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Media bandwagon

The media will provide a powerful vehicle in pharma's battle to defend its efforts

Access and affordability are high on today's media agenda: articles are cyclic, with one issue holding the attention of the health pages for a few days, soon to be followed by the next.

Stories are, more often than not, led by the newswires, picked up by the nationals and then followed by local comment, with the tone ranging from accusative to just plain vitriolic.

Our industry needs to face this issue, especially in the consumer and business press. The time for change is upon us and the media will prove to be a valuable vehicle.

Overall, there is high and growing pressure from all stakeholders for pharma to reduce and/or modify pricing structures. Pharma companies are responding by pushing the creative boundaries and, in some cases, bending over backwards to accommodate these growing demands and deliver the access to healthcare we all take for granted, the world over.

Mainstream media however, insists on the partisan approach, siding with the payers, the providers and the patients, and creating an ever-increasing list of reasons for pharma to reduce its dependence
on intellectual property, forgo patent protection and invest in, ultimately, unprofitable ventures. Current media topics of choice include: country pricing discounts; patent variations; value-based pricing; payment by results; disease burden programmes and investment in developing markets.

Discounts & patents

Country pricing deals remain the mainstay of many access strategies, however the spirit of healthcare procurement seems to have been adopted by some national governments, as a number of magazines and newswires were eager to point out.

"Brazil may have struck a deal with Abbott Laboratories over Kaletra but a similar deal with Thailand still seems a long way off as the price for the US firm's AIDS drug is still considered to be too high," Forbes stated on July 5, 2007.

Six weeks prior to this, Bloomberg argued that the US is angry with Thailand for 'copycatting' to undercut American IP and is looking to Thailand to reverse its decision to break patents on several drugs.

It seems natural for the industry to detest compulsory licensing, in which a patented or copyright product is given to others to manufacture to reduce the cost. Thailand's move to tap generic suppliers for key drugs could be seen as dangerous.

"In this debate, what's important to remember is that neither Thailand, nor Brazil has done anything illegal. Compulsory licensing of drugs is a legitimate right of any member of the World Trade Organisation

"Finding a new drug means spending 10 years and USD 800m with no guarantee of success at the end. Have Thailand and Brazil put humanity at risk by threatening to pull the plug on supernormal profit, which is the drug industry's main incentive to innovate?" Bloomberg, May 29, 2007.

Boldrin and Levine go further in their book, Against Intellectual Monopoly, claiming that cerebral assets are different from physical ones - although legal defense of the ownership rights of a factory helps everyone, the same protection applied to ideas inhibits innovation. When Watt had patents on steam engines, the UK added 750 horsepower every year, but in the 30 years following the expiry of patents, more than 4,000 horsepower of steam engines were produced every year.

Boldrin and Levine's sentiments were echoed in a Bloomberg article in May 29, 2007. "The idea of separating compensation from ownership doesn't appeal to those who dislike government interference in markets. They rightly note that it is a halfway house: Bob Dylan gets a cut every time someone releases a cover version of his songs through a mechanical licensing process; but he can't stop anyone from having a go at Knockin' on Heaven's Door."

Value-based pricing

Janssen-Cilag, the maker of Velcade, has offered to refund the cost to the NHS if the drug fails to work. On the face of it this could be seen as positive, as an article in the Daily Mail on June 4, 2007 suggests, and it did lead to the National Institute for Health and Clinical Excellence (NICE) issuing guidance on the use of the drug in the NHS in England.

"The U-turn will give new hope to some 20,000 Britons living with bone marrow cancer. Velcade costs up to GBP 18,000 per patient and extends life by an average of two to three years, although it has given some sufferers an extra seven years.

"Last year NICE ruled it was not cost-effective, making it virtually impossible for it to be prescribed on the NHS in England. The government was immediately accused of medical apartheid because Velcade was available to NHS patients in Scotland, Wales and Northern Ireland. Since then, cancer patients and charities have been fighting a fierce legal battle for the drug.

"Now NICE is poised to agree a deal with the manufacturer: under the proposed scheme every multiple myeloma patient would be given three months' treatment with the drug, during which time their reaction to it would be monitored."

