co-development opportunities in most of our therapeutic areas, so it’s not that we have totally closed our eyes to outside opportunities, but clearly we’ve been successful with organic development internally,” says Smith. “A good company should constantly reassess what their strategy is and make sure that it makes sense for the current strategic period. Clearly, there’s some great innovation going on in some smaller companies, biotechs for instance, and we would be unwise to not keep our eyes open to those opportunities as well, but it’s important to remember how we got to where we are now and making sure that we continue to make good decisions.”

Attrition But despite carefully selected ‘good decisions’, there are still big challenges currently within clinical development. There is always a concern of the high attrition rate of compounds from development, which impacts all companies. Smith advises that as an industry, pharma companies need to make better decisions in investments earlier. “Our ability to absorb late-stage failures is past. As an industry, we really need to be leaner and making better decisions. The trials are getting larger and larger, as well as our ability to get approvals – for example, traditionally, in cardiovascular disease you could get approvals for surrogate endpoints, but the tough job ahead of us is keeping the trial size appropriate so that we can still continue to do work in some of the big areas like diabetes mellitus and cardiovascular disease. “We’re still involved in fairly large programs in that regard with one of our compounds; so that is a concern and utilises resources that we could use in other therapeutic areas. We continue to be vigilant in drug safety for our compounds, both in development and post-marketing, and that is an area where the industry has really come a long way in the past decade. Just being able to service the portfolio of the company and try to make the best of what’s coming out of our research pipeline. Obviously, we’ll have to make some choices as to what will be developed, and if we can be more efficient we’ll be able to develop more with the resources that we have,” he says.

Risk To combat attrition, it is not uncommon for drug firms to severely focus on translational medicine, and the same is true for Boehringer Ingelheim – it being selectively done in several

of the company’s therapeutic areas, specifically on the inflammatory diseases side. Smith believes this to be one opportunity to try to mitigate some of the early risk by translational or experimental medical approaches. However, some risks cannot be mitigated. Boehringer recently sponsored research into Profess, the prevention regimen for effectively avoiding second strokes. Designed to examine the effects of different prevention regimens on recurrent stroke, including the Boehringer’s product Aggrenox versus clopidogrel and Micardis versus placebo, the results were not brilliant in the company’s favour. Yet despite this, Boehringer was able to use the strategic processes within the company to cope with the negative publicity, even transforming it and turning the criticism around. “We do have responsibility to fully develop our products and we need to be careful about the choices that we make, but to realise the full potential of the products in the portfolio, sometimes it requires us to take a chance,” replies Smith. “This is particularly so if the prescribers see that there is an opportunity for the compound to potentially be useful for more patients, and that we have clinical proof of that efficacy. So as a result we have em-

“You learn when you graduate from medical school that being a physician and relieving suffering is one of the highest callings there is”

barked on a fairly large clinical trial program in the past six to seven years. Unfortunately, in the case of Profess it didn’t quite work out as well as we would have liked it to. “But a trial that delivers a clear result shouldn’t be considered a negative trial. It informes the prescribers. It informs the medical community. In that regard, it is successful. We’ve learned a lot about our compounds in that exercise. Certainly it would have been better if it had turned out the way that we had anticipated, but that’s part of our responsibility as an industry – to continue investigating and monitoring our products,” he says. The products involved in that trial are still of clinical benefit to the patients, which they’re indicated, and will continue to be available. Smith explains that for those teams involved in the trial, they are still in the process of understanding the results and producing further analyses and publications, which are widely anticipated. A clinical trial of that size, incorporating a rich database, takes great measures to understand the disease, specifically if they don’t turn out as they were originally predicted to do so. “The model of disease is not quite what we thought it was, and that gives us an opportunity to explore new hypotheses. So there’s still a lot of work to be done on those datasets. They’re large and robust, and we still have more to learn,” explains Smith. At the other end of the scale, Boehringer’s BIBW2992 product recently received fast-tracked status by the US Food and Drug Administration, but Smith doesn’t believe this to have impacted the company’s other programs. “Obviously, we’re happy that the FDA has given it that designation. Clearly, we now need to

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do the work and deliver the data on a similarly accelerated timeframe. It’s very exciting for us to really be branching into this therapeutic area. It’s an area where Boehringer has been active on a research side for a while, but we really haven’t realised success in the clinic. There is hope that this will really launch our oncology portfolio, and clearly there’s a lot of competition for oncology in the US. “We’ll have a big hill to climb to get that recognition of Boehringer as an oncology company, much like we have for respiratory or cardiovascular diseases outside the states. But hopefully if we execute well, we’ll be successful and be able to take advantage of that designation by the FDA,” he says.

John Smith is VP of Clinical Research at Boehringer Ingelheim Pharmaceuticals, Inc. He was formerly the Executive Director of the Cardiovascular and Metabolic Clinical Operations group at BIPI. Prior to moving to BI, Smith was Director of Cardiovascular Diseases at Centocor, Inc.

Mergers In light of recent partnerships, Boehringer’s former Chief Executive, Alessandro Banchi, told Reuters that a merger and acquisition strategy is, “Not the way forward,” citing Pfizer as an example of this. But Boehringer Ingelheim recently acquired Actimus Pharmaceuticals, taking a U-turn in previous company activity. “Not speaking necessarily for the company, but clearly the mega-merger model has run into some rocky ground in the US as well as globally, and Boehringer has generally grown with organic growth by doing a good part of our research and development internally, making selective partnerships with companies for promising products that complement our pipeline. But my sense is that we watch what goes on elsewhere in the industry, and Dr. Banchi was quite wise in avoiding getting caught in those traps that maybe other companies have fallen into – that you can grow by combination. “Well, we’ve been able to successfully grow organically. And while I don’t make those judgments going forward for the company, presumably our new leadership is also looking externally and carefully watching the industry, making good decisions for the company in the long run,” explains Smith. Pharma companies have previously always been the first to be cast in a negative light by the public, but Smith believes this phase to be diminishing and communication to be increasing: “We are moving into an era where there is going to be more public availability of data, and that’s going to help. “There is obviously going to be more transparency in the industry broadly, mostly in terms of clinical trial disclosure, and we’ve made some very good strides in that regard. Results are now starting to be posted on websites such as ClinicalTrials.gov. There will always be a difference between an academic response and a corporate response in terms of the timing and we’re going to be studying the issue carefully – we need to meet our regulatory reporting requirements, and that’s very important from a compliance standpoint. “But academics will be free to review our data and offer their opinion on this. So we are moving into an era of more transparency and broader discussion of the information; academics may in fact do combinations of clinical trial data from different sponsors, and that’s something that maybe we wouldn’t necessarily do, combine our data with that from another company. But that might happen with academics, and we will have to be proactive in trying to understand the findings, where they may differ from our conclusions, and have a healthy debate in public,” he explains.

Trust Smith believes this to be not the only area in which clinical research can build trust with the consumer. He advises that as a healthcare consumer and a prescribing physician himself, there can be no way that the American public can be happy with the current treatment options. “For the past 50 years it was the pharmaceutical industry that really bridged that gap between where we are now and where we really need to be in treatment options for the patients in the future, whether that be in chronic diseases, malignancy, or in virtually any condition that we have under study. So what we need to do is make sure that the public understands that we really are working with their best interests in mind. “You learn when you graduate from medical school that being a physician and relieving suffering is one of the highest callings there is, and the industry is part of that. The physicians get the tools for relieving that suffering predominantly from the industry, and it’s unfortunate that that message really has not gotten across. But certainly we want to make sure that we are fully transparent in our clinical research, that we do ethical clinical research; I think that we do that and that we get definitive answers to the clinical problems, and get them into the public domain as quickly as we can.” Smith concludes by looking to the future. President Obama’s healthcare reform agenda has unveiled a determination to offer easier access to generics, a huge part of pharmaceutical’s business. Boehringer – like other pharma companies, being intrinsically linked to the industry in terms of intellectual property protection – has a destined future, which to a certain extent is uncontrollable. But, as Smith has explained, the current portfolio of medicine does not meet the consumer’s need, and so there has to be a balance between access to affordable medicines and intellectual property that allows the innovation to move forward. “Hopefully, we don’t undo a system that has really produced a significant number of medical advances over the past few decades. We’ve stumbled a little bit as an industry – we’ve not had as many innovative approvals, and that’s with a footnote. There have been some really remarkable medications that have come out in the last five to ten years. Given the amount of effort and spend by the industry we certainly could be doing better – making better decisions earlier in development and being more efficient so that we can bring more innovative compounds forward.”

“Given the amount of effort and spend by the industry we certainly could be doing better – making better decisions earlier”

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ASK THE EXPERT

Sound responses to the changing late-phase game Safety concerns in drug development, both from the public and regulators, have clearly intensiﬁed – and there will be no let up. By Dipti Amin

he FDA, through the FDA Amendments Act of 2007, has new authority to require post-marketing studies, and the EMEA in 2005 made the submission of risk management plans mandatory in the European Union. New regulatory requirements mean that pharmaceutical companies must allocate additional resources for large-scale patient safety studies that assess adverse events in real-world patient use. Getting a drug to registration, therefore, is becoming just a step along a long and winding road. Meanwhile, payers are also demanding more health economics and comparative outcomes data – the layer behind the safety and efficacy data – to determine if one drug is better than others for a particular indication. The growing significance of comparative effectiveness research opens the door to new types of phase IV trials and to a reconsideration of how clinical research is conducted to maximise service delivery. At Quintiles, we believe in starting the conversation about latephase study design during phase II. What will it take to get the work done effectively? What have we seen with other drugs in this class? What are the data requirements? With a choice of possible study designs, we can decide what truly distinguishes the evolution of phase IV, with a consideration of everything from global lifecycle benefit-risk management to prospective and retrospective epidemiology studies. These opportunities introduce a new view of large-scale phase IV studies that can make the entire research effort more efficient. The thinking goes like this: if large-scale phase IV studies are going to be built, they also can be used cost-effectively as the backbone for any subset studies, since shared systems, sites, trained personnel, data management platforms and contracts are already in place. Such sub-studies could include comparative, side-by-side studies, treatment satisfaction studies, target biomarker investigations, burden of illness assessments, randomised clinical trials, patient-reported outcome studies, observational/non-interventional studies and registries and new indication studies. Th is use of an existing phase IV research infrastructure also calls

Dipti Amin is the Senior Vice President and Global Head of Quintiles, Late Phase and Safety Services unit. Educated in the United Kingdom, Amin earned professional degrees through GKT Medical School of the University of London. She earned graduate degrees or certiﬁcates in medicine, surgery, family planning, obstetrics and gynecology, child health and clinical pharmacology. She is licensed to practice medicine in the US as well as the UK.

for changes in the research methodology and the use of certain procedures and tools, such as central monitoring and controlled sampling of source data (both authorised by the ICH E6 GCP Guideline, Section 5.18.3). Central monitoring – monitoring techniques from a remote monitoring resource – can be done successfully, especially when there is a solid understanding of the efficacy and risks of a product. Controlled sampling of source data using statistical sampling methodology can be used for certain criteria and risk-based studies. The introduction of risk identification and triggered monitoring techniques are used to measure risk to subjects or risk to data, such as sampling methods, source data, query rates or even such qualitative risks as site communications. Triggered monitoring is a planned methodology for timing onsite monitoring and source data selection based on on-site workloads or other quality triggers. Greater incorporation and/or access to electronic health record information – the use of EHR would help identify subjects qualified for trials in any phase, abbreviate the process of moving data or complete entire studies using only electronic health records, such as a retrospective examination of a control element of a previous study. With existing large-scale phase IV studies, we can step away from a single use approach to study design and use the existing infrastructure or portions of it for additional, specific research. As such, the infrastructure is available not only for basic safety and exposure data, but also for focused investigations to meet either regulatory demand or strategic, post-marketing needs. We believe this new model produces both the service delivery efficiency and cost advantages to do all.

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EXECUTIVE INTERVIEW

The future of biomarker assays Ralph McDade tells NGP why more is better when it comes to data used to identify meaningful biomaker patterns.

