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European Biopharmaceutical Review

Gaining Approval

Research and development in leading pharmaceutical and biotech companies is once again delivering on its promises. The number of new molecular entities (NMEs) registered with the US Food and Drug Administration (FDA) has reached its highest level since 1996 (see Figure 1). Unlike in 2000, many of these biotech companies already have cash-generating drug products on the market. Those who do not are at least close to obtaining market authorisation for a new molecular entity.

However, after approval has been gained, there needs to be a launch. Many biotech companies are dealing with the full complexity of country-specific market access requirements, licence regulations and distribution platforms for the first time.

The number of launches last year was clearly above average, while 41 new drug applications have since been sent to the FDA. This is good news after years of painful analysis on low productivity, ongoing restructuring in R&D, commercial re-organisations, and increasing pressure on medical evidence and prices. 

Different Dynamics

In the past, it seemed natural for Big Pharma to launch NMEs in known business areas and territories. Customer structures were well known and new products could easily be integrated into existing clinical practice. However, with changed gross domestic product (GDP) dynamics, and specific local market access requirements, present adaptations need to occur. Companies must transform their launch approach to meet these challenges and ensure excellent results.

Today, after the rise of the emerging markets and the financial crisis related to the downturn of the Southern European economies, we need to acknowledge three different market types according to their GDP dynamics: the ever-growing emerging markets, for example China; mature markets with little growth, such as Japan, Germany and the UK; and declining markets, such as Greece, Portugal and Italy (see Figure 2, page 76). These dynamics affect types of market access challenges that are put forward by governments and payers.

Growing countries tend to limit growth of healthcare spending as a percentage of GDP and this means there is growth in the pharma and healthcare sector within these borders. Some countries also allow for patient co-payments, and thus use the positive GDP dynamics to foster pharma market growth from the private sector. While Brazilian and Russian patients are used to paying for certain medications directly out of their pockets, more and more private insurance schemes are being introduced in China to take over costs that the basic insurance system does not cover.

In contrast, the stagnating mature markets impose very sophisticated means in order to assess the value of drugs compared to existing therapies. The German Institute for Quality and Efficiency in Health Care (IQWIG) assessment following the Act on the Reform of the Market for Medicinal Products (AMNOG), as well as the UK logic of quality adjusted life year (QUALY), are perfect examples of this (1,2). Conversely, governments and payers in the declining Southern European countries have the tendency to introduce rigid and immediate price cuts, simply to keep the basic healthcare provision intact during times of crisis.

Market Access Challenge

Nothing is more important for pharma companies than the successful launch of a new patented drug. After more than 10 years of R&D and the investment of €1 billion, this is the most critical moment for economic success. Two parameters are key: the time to launch and the sales development during the product lifecycle.

The timing of the launch depends on both the speed of clinical development and the subsequent approval process. Once the market authorisation is reached, the company needs to tackle the necessary access hurdles quickly. In Europe, this means dealing with many different national and, in some countries, even regional authorities and processes. Even though the European Union market authorisation procedures have been standardised – and in most cases the European Medicines Agency is responsible for granting a Pan-European licence – many countries require local licences to get started with in-country sales. For larger companies, these processes are routine, but small biotech players launching their first NME run the risk of missing something important and losing valuable time. Payers and their scientific institutions then review the new drug’s clinical studies to determine their value in terms of efficacy, safety, quality of life and health economic impact.

National Differences

Every market has different timelines and a unique focus. For example, when launching a new product in the UK, different processes, such as the early assessment by the Scottish Medicines Consortium is key, since it provides the first direction to payers and shows how significant the value of the new drug is considered to be, with a strong impact on sales upturn for the manufacturer. In addition, UK payers demand a budget impact analysis in order to plan for expenditures related to the new drug, as well as health economic studies.

In France and Germany, early value assessments from central authorities have been introduced, which require slightly different approaches. According to the AMNOG law, companies need to provide evidence based on hard clinical outcome parameters, to prove that their NME provides significant value over the existing standard therapy. There is a highly strategic aspect to which comparator is selected by pharmaceutical companies in clinical studies to compare the effects of the new drug with, and what the IQWIG and Federal Joint Committee (G-BA) accept. The only way to mitigate the risks is to let these institutions participate in the design of the clinical studies at the beginning of Phase 3. There is a process of early advice in place, which companies can use to ensure they are aware of these facts and have understood the significant impact that the early involvement of payers can have on the commercial success of the new drug. However, statistics in Germany show that the majority of NMEs investigated by IQWIG have been rated as having no additional value over the existing standard therapy (see Figure 3, page 78).

