Speeding Time to Market Cost-Effectively

With the recent news of pharma’s frustration with more price controls around the world, John Avellanet, frequent Biotech Blog poster and author of Get to Market Now!, is grinning right now for having predicting a strengthening of such price controls back in 2009 and in 2010.  Here is a brief interview with John, covering price controls, comparative effectiveness, personalized medicine, and other industry trends.

BiotechBlog:  In your book, on p. 32, you noted an expectation for the role of NICE and other cost-efficiency-driven healthcare agencies to expand. What’s changed since then?

John Avellanet:  Last year the new government in the UK announced it was planning significant changes to the role of NICE and a shift to “value-based pricing.” Pharma firms were very excited about this change, but as I told my regulatory intelligence newsletter subscribers in October last year, “Value-based pricing will price drugs according to their clinical value to patients.” In other words, as I pointed out in Get to Market Now!, cost of a drug is being directly equated with efficacy and safety. Medicine approval and reimbursement simply has to be based on efficacy and safety. The greater the efficacy and safety of the drug, the greater the price.

BB:  So you see this trend increasing?

JA:  Without question. The US’s recent initiation of comparative effectiveness studies under the aegis of the Institutes of Medicine, and the pilot parallel review programs of FDA and CMS – these are just baby steps toward more value-based pricing. Let’s face it, you can’t have a situation where the latest product is only 5% better but comes at a 75% premium – not in this economy. Private insurers and prescription management firms in the US started a number of these comparative studies last year because if they don’t get healthcare costs under control, they’ll go out of business.

BB:  What driving this cost-containment push? The economy?

JA:  Well, a lot of factors are actually converging – the weak global economy is only speeding the problem to be right now rather than 2 or 3 years from now. This was always going to happen because you have many powerful trends coming together:  costly knowledge specialization, aging demographics, growing globalization, diversion of regulation and technology, and so on. I spend significant time looking at a lot of these trends in the book – the entire first half of Get to Market Now!

If you look at all these trends together, it becomes pretty clear that no matter how you slice it, healthcare costs simply have to be capped. Now, there’s lots of ways to do this, but that’s not the point of the book.

Instead, with Get to Market Now!, I tried to answer a more pressing question for pharma and biotech firms:  “How can we still bring new innovative medicines to market for less cost?”

BB:  A lot of companies out there are offering specific solutions they claim will speed time to market and reduce development costs. How does the book handle this?

JA:  I avoid all those specific one-offs claiming to be silver bullet solutions. If it were that easy, we wouldn’t have this challenge, would we?

I walk readers through what’s worked for other industries faced with similar challenges, why it’s worked, and how to apply these lessons in pharma today. And I offer a lot of examples of drug and biologics firms successfully applying these techniques. There’s over 113 different tactics in the book that work, so readers can pick and choose what will work best for their organization. I’ve also got discussions with FDA officials, case studies and so on.

BB:  So the book isn’t just about the dialogue, it’s about what has worked for other and what is working in pharma and biotech today?

JA:  Correct. And thankfully, a growing number of industry executives, venture capitalists, and industry publications have deemed Get to Market Now! a success. It’s certainly generated a lot of interest because of both the analysis of the trends we face today and all the various tactics the book lays out, from using voice of the customer in preclinical, to quality by design throughout development and the post-market, to taking advantage of Foucault’s panopticon in regulatory compliance. The key is to use the regulatory constraints to your advantage.

I always say, “Think of regulations and reimbursement rules as the boundaries of the field. Now within the boundaries of the field, you can play any game you want or any combination of games. But the regs are the lines you can’t cross. So within the boundaries of the field, play to your strengths and everyone will cheer.”

BB:  Do you see these tactics also applicable to personalized medicine?

JA:  Yes, and perhaps even more so.  Remember, with a one-size-fits-all drug, you’ve got a huge percentage of the world’s population as potential customers. With personalized medicine, your potential customer base shrinks dramatically. If you can’t streamline development and put into play as many of the tactics in the book today when you’ve at least got the revenue base from a one-size-fits-all drug portfolio, how are you going to put them into play when you’re revenue has shrunk by 80%?

That’s the worry of a lot of the executives that bring me in to talk them through how to better apply these tactics to their companies. We know the tactics work – all the historical data from other industries proves it. So how can we start tailoring and applying them today, right now, before it’s too late?

For more on Get to Market Now! Turn FDA Compliance into a Competitive Edge in the Era of Personalized Medicine, visit the book’s dedicated resource site for readers, www.Get2MarketNow.com. Mr. Avellanet has made the first chapter free for download, plus a number of free mini-tutorials on some of the tactics from the book. The book is available through Amazon.com, Barnes & Noble, and the publisher, Logos Press.

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  1. John Avellanet
      September 27, 2011

    Just a quick note – the NY Times just published an article on how health insurance in the US is continuing to skyrocket as insurance firms cope with higher medical costs stemming from all the items discussed in the book: http://www.nytimes.com/2011/09/28/business/health-insurance-costs-rise-sharply-this-year-study-shows.html

    I think this just continues to emphasize my original starting point for the book – we don’t have a healthcare crisis, we have a healthcare *funding* crisis – and one that’s starting to trickle down onto pharma, biotech and device firms.