Smaller, Refocused Salesforce Will Enable Pharmaceutical Companies to Create Greater Value for Patients, Says New PricewaterhouseCoopers Report

Market for Specialized Medicine to be Twice the Size of Current Prescription Drug Market


NEW YORK, Feb. 25, 2009 (GLOBE NEWSWIRE) -- The current role of the pharmaceutical industry's sales and marketing workforce will be replaced by a new model over the next ten years as the industry shifts from a mass-market to a target-market approach that will drive revenue growth in the industry and create value for patients, according to a new report published by PricewaterhouseCoopers LLP (PwC).

The growth of specialized medicine and the changing healthcare landscape are creating new opportunities for pharmaceutical companies that won't rely on an army of sales representatives, billions of dollars in free drug samples, millions spent on TV advertising and aggressive marketing to doctors and patients to ensure brand growth or commercial success, according to PwC.

"The science is leading the industry towards specialist therapies, and sales and marketing will have to adapt to this change," said Anthony Farino, PricewaterhouseCoopers' U.S. pharmaceutical and life sciences advisory services leader. "Healthcare policymakers, payers and patients are now assessing the relative economic, health and societal value of different medicines. Pharmaceutical companies will need to package products and health services in a way that adds value, demonstrating that their medicines really work, that they provide value for the money and potentially reduce healthcare costs by being better than alternative forms of intervention."

According to PwC, the pharma industry's sales force of the future will be dramatically smaller, more agile and require new skills, including an education in science or health, greater understanding of specific complex diseases and the ability to negotiate with powerful payers and medical specialists. Its focus will no longer be just selling products, but on better managing health outcomes through a full complement of health management services, including health screenings, compliance programs and nutritional advice.

In its paper, Pharma 2020: Marketing the Future, PricewaterhouseCoopers outlines the convergence of factors leading to a new marketing and sales model, including:



 * Balance of Power is Shifting to Payers:  For years, pharmaceutical
   companies have decided what their products were worth and priced
   them accordingly, investing little effort in understanding the
   payer's perspective or what the market was willing to buy.   With
   healthcare costs rising, payers, including governments and private
   insurers, are becoming the ultimate arbiters of pricing and value,
   reimbursement and prescribing decisions.  There will have to be a
   stronger link between marketing and R&D, according to PwC.  Pharma
   companies will start thinking about product pricing earlier in the
   development phase, commercially de-risking their portfolios in
   phase II by terminating any drug candidate that looks unlikely to
   generate commercial demand.

 * All For One and One for All:  The often contentious relationship
   and competing agendas that have long existed among pharma companies,
   payers and providers will end as pay for performance and
   comparative effectiveness analysis force them to work together for
   the common goal of improving health outcomes for patients and
   demonstrating real value for the money.

 * Product Portfolio to Change:  The current blockbuster model was
   designed to promote mass-market treatment of common diseases such
   as hypertension, diabetes, and high cholesterol to primary care
   physicians. Sixty-five percent of these drugs are now sold
   generically in the U.S. and 70 percent in Central and Eastern
   Europe. In the next ten years, only drugs considered truly
   innovative will be financially rewarded with a premium price.
   Pharma companies that choose to focus on specialized medicines will
   gradually shift their product mix to include more biologics and
   medicines that are targeted to specific and more complex disease
   states.

 * Specialized medicines to soar: Science is moving to specialist
   medicine - highly targeted therapies developed for specific complex
   conditions, typically administered by a specialist versus general
   practitioner, developed in small doses and in need of refrigerated
   handling and storage. Specialized drugs are significantly more
   expensive, in some cases costing thousands for a single dosage or
   treatment.  The global market for specialized medicines, which
   accounted for 44 percent of worldwide prescription drug spending in
   2008, could be twice the size of the current market for all
   prescription drugs by 2020, according to PwC.

 * Regulatory Harmonization will Facilitate Simultaneous Multi-Country
   Launches: The FDA and other leading regulatory agencies are exploring
   various new methods for assessing, approving and monitoring innovative
   medicines. While a single global regulatory body is unlikely,
   global regulatory harmony will make simultaneously multi-country
   launches routine.  By 2020, the launch of a new drug will become
   much more incremental. The big bang, big budget, blockbuster launch
   will be replaced by a process in which clinical outcomes
   information is continuously disseminated in a series of much
   smaller waves. New medicines will be launched with 'live licenses',
   conditional on further in-life testing to substantiate their safety
   and efficacy in larger/different populations.

According to PwC, the future sales and marketing process must master each of these dynamics and synthesize them into a new system. Pharma companies will need to restructure their marketing functions accordingly, with the appointment of key account managers who will be responsible for collaborating with healthcare payers to shape the information doctors receive and provide hard proof that a product really is safer, more effective or more economical than its rivals before they add it to the formulary.

Pharma 2020: Marketing the Future: Which path will you take? is the third paper in PwC's Pharma 2020 series. A full copy of the report is available at www.pwc.com/pharma2020marketingthefuture.

About PricewaterhouseCoopers Pharmaceutical and Life Sciences Industry Group

PricewaterhouseCoopers Pharmaceutical and Life Sciences Industry Group (www.pwc.com/pharma) provides clients with audit, tax and advisory services. The firm has extensive experience in delivering solutions on a wide range of strategic, financial and operational issues. The firm has also developed industry-specific services in the areas of strategy, operations performance improvement, regulatory compliance, and IT and financial effectiveness. The Pharmaceutical and Life Sciences Industry Group is part of PricewaterhouseCoopers' larger initiative for the health-related industries that brings together expertise and allows collaboration across all sectors in the health continuum.

About PricewaterhouseCoopers

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.



            

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