Pharma Trends – 2015 Midpoint Health Check

It’s halfway through the year and high time we took the temperature of 2015’s current trends in pharma. In case 2014 is already a fading memory, here’s a quick reminder of what we were thinking six months ago: We were celebrating the impact of the ice bucket challenge (remember that?) and wondering what’s next after Sovaldi. Some of us had received Fitbits and Smart Socks in our stockings; lots of us were still trying to figure out what to do with them.

So what’s changed in the first half of 2015?

1. Sovaldi’s impact continues; now Merck prepares to take on Gilead

Last year Gilead reaped $10.3 billion in sales from its Hepatitis C drug Sovaldi; the company is expected to generate over $17 billion this year from Sovaldi and Harvoni combined. The other HepC drug is owned by AbbVie. Now Merck plans to take a bite out of that market. It’s developing a pill which combines grazoprevir and elbasvir, aiming to introduce the treatment to the market in early 2016.

Merck’s research laboratories president, Roger Perlmutter, says its drug will be suitable for patients with “substantial renal insufficiency,” and those on dialysis. Sovaldi and Harvoni can’t be taken by patients with severe renal impairment or on dialysis. Meanwhile, Gilead is currently testing its drug on patients with severe renal insufficiency. Even as Merck seeks to enter the market with a cure, it’s preparing to take on Gilead and AbbVie again in the race to develop a next-generation hepatitis C treatment – a pan-genotypic drug that could work for patients with any of the six subtypes of the virus. Only time will tell if Merck will be able to harness a portion of the market share, which AbbVie and Gilead currently have locked up via relationships with health insurance plan managers. However, with Merck’s drug is targeting patient audiences that the existing drugs can’t, it has the potential to capture a corner of the market simply by correctly marketing the product.

2. Wearables and Personalized Health

Clinicians and patients are embracing mobile apps and devices, continuing the trend of personalized smart health for our smartphone society. The Apple Watch launched in April, not with a queue-round-the-block razzmatazz but with a gradual rollout of products. The early wearables were all gimmicky gadgets – Fitbits and so on. The first half of 2015 has seen the launch of several exciting next-generation wearables and smart devices. From remote heart monitors to smart asthma inhalers, patients are seizing the opportunity to manage their own healthcare, while GPs’ find their time is freed up. With the digital transformation in healthcare, gaining a competitive edge depends on optimizing technology based on customer needs. As such, across the industry, pharma organizations must adopt a cultural shift to ensure digital transformation success.

3. Specialty Pharma Launches

Patients are continuing to reap the benefits of access to brand new drugs that are entering the market. A promising pipeline of immune-oncology treatments will likely deliver many more over the coming years. Across the globe, spending on cancers medicines hit an all-time high of $100 billion in 2014, up 33% from $75 billion just five years ago. In 2014, global spending on cancer drugs jumped 10.3% from the previous year, according to stats from the IMS Institute for Healthcare Informatics. This survey identified 200 new drugs forecast to be launched in the next five years, and has played out so far, with 2015 seeing launches of new specialty drugs by Novartis, GSK and AstraZeneca.

4. Mergers and Acquisitions Surge

The first half of 2015 has seen a $221 billion surge in pharmaceutical M&A. This follows 2014’s absolutely huge deals, such as Allergan’s $66 billion acquisition of Actavis. 2015’s high-profile acquisition bids so far include Teva Pharmaceutical Industries’ announcement that it’s buying Allergan’s generics business for $40.5 billion. Simultaneously it’s dropping its hostile bid for Mylan. Allergan says it’s buying the biopharma firm Naurex for $560 million. Why now? With the pressure to keep revenues growing and with the increasing costs of creating breakthrough medicines, corporations are jettisoning slower-growth divisions while acquiring profitable smaller companies.

5. Collaboration Between Pharma and Tech is Bubbling

With more data available and less duplication of efforts, the pharma industry can pool their R&D resources in order to develop effective, profitable, and innovative new healthcare solutions at a lower cost to the end user. Examples from the first half of 2015 include Roche and Qualcomm’s collaboration to improve remote patient monitoring – thanks to Qualcomm Life’s 2net Platform. AbbVie has announced a collaboration with Google’s Calico to use their pooled scientific and clinical development support and commercial experience to discover, develop and market new therapies for patients with age-related diseases. Sanofi and Google are also collaborating to improve diabetes treatment options. The first stage of the project involves collecting data. Then the team will use data analytics to build technology that helps patients successfully manage the disease, with supporting tools from healthcare professionals. To thrive in the increasingly competitive modern pharma market, companies will have to work together to develop innovative new products, services, and solutions, as well as share skills and expertise.

6. The Need for a Clear and Concise “Data Story”

Given the fact that healthcare costs continue to rise in 2015 and the FDA-influenced pricing model that gives more prominence to clinical value (using factors like the quality-adjusted-life-years rating), there’s a need – more than ever – for good data analytics to get information to payers and communicate clearly. As PwC commented in their Health Industry report, “The growing conflict between drug access and affordability will create fresh pressure for data that show these expensive medications work better than others and are worth the premium.” Communicating new evidence about drug value to key stakeholders – insurers, physicians and patients – requires additional skills and techniques. With new and sophisticated use of Big Data, pharma companies will be able to customize drug information much more quickly and easily, and demonstrate value in new and engaging ways.

7. Patient Engagement and Patient-Centricity

While patient-centricity and engagement are the focal point of industry discussions and pharma organization objectives, there remain concerns about how to successfully go about putting the patient first. From the goal to incorporate the patient’s voice into the business’ core system to the rise of sites that give voice to patient concerns, pharma is taking notice. On the other end of the spectrum, pharma’s patient engagement strategies include social media, platforms that bring with them another set of concerns about patient privacy and FDA regulations. If pharma is going to truly put patients at the center, they’ll need to figure out how to balance open discussions about patient issues and products, along with negative public opinions about pharma organizations.