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Specialty Pharmaceuticals: Driving Industry Growth into the Next Decade

Published by: CHI Insight Pharma Reports

Published: Oct. 1, 2006 - 134 Pages


Table of Contents


CHAPTER 1. INTRODUCTION: THE ASCENDANCY OF THE PRIMARY CARE MODEL


Definition of a Specialty Pharmaceutical


1.1. Background: Evolution of the Industry’s Focus on Primary Care Markets

1.2. The Impact of the Blockbuster Model on the Current Structure and Economics of the Pharmaceutical Industry


R&D

Sales and Marketing


1.3. The Uninsurable Risk of High-Volume Drugs

1.4. The Stirrings of a Shift


Increased Spending on Specialty Drugs

A Surge in New Product Development of Biologicals




CHAPTER 2. THE EMERGING PORTFOLIO BALANCE

2.1. Drivers behind Big Pharma’s Interest in Specialty Markets


Cost Reduction

Clinical Development

Comparative Approval Rates: Large vs. Small Molecules

Sales and Marketing

Pharmacovigilance

Incremental Revenue

Risk Management

R&D

Post Market

Public Image


2.2. Hoffman-La Roche Case Study: The Big Pharma Specialist


Background

Evolution of Roche’s Specialty Care Strategy

Roche’s Financial Performance


2.3. Other Examples from Industry


Pfizer: Buy It and Sell It

Bayer: Hunker Down and License

Eli Lilly: Build It Up from Scratch




CHAPTER 3. THE WORLD OF THE SPECIALIST

3.1. The Specialist Emerges as a Key Player in the Health Care Economy

3.2. Specialist Practice Economics


Changes in Reimbursement and Utilization Management Impacting Specialists

Medicare CAP and “Buy and Bill”

Special Feature: The Medicare Competitive Acquisition Program (CAP)

Movement of Injectables to the Pharmacy Benefit

Practice Structure and the Service Component

Conditions Requiring “High-Touch” Service

Referral Generation

PCPs

“Suspect and Refer” Physicians

Patient Self Referrals

Impact of Medicare Part D on Referrals

Specialists and Clinical Research

Upside for Physicians

Upside for Sponsoring Company


3.3. Detailing to Specialists


The Specialist vs. the PCP

Ease of Access

PCPs and Primary Care Reps

Specialists and Specialty Care Reps

Opportunities for Providing Value-Added Support Services to Specialist Practices

The Specialist Rep


3.4. The Specialist-Focused Strategy


Relationship Equity with KOLs

The Cycle of Mutual Support

KOLs and Clinical Research




CHAPTER 4. THE WORLD OF THE PATIENT

4.1. Profile of the Specialty Care Patient


An Engaged and Proactive Mindset

Patient Activism

Specialist Marketers Discover the Patient


4.2. Reaching the Specialty Care Patient


The Channels

The Specialist

Specialty Pharmacies

Patient Advocacy Groups

DTC Advertising of Specialty Drugs


4.3. A 3-Step Method for Reaching New Patients: A Case Study of Pegasys for Hepatitis C


Know Your Patient Population

Know the Disease

Know Your Physician Population




CHAPTER 5. REGULATORY AND REIMBURSEMENT ISSUES

5.1. FDA Regulatory Pathways for Specialty Care Products


The Orphan Drug Act

The Accelerated Approval Program


5.2. Managed Care and Specialty Drugs


Specialty Products Move from the Medical Benefit to the Pharmacy Benefit

A Bewildering Variety of Benefit Plans and Copay Structures

Specialty Injectables and the Formulary

Tactics for Gaining Formulary Placement

Clinical Data will be the Cornerstone of Negotiations

How Managed Care is Controlling Utilization of High-Cost Specialty Products

Prior Authorization

Managed Injectable Programs

Cost Shifting


5.3. Biogen Idec’s Amevive: A Case Study in Positioning a Specialty Product for Managed Care




CHAPTER 6. ANALYSIS OF TWO SPECIALTY DISEASE MARKETS: PULMONARY ARTERIAL HYPERTENSION AND SCLERODERMA

6.1 Pulmonary Arterial Hypertension


Pathophysiology, Taxonomy, and Symptoms

Pathophysiology

Taxonomy and Symptoms

Epidemiology

Diagnosis

Treatments

Calcium Channel Blockers

Prostanoids

Endothelin Receptor Antagonists (ETRAs)

