IMS Perspective on Specialty care Sarah Rickwood VP, European Thought Leadership
Agenda
• Shift to specialty medicine
− A changing landscape − Pipeline and approvals − Regulators and Payers − Bundling of products and services: adding value to patients
• Innovation in speciality − Oncology: The largest therapy area for specialty medicine − Paying for innovation in specialty
2
The specialty segment of the market will be the dominant story to 2020
• By 2020 it’s likely that 75% of the world’s top 20 pharma will be partially or wholly specialty dominated
• New specialty drugs in previously primary care areas
Big pharma is specialty dominated
• New biologics for asthma, COPD, dyslipidaemia, Alzheimer’s, Parkinson’s, Heart Disease
Specialty products enter genericised and primary care areas
• Increasing orphan drugs approvals means that the total orphan drug market becomes significant as a budget item
Orphan drugs major share of non generic
spend
• Oncology continue to be the single most valuable therapy area, and new immunotherapies among the largest selling
Oncology passes $100bn in value by
2018
Specialty products defined as medicines that treat specific, complex chronic diseases with four or more of the following attributes: Initiated only by a specialist, require special handling and administration; unique distribution; High cost; warrants intensive patient care; might require reimbursement assistance
3
Specialty becomes 25% of market value – and is especially important for big pharma
Global: specialty (*) sales (billion US$), list price, excludes rebates and discounts
(*) IMS definition: Specialty products defined as medicines that treat specific, complex chronic diseases with four or more of the following attributes: Initiated only by a specialist, require special handling and administration; unique distribution; High cost; warrants intensive patient care; might require reimbursement assistance
900
800
700
600
500
400
300
200
100
0
1,000
Sal
es,
US $
bn
2014
901
25%
2004
492 16%
84%
75%
Specialty Traditional (Primary)
Source: IMS Health, MIDAS, MAT June 2014, Non Rx Bound
Top 15: specialty (*) sales (billion US$), list price, excludes rebates and discounts
2014
441
36%
2004
304 19%
81% 64%
4
9%
17%
0%
2%
4%
6%
8%
10%
12%
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 G
row
th,
LCU
S$
Sal
es,
US
$ b
illio
ns
Biologics Sales Biologics Growth Total Pharma growth
Biologics, which are primarily specialist, outperform the market and focus on developed
5
Biologics growth outpacing that of total pharma
Source: IMS Health, MIDAS, MAT Q2 2014, Rx; Brazil and Mexico Non Retail Sales are included; Share of growth in LC$
6,6% 9,8%
12,6%
21,2%
49,8%
Japan Pharmerging ROW EU5 US
2,7% 10,2%
8,9%
15,3%
62,9%
Biologics – Share of sales
Biologics – Share of growth
Global market trends Sales and Growth
Biosimilars/NOBs currently a very small element of developed markets- key impact is in pharmerging
6
Mature 8 markets biologics split
MAT 2012:
Pharmerging* markets biologics split
MAT 2012:
Source: IMS Health MIDAS Dec 2012. (*) It includes 16 Pharmerging markets. Mature 8 is EU5, Canada, US and Japan.