Ralph McDade

What is DiscoveryMAP? Ralph McDade. DiscoveryMAP v 1.0 is RulesBased Medicine’s (RBM) newest and most comprehensive biomarker assay, measuring 189 clinically relevant proteins from a single 500 microlitre sample of serum or plasma. The service offers drug developers broad coverage of the most physiologically relevant pathways, providing key biological information, leads for further study and support for go/no-go decisions. The sheer number of important analytes in a single test increases the odds of identifying new protein biomarker patterns in almost any drug development or diagnostic discovery project. What prompted the development of the service? RM. When it comes to identifying meaningful biomarker patterns, more data is better. DiscoveryMAP was designed in response to requests from our biopharma customers who recognised the value of combining our various human MAP services into a single comprehensive assay. How does RBM’s DiscoveryMAP service compare to alternatives? RM. First, DiscoveryMAP utilises RBM’s proprietary multi-analyte profi ling (MAP) platform to quantify key blood-based biomarkers representing dozens of important biological pathways. With this platform, customers receive the most robust, quantitative data compared to any other available proteomic service or platform technology. All samples

are processed in RBM’s CLIA-certified lab using proprietary reagents and soft ware to give the most accurate and reproducible protein measurements. Second, multiplexing allows all of these assays to be processed from a 500 microlitre sample of serum or plasma, compared with single-plex platforms, such as ELISA, which would require 10 to 15 millilitres of sample. And fi nally, all samples are processed on an industrialised, automated platform that enables the discovery of biomarker patterns made up of multiple proteins, many with small, yet reproducibly detected, changes. Once a customer receives his or her initial data, is that the end? RM. No, and that’s another reason DiscoveryMAP is so unique. While being a cost-effective way to measure 189 analytes, it’s also the fi rst step of a process that can yield a new custom panel tailored for each customer’s needs. DiscoveryMAP includes biomarkers known to be important in the major disease indications for drug development. Once a pattern is discovered, we can convert those biomarkers into a new custom panel for high-throughput sample processing in clinical trials as a service from RBM or supplied to the customer as an optimised kit. And since all of our work is done on a clinically validated platform, our biomarker pattern discoveries are more easily applied throughout remaining clinical trials. Are there any noteworthy success stories to date? RM. In fact, DiscoveryMAP has already been successfully used in the discovery of new diagnostic biomarker panels. RBM’s partnerships with Psynova Neurotech, Satoris, Inc., and leading academic researchers have yielded diagnostic biomarker patterns that have been validated with multi-site sample collections for applications such as neuropsychiatry, neurodegenerative disease,

nephrology, immunology and cardiology. RBM is also partnering with several pharmaceutical companies to develop companion diagnostic products. Looking forward, RBM is seeking additional collaborations to develop diagnostic and companion diagnostic applications based on patterns detected with DiscoveryMAP. You mentioned the ‘RBM approach’ earlier. Can you tell us more about that? RM. Let’s use an example to illustrate the RBM approach. Th irty years ago, researchers found that blood cholesterol was a good marker for cardiovascular risk. Unfortunately, elevated cholesterol only identified roughly 50 percent of the at-risk population. Eventually, research uncovered the role of lipoproteins (HDL and LDL), which showed better predictive value than cholesterol alone. Today, research has identified 25-30 blood-based markers that provide even better predictive value in assessing cardiovascular risk. The problem is that measuring all of these markers has been prohibitively expensive and unreliable. Applying multiplexing technology, the RBM approach provides drug developers and researchers with a cost-effective and reproducible way to measure dozens of relevant clinical markers and pinpoint the biomarker patterns that are either directly involved in the disease process or are useful surrogate markers. When those patterns can be reliably measured, the efficiency of drug development is accelerated while achieving greater efficacy and safety.

Ralph McDade is Strategic Development Officer for Rules-Based Medicine and has held this post since the company’s inception in 2002. He was formerly Chief Scientific Officer for Luminex Corporation from 1996-2002, where he was closely involved with the development of xMAP technology. He received his PhD in Microbiology from the University of Texas Southwestern Medical School in 1980.

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RESEARCH

Changing times Wyeth’s Thorir Bjornsson talks to NGP about dealing with attrition, the fallout from the merger with Pﬁzer, and what the future holds for the industry.

he targets have been set. By refi ning the number of potential therapeutic targets analysed and decreasing development times, R&D expenditures are expected to drop substantially. But how can the industry achieve this? Bjornsson advises that a number of industry challenges must fi rst be addressed, from decreasing productivity to increas-

ing guarantee costs. “The most important issue affecting the industry, certainly from my perspective, is attrition. Attrition is very high and varies from company to company, from therapeutic area to therapeutic area, but by and large it’s about 90 to 95 percent. What this means is that the likelihood for suc-

cess for any given new compound that comes into development is around five to 10 percent, which is terrifically important to keep in mind. “That’s the baseline where we are today. Anything we try to do to increase productivity means we are up against this, so the question is how can we become more productive? Productivity overall is the underlying solution to the challenges that we have today, and so the fundamental solution has to focus on a better understanding of compounds, a better understanding of the likelihood of success and how likely is it that that will become a positive outcome. We also need to ensure that safety issues are not going to become safety problems with our compounds. “Similarly, it’s important to understand how the body handles the compounds, and when we do, then we can add up these different char-

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acteristics and if they all line up then our likelihood of success and thus productivity will increase drastically. So productivity is key: predicting the likelihood of what will happen and getting the desired outcome,” says Bjornsson. The subject of increasing productivity has always been high on the industry agenda. Historically, the approach to attrition within the pharmaceutical industry has varied from company to company. Wyeth’s approach is steered by the recent works with metrics instituted by former President of Research, Robert Ruffalo, when he joined the company in 2002. “We set productivity metrics, meaning you get so many compounds per year that are put on the development track and so many R&Ds per year,” he explains. “Wyeth very recently tuned down the number of compounds going into development to a lower number. For us, the issue is always quality, and the ability to have compounds better characterised and therefore likely to succeed.”

Global challenges Wyeth’s R&D centres are situated across the globe, and despite the obvious benefits of multinational operations, the challenges these centres face is increasing. Bjornsson notes the latest big trials and the problem of conducting them with the US and Western Europe, due to bigger regulatory requirements. Most major pharmaceutical companies now conduct many of their biggest trials in the emerging markets of China, India and the Far East, as well as in Eastern Europe where the number of hospitals is increasing. “It brings increased challenges in terms of the monitoring of sites, due to some of their practices not being perhaps exactly the same as we are used to. Similarly, there are regulatory agencies in those countries that we have to work very closely with, and they become more cumbersome in a way. There are now more regulatory agencies involved, rather than the FDA or the individual regulatory agencies previously used in individual European countries. “Also, the number required for such trials to get to a statistical outcome has led to an increased number of patients. With diseases also everchanging, the process becomes more complicated, and again requires a higher number of patients than before.” When asked if the days of so-called ‘easy wins’ for the big drug companies have come to an end, Bjornsson agrees. “I’ve been in this industry for a while and looking back, I’m not sure I would call it the good old

Thorir Bjornsson

days, but it is true, certainly for those where disease cases were easier to investigate. Studies were shorter; it would take a shorter time to see whether you had clinical effect or efficacy, and you would see the results much sooner. “Nowadays, studies are much more complicated, and chronic diseases, such as Alzheimer’s, are now of key interest to the major drug companies. Some of the immunological diseases – arthritis, lupus and so on – only require a year maximum to see a meaningful clinical outcome.”

“The merger will create an extremely strong company capable of doing things even Pfizer wouldn’t necessarily have been able to do on its own”

Mergers

The recent pharma buyouts are sure to only increase these challenges, as the bigger the operations, the bigger the challenges. The mergers – Pfi zer/Wyeth, Roche/Genentech, Merck/Schering-Plough – met with a mixed reaction within the industry. For example, John Lechleiter, CEO of Eli Lilly, was dismissive: “I think we’re seeing deals that are really driven more by weakness than what I would describe as strong strategic combinations. They are predicated on synergies and massive cost cutting that will improve short-term problems but fail to answer the long-term question of research productivity.” So how is the focus on R&D retained during the merger and acquisition process to ensure Wyeth continues to combat these problems? Bjornsson is quick to note that staff at Wyeth “are all extremely excited” about the planned acquisition. “It will create the world’s biggest pharmaceutical company and will build on the strengths of both companies. When you add those together you have a hugely diverse pharmaceutical company that crosses all platforms: small molecules,

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biopharmaceuticals, vaccines and then subsequently also the new avenues for development like nucleotides. “That’s the view we have taken and we fully embrace the future as a part of Pfi zer. The merger will create an extremely strong company capable of doing things even Pfi zer wouldn’t necessarily have been able to do on its own. “Granted, over the years there have been various criticisms, questions or people raising doubts about mergers and acquisitions in the pharmaceutical industry, and certainly, if you go back 20 years, you see how many companies have just disappeared. Prediction is always on a case-by-case basis, but as for this particular one that is facing us, we’re extremely positive and focused on the future, and will be sure to make certain that people remain optimistic and focusing on the projects they have to work on today, because that will only make the future better for the combined company.” To combat any disruption that the merger may cause, Bjornsson notes Wyeth’s strategy of focusing at local levels. He advises that by keeping individuals focused on their individual projects, the amount of disruption will be kept to a minimum. Simultaneously on a higher level, plans are being formulated as to how the combined company will work.

“We are all in this together. It is too much to expect that only the pharmaceutical industry will identify the challenges in the societies we have” Disease therapy Bjornsson says it’s impossible to predict how the industry will develop in the future. “I wish I had the answer to that. There has been a lot of interest in bioinformatics to better understand biological pathways, to understand what pathways fit best with a given disease or a given indication. Similarly there has been a lot of interest both in the lay press and the scientific press about topics like personalised medicine. “Those two are related. Our understanding of what causes a disease in one person or another may not be exactly the same on disease expression, but it looks very, very similar. So looking to the future, probably more than two decades, one does fully anticipate and hope that with increased scientific understanding, better biology systems and increased user technology, we will eventually progress to be able to address the most significant diseases,” he says.

“There is one thing we should never lose sight of. If you look back over the history of drug development, many of the big successes – such as cholesterol lowering and the oncology diseases, like the Philadelphia chromosome that led to Gleevec – in both instances the scientific basis that led to those very successful therapies was due to medical knowledge that had been accumulating over five decades. So even though things are challenging and difficult, things usually become better and better. We also have to be patient; it takes time for science to move on and become evidence-based.” One of the more infamous challenges within the pharmaceutical industry was the recent health scare regarding GSK’s Avandia. Bjornsson says that the pressure on the pharmaceutical industry is too much, and that responsibility should be placed on the national agencies rather than leaving it to the drug fi rms to fi nd every disease cure. “We are all in this together. We all die at some time. We all have diseases. It is too much to expect that only the pharmaceutical industry will identify the challenges in the societies we have. The pharmaceutical industry certainly will do its part and has done so in the past, but pharmaceutical development is an extremely costly endeavour, and we need to have the room to be able to identify the future breakthrough drugs that will eventually come. “Most of us in the pharmaceutical industry feel that some of the criticism that has been leveled against the industry is just not well-founded. The industry, through its various organisations, has tried to make its case, but it takes a lot of effort and some other mechanisms might be utilised to explain the value that the pharmaceutical industry has to society,” he adds. But times are changing. The Obama government in the US has unveiled the preliminary details of its healthcare reform plan and is displaying a commitment to provide wider access to generics, which is sure to have an impact on the pharmaceutical industry. “We’ve only seen the broad strokes of what the new administration is thinking about so far, and in many respects it isn’t that different from what we saw in an administration one or two removed. “From my own department we’re dealing with the earliest part of generic development, and I don’t see it impacting on that a whole lot, except we all have to be doing better and applying greater science to identify the best possible way the drugs can benefit those who need them and fi nding value-added medicines through better tests. Personally, it challenges us to do better from a pharmaceutical perspective. I’m not quite certain how that will all play out. “I firmly believe that when there are challenges we need to rise to them. With the challenges come new solutions and we will typically do better at the end of the day.” Thorir Bjornsson is Vice President of Early Development and Clinical Pharmacology at Wyeth. He joined Wyeth in 2001 from Bristol-Myers Squibb, where he was Vice President of Clinical Pharmacology and Experimental Medicine.

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RESEARCH

BRINGING DRUG DISCOVERY INTO FOCUS

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GSK’s Anne Phillips offers a clearer picture on transparency, creating value for patients, and the challenges of conducting clinical trials in a global marketplace.

t is Anne Phillips’s background as a physician that led her to a patient orientated area of pharmaceuticals. As Medicine Development Leader at GlaxoSmithKline, Phillips works at the oncology group within Research and Development, overseeing the development of any one particular asset from the earlier preclinical development to managing it in different markets around the world. “I am fortunate enough to oversee the aspects of the development of Eltrombopag, which is a drug that works to increase platelet count in patients who have low platelets and are predisposed to bleeding as a result of that. We currently are indicated for ITP in the US, and the job is really fantastic because it brings together all of the experience that I’ve had in pharma to date,” she explains. So how has the transition from doctor to her recent appointment at GSK affected her management approach? Phillips advises that her role involves a multitude of management and leadership aspects, as she oversees a huge number of individual projects. “As a physician I have this very strong desire to add value to the lives of patients. It doesn’t really matter what role I’ve had, that’s always been core to what’s important to me. Th is role is fantastic because the drug is very effective at increasing platelet count, and the patients are really at risk of serious bleeding, so there’s a huge impact,” she continues. “In my view, ultimately, it all moves towards making a very important drug of great value, and available to patients who need it.”

“As a physician I have this very strong desire to add value to the lives of patients. It doesn’t really matter what role I’ve had, that’s always been core to what’s important to me”

Clinical challenges

Phillips entry into the pharma industry, specifically drug discovery, has come at a time of challenges. Modern drug delivery is now very different to the way it once was. She notes that even when proof of concept has been shown within a drug, conducting clinical trials themselves is a huge challenge to undertake in a global environment. “You have to make sure that you conduct the study in the right patients at the right dose and design the correct study. Sometimes the logistics in the global environment of getting subjects enrolled in the study can, in and of itself, be a big challenge. “There are clear regulatory challenges; differences across the globe, once again, in regulatory requirements and what is needed there. The safety hurdle that we’re seeing for drug development is now unprecedented globally. That is a huge challenge – it’s a very risk-averse environment. You have to anticipate those potential challenges to any drug, and then once you do get approval, what the label looks like and how you can get that drug to the patients themselves. There’s the payer component:

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you can get a drug approved, but if you can’t get the payers to pay for it, the patients can’t get the drug. “So that, again, is a huge challenge, and there is such a diversity of payers and requirements and what they need and don’t need from any particular drug. That’s a new and more important challenge than ever right now. And you need to be able to solve that in order to get the drug available for patients who need it,” explains Phillips. As Medicine Development Leader, Phillips has a small core team that works alongside her on an ongoing basis, with a number of broader teams that work to deliver the different aspects that feed into the core team. She has no direct reports and no direct managerial control over individuals, but does have control and input into annual bonuses. GSK’s structure ensures that its individuals report up through their lines, determining efficiency within the different processes of the drug’s development. “I can choose the individuals to work on a particular project. You have to have an incredible team spirit and an incredible commitment to development of an asset to run this kind of structure well,” she says.