Phosphodiesterase 5 (PDE-5) Inhibitors

Market Dynamics


6.2. Scleroderma


Pathophysiology, Taxonomy, and Symptoms

Pathophysiology

Taxonomy and Symptoms

Epidemiology

Diagnosis

Treatments

Fibrosis Inhibitors: CTFG Antagonists and TGF-beta

Immune Inflammation: CCR2 Antagonists, Cyclophosphamide, Interferon, and Leukocyte Elastase Inhibitors

Vascular: Prostacyclin and Alpha-2-Adrenoreceptor Agonists

Market Dynamics




CHAPTER 7. CONCLUSIONS: IMPLICATIONS AND CONSIDERATIONS

7.1. Factors Impacting the Future Commercial Vitality of Specialty Disease Markets


Price and Utilization Controls

High-Cost Specialty Drugs Come under Fire

The Industry Reconsiders the Rationale for High Drug Prices

What does It Mean for Specialty Products?

Biogenerics

R&D Considerations

A Finite Number of Targets for Protein Drugs?

The Oral Deliverability of Biologicals

Q&A with Manuel Vega, PhD, of Nautilus Biotech

Small Molecules that Target Protein-protein Interactions


7.2. Some Strategic Implications of Big Pharma’s Embrace of Specialty Products


The Organization

GSK’s Biopharmaceutical CEDD

The Rise of the Specialist

The Ongoing Morphing of Disease States

Conclusion




EXPERTS INTERVIEWED FOR THIS REPORT

Thomas Bumol, PhD (Vice President of Biotechnology Discovery Research at Eli Lilly)

David Caponera (former Vice President of Strategic Initiatives at TheraCom, a division of Caremark)

Dan Hawkins (founding Partner of Clarion Healthcare Consulting)

Kenneth Kaitin, PhD (Director of the Tufts Center for the Study of Drug Development)

Sandy Lauterbach (Senior Director of Global Marketing at Genzyme)

Jesus Leal (Vice President North America Infectious Diseases, Transplantation & Immunology at Novartis; former Vice President of Interferons at Roche)

Paul C. Nagel (Partner at Biomedical Insights)

James F. Resch, PhD (Director of Strategic Intelligence at AstraZeneca)

Ramana Sonty, PhD (Senior Director of Project Management and Medical Operations at Pfizer)

Debra Stern (Vice President of RxPerts)

Manuel Vega, PhD (CEO of Nautilus Biotech)

Eugene Williams (CEO of Cambridge Healthtech Associates; former Senior Vice President of Immune-Mediated Diseases at Genzyme)




References




Glossary




Company Index with web sites




List of Tables and Figures

Figure 1.1 Proportion of Pharmaceutical Sales from Blockbusters, 2003

Figure 2.1 Total Clinical and Approval Phase Costs by Disease Area (in millions of 2000 $)

Figure 2.2 Approval Success Rates of U.S. Biopharmaceutical Products Compared with NCEs

Figure 2.3 Pricing Advantages of Specialty Products Drive Roche’s Growth

Figure 2.4 Roche’s View of the Benefits of Specialty Care: Blockbuster Potential with Low Commercial Risk

Figure 2.5 Roche’s Shifting Balance between Primary and Specialty Care, 2003 - 2009

Figure 3.1 Annual Average Cost per Patient: Acute, Chronic, and Rare Chronic Diseases

Figure 3.2 Percentage of Specialists Likely to Enroll in CAP, by Specialty Area

Figure 3.3 The Specialist-Focused Strategy As A Virtuous Circle

Figure 3.4 How Super Specialists Can Drive Patient Recruitment in Clinical Trials