$137 Bn
0.4%
99,6%
Biosimilars
All other biologics
10.7%
89,3%
NOBs
All other biologics
$15 Bn
3-5%
95-97%
NOBs/biosimilars All other biologics
Global market by 2017:
$205-235 Bn
*NOBs: Non Original Biologics. Biologics defined as according to IMS MIDAS definition as macormolecules of natural original or based on natural origin macromolcules. Non Original Biologics defined as biologics which are neither original nor have followed a dedicated biosimilar approval pathway
Expect variations at the therapy area, country and molecule level
7
Filgrastim almost resembles small molecule generic performance in some countries
0%
10%
20%
30%
40%
50%
60%
70%
80%
ITA GER FRA SPA UK NE
% U
pta
ke,
DD
D
Biosimilar uptake across TA/Countries MAT 12/2013 (Volumes, DDD)
ALL Filgrastim Somatropin EPO
130 104 102 86 56 Values, M$
Source: IMS MIDAS, MAT 12/2013. To calculate uptake, reference and non reference products have been included. (*) size: MAT 09/2014; Netherlands: only retail panel available (Somatropin uptake not captured)
2.6
Infliximab, the first European anti-TNF biosimilar, has launched at up to a 39% list price discount
Expected biosimilar discount
Likely Access of Biosimilars (given value proposition and data is sufficient)
Payers KOLs
~30% 20-30% • Local: Hospital purchasing of anti-TNFs will select the cheapest molecule (brand or biosimilar)
20-30% 10-25% • National/regional: Reference group likely to be formed; G-BA may push
for biosimilar use by applying % target quota for new patients; additional rebate agreements are possible
~30% 5-30% • National/regional/local: With a significant discount quick AIFA process
and regional tendering to push biosimilars as preferred drugs; potential for step therapy through biosimilar
20-40% ~25-50% • Regional/local: There is expected to be pressure to recommend biosimilars and step therapy is likely
10-30% 25-30% • Regional/local: There is expected to be no differentiation between the brand and the biosimilar so the cheapest product will be used
Celltrion is offering Infliximab at a 39% discount vs. remicade in Norway. This is above and beyond the average reductions we have seen in Europe so far and shows
biosimilars manufacturers’ willingness to take the European market by storm and boost uptake at the expense of margins
8
Recent most successful launches are mostly specialist and for focused patient populations
Achieving >$1.0bn with a launch in the 5 year period 2008 - FY2013
ü All launched into areas of high need: • Diabetes • Multiple Sclerosis • Osteoporosis • Venous Thrombosis • Macular Degeneration • Psoriasis/Crohn’s • Prostate cancer • Schizophrenia • Hepatitis C
ü Specialty Products
dominate
Gilenya (Novartis) Launch Sept 2010
($1.934bn, FY2013)
Source: Company reported information. IMS Health Dec 2013, first word and IMS analysis. * Sovaldi included (launched in 2014)
Victoza (Novo Nordisk) Launch June 2009
($2.071bn, FY 2013)
Stelara (J&J) Launch Jan 2009
($1.504bn, FY 2013)
Eylea (Bayer/Regeneron) Launch Dec 2011
($1.851bn, FY 2013)
Prolia/Xgeva (Amgen/GSK) Launch May 2010
($1.763bn, FY 2013)
Xarelto (Bayer/J&J) Launch Sept 2008
($2.124 bn, FY 2013)
Zytiga (J&J) Launch May 2011
($1.698bn, FY 2013)
Invega Sustenna (J&J) Launch August 2009 ($1.248bn, FY 2013
Five are biologics
Incivek/Incivo (Vertex/J&J) Launch May 2011
($0.983bn, FY2013)
Sovaldi(Gilead) Launch Dec 2013
($2.27bn, Q1 2014*)
9
© 2014, IMS HEALTH INCORPORATED OR ITS AFFILIATES. ALL RIGHTS RESERVED
And specialty areas dominate the late stage pipeline, with Oncology leading
10
Source: IMS R&D Focus, Nov 2014
29
0
50
100
150
Oph
thal
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ogy
GI
Prod
ucts
137
Dia
bete
s
18
Resp
irat
ory
18
Onc
olog
ics
19
Blo
od c
oagu
latio
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19 19 22 23 30
40
# A
ctiv
e Pr
ogra
ms
indi
catin
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erap
y cl
ass*
Der
mat
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ics
Vacc
ines
Oth
er C
NS
Pain
Ant
ibac
terial
s
Most Active Therapy Areas in the Pipeline (Phase III to Registered)
* Some programs in pipeline are multi-indicational and are assigned to multiple ATC classes
© 2014, IMS HEALTH INCORPORATED OR ITS AFFILIATES. ALL RIGHTS RESERVED
The FDA continues to be first to approve specialty medicines in common between the FDA and EMA
11
61 of these are specialty medicines
45 of these are primary care oriented medicines
54 have first approval by FDA
7 have first approval by EMA
25 have first approval by FDA
20 have first approval by EMA
There have been 106 new drug approvals in common between the FDA and EMA in the 2007-2013 period
That the FDA is first to approve does not mean the EMA is necessarily slower as this does not consider the filing date with the respective agencies and many pharmacos file at different time points with the FDA and EMA. But what it clearly means is that patients in the US are getting faster access to specialty medicines
Source: EMA Website, EU Commission website, FDA website. It includes molecules only visible on IMS Health MIDAS.