However, the reality if somewhat different as defining a successful outcome and, therefore, the true definition of the rebate, may be a stumbling block for the deal. The scheme could also be seen as lacking empathy as a US specialist told the New York Times on July 14, 2007.

"Dr Tunis, the former Medicare chief medical officer, said an American biotechnology company sought his opinion about whether to offer a money-back plan on a new cancer drug. I and others suggested a money-back guarantee on a cancer drug looked silly, said Dr Tunis. Oh, I'm sorry your grandma died. Here's your money back."

Payment by results

You pay more, you get more ñ the law of commercial supply and demand. But what is 'more' in healthcare? Efficacy, safety, ease of use, indications? And who will take responsibility for placing a relative value on each?

When the the Office of Fair Trading (OFT) proposed that the cost of drugs to the NHS should be based on health impact, rather than the cost to manufacturers as happens now, in a move that could see estimated savings of GBP 500m on the GBP 7bn healthcare bill, the media, including the Health Economics Journal homed in on the news.

The government is expected to respond formally to the proposed value-based pricing system in the coming weeks. However, if the media is to be believed hopes that the OFT proposals would result in significant cost reduction could be dashed.

A spokeswoman for the Department of Health (DoH) told the BBC: The government is looking carefully at how to maintain and accelerate the flow of life-saving, effective drugs onto the market, at a fair price for the NHS that also rewards the innovation of pharmaceutical companies. We have been listening carefully to a wide range of views and will publish our response later in the year.

Global burden

Only 10 per cent of health research investment is spent on diseases that make up 90 per cent of the global disease burden. The burden of disease approach is a large and growing focus for the treatment and prevention of disease, for example, the Global Fund to Fight Aids, Tuberculosis and Malaria. Not surprisingly, it makes the political agenda too and creates a further platform for the media to sling mud at the pharma industry. The following extract appeared in the Student British Medical Journal in July.

"You are in Malawi. A mother with a young child has made a long journey on foot to get to the nearest health centre. The child has tuberculosis and needs a course of antibiotics. But the clinic has run out. The nurse tells the mother to come back tomorrow. They have no medicine left today; the chance of there being any medicine tomorrow is small, perhaps nil.

"The Commission for Africa identified the need for a predictable supply of affordable drugs and drug firm incentives to investigate diseases that affect Africa.

"In addition to problems obtaining drugs, poor countries have limited access to medical information about how to use them. Former US President, Bill Clinton, told the New England Journal of Medicine: Building the capacity to run effective programmes for care and treatment in poor countries is very difficult. It requires developing protocols and organising substantial treatment networks at local and national levels.

Untapped resources

Some of the world's biggest corporations are investing in a market ignored for decades: the world's four billion poor, estimated to have USD 5trn of annual purchasing power parity.

Some 60 per cent of the world's population exists on less than one pound a day, but they are now regarded as a major growth market. We have to get away from thinking of the poor as a problem, said CK Prahalad, author of The Fortune at the Bottom of the Pyramid. Part of the problem is that people have not had a full understanding of the size of the opportunity.

Accessing these markets requires innovation and creativity; new, affordable products, novel ways of marketing them and local infrastructures to achieve this. An article on Reuters on June 4 details the efforts of organisations, such as Danone, in addressing the needs of some of the world's poorer populations.

"In South Africa, French food group, Danone, and local dairy group, Clover, have launched a project selling individual pots of vitamin-enriched Danimal yoghurt for one Rand (GBP 0.07) by a network of women in townships.

"Danone created a new business model, set up a new distribution network and promoted the product in schools with a show that teaches the benefits of nutrition."

According to Reuters, women who were struggling to survive in sprawling townships were recuited by Danone and are now thriving, selling over 700 pots of yogurt on a busy day. "The saleswomen keep a profit of 20 South African cents from each yoghurt pot they sell. After less than two years, sales by volume of the new low-cost product, so far only rolled out in the Johannesburg area, are outstripping some of the firm's major national brands," the Reuters article continued.

With articles on pharma and healthcare continuing to come down on the side of the payer, the industry needs to build improved relationships with the business and consumer media.

The Author

Paul Kiernan is director of PR at Sudler & Hennessey

16th October 2007


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