Global challenges GSK’s R&D centres are located around the globe, and so multi-site operations bring an even bigger possibility of challenges. “To have that available is fantastic,” says Phillips. “You can get diversity of subjects enrolled in the clinical trial. Diversity in terms of input and expertise into how you develop an asset the best way can be incredibly beneficial. There are many of patients around the world that you can access and get the drug to, so there are a lot of advantages. Time zones are often a problem – working on the east coast of the US and working with Japan and Australia makes both timing and language an issue. “Very often in clinical trials some of the scales that we use may be validated in one language, but may be interpreted quite differently in another. As we have to have more and more health outcome measures, you have to make sure that what is important to somebody in the US is important to somebody in the country in which you’re conducting the clinical trial. Standards of medical care can be very different in different countries. Certain procedures may be routine in one country and not acceptable in another country. “So there are a multitude of differences involved during regulatory approvals – you can get a trial up and running quite quickly in certain countries; it can take 10 months to get a study started in other countries. There are a lot of huge differences, but in the end to get the diversity of subjects into a clinical trial outweighs those challenges.” Being part of a successful global brand does bring innate weight and advantages, however. The size of the company, number of contacts and knowing individuals in different parts of the world are just some of the benefits that Phillips points out. She notes the way in which other global companies operate, working through CROs to enjoy similar benefits. How has the current pharma climate of major drug mergers and buyouts has affected GSK and does it add to their list of challenges? GSK’s long-term strategy has been to install a very strong R&D group. Over a number of years, the company has been supplementing very strong scientific internal discovery engines with more externalisation, which has been conducted many ways. Phillips notes CEEDD as an example of this.

“With Avandia and with any drug, the key was and is to be transparent. If you have data, get it out there, let people know it, understand it, query it, and that is what we had done”

“So this Centre of Excellence for External Drug Discovery is a very small group of individuals that has gone out over the past number of years to work with biotechs around the world, creating alliances with them to allow the biotechs who really have that very strong expertise in certain areas to develop their own pipelines in alliance with GSK. “The idea is that we don’t get in and interfere and take over their assets they develop in a biotech way with their expertise to a proof of concept point, and at that juncture GSK can option that molecule. It’s a risk-sharing model, and it’s one where the biotech is incentivised by milestone payments along the way. So it’s a different kind of externalisation of drug discovery, and it’s a way to supplement what is going on internally. Now what we’re seeing is more and more of this activity – in the different centres of excellence for drug discovery they have an increasing proportion of their work – they’re continuing those programs that they’re excellent at internally. “However, they’re also looking outside for individual assets that they might bring into GSK; in a bigger sense GSK is looking for smaller companies that we might want to acquire. Sirtris was an excellent example of a small biotech company that GSK recently purchased. There are a number of different innovative business models that we’re using and looking at around the globe to really supplement the core R&D work that’s ongoing. Importantly, there’s a diversification of the way that we are going to feed that R&D pipeline.”

Personalised goal Phillips’ own ultimate goal is not self-serving; her vision is to bring medicines of value to patients, and for her, 2009 is a year to be look-

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ing backwards, not forwards, in terms of revolutionary therapies. “There’s a change in the focus now, and we are beginning to take a look backwards, in a sense: we work from the patient to what we’re actually developing. It’s the end-user who will be changing the focus as to how drugs are going to be developed. “What are the unmet medical needs? What is of real value to patients, to payers? What is that need, and then how do we develop molecules that will go there? Whereas previously we would focus a lot on developing as many molecules as we could. There was also a lot of ‘me toos’. The fast followers didn’t have to be terribly differentiated. “It’s not going to be acceptable going forward. Each new medicine is going to have to demonstrate clear value before it will be reimbursed and before patients will be able to get access to them. So we’re going to have to start thinking very early on, ‘What are the characteristics that are going to make this medicine add that incremental value?’ Just being a different new chemical entity doesn’t necessarily translate to value for the patient,” says Phillips. She explains that forcing these changes also bring challenges, such as the death of blockbuster drugs and technological advances, as well as being able to meet individual needs of particular patients. She also notes the importance of generic competition: “If you have a patient with a medical condition, and you have three to five genericised medicines; in order to rationalise paying for a new drug, you have to have value over the generic medicines in order to justify paying a premium price for new entry into a particular therapeutic market.” The pharmaceutical industry’s recent race towards a super-fit manufacturing and supply chain was something blueprinted by the automotive and aerospace industry around 25 years ago, so why has it taken so long to get to this method? Phillips is quick to add that developing a drug has always been expensive – one out of 10 molecules successfully becomes a drug – and the process has always been difficult. “It’s even more difficult now,” she says. “My background isn’t in manufacturing, so I can’t speak specifics about what has happened in the past, what’s happening in the current environment or what is happening going forward, but certainly our manufacturing processes at GSK have always been extremely rigorous. Not only because they Anne Phillips have to be when creating medicines, but very rigor-

ous in continuously improving and becoming leaner and focused. “Ever since I’ve been in the industry I have seen that very clear drive towards becoming very lean, very effective and maintaining the highest possible standards.”

Safety scare The recent safety scare surrounding Avandia produced quite a wide impact throughout the industry. From Phillips’ perspective, the handling of the situation was nothing other than successful. She remarks on the transparency: “The meta-analyses that GSK had done had been given to the regulatory authorities many months before this became a big media issue, so there was certainly transparency there. The data had also been in the public domain on the clinical trials register, so it also had been available for a long period of time. What happened around Avandia became larger than life. “It became a very big media issue, and patients reading the newspapers, listening to the television or listening to the radio became frightened, and it was a difficult situation. I’m not sure that there could have been any more transparency because science was out there, but the allimportant relationship between a physician and their patient is where we had some difficulty here. “That relationship between physician and patient, for all medicines, is pivotal. It is unfortunate when any situation becomes a big media issue and people watching the media make their own personal decisions based on what they’re seeing rather than making sure they get the advice from their healthcare provider.” Phillips explains how GSK worked hard to place the science in the public domain at that time, and published all of the data, but the difficulty remained with the attractiveness of a sound bite, which can be digested and incorporated. The scientific explanation isn’t as attractive to the media, and is therefore a difficult message to get across. The key, for Phillips, is to, “Continuously make sure that the science is in the public domain, is available to those who can understand it, digest it and then transmit it to patients and to the public in an appropriate way. “With Avandia and with any drug, the key was and is to be transparent. If you have data, get it out there, let people know it, understand it, query it, and that is what we had done. We had done that with the regulators. We had been in constant communication. “It’s what is expected. As with Avandia, publication is critically important, not just to try to generate information, but it has to get into the public domain. That can be done by registers, publishing in journals, presenting at scientific conferences – there are different venues for doing this. But the key is to be very open and transparent about the scientific data. “The lessons learned was around the impact of a sound bite or what an interpretation of data can mean. You have to be rigorous about the science, you have to be rigorous about the safety profi le of every drug, and you have to be always transparent about it.”

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INDUSTRY INSIGHT

The engineering challenge of synthetic biology Bioinformatics and computational modelling are essential to meeting the challenges and potential of synthetic biology. A new generation of computer-aided design tools for validation of synthetic networks is rapidly emerging. By François Rechenmann and Adrienne Craig-Kennard

ynthetic biology brings the life sciences together with engineering to design and optimise cellular behavior. By building biological systems from component parts, synthetic biology is expected to produce proteins and molecules with specifically engineered functions by designing or reprogramming genetic circuits and metabolic networks. The market potential for products resulting from synthetic biology technology is high and the impact on healthcare will be significant. Simpler, lower-cost production of biopharmaceuticals, novel drug delivery systems and effective therapies for chronic illnesses are examples. Synthetic biology also provides promising solutions to environmental problems such as sustainable, economical production of chemicals and biofuels, and bioremediation using engineered micro-organisms. The engineering challenge of synthetic biology lies in the design of genetic networks that will rewire cells to produce the expected molecules in a timely way. Modelling and simulating the synthetic network prior to its implementation is a critical step made possible by bioinformatics, which has become the indispensable computer-aided design tool of synthetic biology. In order to perform meaningful systems level analyses, it is necessary to access and connect diverse data on the networks of interacting entities involved. Data integration becomes essential for dealing with the complexity of these networks and extracting useful knowledge quickly. Integrated software and databases that connect and structure information on the links between genes, proteins and biochemical data – compounds, reactions and pathways – enable researchers to productively analyse their data. Genostar’s MicroB database and Metabolic Pathway Builder (MPB) soft ware integrate powerful, user-friendly methods for effective navigation, querying and analysis of genomic, proteic and metabolic data. With these tools, researchers can also easily visualise their experimental data. Visual representation offers a real advantage to the biologist: for example, gene expression data sets may be readily mapped onto the metabolic pathways, allowing for quick and efficient differential analysis. Collaboration and partnerships are vital to progress in this field. MicroB was developed in partnership with the Swiss Institute of Bioinformatics (SIB) and the French National Institute for Research in Computer Science and Control (INRIA). Partnerships between industry and academia as well as between industries will continue to drive progress towards

François Rechenmann is Scientiﬁc Advisor and co-founder of Genostar. Rechenmann has 30 years of experience in the design of knowledge-based software and databases for the understanding of biological systems and led Genostar’s technology platform development. A Senior Research Director with the INRIA, he holds a doctorate from the Institut National Polytechnique de Grenoble. Adrienne Craig-Kennard is Chief Operating Ofﬁcer of Genostar. She has over 10 years of experience in the agrochemical and pharmaceutical industries, as well as in international consulting. She holds a Bachelor of Science degree in chemistry from the University of California at Berkeley and an MBA from the Grenoble Ecole de Management in France.

understanding the complexity of living systems and designing biological systems to meet healthcare and environmental needs. Exploration, querying and visualisation of interacting entities are necessary steps in designing biological systems. The next step is to understand and predict their dynamics through mathematical modelling and simulation. Genostar’s Genetic Network Analyzer (GNA) soft ware was designed to build, simulate and validate molecular regulatory network models. It relies on qualitative modeling technology developed by the INRIA and offers an excellent balance between data requirements and predictive capabilities. A GNA model can be used to predict the concentration of gene products such as mRNA and thus predict the level of gene expression, which can then be compared with experimental results for validation or refi nement. GNA has been validated in numerous modelling projects. D. Ropers et al. describe and simulate the interaction network involved in the carbon starvation stress of E. coli (2006, BioSystems, 84(2):124152). GNA has been used by many research laboratories worldwide for modelling and understanding phenomena and systems, including the biochemical network underlying quorum sensing in human-pathogenic Pseudomonas aeruginosa (A. Usseglio Viretta, M. Fussenegger, 2004, Biotechnology Progress, 20(3):670-678). Genostar provides bioinformatics tools for genomic and proteic analysis, and for modelling and simulation of molecular interaction networks. We participate in COBIOS, a European-funded project that aims to develop well-characterised, engineered, synthetic biology devices for therapeutic use, in particular for timely insulin delivery. The COBIOS project brings together biologists, mathematicians and bioinformaticians from academic institutions and private industry in four European countries and the United States to meet the goal of designing, verifying and validating synthetic genetic networks. Future breakthroughs in synthetic biology will come from such multidisciplinary associations.

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EXECUTIVE INTERVIEW

Starting at

phase zero

Michael Butler looks at the value a microdose study adds to a drug development programme. What is a microdose study? Michael Butler. A microdose study is a human clinical study that is typically conducted very early in the development of a new drug and which is defined by the dose administered. Microdose studies are ideally conducted just before or in parallel with preclinical and CMC development. A well-designed microdose study will yield PK and ADME data on a promising drug lead or candidate series. Because of their role in very early clinical development, microdose studies are also known as phase 0 clinical studies. What is the regulatory environment for microdose studies? MB. As part of the FDA’s Critical Path Initiative to streamline drug development and improve the understanding of drugs early in the clinical process, the Agency has produced guidance on ‘Exploratory Investigational New Drug Studies’. Microdose studies are included as one

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approach that could allow pharmaceutical researchers to study sub-therapeutic doses of a drug in humans. The EMEA in Europe and the FDA in the US both define a microdose as 100th of the predicted pharmacologic dose or 100 μg, whichever is smaller. These small doses are considered inherently safer than pharmacologically active doses. Therefore, the regulatory authorities are comfortable with a much reduced safety toxicology package. This allows the drug candidate to be administered to human volunteers earlier, faster and with less expenditure compared to a phase I clinical study. In order for a microdose approach to be useful, the results from such studies must be representative of the situation under pharmacologically active doses. Can you comment? MB. Microdose studies must yield results that can be relied upon to represent a similar investigation conducted at a pharmacologically ac-

tive dose. This issue has been the subject of considerable debate over the past 10 years. Pharmaceutical companies have collaborated twice to investigate the representativeness of a microdose to a pharmacologic dose. These are the so-called CREAM and EUMAPP studies (www.eumappp.com). At Xceleron, we also benefit from our experience from proprietary client investigations. Of the results in the public domain, the microdose intravenous pharmacokinetics is almost 100 percent representative of that seen at a therapeutic dose. For orally administered drugs, the PK of about 79 percent of the drugs given as a microdose are within a factor of ±2 of the therapeutic dose (a widely accepted criterion used in allometric scaling). Why is microdose data for a minority of compounds not representative of the pharmacologically active dose?