The shift to specialty medicines also changes drivers of profitability for other healthcare players
12
Specialty medicines
Traditional medicines
Past Evolution
Retail market Hospital market
Increasing Specialty investment
Payor action
Pharma Shift
Channel shift
Value Chain IMPACT
Product Polarization Retail Specialty distribution - Most volume is low cost GX packs - Most of value is high cost packs
- Fewer dispensing points - Fewer distributors
More stringent regulation of supply chain margins and discounts à Pressures could result in drug shortages
Moving dispensing to hospital enable Payors to leverage price negotiations à Hospitals are bearing higher costs
Market development is forcing manufacturers to look to new areas for growth/profitability. They are looking for a more efficient supply chain and ways to add
value via services
Pharma
- Pharmacies focusing on discounts while wholesalers consolidating, expanding, exiting certain countries, vertically integrating, investing in specialty distribution etc.
Pharmacy/Wholesalers
Companies seek to add value with bundles of products and services Wide range of approaches and players
Beyond the product
Product bundled to service
Patient co-pay support
Education and training
Delivery of medication/other
patient care
Product bundled to other products
Package of products for
single disease
Package of products for
multiple diseases
Rx only or mixed Rx/OTC
packages
Product bundled to service and
product
Combinations of product/service
packages
• Product bundles occur as a function of therapeutic protocol in areas such as cancer
• In other diseases such as diabetes, patients will use a variety of products and services to manage their disease
• Bundles are often offered by distributors/healthcare providers/insurers
• Product bundling has proven controversial in the past
13
But focused around a single product Examples of Value-Add Product plus service programs
Stelara
Remicade
Humira
14
Agenda
• Shift to specialty medicine
− A changing landscape − Pipeline and approvals − Regulators and Payers − Bundling of products and services: adding value to patients
• Innovation in speciality − Oncology: The largest therapy area for specialty medicine − Paying for innovation in specialty
15
Oncology spending growth in the total market reaches $100 billion by 2018
16
0
20
40
60
80
100
2008 2013 2018
US EU5 Japan Pharmerging ROW
$710 -730Bn
$220Bn
$48Bn
$65Bn
$85-115Bn
CAGR 2014-2018 7-10% CAGR 2009-2013 6%
Source: IMS Health Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014
GLO
BAL
SPE
ND
ING
US$B
N
7% 14% 6%
5%
6%
7-10%
11-14%
7-10%
7-10%
7-10%
Oncology is the largest therapy area in developed, fourth largest in pharmerging
New transformational Oncology launches are seeing sales uptake match that of early blockbusters
17
0 1 2 3 4 5 6 7 8 9 10 11 120
50
100
150
200
250
300
Quarters Post-Launch
Glo
bal S
ales
(LC
US$
Mill
ion)
ZYTIGA
Source: IMS Health, MIDAS, MAT Jun 2014. Oncology (L1&L2&V3C&Revlimid&Xgeva&Proleukin&Pomalyst). Europe doesn’t include Russia and Turkey
Uptake of Selected Targeted Oncology Launches (launch year 2010 onward)
Zytiga had strongest uptake of any onco drug launched in last 4yrs
JEVTANA
PERJETA XGEVA
VOTRIENT
JAKAVI KADCYLA XTANDI
ZELBORAF
YERVOY
Zytiga is one of the strongest oncology
launches of all time: and has already turned over >
$1bn in Europe alone since launch
But what succeeds in oncology varies significantly between countries
18
US JP DE FR IT ES UK CA