Impact on Biotech

As many biotech companies enter partnership agreements with Big Pharma to have the new product commercialised, they also rely on them to manage the market access processes in the same professional way that they do the marketing and sales.

But what if it is essential to involve market access stakeholders and authorities as early as the late Phase 2 process in the development cycle? When negotiating their deal with Big Pharma, many biotech companies receive detailed questions around the market access potential of their drugs. They need to show that they have dealt with these development topics and what they have done to ensure the acceptance of authorities.

For the group of biotech companies with promising late stage pipeline candidates that want to commercialise their products themselves, this problem is even more severe. Before starting Phase 3 clinical trials, both groups of biotech companies should understand the full set of market processes and criteria for the target geographies of their drug candidate. They need to involve stakeholders in clinical study design decisions and trigger the options they may have in order to improve their position – for example, through fast-track processes and relaxed criteria for pricing and reimbursement for orphan drugs. 

Integrated Solutions

In addition to the market access challenge, there is a new trend to create integrated solutions. The idea is to provide additional value to the drug therapy by helping structure the processes of care, avoid frictions, double examinations and fully use the power of real-life treatment data. This becomes powerful if several key players of the treatment value chain are integrated into the solution, and if the data is used to empower the patient, facilitate diagnostics and applications, and support doctors and nurses to manage their daily workflow to come to the right decisions that will benefit the patient (see Figure 4).

Some companies are very good at creating a closed and integrated healthcare system, in which it is much easier for them to launch new products and services. Fresenius in Germany has executed this with the integration of medical devices, pharma products and private hospitals. Linde has recently created an integrated world of services around patients with chronic lung diseases: the company is not only delivering the necessary devices, but also operates hospitals, rehabilitation and respiration centres to support each stage of the patient’s journey.

A very similar strategy is currently implemented by Samsung Healthcare in Korea, while UK-based private health insurance Bupa is expanding into health provisions from the payer side. On top of this, these companies will create digital solutions that are powerful in consolidating and evaluating data, which provides plenty of opportunities to optimise the treatment quality process for each patient.

For biotech, this means that once they are marketing their own product, they are competing against these integrated structures of care. The more unique the new drug is and the more significant value it holds, determines the likelihood that it has to succeed and tackle the classic market access hurdles. But in close races with similar competitor drugs, additional services will have a decisive character in the fight for market shares. 

Key Success Factors

The key success factors in the new world addressing these trends are:

● Implement purchasing power-adjusted pricing schemes
● Search for win-win solutions with payers
● Create positive customer experiences with patients
● Sell solutions not products
● Adapt corporate strategy locally to seamlessly fit new therapy into system

In order to successfully implement these factors, creative thinking is needed. Companies need to hire the best people and create an environment of transparency, trust and freedom. A Chinese health insurance strategy requires sound knowledge of the local healthcare ecosystem with its specific incentive structures, regulations and customer needs. To develop a differentiated pricing strategy in Europe, sound knowledge of trade routes, invoicing pathways and regulations are essential. There is much more than a cash discount to offer payers for reimbursing groundbreaking new therapies. Elements of warranty, risk sharing, payment terms and free of charge services can be used to have an affordable package around a medical value. And it certainly helps to put the patient in the centre, to transform patients into consumers and create positive customer experiences.

Towards Launch Excellence

There are many innovative solutions to put on top of the standard launch plans that companies are used to running. Still, preparations need to start early, alongside the later development stages. A clear vision of the future healthcare ecosystem is thus essential. Market access and commercial departments have to work closely with R&D teams from Phase 2 in order to ensure the necessary health economic aspects are implemented into trial designs. Study participants should be interviewed on their daily disease-specific needs to develop targeted service solutions. Figure 5 demonstrates how these new concepts can be integrated into the basic launch approach.

Times are becoming more challenging, so testing creativity and putting more pressure on change and value provision is a necessity. Biotech companies will need to truly understand key success factors for success in their target markets. Big Pharma will have to transform their approach to launch excellence, implementing new business models for new groundbreaking therapies.


1. IQWIG, Institute for Quality and Efficiency in Health Care
2. AMNOG, Act on the Reform of the Market for Medicinal Products

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Dr Thilo Kaltenbach is a partner and head of the Arthur D. Little Healthcare practice in Central Europe. He is a registered pharmacist with a PhD in Pharmaceutical Chemistry. Over the past 11 years, Thilo has led more than 50 global projects in the area of commercial and operational excellence for leading pharmaceutical companies and rising biotech players. Many of these projects have been on launch excellence, where he has supported the launches of NMEs in different specialty indications.

Dr Thilo Kaltenbach
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