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MB. One reason we see is that certain enzyme systems might be saturated at higher doses, thus leading to differences between a microdose and a pharmacologically active dose. How are the low levels of drug in microdose studies measured? MB. The bioanalytical technologies most often used to measure such low doses of drug are accelerator mass spectrometry (AMS) and LCMS/MS. The choice of instrumentation is determined by the need for sensitivity to ensure that the drug is measured over a suitably long period of time in all of the tissues and compartments of interest. Xceleron provides its customers with the more sensitive AMS option. Under the right circumstances, we can quantify in the femto to attogram range (10-15 to 10-18 g) or typically three to four orders of magnitude more sensitive than LCMS/MS. It’s important to use a fit-for-purpose approach. If a microdose study is deemed appropriate, then the next question to be asked is which bioanalytical approach is better. How does a microdose study add value to a drug development programme? MB. There are situations in which such studies make perfect sense and situations in which they add no value. We have observed changes over time in the way that pharmaceutical companies use microdose studies and differences between large and small companies. We have conducted microdosing studies for drug candidate selection, on drugs which have conflicting animal ADME/PK data, on drugs with a novel mechanism of action for which there may be no human precedent, to investigate drug/drug interactions and to enrich PET imaging studies. Smaller companies often use microdosing to investigate individual compounds for better decision making and to add value for potential fi-

nancing opportunities. Larger companies tend to study multiple compounds concurrently. When the ADME/PK of multiple compounds is studied it is often for two reasons: as a screen of multiple pre-clinical candidates; and to expedite the development of back-up compounds where the lead has performed poorly in phase I. We can also gather much more than simple PK/ADME data from a microdose study. In one Xceleron study, a respiratory anti-infective was administered orally and intravenously. Blood and excreta were collected, lung biopsies were taken and a bronchoalveolar lavage (BAL) was performed. We demonstrated that the IV pharmacokinetics were very favorable. Conversely, the oral kinetics showed that the drug was poorly absorbed and underwent extensive first pass metabolism. We also demonstrated that the drug accumulated in

crotracer and microdose. Microtracer in our world is a small amount of 14C labelled drug and it’s used it in all of the studies in which AMS is the bioanalytical method of choice. A microdose study is just one of many that can use a 14C microtracer. Just as we’ve seen the utility of microdose studies grow with time, we’ve witnessed growth in the use of the 14C microtracer generally. We have used a 14C microtracer in microdosing, IV/PK absolute bioavailability, MIST solution, drug/drug interactions, regulatory ADME, straight bioanalytical and investigations of proteins. Our microtracer regulatory ADME studies have been submitted in the filings of six marketed drugs. That aside, phase I is probably the area of greatest interest for us because of the opportunity to gain vital information within existing safe-

“A well-designed microdose study will yield PK and ADME data on a promising drug lead or candidate series” MICHAEL BUTLER

the lung tissue plus the alveolar macrophages. Therefore, once in circulation, this drug candidate was likely to provide very effective exposure. Since an oral formulation was less likely to be effective, the inhalation route was prioritised. The microdose data provided invaluable insight to enable informed choices to be made early. You may hear others refer to this as de-risking downstream drug development.

ty studies at small incremental expense. This is especially the case for absolute bioavailability and MIST elucidation. In the case of the former, complexity warrants additional internal standard approaches to ensure that the quantitative bioanalytical data is representative I’d like to finish on a point that is important to me and others at Xceleron. We recognise that 14

MB. In addition to the applications I’ve already mentioned, I’d expect to see more studies in sensitive populations such as pediatrics, more studies looking beyond the systemic circulation as we did with BAL, and more imaging.

C AMS studies and microdose studies in particular may not always be the answer. We must take a fit-for-purpose approach in offering our clients a drug development solution. However, under the right circumstances, a microdose study can provide quite unique clinical insight at an early stage. The cost-effectiveness of this approach should not be underestimated.

You mentioned that you use a 14C microtracer to measure drug levels from microdose studies. What are its other uses? MB. There is still confusion around the terms mi-

Michael Butler is CEO of Xceleron. He has 20 years of experience in science-driven businesses in Europe, US and Asia. Butler has been President, Scientific Operations and Chief Scientific Officer with Aptuit, Group Vice President at MDS-PS, and Group Director, Business Development for Huntingdon Life Sciences.

What do you see in the future of microdosing?

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MARKETING

PERSONAL BEST

Central to the success of global drug ﬁrms is the need for transparency and individual accountability. EMD Serono’s Jim Hoyes explains why these characteristics play a crucial role in sales force effectiveness.

s the Chief Commercial Officer, Hoyes faces the everyday responsibilities for sales and marketing within the US managed organisation. Included within this is also EMD Serono’s commercial excellence group, which incorporates sales training, marketing excellence and sales excellence, as well as the various support functions for those three

commercial pillars, such as market research, analytics and business intelligence. But the arena of sales and marketing has not always been such a structured business. Hoyes explains that in recent years there has been a tremendous change in the pharmaceutical sales model, mostly due to the industry shift from an emphasis in primary care to speciality.

Sales model “That shift has occurred for two reasons,” he explains. “The fi rst being very pragmatic, there’s been a lot of the large primary care blockbuster-type brands going off patent and on the fl ipside, a lot of the new innovation that’s been in pharmaceuticals has come into speciality space, such as in oncology and neurology, for instance. Because of that, there’s

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been a move away from the mega sales forces where you had layered or mirror images of sales forces on top of each other driving call frequency, now to a shift towards call quality and driving value for the patient. “For us at EMD Serono, that is the model we’ve had historically because we’ve always been in the speciality space, so we spend a lot of resources on training. That’s becoming more important – not just product knowledge training, but training to uncover customer needs. Our concern is to really understand how physicians interact with their patients in their practice. What’s the patient flow? What’s on the patient minds? What are the physicians really trying to accomplish in their prescribing decisions? Th at adds a lot of value to the innovative pharmaceuticals that we bring to the market as well. “The other change is that there has been a move to more compliance training for sales forces in the industry, both from the changing landscape of the Research and Manufacturers of America Pharmaceutical guidelines (PhRMA) that our sales forces in the industry follow, as well as internal company policies regarding higher levels of compliance. So that’s an integral part of companies’ sales training programs, and in speciality spaces and for companies like us. You’re getting a higher level of sales reps certified through a formalised training process that leads to a certification that allows you to move from a Level 1 to a Level 2, and you see that play out with legislation at the state level.” The District of Columbia now enforces a law that demands sales professionals to be certified before calling on healthcare professionals in Washington, DC. A number of states, including Massachusetts most recently, also have legislation pending requiring sales reps to be certified to sell in their field. The result of this has produced focused, smaller sales forces with a clear direction, and a movement away from mirrored sales forces. Th is also creates better accountability, as it demands less reps calling on a certain physician and there is greater awareness of who’s driving the prescription activity.

Customer care Another new significant focus for the industry today is on the payer system, Hoyes

Jim Hoyes explains, and ensuring patients have the support they need to navigate what can be a complicated reimbursement journey. “We really need to understand the entire patient spectrum. What’s the role of managed care in a patient’s treatment paradigm? How can we help ensure that patients get reimbursed, or make sure that if there’s a device associated with a product that the two get linked together? “And so that’s where we have a very close interface in all of our therapeutic areas that we sell in with patient call centres, so we can help offices align those activities and make

provide support for our patients to make sure they get the best outcome from the therapies that they’re on,” he explains. As trends are changing, the sale forces must adapt quickly, which is not necessarily straightforward or an easy task. Hoyes explains a main shift in recent trends to have been the integration of EMD Serono’s care account managers into the sales and marketing mix. “They need to work as a team to provide the best solutions to large clinics and physician practices,” he says. “One of the main drivers that physicians look at after they make the right diagnosis and as they look for the right therapeutic agent is the managed care coverage. They don’t want to write endless prescriptions that then end up getting called back or any other form of a hassle factor about coverage. We focus very much on driving high access levels for our pharmaceuticals and then making sure that as we execute that at the physician office level, our sales, our marketing and our managed care teams are all seamlessly working together.”

Future Hoyes believes there is a promising future for sales force effectiveness, both within the industry and EMD Serono itself. The result of the rising trend of individual accountability and transparency to create a more targeted form of sales force will create motivation amidst those individuals who understand the need for such a change. “They like to see the cause and effect of their work, and in the older models where there are four and five reps call-

“To sell effectively with innovative products, especially considering what’s going on in overall healthcare reform, is going to heighten the value of a well-trained sales rep to a company” sure that if a prescription is written that it gets reimbursed and that there’s nursing support provided, whether that’s on simple things like injection training, as well as reconstituting the product if they have questions about continued therapy. So none of this gets in the way of the physician-patient relationship, but it helps

ing on a specific physician, again it was hard to see who was doing what. So accountability will be increasing. “The quality of the call will need to go up, and we’ll need to fi nd ways to measure that beyond just tracking prescription data. There’s potential ways. Do we need to be

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doing, for instance, 360º reviews with key prescribers to see what the reputation of the company is, how high the service level is, and then how useful our products are for them? “Another future trend will be the rise of companies assessing their core competencies, for instance the ability to launch products effectively. If the window of exclusivity that you have is shrinking for a variety of factors, you’re going to need to get out of the gates very quickly, so launch experience is going to be very important. On the other hand, you may see companies start to use external sales forces – contract-selling organisations – as products hit the more mature parts of their lifecycle. So greater flexibility, and a real evaluation of what is the critical success factor for your own company and your own product portfolio that you need to maximise sales, will become more significant than a one-size-fits-all approach that was used in the past,” says Hoyes. He attributes the success of EMD Serono’s sales teams to its teamwork approach,

which has proved critical in drawing together the various means of sales, marketing and managed care, and bringing in the results. “We have to align patients, prescribers and payers into the story, so that’s something we’re focused on, and the other is really making sure and measuring that our sales forces are improving year over year and are ranked one or two in their therapeutic classes in terms of effectiveness. We have a scorecard whereby we use a number of metrics to track that – we want to look at it longitudinally, so again we can see the continued progress upwards and a number one or number two ranking due to the work in pursing leadership in our therapeutic areas, and not just the brand. That includes the people that we have in the direct face of the customer and that’s usually our sales force.

Conclusion “The key of the speciality space is growing in importance, and that’s where the innovation is going to lie in the future from a healthcare perspective,” says Hoyes. “To sell effectively with innovative products, especially considering what’s going on in the overall healthcare reform, is going to heighten the value of a welltrained sales rep to a company. It’s going to be critical that you have a strong sales force to be successful, and that doesn’t mean the old days of having a countless number of reps. “It’s an individual basis, and you’re going to have to have stars in your sales organisation – they’re going to have to be performers and they’re going to be held accountable for success in a very challenging environment. But sales forces enjoy that challenge and therefore they’ll continue to thrive.”

“There has certainly been a move to more compliance training for sales forces in the industry, both from the changing landscape of the pharma guidelines that our sales forces in the industry follow, as well as internal company policies”

James Hoyes is the Chief Commercial Ofﬁcer at EMD Serono, Inc., responsible for business operations in the company’s key therapeutic areas of neurology and endocrinology, as well as managed care and sales and marketing operations.

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ROUNDTABLE

Strategies for successful marketing What is the importance of branding for a successful marketing strategy? Scott Cotherman. In this globally driven, regulatory-focused marketplace, more reliance than ever is being placed on the scientific integrity of a brand, leading the industry to communicate more credibility at every front. From developing a unique nomenclature and lexicon to position the brand in clinical communications, to establishing visionary campaignability with long-term application, some agencies are taking advantage of this shift in grounding professional value propositions by developing innovative ways of approaching branding. A focus on core values is a primary requisite for the opportunity to create uniquely ownable and motivating language and visuals. These branding hallmarks are the most permanent public expressions of the brand’s character or personality – how it looks and feels, as well as its tone of voice. They are important contributors to overall brand equity that are inextricably linked to the brand for its lifetime. While they are certainly a significant component of advertising and promotion, they also live in venues

Michel Dubery is Managing Director of GHG London. He is a leader in strategic healthcare communications with extensive experience in healthcare professional marketing, together with deep understanding of patient communication. Dubery has 28 years’ experience in healthcare, including seven years as a nurse and 15 years in sales and marketing for AstraZeneca and Novartis in the UK and global positions, before joining the agency side seven years ago.

where advertising and promotion do not – such as scientific conferences, packaging and so on. Michel Dubery. Branding still remains core to any marketing strategy. As channels of

Four experts give NGP the inside scoop on the latest techniques for establishing and promoting brand awareness.

“Branding still remains core to any marketing strategy” - Michel Dubery

communication become ever more complex, the existence of a strong brand acts as an anchor for customers, a short cut that simplifies choice in a world where choice multiplies faster than ever before. In pharma 20 years ago, the fi rst brand in a new class could have three to five years of exclusivity before being followed by a competitor. Today that can be as little as three to five months, with another five competitors following in that previously exclusive three-to five-year period. In the absence of strong brands that stand for something, payer pressure can rapidly turn innovation into a price-led commodity market, particularly if the fi nal users are indifferent to the choices they are offered.

Mike Rea. Branding isn’t optional – there are only two alternatives. Branding will happen, either passively when the audience makes up their own minds about the brand (or are led to do so by your competitor), or actively when you get to shape what they believe. So, a qualified ‘it’s essential’. The qualification is that we need to be clear about what we mean – too often in pharma, people hear the word branding and think logos and colours, maybe even a tagline, but in this industry, those have been proven to be among the least important parts of a brand. Brand communication is actually non-visual – it happens peer to peer, or in the literature, and our buyers are all informed buyers. That is where ‘bad’ brands get built passively – often by companies that believe the product’s benefit is self-evident from the data collected, or that ads and logos are more important. Brands that outperform their market have always actively built their whole idea, and those that haven’t

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have underperformed. There have been occasional exceptions, but they were truly that – unexpected. You’d hope that unexpected success wouldn’t be part of companies’ ambitions for their pipelines.