1 AVASTIN AVASTIN ZYTIGA ZYTIGA SUTENT AVASTIN ZYTIGA ELOXATINE
2 ELOXATINE ELPLAT SUTENT AVASTIN AVASTIN TARCEVA YERVOY ZYTIGA
3 XGEVA ERBITUX YERVOY ERBITUX ERBITUX ERBITUX ZELBORAF YERVOY
4 ZYTIGA VECTIBIX NEXAVAR TARCEVA VIDAZA VIDAZA SUTENT SUTENT
5 YERVOY IRESSA AVASTIN SUTENT TARCEVA ZYTIGA VOTRIENT ELIGARD
6 PERJETA XGEVA TARCEVA ALIMTA ALIMTA SUTENT SPRYCEL AVASTIN
7 ERBITUX NEXAVAR XGEVA XGEVA NEXAVAR NEXAVAR JEVTANA XGEVA
8 TARCEVA VIDAZA ZELBORAF YERVOY VELCADE VELCADE TASIGNA TARCEVA
9 TREANDA TEMODAL M-CO ERBITUX NEXAVAR IRESSA ALIMTA VELCADE
10 ALIMTA AFINITOR VIDAZA SPRYCEL DEPO-ELIGARD
11 SUTENT VOTRIENT
12 ABRAXANE VIDAZA
Excellent oncology launches since Jun 2002 (Top 25 percentile value at Q8)
Source: IMS Health, MIDAS, MAT Mar 2014. Excellent launches based on top 25 percentile of any onco drug launched since June 2002.in that country. Note Xgeva is a supportive therapy (denosumab for hypercalcaemia of maliganancy). Osteoporosis sales have been excluded.
If market reward is a valid measure of consensus on value, Zytiga, Avastin, Yervoy and Sutent are valued across countries, but otherwise picture is highly variable – why?
Avastin rejected by NICE – why it does not appear in UK
Recent examples indicate payers are penalizing new products for lack of H2H data in Europe
19
France Germany
• Insufficient SMR – not granted reimbursement
• Re-assessment once active comparator data is available
• No proven additional benefit given lack of data vs. ‘appropriate’ comparator in 80% patient sub-population
• Entered negotiations for pricing reimbursement with sick funds
Not reimbursed Negotiations necessary
Companion diagnostics are expected to play a large role in future drug selection
20
Prognosis and chemo –therapy evaluation
Companion diagnostics
Early detection/ Screening
• Assays must have very low price to gain widespread use; unattractive for IVD developers so low investment area
• Controversies over PSA mean new tests will be treated with apprehension
• Precise dynamics unclear, however tests are too early in disease pathway to have significant immediate effects on drug treatment
• Launches in new tumour types (CRC & prostate) as well as increased competition for existing tests
• Though pipeline is busy, many developers lack size and financial requirements for effective product launch
• Lack of clarity surrounding regulatory environment of diagnostics may hinder any upcoming product launches
• Area of significant focus for major players in oncology with more new products having companion Dx
• Can increase physician willingness to use product
• Expensive targeted therapies will increasingly require companion Dx to demonstrate value
• Recent examples: ― Zelboraf - $9,400 per mo.
― Xalkori - $9,600 per mo.
1 2 3
Rationale Rationale Rationale
Low impact on drug spend
Small decrease in drug spend for specific tumour types
Will facilitate launch of expensive drugs
Sources: PWC Diagnostics report 2011, IMS Consulting Group
Agenda
• Shift to specialty medicine
− A changing landscape − Pipeline and approvals − Regulators and Payers − Bundling of products and services: adding value to patients
• Innovation in speciality − Oncology: The largest therapy area for specialty medicine − Paying for innovation in specialty
21
Market access challenges (and increasingly specialised launched)
22
75 85
5
6
7
60 70 80 35 90 0
1
2
3
4
8
5 15 25 45 55 65 40 50 0 10 20 30
Luxembourg Austria Belgium
Bulgaria
Croatia
Czech R.
