OR WAIT null SECS
Lists are all the rage now, both as a start-of-the-New-Year exercise and as an attention-getting element of online publishing. We present our list of the past year’s news (which will inform much of industry activity into this year) with these caveats: as its name suggests, Pharmaceutical Commerce is focused on commercial activity, and not on fundamental medical research; and editorially, we pay a lot of attention to how drugs move through distribution channels, and the accompanying marketing activities for those channels. Our data come from tracking hits to stories on our website (we publish everything that appear in print, online, as well as online-only coverage).
With that out of the way, here are our top attention-getters:
1. Drug Quality and Security Act of 2013
Even purely general-interest news rankings put the Affordable Care Act (aka Obamacare) near the top of many lists; it was an obsession in Congress for a good part of the year, and then the rollout in the fall had major hurdles to overcome. Looking back we find that our coverage of ACA informs a wide range of seldom-reported elements (hospital quality-of-care measurements; outcomes research; the legal status of consumer drug coupons), but the overall message in 2013 for pharma is—there is lots of speculation about its impact on the industry, but few certainties. The new patients, the new insurance plans and the new prescribing practices are yet to be understood.
What is known now, and was primarily hashed out in the same halls of Congress, is the Drug Quality and Security Act (DQSA), which culminated a decade-long effort to standardize drug-distribution regulations nationally; ended the January 2015 California “e-pedigree” deadline; and—not coincidentally—imposed some regulatory rigor around compounding pharmacies (see below). Among other things, DQSA will change drug labels, will pave the way for centralizing data collection of where drugs go in distribution; and who (manufacturers, distributors, logistics providers and pharmacies) is handling them. Passage of the law was reported here; envisioned implementations are here, here and here.
2. Oncology/specialty pharmaceuticals
The specialty pharmaceutical market is dominated by oncology, representing well over half of expenditures; moreover, as PhRMA reported in 2012, there are nearly 1,000 drugs and vaccines in development for oncology. Our reporting in this therapy area showed the evolution of clinical pathways for cancer treatment; also the rise of biomarkers and related diagnostics. Notwithstanding the progress in the field, the Institute of Medicine reported that cancer treatment is “a system in crisis” due to rapidly rising costs, and that those pathways and clinical practice guidelines generally come up short compared to recommended practices.
In the specialty pharma arena generally, the importance of the right “channel partners”—trading partners by which access to the range of distribution channels is obtained—was a hot-button issue.
3. Hub services/patient access programs (PAPs)
In past years, specialty pharma companies learned the value of assisting patients with reimbursement processes to gain access to drugs; that evolved into overall PAPs, and is now in the process of widening yet farther, into coordination of care, financial support, keeping patients on therapy, and supporting patient advocacy programs to continue to bring new treatments (especially for rare diseases) onto the market. Thus, what is becoming known as hub services. These services, available from a growing variety of service providers, specialty pharmacies and specialty distributors. A looming problem area is figuring out whether all or part (or none) of these manufacturer-supported services will be available to patients newly insured under the Affordable Care Act.
4. Drug delivery technologies: injectables, transdermal, compliance packaging
Transdermal drug delivery and compliance (unit-dose) packaging are not new, but garnered new attention in 2013. In both cases, the importance of aligning patient convenience and preference with the drug therapy is an important factor. Compliance packaging has been shown to improve patient adherence; meanwhile, new technologies for delivering drugs transdermally are changing the range of formulations suitable for this form of drug delivery.
At the same time, the importance of what is arguably the most patient-unfriendly form of drug delivery—injection—is evolving rapidly. Autoinjectors and pens are growing in significance, in part because they take drug administration out of the doctor’s office and into wherever it is convenient or appropriate for patients to self-administer—thus saving on healthcare costs for both the patient and the payer.
5. Sales force automation (SFA) and CRM analytics
The wave of adoptions of interactive tablets—specifically the Apple iPad—continues to revitalize field sales practices. In 2013, leading vendors of SFA and related customer-relationship management (CRM) systems expanded their scope to the Microsoft Windows platform—reacting to the reality that many sales forces employ tablets for demonstrations, but still rely on laptops running Microsoft Office for internal communications and reporting. Meanwhile, CRM systems are evolving to go beyond simple call tracking and reporting, to multichannel analytics, reflecting data gathered from many types of interactions with physicians (social media, e-detailing, e-sampling and others)—true “closed loop” marketing.
Patient adherence figures in several of these Top 10 items, such as hub services and compliance packaging. But in 2013, the realization that a) poor adherence affects pharma sales and b) healthcare providers are being rated on quality of care, for which adherence is one measure, both hit home. A late-2012 study from Capgemini found a near $200-billion “adherence gap” between actual and potential pharma sales in the US market; and as NEHI, a Boston healthcare-policy group noted, the US Congressional Budget Office now factors savings in overall healthcare costs into its budget estimates (whereas, previously, higher medication usage simply registered as higher pharmaceutical costs). Manufacturers, pharmacy benefit managers, payers and providers are all uniting in a focus on improved adherence.
7. Patient safety
Patient safety is an ever-present concern for manufacturers, who are obliged to perform adverse-event reporting and to ensure safe delivery of drugs to dispersers. But a study sponsored by Becton Dickinson found that there is as much as $5.1 billion in avoidable costs from medication errors in administering injectables. And outside influences—the appearance of counterfeit cancer drugs in doctor’s offices—were one of the supply-chain-security worries that spurred the passage of DQSA (see above). But the biggest patient-safety issue, hands down, was the effects of tainted, compounded steroids, distributed nationally, causing over 750 injuries (including, at latest count, 64 deaths). That incident led directly to passage of DQSA, which gives FDA clearer authority to inspect high-volume compounding facilities.
8. Regulatory compliance: aggregate spend reporting, REMS, sample accountability
Pharma is a “highly regulated” industry, and has been for years, and 2013 saw the expansion of this regulation into national-level reporting of expenditures on prescribers (now becoming an international standard); data collection began in 2013 and will be reported publicly for the first time this year. The REMS (risk evaluation and mitigation strategies) program, begun under the 2007 FDA law, has evolved into the concept of “class wide” REMS programs, affecting many of the drugs in specific drug classes, and necessitating collaboration among competing manufacturers. Meanwhile, compliance with the Prescription Drug Marketing Act (PDMA) continues to be a focus of the managers of sample-accountability programs.
9. Cold chain logistics
Any drug that requires refrigeration—including most if not all biologicals—during transportation and storage requires special packaging and handling by manufacturers and trading partners. In 2014, the industry saw the formal adoption of European Union “good distribution practices” (GDPs) rules. Service providers—including third-party logistics firms, wholesalers, air and ground carriers and others, responded with major investments in new capacity by FedEx and others, and new technology.
10. Wholesaler internationalization and collaboration
A dramatically new level of collaboration between the Big Three wholesalers and their traditional customers—retail pharmacy—was kicked off when AmerisourceBergen announced a 10-year deal with Walgreens; Walgreens happens to be simulataneously involved in an international merger with the UK’s Alliance Boots wholesaler/retailer. That spurred McKesson to initiate a purchase of Celesio, a leading wholesaler and retailer in Germany (still up in the air at the beginning of 2014), and led to a partnership between Cardinal Health and one of its leading customers, CVS Caremark (Cardinal also has an earlier, significant purchase of a distributor in China). This consolidation of effort is expected to make life tougher for generics manufacturers, who are facing a smaller number of major, unaligned customers; it also has the potential to bring US-style marketing services to other parts of the world.