“Brands that outperform their market have always actively built their whole ‘idea’, and those who haven’t have underperformed” - Mike Rea

Graeme Chrystal. If the goal of a marketing strategy is to optimise profitability by identiFor strategic marketing, anything that fying, anticipating and satisfying customer can help understand the unmet need and requirements, then the importance of brandbenefit headroom in the market – from better ing in successful marketing is much the same data mining and gaining insight from broader as the importance of having wings if you are a groups of customers, to ways to prototype and bird and want to fly. test new ideas with those customers – will be At the absolute core of marketing sucimmensely valuable. Th ink for example of cess lies the ability to understand and comthe lost internal time and cost to get advisory municate consistently and succinctly what meetings together now, and even more of just a brand stands for, and what rationally and how inconclusive they usually are. emotionally makes it unique, versus its comGC. New technologies petitors, when meeting open up exciting opportunities for reaching the or resonating with an target audience, and in important need in a departicular the emergence fi ned target customer’s of online communities is mind. That distilled facilitating a more rapid comprehension of the spread of communicabrand should permeate tions messages. We must all internal and external remember though that communications and however exciting a new provide the basis for the technology may be, it is marketing strategy. only a marketing chanIt is imperative that nel and the technology is the brand is marketed Mike Rea is CEO of IDEA Pharma, just that – a technology in such a way that at a leading global consultancy in pharmaceutical strategic marketing. – a tool, system, techall its touch points the Rea has worked in international nique. New marketing words and actions of healthcare communications for over 20 years, and has developed global channels facilitate the the brand are cogent marketing solutions for most of the world’s top 10 pharmaceutical delivery of messages but and consistent. The only companies. His principal point of don’t guarantee the efway to achieve this is to interest is the incorporation of best practice into pharmaceutical fectiveness of our comhave a single-minded marketing strategy, and he has helped lead the strategic direction munications. view and application of of over 50 pharmaceutical brands. As marketing prothe brand throughout fessionals we need to the marketing process. really understand how individuals interact with these new technoloAs communications evolve, what new techgies, and how this cyberpsychology impacts nologies can companies use to enhance on how messages are received. When we inmarketing? teract with technology, our minds will work MR. It depends whether the marketing is differently, and it is not enough to simply tactical or strategic. For tactical marketing, the goal of connecting a message to its audicommunicate through technology, we need to ence would suggest that new technologies ensure that the message is received in the way that make a message more tailored to people’s it was intended. Cognition of the technology wants and needs, and where they’re receptive linked with the emotional experience and the to hearing it, will succeed. culture it is being used in are all elements that

need to be researched and understood to best utilise new marketing channels. MD. The use of the web has, or should have, been established for years as core in any company’s marketing strategy. The way this technology is applied, though, has changed and will continue to change. The old model in which people sat at their computers and consumed content provided for them is as out of date as watching black-and-white soap powder ads on one of two TV channels. The growth of mobile browsing, user-generated content and social networking has encouraged an environment in which customers talk to each other about anything that pleases them, including the brands of which we are so proud. Research shows that customers are far more trusting of information provided to them by their peers about products than that from any commercial organisation. Th is is far more pervasive than the growth in review sites that was seen a few years ago. If people have a disappointing experience with a brand, it’s on Twitter two seconds later and at the same time their Facebook and other social network pages have been updated with the same content. If you think that this doesn’t apply to pharma, try going to Facebook and searching for a medical condition. As for how user-generated content may affect marketing, take a look on YouTube and see what individuals with a little time on their hands have done to well-known brands’ ad campaigns. Many of these new versions are more interesting and engaging than the originals. SC. Successful customer relationship marketing (CRM) depends on multi-channel communications that let companies reach customers any time, anywhere, and in whatever way they prefer. Our defi nition of closed loop marketing (CLM) is the ability to optimise communication by capturing brand message interactions, measuring them for marketing

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effectiveness, and refi ning the experience for future interactions. CLM is the process of information exchange; CRM is the process of developing relationships using technology to facilitate deeper and more meaningful interactions with our target audiences to help in both personal and non-personal selling. Content management solutions output information by specific need, including audience and timing of distribution. Campaign management solutions construct and distribute customised content through a variety of

“There is an increasing awareness of the value in understanding the non-clinical needs and perceptions of customers” - Scott Cotherman

media channels and measure the output of the content to segmenting audiences. Sales force automation systems provide two-way dialogue that addresses physician expectations of what they consider valuable, and help build a foundation for future interactions. There is also a rich opportunity to integrate CLM technology with handheld, wireless technology. Mobile healthcare applications and text support are growing exponentially through mobile phones, gaining permissionbased status with customers while managing one-way and two-way messaging with both patients and healthcare professionals. What research techniques are used to understand the marketing needs of clients? GC. Many healthcare companies have moved towards a much more customer-centric attitude and thinking in terms of understanding and reacting to needs. In some pharma companies, precedence is now given to understanding patients’ and payers’ needs over those of healthcare professionals. So voice of customer research is a key technique.

The other key change is a move towards deeper understanding of the emotional and psychological needs of customer groups. Approaches used to access this information go beyond the more standard left-brain and traditional question and answer that has been the mainstay of healthcare research. They involve advanced projective and elicitation techniques – such as role play, drawing and gestalts to name a few; skilled, executive level interviewing; as well as advanced methodologies such as psychographics, ethnography and semiotics to provide deeper contextual information and advanced analysis based on grounded theory, neuro-linguistic programming (NLP), transactional analysis and linguistics. SC. Established research techniques, such as industry analysis of trends and prescribing patterns, as well as one-on-one and group responses to product activities, remain important components to understanding and supporting the marketing needs of clients. Many of these response activities can be conducted online, to broaden the number of responses and reach a larger geographical area. However, in crowded markets, where there is little clinical differentiation in products, more sophisticated techniques can tease out a different kind of information. There is an increasing awareness of the value in understanding the non-clinical needs and perceptions of customers. Cultural anthropologists and psychologists are using a variety of tools, such as semiotics and psychographic analysis, and interactive activities such as a visual collage stimulus, to gain customised insights that enhance established research techniques. Segmentation is a research tool designed to identify a communication bullseye within specific audiences and leads to the prospect, who may be a subset of the total market. MR. Again, I’d clarify what we’re covering: strategic marketing or tactical marketing strategy. If we can understand what people really want, and then give it to them, we need

to spend a whole lot less effort afterwards to persuade them they want it. In the former case, we tend to use techniques like prototyping to help prescribers and payers understand what might be possible – after all, unmet need isn’t always apparent to people who, day in and day out, are doing their best with what they have. Many companies end up relying on ‘research’ that tends to state the obvious – we’d all like what we have, but a little bit better: more efficacy, more safety, better tolerability, less cost. Henry Ford made that point a century ago when he said that, had he asked, people would have said they wanted a faster horse. The work of uncovering what might be wanted, via ideation, has to happen really early – discovery people are great at it – before it gets channelled into a more ‘paint by numbers’ development and marketing programme. MD. There are formal research tools available to research the marketing needs of clients, but as an agency, the most effective methods often do not use formal tools. Staying close to the client’s business and spotting trends in their, and other, sectors that may be applicable, can allow smart agencies to anticipate or even create new marketing requirements.

Scott Cotherman is CEO of Corbett Accel Healthcare Group. Cotherman shapes the strategic direction of the company, leads its growth and diversiﬁcation initiatives, manages its reputation and corporate image, and develops leadership talent. His integrity and high performance standards earned him recognition as a top 100 inspirational industry leader. Cotherman is Chairperson-elect of the Medical Advertising Hall of Fame.

More formal approaches, such as the use of the discussion tools on business networking sites such as LinkedIn, can also generate useful insights into the evolving requirements of marketing clients. Half-yearly review meetings with senior clients that involve general discussions around major trends in their markets as well changes in their own commercial objectives are also invaluable in ensuring that your client offer stays current.

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How do you see the future of marketing developing in the next few years? MD. Marketing will continue to evolve away from the one-way, one-to-many communications of the past. Smart marketers will realise that, at any one time, there may be thousands of conversations going on that involve their brand, and the only way to have any influence is to get involved in the more important conversations out there. Th is may involve setting aside the disdain that some feel for the humble blogger, but that should be measured against the influence that some of them wield. It may be far more than that treasured inside front cover spot on your favoured medical

one say something nasty about your brand on your site where you know about it, than somewhere you may never see it. SC. The industry’s progression towards more effective and efficient approaches to the creation and execution of global communications is influencing the convergence of new technologies, globalisation and enhanced marketing disciplines. Personalised healthcare and genomicbased therapies are slowly disintegrating broad-based marketing approaches that seek to reach large groups with a general message. The move towards CRM will meet the individual needs – clinical, product, psychological and emotional – of customer targets with tailored messaging. Social media will help deliver the message any time, anywhere and in whatever platform customers prefer. Global marketing will become increasingly efficient, leveraging technology for the application of brand messages throughout all

Secondly, the deeper the strategic marketing mindset goes into an organisation, the closer it fits with R&D – the two have to be iterative and highly aligned. In fact, the best performers in the past 20 years have been those brands whose strategic marketing influenced the course of their R&D, regulatory approach and indication roadmap. Differentiation and the value proposition needs to begin early, during phases I or II, so that companies that continue to try to stick on some positioning and health economic arguments in phase III will really struggle. Hopefully the future of tactical marketing will be a more targeted, higher ROI one, which is better because the strategic gearing will be higher, and also because it is one area where the industry’s image continues to falter. GC. The biggest shift will be that pharmaceutical companies will move from illness management solutions to providing wellness management with their drugs/devices spe-

“The biggest shift will be that pharmaceutical companies will move from illness management to wellness management ” - Graeme Chrystal Graeme Chrystal, Founder of the Zaicom International group of companies, has 30 years’ experience in pharmaceuticals and marcomms, developing and implementing prelaunch communications programmes. Passionate about behavioural change, he is a qualiﬁed practitioner in NLP and hypnotherapy, a member of the International Association of Business Communicators and a student of the psychology of communication.

markets through the flexibility of customisation for individual markets. Given the need for increasing accountability, marketing will become even more cost-effective for pharma clients, because there will be the need for fewer local agencies.

publication or even, heaven forbid, your own carefully constructed website. More and more companies need to invite customers to talk to them. The easiest way to do this is of course to use their own websites, although this often causes terror from a legal and regulatory perspective. What if someone posts an adverse event? There are of course ways to handle this and many companies are doing so already. Free text entry on a site may look terrifying from a medical perspective but in terms of insight generation it is an invaluable resource. It’s better to have some-

MR. First of all there needs to be a recognition across the industry that marketing isn’t a single discipline. It has been treated as one for too long, and fails to reflect that there is strategic marketing – trying to decide what a market wants or might want and will pay for – and there is tactical marketing, the business of persuasion, which overlaps with sales. Companies that don’t recognise the skills and expertise difference presented by that very simple separation will always come second. That isn’t a simple solution – most marketers (and fewer management consultancies, it seems) don’t recognise that split either.

cific or bundled into wellness programmes. The impact on marketing will be significant, requiring a more consensual and integrated approach based on co-creation or co-development with key stakeholders, such as less telling people why they should want a brand and more understanding of how a brand fits into an holistic wellness system, and working within a flow of communication rather than trying to control the communication. The drivers for this shift will be that pharma companies and patients will play a greater role in responsibility and payment for welfare management regardless of payer system. Payers are likely to start to incentivise consumers/patients for healthy habits and to disincentivise for unhealthy habits. Also, it has been suggested that regulatory bodies will come to expect such programmes as part of the cost of getting product and price approval and to help optimise drug use or need and develop better adherence.

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EXECUTIVE INTERVIEW

Medical communications in a changing world Amanda Smith explains the effects of the movement towards evidence-based medicine. Over the next three to ﬁve years, what will drive medical communication programmes? Amanda Smith. The world of medical marketing and communications is changing fast. In this environment medical communications agencies will need to understand how to help the pharmaceutical industry achieve clinical positioning that is not only credible and well-founded, but impactful. I see increasing demand for medical communications coming from the push to improve transparency and reputation. The continued move towards evidence-based health will need increased leverage of evidence-based information and assets, including expert opinion. At the same time, the ongoing expansion of the stakeholder base influencing treatment decisions will drive a greater need for educational support, especially in the area of disease prevention. This broader and more heterogeneous mix will include not only healthcare professionals at all levels but also patients and carers, all needing the evidence base to be interpreted and communicated in ways that are meaningful for them. Will this affect the range of products and services on offer? AS. Increasingly complex targeted therapies need educational support to help healthcare professionals and others to understand their place in clinical practice. The need for high-level scientific communications at international congresses and in peer-reviewed journals will therefore continue. Taking the messages to local levels, however, will require a different approach. There will be growing demand for integrated programmes that provide a consistent thread from global to local level, while also ensuring that key messages are appropriate for the markets in which they are delivered. Examples of such programmes include integrated payer programmes to reflect increasing payer power, as well as the need for payer insight and engagement, and activation of evidence programmes that connect evidence, education and

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dated guidelines for Good Publication Practice (GPP2), due to be published in late 2009, have been designed to establish high levels of integrity for all those involved with communicating clinical trial data, and I expect that they will rapidly be accepted as the ‘gold standard’. Before long, failure to comply with GPP2 will be assumed to mean unethical practice. Agencies and their clients therefore need to start working to these standards as soon as possible.