Estonia
Finland Greece
Hungary
Ireland
Latvia Lithuania
Netherlands
Norway
Poland
Portugal Romania
Russia
Slovakia
Slovenia
Sweden
Switzerland
Turkey
France
Germany
Italy
Spain
UK EU Average 3.9%
EU Average n49
EU Average 2.9%
EU Average n46
NCEs
(20
09-1
3) M
arke
t Sha
re o
f To
tal R
x M
arke
t N
CEs
(20
04-0
8) M
arke
t Sha
re o
f To
tal R
x M
arke
t
Number of NCEs (2009-13)Launched Number of NCEs (2004-08)Launched
Countries with high # NCEs and low
penetration
Countries with low # NCEs and low penetration
Countries with low # NCEs and strong penetration
Countries with high # NCEs and strong penetration
Country Innovation profile (NCEs launched vs. Market Share achieved)
Other European EU5
Source: IMS Health, MIDAS, Year 2013, Rx only.
Europe
On average 2.4 fewer NCE’s approved in each European country
23
Very few countries have seen any growth in share/NCE – Netherlands is one of them
-0.09
-0.08
-0.07
-0.06
-0.05
-0.04
-0.03
-0.02
-0.01
0.00
0.01
0.02
0.03
0.04
10 8 6 -14 0 -2 -4 -6 -8 -10 2 -12 -26 12 4
Estonia
Czech R. Croatia
Belgium Austria
Bulgaria
Cha
nge
in S
hare
/NCE
Change in number of NCEs Launched
UK
Turkey Switzerland
Sweden
Spain
Slovenia Ireland Russia
Romania
Portugal
Poland
Norway Netherlands
Luxembourg
Slovakia
Latvia
Italy
Hungary Greece
Germany
France
Finland
Lithuania
EU5 Other European
EU Average n-2.4
EU Average -0.02%
Source: IMS Health, MIDAS, Year 2013, Rx only.
Payer willingness to fund often relies on proving value in treating remaining unaddressed symptoms
Payer perceived unmet need
Behavioural adjustment required?
Surgical/ other interventions
required?
Drug treatment required?
Cure disease?
Address progression/ mortality?
Relieve remaining
symptoms?
Severe remaining
symptoms?
Moderate remaining
symptoms? Mild remaining
symptoms?
> >
> >
Common field of play - success
most challenging for Pharma
Symptom level of unmet need
Type of unmet need
Pharma ability to revolutionize
treatment paradigm = high
probability of funding
24
Even in oncology Payers are demanding more
25
Source – Published payer assessments (CT reports, G-BA assessments, NICE guidance). From Unravelling payer perception in oncology• P&8 MA Forum June 2013
As specialty becomes a dominant cost driver, addressing payer concerns will be key
26
• Comparative data strongly preferred: almost mandatory in Germany, France and the UK to support P&MA
• HTA becoming one of the biggest influence of P&MA in Europe • In USA priority reviews ease go to market challenges
Clinical Evidence
Pricing flexibility
Level of cooperation
Health Information Technology
• Increase of “innovative” reimbursement systems e.g. Pay for performance. Risk sharing etc.
• RWE to become more important than clinical trial data in determining sustained market access
• More open data access policies spearheaded by Europe
• Increasing cost controls throughout Europe • In Pharmerging Markets, payers increasingly demand significant discounts for
therapies in areas of high unmet need, and threatening IP if negotiations unsuccessful
• Price premiums are more and more based on added value vs. current price paid • Free pricing and price increases to remain a feature of the US market, but
discounts/rebates increasing to ensure access
• Increased number and type of stakeholders involved in the US with shift of budget risk to providers
• Higher international cooperation and information gathering between payers • Increase of international reference price systems
Source: IMS Consulting Group
As specialty dominates the future it also changes the healthcare paradigm
• Wide range of primary care products for a single healthcare stakeholder: the family doctor/general practitioner
• Focus on the drug: genericisation seen as the primary route to cost savings
• Broad labels, open patient populations: products maximise value by being “good enough” for largest possible population
• Specialty focuses on a narrower therapeutic set but a much broader group of stakeholders: multiple specialists, payers, providers, and patients
• Focus on patient value add: more sophisticated cost benefit arguments, comparative trials, RWE and broader impact
• Narrow labels, highly defined patient populations: products maximise value by being best treatment for highly specific populations
27
Primary Past Specialty future
Thank you Sarah Rickwood [email protected]