Emerging Business Models in the Pharmaceutical Industries ...

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Long Term Strategies - Targeted Treatment Solution Targeted Treatment Solution Many pharmaceutical companies locked into the block buster model of drug development are witnessing diminishing returns in sales and marketing. As research in personalised drugs becomes more advanced, portfolios are starting to shift towards therapies that target genotypespecific patient populations. Disease management is taking pharma companies towards tailored treatment solutions. Activities of Main Players Personalised medicine is poised to show promising results in the coming years, and all the large pharmaceutical companies have set up divisions to investigate its potential. Roche, likely to be a leading player in the future, has launched the world's first "gene chip" to test the reaction of individuals to drugs. Drugs Company Year Comments BiDil Nitromed Nov-04 Targeted solely at Black Americans. Decreases risk of heart failure. Results from US clinical trials have shown it was a success. It now seems likely that FDA will grant a licence for the drug when Tarceva Global alliance among Roche, Genentech and OSI More than 20 leading pharmaceutical, biotechnology, diagnostics and information technology companies, and major academic centres and governmental agencies have come together to form a new organisation called the Personalised Medicine Coalition (PMC). Based in Washington DC, the PMC is a nongovernmental, non-profit group created to foster understanding and adoption of personalised medicine for the benefit of patients. American Home Products is involved in several gene-based R&D projects. Its heart failure drug for black Americans - Bidil from Nitromed - has had very successful US clinical trials. U.S. regulators have approved Tarceva, the lung cancer drug from Genentech Inc. The once-daily pill targets human epidermal growth factor receptors, blocking them from allowing cancer cell growth. Key Breakthroughs in Personalised Drugs it comes up for consideration next year. Nov-04 U.S. FDA has approved, after priority review, Tarceva (erlotinib) for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) after failure of at least one prior chemotherapy regimen. Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 22
Long Term Strategies - Targeted Treatment Solution The Revenue Model Targeted Treatment Solutions (TTS) are extending the market size for pharma companies. TTS in the form of personalised drugs are expected to capture more than 75% of the Big Pharma revenues in the next two to three decades. Health management is being targeted by all companies as a major step to overcome the loss of revenues resulting from patent expiry. While the market for personalised drugs is smaller than traditional block busters, it could still be substantial. For example, Genentech's total sales of Herceptin since its launch in late 1998 have exceeded $800 million, despite the product only being appropriate for use in 25 - 30% of women with breast cancer. Strong safety and efficacy claims may help companies maintain premium prices. The development of genomic products involves smaller trials and lower attrition rates. This could significantly reduce liability cases, while direct-to-consumer advertising could become more or less redundant and sales forces could shrink. Novartis’ Gleevec was the first drug targeting the molecular basis of the disease, and was immediately accepted by the market, generating worldwide revenues of $1.13 billion. Challenges Identified in Personalised Drugs R&D will undergo major restructuring from mass market to individual prescribed markets. Patients for clinical trials will need to be recruited from all therapeutic classes. There will be problems in getting regulatory approval from the FDA to monitor patients after the launch of products. The sales force will need completely revamped training to sell individualised therapies to specialists. The manufacturing process, including supply, is currently incapable of handling small volumes of complex products. It will involve large supply chains, and will have a very complex structure to deal with many molecules at a time. Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 23
Page 1 and 2: Emerging Business Models in the Pha
Page 3 and 4: Table of Contents Introduction…
Page 5 and 6: Acronyms Big Pharmas The top global
Page 7 and 8: Introduction Pharma Industry Overvi
Page 9 and 10: Market Segmentation Getting Blurred
Page 11 and 12: Growth in the Pharma Market The pha
Page 13 and 14: Factors Restraining Pharma Market R
Page 16 and 17: Geographic Overview Introduction No
Page 18 and 19: Trends in the Pharma Industry Short
Page 20 and 21: Long Term Strategies - Forward Inte
Page 24 and 25: Long Term Strategies - Biotech and
Page 26 and 27: Long Term Strategies - Biotech and
Page 28 and 29: Overview of the Network Model The n
Page 30 and 31: Outsourcing The network approach al
Page 32 and 33: Many of BMS's key drugs are from ot
Page 34 and 35: Growth in Semi Block Busters Even i
Page 36 and 37: Short Term Strategies - Pre- and Po
Page 38 and 39: Short Term Strategies Against Paral
Page 40 and 41: There are two main types of M&Q act
Page 42 and 43: The Revenue Model The market dynami
Page 44 and 45: Short Term and Mid Term Strategies
Page 46 and 47: Top 10 Pharma Companies - Major Mar
Page 48 and 49: Benchmarking - Top 20 Drugs by Sale
Page 50 and 51: Benchmarking by Percentage Growth i
Page 52 and 53: Benchmarking by Geographic Revenue
Page 54 and 55: Rank 1 2 3 4 5 JnJ GSK Company Pfiz
Page 56 and 57: Altace® Biaxin® Zofran® Brands A
Page 58 and 59: Introduction Pfizer is the world's
Page 60 and 61: Introduction GlaxoSmithKline (GSK)
Page 62 and 63: Introduction Merck & Co. develops,
Page 64 and 65: Introduction Aventis’ core busine
Page 66 and 67: Introduction Bristol-Myers Squibb C
Page 68 and 69: Strategic Direction The company aim
Page 70 and 71: Strategic Direction JnJ has been fo
Page 72 and 73:
15% Percentage Revenues by Segment
Page 74 and 75:
12 10 8 6 4 2 0 The Americas Revenu
Page 76 and 77:
20 15 10 5 0 Novartis revenues by S
Page 78 and 79:
Strategic Direction Eli Lilly focus
Page 80 and 81:
New Revenue Models New revenue mode
Page 82:
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