Welcome from Lee Valenta and a look ahead to 2012
Welcome to our second edition of INSIGHTS, the quarterly eNewsletter from the life sciences team at OptumInsight.
2011 was a very exciting and positive year for us, as we transformed ourselves as part of OptumInsight—a member of Optum, the largest health care information and technology services company in the world—unifying all of our parent UnitedHealth Group’s health services businesses.
We are pleased with how we’re working to better help our life sciences clients deliver and succeed in today’s ever-changing and increasingly competitive global economic and regulatory landscape. OptumInsight’s life sciences team of scientists and researchers is the largest in the world solely dedicated to commercialization services for pharmaceutical, biotechnology, and medical device companies.
As we look forward to 2012, we know the life sciences industry faces a number of significant global challenges. I asked some of our top experts in our core focus areas—market access and optimization, regulatory development and compliance, risk management, and patient insights—to provide some insights about what we and the life sciences industry will face in 2012.
Regulatory globalization and convergence
The world really is “shrinking,” with increased globalization and worldwide reach, including the rising influence of emerging markets. There is a growing trend toward regulatory harmonization among drug and medical product regulatory authorities worldwide. For life sciences companies, this is increasing the importance of having a comprehensive strategy in place that bridges the regulatory, development, and commercial marketing functions across geographies to drive for global product success throughout the full lifecycle.
Despite the trend toward global harmonization, we continue to see that success in any given market will still be strongly impacted by local factors. This raises the stakes for global operations moving into new markets, and reinforces the importance of getting expert, locally focused support from our global OptumInsight life sciences team.
Mounting regulatory scrutiny of drug and device efficacy
Global regulators are increasing the pressure on life sciences companies to ensure the safety and efficacy of their products, as well as protect the manufacture and delivery of ingredients and products, regardless of where they are developed, manufactured, and marketed.
To accomplish this, comprehensive regulatory and risk management strategies are critical and must be developed and implemented as early in development as possible, and continue post-approval throughout the marketing lifecycle.
We see the drug safety and efficacy concerns supporting the trend of companies not placing “all their eggs in one basket” and diversifying their portfolios. But it also poses challenges as life sciences companies increasingly seek to develop products that satisfy unmet clinical needs. Currently, approximately two-thirds of all compounds under development in human clinical trials are tailored therapies, and half of those are oncology products.
The mounting focus on relative efficacy will increasingly impact the time taken to develop drugs—including the size, scope, and number of clinical trials required to win approval, the growing need for late phase, real-world monitoring to assure safety and efficacy, and the absolute importance of risk management programs to reduce the potential for post-marketing issues.
Growing importance of patient insights based on real-world evidence
Despite positive steps being taken by many life sciences companies, as we look to 2012, we see the need for more companies to change how they think about research and development. This means altering pipeline development from the earliest stages to benefit from data-driven insights and real-world evidence that will allow for a better understanding of what is needed to maximize regulatory, reimbursement, and marketing success, driven by a demonstration of substantial advantage and the value of new therapies over those currently available.
By using evidence mapping, based on proven real-world evidence and data-based analyses and projections, products can be developed in ways that will resonate with regulators and payers. Looking at compounds based on the value they’ll need to deliver enables companies to make smarter pipeline decisions earlier, getting ahead of more complex risk-benefit calculations.
The rising importance of health economics, including the importance of measurable health benefits, is at the core of a growing global move to value-based drug development and pricing models.
Efficacy and safety are no longer sufficient to assure that products find their way to the appropriate patient populations. Payers must be convinced that the products will be effective in real-world treatment settings and will provide good economic value.
This is more important than ever because payers have never before faced such a flood of tailored therapies entering the market at the same time. Tailored therapies (generally biologics) have higher price points because the development costs need to be spread over narrower patient populations.
Market access issues including value-based pricing
As the health care landscape transforms to improve access and emphasize collaboration, patients increasingly are at the forefront of changes. These include a trend to real-world data, especially patient-reported outcomes (PROs) in post-marketing studies as regulators and payers demand to see real-world effectiveness and value.
The relationship between value and price in medical treatment is changing, and we see the trend increasing in the years ahead. Two of Europe’s largest and most influential markets have made significant changes, with Germany now requiring value-based pricing on all new drugs, with the maximum price allowed for reimbursement of a drug linked to the value that the drug adds, over and above existing care protocols. The United Kingdom will launch a similar value-based pricing system in 2014.
This approach is being adopted elsewhere—including in the United States, first with private payers—as we continue to closely tie value and benefits to costs through payer reimbursement limits. A sound development and regulatory strategy will ensure that the data that demonstrate value are available as novel products and therapies enter the market.
Lifecycle management
With fewer “blockbuster” drugs coming to market and the move to focus on tailored therapies for smaller patient populations with unmet needs, lifecycle management is of ever-greater importance to life sciences companies seeking to get the most from all of their products on the market. While prescription to over-the-counter switches prior to patent expiry can sometimes help, OTC switches have limits, especially tied to safety and clinical management issues for many conditions, such as cardiovascular.
Looking at 2012 and beyond, we think companies need to take a broader, global view. We are working to help clients explore increasing market access in emerging markets, as incomes in Asia-Pacific, Latin America, Eastern Europe, and Russia continue to rise rapidly and fuel the demand for pharmaceuticals and medical products.
Changing the future of health care
In 2012, some 133 million people in the United States with chronic diseases will suffer significant, negative impacts on the quality of their lives. Worldwide, 80% of the estimated 35 million chronic disease-related deaths next year will occur in low- and middle-income countries, according to the World Health Organization. Premature deaths in emerging markets, including China, India, and the Russian Federation, are projected to cost billions of dollars over the next 10 years.
Chronic diseases need not carry such a heavy burden. The growing global threat from chronic diseases underscores how important it is for life sciences companies, providers, and payers to listen to patient needs in support of healthy behaviors, such as prevention services, and to address adherence issues to medication protocols that are critical to patient wellness.
The OptumInsight life sciences team believes that making the world’s health system work better is going to occur one community at a time, and that no single player can create meaningful and lasting change alone.
We are committed to working together in new ways across the health system to help shape a healthier future—bringing together consumers, physicians, hospitals, employers, insurers, government agencies, and, of course, life sciences companies.
Happy New Year, and thank you.
Lee Valenta
President, Life Sciences
OptumInsight