Amanda Smith is Global Head of Caudex Medical. She has a background in nursing and has over 20 years of industry and agency experience in a variety of commercial roles, encompassing sales, marketing and communications. Moving to medical communications in 1990, Smith has worked with European and globally based pharmaceutical clients, including GlaxoSmithKline, Roche, Novartis, Merck Serono and Johnson & Johnson.

behavioural change. We are already seeing a need for validated decision-making tools to support personalised healthcare, and I foresee increased use of education programmes targeted at improving adherence to treatment, optimising both the clinical and economic value of a given therapy. Reflecting these changes, there will be increased emphasis on educational initiatives designed specifically for nurses and pharmacists, to reflect their growing role in patient management. We may also see a need for medical communications for non-prescription drugs. Do you see an impact in Europe from the ongoing legal investigations involving pharmaceutical and medical communication companies in the US? AS. The retrospective nature of these cases demonstrates the need to think ahead of regulatory requirements to ensure that we are operating in a transparent and ethical manner now. The up-

Do you think that there will be further regulatory changes affecting medical communications programmes? AS. It is clear that regulatory bodies want to ensure that scientific publications remain free from marketing influence. This will also be driven by the need for greater transparency, such as the conflict of interest disclosures mandated by GPP2. In practice, this will lead to increasing separation of relationships with external experts. Experts who work on clinical trial programmes will author the scientific publications and work

“I see increasing demand for medical communications coming from the push to improve transparency and reputation” with clinical or medical departments, while the marketing department will work with a separate group of experts, at company-sponsored meetings and elsewhere, to explain the relevance of the data for clinical practice. Pharmaceutical companies will have to expand their network of external experts beyond clinical trial investigators and ensure that they invest additional time and energy working with professionals whose endorsement will be influential with their peers. n For more information please contact amanda.smith@caudex.com

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Van Spaendonckâ&#x20AC;&#x2122;s BU â&#x20AC;&#x153;Value Innovation in Medical and life Sciencesâ&#x20AC;? is a focused consultancy firm on strategic change. Van Spaendonck management consultancy supports and directs parties and professionals involved to proper choices and processes to create and develop their USP, a better market position and performance. In the dynamics of health care systems, pharmaceutical industry, health care insurers, social parties, and health care professionals will be challenged more and more to their added value.

Expertise and experience to initiate and develop processes for the practice of health care, marketing, sales and management systems, professional development, and strategic organisational change. More than 20 years of consultancy expertise to pharmaceutical and medical industry, life sciences and health care. Actual research and publications in health care and marketing developments.

Rob Halkes | T +31 418 578000 | www.medicalandpharmamarketing.com R.Halkes@VanSpaendonck.nl | the Netherlands

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ROUNDTABLE

The importance of CRM NGP talks to Rob Halkes of Van Spaendonck, Vivian Hunt of McKinsey & Company and CDM’s Torben Vogt about optimising relationships with customers. What is your deﬁnition of customer relationship management? Rob Halkes. CRM is the company’s attempt to make the most of its relationship with buyers. It relates to the company’s value orientation on customers throughout the company with an accent on its business model. However, CRM systems in pharma are predominantly used as a sales reporting system and for the segmentation of target groups to be visited by the reps of the company. To create sustainable and profiting relationships with customers, it needs to see the individual customer in its personal context of influences from other stakeholders. If the proposition of pharma turns into a commodity, its relation with stakeholders turns into a commodity.

hancing reputation and brand value. The customer-oriented processes of CRM are typically supported and automated by an IT application known as the CRM system.

Torben Vogt. CRM is a way to organise your business. Embracing all aspects of the relationship between the customer and the supplier, CRM is a structured process with which a company can maximise the efficiency of all customer-related activities, ultimately increasing revenues. For pharmaceutical companies, CRM is a tool for organising a dialogue with the healthcare environment, strengthening the perception of the company among doctors, healthcare personnel and other stakeholders, thus en-

“CRM should cover relationships with all stakeholders and specifically with their decision-making units” Rob Halkes

Vivian Hunt. We think of CRM as a collaboration between marketing, sales, customer service and IT to re-evaluate and optimise how a company most effectively interacts with its customers. It should be much more than a technology tool and requires a clear viewpoint on value creation. Our experience suggests that those organisations that excel at CRM share a number of char-

acteristics. They invest in superior insights, taking a segmented view of customers, and have a deep understanding of the value drivers; they use CRM as the basis of focused sales and marketing activity, aligning marketing and sales resource with opportunities, and understanding which vehicles and channels should be optimised to capture those opportunities; they tailor customer service to the needs and value of segments; and they link CRM to overall business unit strategies and continually measure impact. Why should a pharmaceutical company consider implementing a CRM system? What are the advantages? TV. The main benefit of a CRM system is that it enables pharmaceutical companies to increase the efficiency of all customer-related activities, enabling them to grow their revenues without expanding their resource spending. For example, a well-updated CRM system allows the company to see if its sales efforts are working effectively by measuring both the influence on healthcare contacts as well as hard sales facts. Implementing the right kind of CRM helps coordinate collaboration between sales, marketing and regulatory and customer service departments, presenting

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THE PANEL Rob Halkes has been a consultant to the market of pharmaceutical and life sciences for 20 years. He works at strategic change, innovation and professional development with executive, marketing, sales and medical management. In the pharmaceutical industry, he is currently developing value innovation as a new business model.

Torben Vogt has more than 20 year’s experience in the life science sector, with various leading positions in sales, marketing, ﬁnance, IT, logistics and planning. This includes three years with Novozymes in Brazil, managing the planning and logistics for Latin America. At CDM A/S, he is VP of Sales and Marketing.

Vivian Hunt is a Director at McKinsey & Company, based in London. She is the Head of McKinsey’s UK Pharmaceutical and Medical Products Practice and leads its Medical Technology Practice for Europe. She had a 15-year career serving a variety of healthcare clients across the full value chain.

one face to the customer. This ensures that sales representatives and marketing keep the pharmaceutical company in the top of mind of doctors and other key stakeholders. A CRM system is pivotal in maintaining the greatest asset of a pharmaceutical company – its good reputation. In the close-knit world of healthcare, the negative experience of one doctor who has an interaction with the company may ruin the hard-earned reputation of the company for years to come. Having a CRM system that is used optimally will counteract this. To sum up, CRM is extremely important for the professionalism of pharmaceutical communications and a cornerstone in maintaining the company image and brand. VH. Successful CRM organisations view every customer interaction as an opportunity to create value: offering the right product or service to the right person at the right time. Equally important is to focus on the activities that offer the highest return on investment by taking a holistic view of the value potential of a customer, and the costs to serve them. We would argue that both should matter as much to a pharmaceutical company as to any other commercial organisation. Typically the distribution of value from customer accounts is very wide and the 80/20 rule applies: a relatively small group of customers often account for a disproportionately large amount of value. Understanding which customers generate most value, and why, can have a significant impact on the bottom line, directly impacting the selling process in three areas. The first being coverage and contact strategy: focusing sales resources on the current customer accounts that offer the highest potential value, by virtue of their absolute size, cost to serve and propensity to work with your organisation. This

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isn’t just about having the right reps in place: you need to make sure you cover the touch points that matter most to you customers, providing the combination of channels they need. Equally importantly, helping identify higher potential new accounts. The second is opportunity spotting and bid management: identifying opportunities to increase share with the customers that count and defending against potential competitor attack; and the third is pricing. Effectively using the pricing and discounting opportunities available to set your overall pricing strategy, optimise tactical pricing, and to tailor commercial propositions to customers needs and value. RH. The effectiveness of pharmaceutical promotion to individual prescribers is quickly diminishing. Market conditions change and networks around the prescriber get more influence. CRM should cover relationships with all stakeholders and specifically with their decision-making units. This is conditional for effective promotion in advanced markets, but probably not sufficient for keeping up sustainable performance. When decision-making in therapy and drug selection gets more complicated, pharma needs to follow up on that.

“Addressing the challenges associated with launching a CRM initiative is critical to overall success” Vivian Hunt These advantages of a CRM system are both in coordination of relationships with stakeholders, and in the generation of relevant stakeholder information. Used adequately, CRM renders information that indicates where preferences, concerns, interests and needs of stakeholders are heading. New segmentations may be done for specific campaigns, and one could find distinct new trends that could be relevant for one’s business. What tools and solutions would you recommend to ensure a company gets maximum beneﬁt from a CRM system? RH. Maximum benefit will lie in sound alignment of the CRM system with the specific business approach that accommodates with specific market characteristics. If the influence of networks around the prescriber on drug selection is raised, stock taking of these networks and their decision-making units is needed. If done right, this segmentation will lead straight to a target hierarchy of DMUs of networks with which quick wins are possible, down to those that need longer lead times. Hence, a system of focused account management will be more effective to cover relationships with these networks than just a

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promotion effort by reps only. The question of who in the company will do what, with whom of the targeted account, will quickly be made possible. One would also need to install real account managers that who account for the development of the network and will be the spokespeople and coordinators to the relevant people of the network for the company. TV. Start with a business process review and improve/redesign it with industry best practices. Identify the three to five technical and/or economical key success factors for CRM in your company. In our experience, high user adoption is probably the most important in ensuring maximum ROI on your CRM investment. The sales and marketing tool moving ahead of all today is Microsoft Dynamics CRM. The key to its success is that it is seamlessly integrated with MS Outlook, the IT system in which sales people typically spend more than 80 percent of their IT time. CRM should not be a data island in itself and it is thus important to get the CRM platform integrated well with other systems – and Microsoft meets this challenge with Dynamics CRM. This platform offers the lowest TCO of any solution in the market. It is the fastest growing CRM platform globally, with more partners, solutions and technical resources available than any other. VH. CRM tools do not always have to be sophisticated, and there is real merit in considering what fits best within your existing sales and marketing culture. At one end of the spectrum are dynamic tools that automatically generate recommendations. They tend to have high compliance rates but their obvious drawback is the upfront investment cost. The lower tech solution of static handheld PDAs (the modern equivalent of handouts) can work well for reps, giving them fast access and the ability to record information real time. Regardless of the system adopted, addressing the challenges associated with launching a CRM initiative is critical to overall success. For example, companies that reported successful CRM implementation in a recent study we conducted were almost twice as likely to report that implementation specifically addressed the cultural shift required to adopt the new system. Even more claimed that modules were launched at intervals to prompt adoption. How do you see CRM developing in the future? VH. We believe that CRM and the importance of understanding your customer may actually be becoming more critical in pharma as healthcare providers struggle to control the growth of their budgets and demonstrate they are achieving value. This puts increased pressure on pharma to ensure they understand, anticipate and meet the needs of their core customers now and into the future. Added to this is the mounting pressure to create value as the commercial model undergoes radical change in many markets. TV. Briefly put, CRM will move back to basics. Pharmaceutical companies – in particular big pharma – have a long experience with CRM. This is often an expensive and unsuccessful implementation projects, as pharmaceutical IT and sales directors have seen large systems featuring loads of functionality go virtually unused by the sales and marketing staff, due to high complexity and unclear processes. Thus we see a growing focus on quicker implementations of smaller, more user-friendly and cost-effective CRM solutions, which will surely help increase the success rate of CRM projects.

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An emergence of new communication channels will significantly broaden the concept of CRM in the coming years. CRM systems need to coordinate these, keeping communication with healthcare contacts uniform. Examples of emerging new channels include Web 2.0 and the newest communication tools like web meetings, e-learning, one to one videoconferencing, and e-detailing. Only CRM systems with flexible integration points will be able to handle this. Finally, we see a huge increase in CRM deployed as hosted or Software as a Service implementations. However, the hosted CRM systems with the greatest success will be those built on familiar and widespread technology such as .NET and that are tightly interwoven with mail programs such as Microsoft Outlook. RH. In several countries, the future is here already. We have seen developments in which variables for target group segmentation are augmented with methods of profiling. This profiling is aimed at further behavioural segmentation of prescribers – one expects that specific personal and psychological variables will further differentiate between targeted persons in terms of drug, therapy preferences and/or attitudes. This detailed segmentation will also direct the process, substance and communication style of rep calls. Advocates

“A CRM system is pivotal in maintaining the greatest asset of a pharmaceutical company – its good reputation” Torben Vogt of this profiling hope that this will generate more effectiveness of calls. But this stays within the framework of the traditional promotion to individual prescribers and will get obsolete with the further development of a more complex structure of drug decisions. Therefore, the pharma company needs to reconsider added value to stakeholders. On the basis of the company’s own detailed information about the drug and its administering characteristics, effectiveness, side effects, adverse reactions and the like, one is able to develop added value propositions relevant to the quality of healthcare itself. Support and information to prescribers and users of the drugs to enhance compliance, reduce feelings of uncertainty and raise experience of satisfaction with the treatment opens the way to co-create the healthcare experience. This is already being done. But the difference in using these services lies in the market approach with these propositions. Companies will need to think of specific kinds of services marketing and concepts: experience marketing, experience co-creation and the like. Differentiation between accounts will make the difference in effectiveness and efficiency. New segmentation methods and account management will show a tremendous change in how pharma companies will set up their market approaches and consequent CRM systems. CRM innovation will go together with value innovation. When pharma companies do not do so in a coherent way of rethinking and redesigning their business model, both will be too costly and insufficient to render business results. n

EXECUTIVE INTERVIEW

MOVING AHEAD IN MEDICAL COMMUNICATIONS David Swinbanks tells NGP about Nature Publishing Group’s recent move into medical communications with its new division, Macmillan Medical Communications. Could you please explain why has Nature Publishing Group has Apart from Japan, what other markets is MMC operating in? moved into medical communications? DS. Based on our success in Japan, we set up a new company in Madrid, David Swinbanks. Nature Publishing Group, alongside Nature, publishNPG Iberoamerica, in 2007, with an MMC unit to handle medical comes over 30 Nature-branded research and review munications in Spanish, Portuguese, French and titles in the life sciences, physical and chemical Italian in the markets of southern Europe and sciences, and clinical medicine. We also publish Latin America. Like its Japanese counterpart, nearly 50 life science and clinical medical titles, it has quickly gone into profit. And this year we such as Kidney International, the American Jourhave set up an MMC unit in India using the infranal of Gastroenterology, the American Journal of structure of Macmillan India, a large Macmillan Hypertension, and the British Journal of Cancer. company that has been operating in India for over Our portfolio of journals in clinical medicine has a century. grown substantially in recent years and we have also launched a whole series of Nature-branded Do you have plans for medical communications review journals in clinical medicine. in the West? Th is wealth of high quality clinical mediDS. We already have a presence in pharma-related cal content has opened up an opportunity for content sales in our NPG office in Boston, and we are investigating the potential for us to establish us to move into medical communications, a larger foothold in medical communications in based both on our content and our expertise in David Swinbanks is Publishing Director the West. In this regard, we would very interested medical publishing. of Nature Publishing Group (NPG), publisher of Nature, the international to hear the views of your readers on how medical A second factor behind our decision to move science weekly, and is responsible for all of the group’s publishing activities in the communications is evolving in the West, particuinto this area is our very strong and growing presAsia Pacific region, with headquarters larly with the advent of online publishing. If you ence in Asia, where there are some of the largest in Tokyo and offices in Hong Kong, Seoul, Melbourne and Delhi. He is also are a reader working in medical communications pharmaceutical markets in the world. the Publishing Director responsible for overseeing the group’s global physical and/or pharma sales we would be delighted if Nature has had a presence in Japan for over a sciences publishing. you would fi ll in our short online survey at www. quarter of a century, and in the past four years we natureasia.com/en/pharma_survey/. You will rehave rapidly built our publishing capabilities in ceive a free copy of the results of the survey and the Asia-Pacific region. 10 participants in the survey will be awarded on a lottery basis a oneyear free subscription to the Nature journal of their choice. Why was Macmillan Medical Communications (MMC) first set up in Japan? DS. Japan is the world’s second largest pharmaceutical market, and neighbouring China is growing rapidly. Our first venture into contentbased medical communications began in 2006 with our publication of Kidney International: Selections, a quarterly digest edition of Kidney International translated into Japanese and distributed to Japan’s nephrology community supported by an educational grant from Kyowa Kirin. However, we quickly learned that the biggest slice of medical communications business lies outside of peer-reviewed content in bespoke publishing, medical writing and editorial services, and, most importantly, the handling of all aspects of drug launch campaigns. So, based on our reputation for high quality medical publishing, we embarked on a strategy to win bids against other large players in medical communications to handle some drug launches. I am pleased to say that in the space of less than three years we have won bids to handle the launch campaigns for two drugs that will go on the Japanese market in 2010.

