Balancing Innovation and Lifecycle Strategy in the Era of the IRA

In a video interview with Pharma Commerce, Murray Aitken, executive director of the IQVIA Institute for Human Data Science, explains the extensive process behind developing the “Global Use of Medicines Outlook Through 2029” report. The creation of this comprehensive resource spans several months and integrates proprietary IQVIA datasets, including the MIDAS (Market Intelligence Data Analytics Solution), market prognosis, and forecast link tools. The report combines robust data analytics with global expert insights to produce a holistic view of the pharmaceutical landscape.

Aitken emphasizes that a key part of the process involves gathering input from IQVIA’s network of experts across the world, each bringing localized perspectives on evolving trends in medicine use, access, and policy. These expert insights are then synthesized by an internal analytics team responsible for compiling the vast volume and value data.

In terms of metrics, the report estimates that 3.6 trillion defined daily doses of medicines were consumed globally in the past year. Additionally, the worldwide expenditure on medicines is projected to be approximately $1.8 trillion at list prices in 2024. Aitken notes that while there are some data gaps, IQVIA’s methodology includes filling in missing information using statistically sound models and expert validation.

The ultimate goal of the report is to provide all healthcare stakeholders—governments, policy makers, pharma executives, and researchers—with a clear, data-driven understanding of where medicines are being used, how frequently, and at what cost. Aitken concludes by expressing pride in his team’s efforts and the value the report brings in shaping discussions around global health policy, drug affordability, and resource allocation.

He also comments on how pharma companies should revise their market access and pricing models to align with the evolving landscape; strategies manufacturers should adopt to balance investment in innovation with lifecycle management in order to maintain sustainable growth; how the competitive landscape will evolve within these high-impact therapeutic areas, the role patient access and reimbursement play in shaping adoption; what he anticipates for the biosimilar adoption curve in key markets over the next five years; and much more.

A transcript of his conversation with PC can be found below.

PC: What strategies should manufacturers adopt to balance investment in innovation with lifecycle management, in order to maintain sustainable growth?

Aitken: There's always this balance between how much are you investing in the novel, breakthrough therapies and how much are you investing in maintaining presence of some of the older drugs, particularly as they lose exclusivity. I sort of come back to the fact that manufacturers overall have really been doubling down on their strategic focus on innovation. If you look across the largest companies over the last five, 10 years, they've all narrowed their focus in on innovative medicines, and ultimately, that's where they believe their sustained success is going to come from.

That being said, when a drug loses exclusivity, of course, that’s where we see the introduction of generics or biosimilars. I think we do see different strategies by different companies. Some definitely try to cling on to the originator drug as long as they can, and through contracting and other mechanisms, maintain that share; others are trying to migrate patients on to the next generation of innovation. I think at the end of the day, those companies that are focused on innovation should focus on innovation, and when a drug comes to the end of its life, recognize that and also recognize the important role that generics and biosimilars do play in creating a sustainable marketplace for both new and old medicines.

There’s a new factor here in the equation, and that of course, is the Inflation Reduction Act (IRA) as it applies to the US, where we now have this finite period—nine years for small molecules, 13 years for biologics—before a maximum fair price may be determined for your drug by CMS. That's clearly putting more pressure on manufacturers to achieve the return on their investment in innovation within that window, and we know that this is affecting the strategy for companies, both when they introduce their drugs, but then also as they manage the lifecycle, because of the finite duration that they that they have under the IRA.