Figure 4.1 The Information Flow between Patients and Specialty Healthcare Stakeholders

Figure 4.2 Amgen’s DTC Advertisement for the Anti-Neutropenia Drug Neulasta

Table 1.1 The Biologicals Pipeline by Disease Target (as of March 2004)

Table 2.2 Sales of Roche’s Top 5 Products — 2004 and 2005

Table 3.1 Sector Drivers of Increased Focus on the Specialist

Table 3.2 Comparative Daily Cost of Newer Injectables vs. Prior Therapeutic Options

Table 3.3 Top 10 Medicare Part B Drugs by Percent of Expenditure and by Source, 2003

Table 3.4 Physicians’ Perceived Benefits of Conducting Clinical Trials

Table 3.5 Key Differences between Specialists and PCPs with Implications for Sales Reps

Table 3.6 Summary of Tactics and Support Services for Building Relationship Equity with Specialists

Table 4.1 Channels Whereby Manufacturers Reach Specialty Care Patients

Table 4.2 Typical Services Offered by Patient Associations

Table 5.1 Formulary Status of Biologicals at Selected Major Health Plans

Table 5.2 Selected Tactics that Plans Use to Control Utilization and Waste

Table 6.1 Recent Launches and Drugs in Development for PAH

Table 6.2 Recent Launches and Drugs in Development for Scleroderma

Table 7.1 Biogenerics: Potential Players and Products

Abstract

High-volume, big-population drugs have fueled the industry’s growth over the past 15 years. But with increasing uncertainty about the ROI of primary care drug development, big pharma is looking for additional avenues of growth. Specialty Pharmaceuticals: Driving Industry Growth into the Next Decade is a window into the complex world of specialty medicine: its stakeholders, its evolving regulatory environment, and its economics. Based on extensive thought-leader interviews, this report is both a manual and a guidebook to competing and prospering in the world of specialty pharmaceuticals. Specifically, it provides:

Strategies for:
  • Sustaining a specialty franchise by building relationship equity with specialists
  • Identifying and communicating with hard-to-reach patient populations
  • Generating referrals, raising awareness, working with disease associations and patient groups
Data that capture:
  • Cost, time, and approval rate comparisons between specialty and primary care R&D
  • Trends in specialty drug sales, pricing, and health care expenditures
  • Specifics about the large- and small-molecule specialty pipelines in big pharma
Insight into:
  • Pricing and uptake prospects for biogenerics and orally delivered proteins
  • The impact on practice economics of Medicare CAP and the shift away from buy-and-bill
  • Positioning specialty products for managed care
Specialty Pharmaceuticals: Driving Industry Growth into the Next Decade delivers the case studies, the recommendations, and the insider insights to help you navigate the shifting terrain of specialty markets: the gathering cost pressures, rising competitive heat, disruptive technologies, changing regulatory guidelines, new reimbursement paradigms, and more. The report also drills down into two specialty disease commercial opportunities -- pulmonary arterial hypertension and scleroderma -- detailing the epidemiology, the drugs in development, and the opportunities for improving on the current standard of treatment.

Big pharma has awakened to the specialty opportunity, and is busy filling its pipelines and aligning its organizations in order to bring to market novel drugs for small but desperately needy patient populations. Lilly currently has 14 proteins in development targeting specialty diseases, constituting about 30% of its early stage pipeline. And Pfizer’s new CEO Jeffrey Kindler boasted in his first major presentation since assuming office that Pfizer, with 35 protein projects in R&D, was on course to generate $1.5 billion in protein therapeutics in 2006, and would triple that number by 2010. Biotech companies, which already dominate most specialty disease categories, are capitalizing on the shifting momentum with the hope of vaulting into the ranks of the top 10 pharma companies. The phenomenal productivity of specialty drug R&D and the impressive commercial performance of a growing stable of specialty products beg a larger question: will big pharma be able to synergize both its specialty and primary care sales forces and to navigate the looming challenges of pricing, biogenerics, and tightening regulations in order to meet the challenge of building a prosperous specialty business?

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