MORE ABOUT NATURE

ature, the international weekly journal of science, is one of the world’s most revered scientiﬁc journals. The publisher of Nature, Nature Publishing Group (NPG), has recently moved into the business of medical communications to support the pharmaceutical industry by setting up a new division, Macmillan Medical Communications (MMC), named after Macmillan, the parent company of NPG. MMC recently won bids to handle the launches of two drugs in Japan. David Swinbanks, Publishing Director of NPG, explains this success and seeks your feedback on how medical communications is developing in the West, at www.natureasia.com/en/pharma_survey

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Keeping in touch Karen Smith explains the importance of physician-patient relationships in ensuring adherence.

s VP of External Medical Relations, Karen Smith fully endorses the building of relationships between physician and patient to ensure adherence. “The physician-patient encounter during the time in which a disease is diagnosed is considered a ‘teachable moment’,” she explains. “It is vital to adherence because patients learn about the impact of a disease, how it can be treated and how to avoid the risks and consequences of ineffective management.” In a study conducted by the Stanford University School of Medicine, 185 patient-physician interactions were analysed to understand more of how the information was relayed. The results concluded that simple conversations were insufficient to promote long-term adherence to treatment, and instead new programs were needed to convey the message to patients. “Providing research data regarding what works to improve adherence is an effective way to support physicians in the important role they play in demonstrating the value of adherence to their patients,” explains Smith. Following a 12-month survey conducted by AstraZeneca of more than 200 office-based physicians, two out of three physicians noted that they believe they have considerable infuence over whether or not their patients follow their instructions. The final third believed a patient’s caregiver, health insurance company, nurse or pharmacist had more influence than the physician. An additional study funded by AstraZeneca evaluated prescription data and found that longer days of supply and lower out-of-pocket cost of medicines also positively impacted patient adherence. “Effective messages should explain that it is important for people to take their medicines as prescribed if they want to experience the full benefit of the medicine and avoid future health issues. It is also critical to pro-

vide physicians with resources to help foster more open, frequent discussions with their patients about how their medicines are working and whether they have affordability concerns,” she says. Smith notes that in addition to online and offline marketing channels, case management approaches also involve multiple care providers, such as physicians, nurses, pharmacists and so on, who have been recognised as being effective in ensuring patients take their medicines as prescribed. “Innovative approaches using patients who successfully manage their conditions as ‘peer-coaches’ to other patients have also been investigated. Health technology companies can help patients take their medicines as prescribed by providing one-on-one, electronic patient support programs that reinforce the information patients receive from their physicians. For example, AstraZeneca partners with one company that uses text messaging to remind asthma patients to take their medication or schedule a follow-up doctor’s appointment. “E-prescribing systems can make it more convenient for patients to fill their prescriptions by allowing prescription transmissions and approvals to take place electronically, minimising patient wait time and inconvenience. This same technology can enable doctors to send an automatic reminder to a patient who has not filled his or her prescription in a specific time period,” says Smith. She describes the adherence efforts being made by AstraZeneca, in addition to those already mentioned, as being patient-focused. For the past 30 years, AstraZeneca has offered prescription savings programs for patients who may have difficulty affording their medicines, and the company also aims to ensure that physicians’ offices can share information on these programmes with their patients.

“AstraZeneca provides a number of resources to help physicians have more open, frequent discussions with their patients about how their medicines are working”

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Karen Smith is Vice President of External Medical Relations (EMR) at AstraZeneca PLC.

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BIOINFORMATICS

ne of the primary goals of bioinformatics is to increase our understanding of biological processes by developing and applying computationally intensive techniques. Qingqin Li, informaticist and Senior Project Lead in the Department of Pharmacogenomics at Johnson & Johnson, uses an example in next generation sequencing to illustrate how this works: “Th is is perhaps more focused on the computational loads than the computation techniques, even though the techniques in the sequence area have been in use for more than 10 years. Those techniques are primarily focused on long reach, and next generation sequencing is more short-reach technology. “Th is technology allows us to identify normal polymorphisms and mutations within the whole genome or a predefi ned specific genetic region. Imagine if we have two related biological conditions, and we could use this type of approach to identify the underlying molecular difference that might explain the relevant biological process driving the phenotype difference.

“With the next generation sequencing technology, each technology could generate hundreds of millions of sequence reads in a single sequencing reaction. Th is poses a big computational challenge for us. In order for us to address this challenge, we set up a cluster computing environment so that we can divide the computational jobs into chunks. For example, for the human genome, we could divide them by the number of chromosomes so that we could send out the computational jobs to different computing nodes simultaneously. And then once the jobs are done, we could assemble everything back into a coherent result. “Anybody who is working with next generation sequencing data would need to have some sort of infrastructure like this. Th is was not as much of an issue before we got into the next generation sequencing technology, since the traditional server was sufficient to deal with the computational load. But as soon as we did get into the next generation sequencing technology, we realised we would not be efficient if we did not have the cluster computing type of environment.”

A flash of insight Johnson & Johnson’s Qingqin Li tells NGP how bioinformatics helps us to understand biological processes.

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Li and her colleagues also work on discovering the biomarker impacting efficacy and adverse events using clinical samples. The team collects DNA samples from clinical trials, and through collaboration with the clinical team and statistics, they also have access to the clinical data. They then perform experiments to genotype individuals by looking at a set of predefi ned genetic variants using either a candidate gene approach or a genome-wide association study approach. “Both approaches allow us to look at the genetic sequence variation in a predefi ned set of loci,” Li points out. “Typically they are the ones that are common in the study population; common being greater than five percent of frequency in the population. “By combining the genotype data derived from these loci and comparing that to the clinical information using statistical models, we are able to identify markers that impact efficacy or side effects. Because of the nature of this type of marker, we typically call this a common disease/ common variant approach in identifying the biomarker. “Another area is next generation sequencing. The next gen sequencing approach allows us to look at the rare variants within the human genome so that we can sequence a pre-selected panel of individuals and identify the rare variants, which include those not captured in the public variation databases. With the rare variant discovered, we are then in a position to do the association studies again, but now looking at the rare variants.” Qingqin Li

Development

“We could use the information derived from this type of study to better understand the relevant pathway and the relevant target” Genetic varations At Johnson & Johnson, the type of bioinformatics activities Li is involved in are related to pharmacogenomics activities. “They are all tied to the fact that there are genetic variations within the human genome,” she explains. “While a few are critical to the biological function, the majority of them may not be. “Our job is to try to fi nd the few ones that have phenotypic consequence, being either as disease risk, differential therapeutic efficacy or adverse events upon therapeutic intervention. People sometimes describe this as trying to fi nd the needle in the haystack. “The fi rst activity is focused on drug targets. You can imagine that if there are sequence variations in the drug targets some of them might interfere with the binding of the therapeutic agent; if there’s inadequate binding, you might expect insufficient efficacy. “What we do is to systematically provide the target variability information so that this type of information can be taken into consideration during screening assay design and during high throughput screening. After all, that's the first step in identifying the lead compound for therapeutic intervention.”

How then is the information that comes from these activities used in the drug development process? “Imagine we have a biomarker that could be validated in different clinical populations and have a good enough clinical effect size,” Li says. “Meaning that the subjects carrying the biomarker, for example, have a much better response than the overall population or have a less adverse event. So if we have a marker like that, we could potentially use it to stratify the clinical population and use it in the subset of the population that has a better benefit/risk ratio. “In addition, we could use the information derived from this type of study to better understand the relevant pathway and the relevant target for a given therapeutic area and feedback into discovery as a next generation of drug targets.” The field of bioinformatics is in a constant state of development, and Li believes it will evolve in line with improvements in technology, and will address the additional computational challenges posed by this new technology. “This has been my experience in the sequencing field, in the gene expression and now in the genetic area. For example, in the genetic field in the past 10 years, people were still using the microsatellite markers. But with the International HapMap Project taking place and also the advancement of chip technology, new chip platforms have come on board, allowing scientists to look at 10,000 markers at a time and then hundreds of thousands of markers and now millions of markers at a time. “The new methodology needed to address this type of data would direct the bioinformatics field to advance and address the question posed by the new technology. “Bioinformatics is an interdisciplinary field. It will continue to involve people from different fields such as molecular biology, statistics, computer science and mathematics, working together to come up with new analytic methods and information platforms to address the biological question.”

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INDUSTRY INSIGHT

Laboratory asset management strategies Masao Moriyama explains how using a single provider for the management of laboratory equipment throughout its entire lifecycle reduces administration, improves efﬁciency and provides critical data to help optimise resources.

rocurement officers, as well as facility and lab managers, have traditionally had no option other than to work directly with original equipment manufacturers (OEMs) to manage their company’s assets, each with different service level agreements and requirements. When we take into account that most companies have multiple laboratories and multiple sites, this can add up to thousands of different suppliers and a correspondingly large number of contracts. Working directly with OEMs in this way carries a massive administrative burden and can divert thousands of dollars worth of time away from core scientific projects to deal with equipment contracts, troubleshooting and service calls. With the pressure mounting on R&D departments to deliver more with less resources, employing a company that can provide detailed data and insight on all assets offers a massive advantage. Consolidating contracts through bringing in an asset management service provider, such as GE Healthcare’s Scientific Asset Services (SAS), is one solution that companies are increasingly turning to in order to improve efficiency and drive down costs. The unique combination of services offered by SAS can be adapted to suit the needs of each individual company, with the ability to support the entire lifecycle of their assets from equipment finance, maintenance and validation, to site moves and disposal. Asset management service providers take control of equipment inventories, categorise and barcode each item to enable easier tracking, review existing contracts to help customers choose the best service model, and implement preventative maintenance plans designed to

engineers are required, the process is managed by the GE Healthcare team, reducing administration and ensuring that quality of service is monitored and not compromised. Powerful data and analysis are also benefits. Data such as contract spend, service and maintenance history, preventative maintenance completion, and current asset market value, are collected for each instrument and service event and held in a single, secure database, AssetPlus. These data can help to understand asset utilisation and minimise under-use. Combined with an understanding of current market value, companies are able to make informed decisions about their surplus or unused equipment. Options could include transparent storage or disposal, with any proceeds fed back into the business. Th is leads to the advantage of increased staff retention. As equipment downtime is reduced to hours instead of days, there is greater freedom to focus R&D resources on science. Th is has a positive effect on motivation and job satisfaction, resulting in improved staff retention rates.

Summary

fit around research schedules. Validation protocols can be customised and standardised, offering a combined solution with significant time and fi nancial savings, and simplifying the FDA auditing process. The benefits of employing an asset management service provider include cost reduction. A detailed review of existing contracts is carried out, which can be used to advise on the best type of cover to suit individual needs and to re-negotiate more cost-effective contracts from individual suppliers. Thousands of R&D dollars can be saved, as scientists’ time can be redirected away from repairs to allow them to focus on key research projects. Purchasing agents can save vast amounts of time that would have been spent negotiating contracts and managing invoices. Enhanced service levels is another benefit, as onsite engineers drastically reduce response times, ensuring that repairs are dealt with quickly and efficiently. If OEM

In the current climate of increased M&A activity and decreasing budgets, pharmaceutical and biotech companies are under increasing pressure to enhance productivity whilst at the same time driving down costs. In a recent survey, Accenture found that executives at top pharma companies rate analytics/data-driven insights as one of the top factors critical to outperforming their competitors. However, few companies collect all data potentially available to drive their asset management programs. Partnering with a global company that can adapt and grow to meet a company’s needs and deliver a total solution for asset management throughout its lifecycle presents an ideal longterm solution.

Masao Moriyama is Service Director, GE Healthcare (Japan). Moriyama has years of experience in engineering and service logistics, and in-depth knowledge of healthcare and Six Sigma methodology.

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ASK THE EXPERT

Clinical process modelling – taking control now Ethan Smith outlines a successful approach to the drug development process.

n today’s economic environment, research and development functions are under significant pressure to bring products to market more quickly, and reduce costs. Regulatory authorities are approving fewer applications, driving costs to nearly US$1 billion dollars to bring a new pharmaceutical product to market in 10 years. While drug discovery can be difficult to manage and standardise, the product development processes can be defined, standardised and optimised in ways that significantly reduce costs, lower risk and accelerate time to market. In fact, some large pharmaceutical, biotech and medical device firms are already tackling this challenge with a great deal of success. Modelling the drug development process with all its intricacies, dependencies and overall complexity is often seen as a Herculean task. Success requires sound planning and a focused, segmented approach – fundamentally breaking down the drug development lifecycle into a series of smaller processes that can be defined and standardised in phases, incrementally contributing to overall results. To support and enable this approach, senior clinical leadership must develop a taxonomy of business domains and their interrelationships. These domains may be based on functional areas, organisational entities or a combination of the two, but the important thing is that they are enterprise-level and can be enforced globally. From the enterprise taxonomy, the various functional areas and underlying processes can be modelled by separate teams in parallel or done by a central team serially. Either way, the business taxonomy enables the modelling team(s) to focus on discrete process initiatives with clear understanding of how each process fits into the overall enterprise to ultimately deliver an endto-end product development process.

Complexities You can see how this effort could become very complex, very quickly. Even following a methodical approach and employing a variety of resources to accomplish the goal, there is a defi nite need for technology to help manage such a critical initiative. Enterprise modelling soft ware suites – such as Metastorm ProVision – provide a repository-based modelling environment to enable reuse of common elements (organisations, roles, activities and so on) and serve as a central point for collaboration and big-picture understanding. Any tool selected must automatically maintain the linkages between the business taxonomy and all of

the underlying process models. Otherwise, team members will suffer a great deal of frustration in having to manually maintain and connect stand-alone models – so simple drawing and diagramming tools will not suffice. Ideally the modelling tool selected should also serve as an educational tool, allowing the models to be reviewed, annotated and published to the entire enterprise for consumption. Publication of the models enables process owners and end-users to better understand how key elements and various roles fit into the overall process. These models also serve as a basis for training, communication and compliance. Organisations that successfully model and publish their R&D processes may also use the online models as the source for linking standard operating procedures (SOP), work instructions and forms, thus providing end-users one source of truth for how a particular process is to be executed and what associated documentation is to be used.

Success Early adopters have already made great strides in process improvement and the adoption of enterprise modelling and business process management soft ware tools. Now that R&D conferences and association meetings are preaching the value of having well-documented, widely communicated processes, it is only a matter of time before business process improvement as a strategic initiative becomes a competitive necessity within the life sciences industry. Implementing a formal enterprise modelling program and the right technology will enable the agility required to bring products to market faster, more safely and more cost effectively – so take action now while you still have the opportunity to gain a strategic advantage.

Ethan Smith has extensive experience in business process consulting in life sciences. He has driven process initiatives across research and development, sales operations, incentive compensation, physician spend management, and compliance. He has delivered well over a dozen BPMS implementations in the industry, and developed enterprise BPM strategies and centres of excellence. Smith currently serves as the Director of Life Sciences Solutions for Metastorm.

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IN THE BACK

REGIONAL FOCUS: CHINA

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n already established manufacturing epicentre and emerging R&D market, China is receiving investment into its pharmaceutical industry, both at home and abroad. With a region that encompasses almost a fi ft h of the t e th world’s population and an area of 9.6 million square kilometres, t itt iis the world’s second largest country by land area. Shanghai is the country’s largest city in terms of population, housing over 20 million people. It is the largest centre of commerce and fi nance in mainland China. China’s second largest city, Beijing, is a metropolis in northern China, and a major transportation hub. The city is recognised as being the cultural centre of the People’s Republic of China and played host to the Olympic Games in 2008. The city is renowned for its opulent palaces, temples and huge stonewalls and gates. Its emphasis on art has long remained integral to its title as the city of culture.

Beijing Olympics 2008 opening ceremony

Terracotta Warriors

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REGIONAL FOCUS: CHINA

IN THE BACK 137

Shanghai

Great Wall of China

China’s pharmaceutical market China accounts for 20 percent of the world’s population, and as its healthcare environment continues to change and expand so does its pharmaceutical industry. The healthcare sector within the region is evolving – a target has been set to extend basic heath insurance to a wider section of the population, and as a result, the operations of the pharma industry are set to expand dramatically to cope with the change. The industry itself is highly fragmented, and it is the fragmentation that has brought the greatest problems. As the number of pharma companies continues to grow, the government is recognising the problem with compliance. There are almost 6000 pharma manufacturers and around 14,000 distributors operating within the country; there are around 3500 drug companies competing within the €7 billion market, but without any of them carving up enough of a slice to become a leader. During the last few years, China has put together several regulations and reform measures within the State Drug Administration – the organisation is now responsible for all drug trading, manufacturing and registration. Since 2004, the SDA has been sanctioning and closing down manufacturers that do not meet the Good Manufacturing Practice (GMP). China’s over-the-counter market is simultaneously growing just as fast, becoming the fourth largest OTC market in the world. Foreign pharma giants have been noting the trends in the Far East and have begun expansion plans, targeting China as an emerging market. Merck announced the launch of its OTC program in September 2003; Roche has listed China as one of its 10 core markets, aiming to expand its OTC sales by 50 percent in the next five years; and both Novartis and Wyeth are setting their sights on the region for expansion purposes.

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Pharma companies of China It is only in recent years that the chinese government has begun to invest time and money into pharmaceutical R&D, in its aim to boost further expansion. Shijiazhuang Pharma Group is based in Shijiazhuang, the capital city of Hebei Province in northeast China. It is one of the largest drug ﬁrms and typical of China’s emerging pharma companies with an interest in research. It works very closely with universities and research groups to develop its research, as well as applying for generic drugs rights before drug patents expire, and has also modernised the traditional Chinese medicines (TCM) to a quantiﬁable method. Wuxi Pharmatech operates as a pharma and biotechnology R&D outsourcing company, providing laboratory and manufacturing services in the process to pharma companies. Its operations include process development and manufacturing of advanced intermediates. One of the more major and successful companies, Wuxi Pharmatech is listed on the New York stock exchange. Harbin Pharmaceutical Group Co. is currently planning a €175 million capital infusion from two foreign investors, Warburg Pincus of New York and Citic Capital of Hong Kong, with the aim of expanding its R&D operations. As the industry continues to grow, chinese pharma companies are clearly becoming more competitive.

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IN THE BACK

INTERNATIONAL EVENTS

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Upcoming conferences and events across the globe. Drug Delivery Summit London, England 2 Sep - 4 Sep 09 Tel: +44 1787 315120 s.marsden@selectbiosciences.com www.selectbiosciences.com/conferences/DD2009/

18th International Mass Spectrometry Conference Bremen, Germany 30 Aug - 4 Sep 09 Tel: +49 30 2093 6985 imsc2009@phc.uni-kiel.de www.imsc-bremen-2009.de/

AestheticMed St Petersburg Exhibition Centre Lenexpo, Saint Petersburg, Russia 7 Oct - 9 Oct 09 Tel: +44 207 596 5221 anastasia.tarasova@ite-exhibitions.com www.primexpo.ru/aesthetic/eng/

7th International Bottom of the Barrel Technology Conference & Exhibition Athens, Greece 8 Oct - 9 Oct 09 Tel: +44 207 357 8394 enquiries@EuroPetro.com www.europetro.com/epc/

Biotechnology for the Non Biotechnologist Radisson SAS Hotel, Basel, Switzerland 23 Sep - 25 Sep 09 Tel: +44 1483 730071 leigh@management-forum.co.uk www.management-forum.co.uk/gxp/eventid/1127

ICSE International Contract Services Expo IFEMA, Feria de Madrid, Spain 13 Oct - 15 Oct 09 Tel: +31 346 559 489 icse@ubm.com www.icsexpo.com

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IN THE BACK

INTERNATIONAL EVENTS

Drug Discovery & Development Week Boston, MA, USA 3 Aug - 6 Aug 09 Tel: +1 800 390 4078 custserv@ibcusa.com www.drugdisc.com

Next Generation Pharmaceutical Summit Ritz Carlton, Amelia Island, FL, USA 28 Oct - 30 Oct 09 Tel: +44 117 921 4000 www.ngpsummit.com

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Microarray World Congress South San Francisco, CA, USA 6 Aug - 7 Aug 09 Tel: +44 1787 315110 s.sharpe@selectbiosciences.com www.selectbiosciences.com/conferences/MWC2009/

Analytica - Anacon India Nehru Centre, Mumbai, India 23 Sep - 25 Sep 09 Tel: +49 89 949 22 121 www.imag.de

AnalyticaChina 2010 Shanghai, China 21 Sep - 23 Sep 10 Tel: +49 89 949 22 119 nicole.klammer(at)imag.de www.analyticachina.com

CPhI SA Transamerica Expo Center, Sao Paulo, Brazil 26 Aug - 28 Aug 09 Tel: +31 346 559 444 cphi@cmpi.biz www.cphi-sa.com

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IN THE BACK

IN REVIEW

140

On the shelf NGP rounds up the latest books in the healthcare and pharmaceutical sectors.

The Cure: How Capitalism Can Save American Health Care By David Gratzer

Drawing upon his experience as a physician in both Canada and the US, Gratzer discredits the involvement of legislative bodies within the healthcare system, believing it to lead to a multitude of inefficiencies and eventually punishing patients. The Cure focuses on reforming the structure to make the individual responsible via a detailed and practical approach. EHM says: an informative account and required reading for anyone wanting to know what went wrong with the US healthcare system. In going against the current prevailing move towards a centralised system, Gratzer makes a strong case for greater deregulation and freedom. May not be to all tastes, but certainly an interesting read.

Leading Pharmaceutical Innovation: Trends and Drivers for Growth in the Pharmaceutical Industry By Oliver Gassmann, Gerrit Reepmeyer and Maximilian von Zedtwitz

Examining the ever-emerging technologies in the R&D sector, this group of authors uses empirical fi ndings, as well as an analytical roundup of research technologies, to produce a well-informed and in-depth review of proactive strategies for value-generating business strategies. As well as new technologies, Leading Pharmaceutical Innovation also focuses on new forms of cooperation and internalisations as other ways of creating a competitive advantage. EHM says: a well summarised account of strategies, as well as examples from Europe, the US and Asia, for the pharmaceutical executive with a desire to better ROI.

Pharmaceutical Sales for Phools: The Beginners Guide for Medical Sales Representatives By Sahil Syed

With testimonials from Gary Fagg, Principle Sales Representative at Novartis, and Charles Marshall, Director of Axis Development, Pharmaceutical Sales for Phools has received outstanding reviews from all aspects of the industry. Clearly written and with precise and well-established principles, Syed has created a fi rst-hand account of the pharmaceutical selling market. EHM says: a well-written and concise conveying of both the industry itself and how to achieve successful sales.

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IN THE BACK

PROFILE

142

As the merger between major drug ﬁrms Pﬁzer and Wyeth becomes reality, what will this mean for the pharmaceutical companies’ heads? Will the union between Jeffrey Kindler and Bernard Poussot result in a compatible partnership, or will it be a struggle for power with only one winner?

JEFFREY KINDLER, CEO, PFIZER

rior to his entry into the corporate domain, Kindler’s background was based in law – he clerked for Supreme Court Justice William Brennan and worked at the law fi rm Williams & Connolly – and it was because of this that he was specifically chosen to be Chief Executive. Rather than choose from a pool of 30-something-year experienced directors, the Pfi zer board selected Kindler, showing a dynamic and fast-paced lawyer to be what is now needed for leadership in an industry where legal issues are growing dominant. On his appointment to the position, Pfi zer’s previous Chairman, Henry McKinnell, described Kindler as a “gifted natural leader [who] inspires confidence, and offers visions and a fresh perspective.” His leadership is very much influenced by the style of both Brennan and Jack Welch, former Chairman of General Electric. A belief in creating an entrepreneurial environment for scientific leaders to flourish is the way in which he manages a creative business. Rather than a set model, he advocates that different people need different approaches, but at the same time, accountability dependent on results is essential. Kindler is also a supporter of the freedom of open and robust debate, bring fresh perspective through rethinking and challenging traditional ideas.

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BERNARD POUSSOT, CEO, WYETH

lifer at Wyeth, Poussot has risen to power in a different way to Kindler. He began at the drug firm in 1986 as Deputy General Manager of Wyeth France and rose up the ranks to become CEO in January 2008. However, although his tenure as executive leader has been relatively short in comparison to Kindler, Poussot is not new to leadership roles, previously ranking as President of Wyeth Pharmaceuticals. In the announcement of the merger, Kindler described Poussot’s leadership as “strong and steady”, and stated him to be an “instrumental part of our integration efforts [who] will continue to provide us with critical counsel and support until the close of the acquisition.” The relationship between Poussot and Kindler was tumultuous, involving eight months of negotiations. The courtship began in June 2008, after Kindler contacted Poussot proposing a buy-out. Following a number of stops and starts, and problems with fi nances due to the economic conditions, a mutual share price was made of $50.19 per share and the sale agreed. It is thought that Poussot will receive US$53 million if his position is terminated following the sell-out to Wyeth, but until the acquisition is closed and the organisational structure revealed, it is unknown what position, if any, Poussot will take in the combined company.

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CATALOGUE PAGE NGPEU:july09 29/07/2009 14:44 Page 143

Your World. Covered From the people you hire to the products you sell, if you’re in business, we’ve got it covered... Next Generation Pharmaceutical

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Approximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise.

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PHOTO FINISH:13 July 29/07/2009 14:39 Page 144

INTHE BACK 144

Cruise ship ‘Ocean Dream’ operated by Spanish company Pullmantur carrying 1159 people on board off Margarita Island, Venezuela, in June. The ship was put in quarantine after three members of its crew were found to have symptoms of H1N1, with a further 11 people also suspected to have the disease.

PHOTO FINISH

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