International Reference Pricing: Why It’s Essential to Your Success

There has been a lot of focus on international reference pricing in the pharmaceutical industry lately. The goal, of course, being to benchmark yourself against competitive products to ensure that you can obtain the highest amount of market share in any given country.

Access to authentic current, and historical, prices for competing products empowers companies with the information necessary to ensure that their own strategies are headed in the right direction and allows them to make adjustments when necessary.

They may also monitor responses by competitors to price actions taken for their own products. In addition, a multitude of modeling exercises such as pharmaco-economic modeling, analogue analysis, and budget impact modeling, often require competitor drug pricing data.

To give you the bigger picture, access to competitor pricing data is essential for:

  • Defining an optimal pricing strategy
  • Evaluating pricing trends of competing products
  • Monitoring responses by competitors to price actions taken for the company’s own products
  • Modeling exercises such as pharmaco-economic modeling, analogue analysis, and hospital or payer budget impact modeling
  • Tracking austerity measures; impact at country level ie price cuts, margin changes
  • Tracking reimbursement decisions and prescribing restrictions
  • Monitoring pricing policies and trends in key markets/therapy areas

For more information, take a look at our international reference pricing products.

Alliance Reports Record Growth in 2013: Revenue Up More than 20 Percent Over 2012, 100 Percent Growth Since 2010, Continued Profitability

Alliance Life Sciences reports record revenues in 2013, and a three-year compound annual growth rate of over 20 percent that has led to revenues nearly doubling from 2010.

“Throughout 2013, we delivered a strong line-up of services and solutions which translate into over 20 percent growth for our third straight year,” says Alan Crowther, CEO, ALSCG. “Also, our addition of Jason Watters as an experienced industry chief financial officer will help lay the foundation for continued growth.”

Watters joined ALSCG after serving as chief financial officer at McKinsey’s IT Solutions division, where he oversaw part of that division’s growth from inception to almost $200 million in revenues in five years. He brings considerable experience in high-growth consulting and IT solution environments.

In addition, ALSCG had record bookings in December 2013 and January 2014, positioning the company for another record year in 2014.

Watters states, “Based on industry trends in Life Sciences, and the growing demand for our unique mix of services, we expect over 20 percent growth in 2014 and 2015. We forecast that the firm will have grown almost 200 percent since 2010 by the end of 2015.”

Not only is ALSCG growing revenues at a significant rate, but also the firm experienced a number of major successes:

  • Three of the Top 10 Pharmaceutical Companies adopted ALSCG’s PriceRight™ global pricing solutions
  • Four of the Top 10 Pharmaceutical Companies used or renewed ALSCG’s PRICENTRIC™ global pricing data services
  • Seven successful “go-lives” at clients with Revenue Contract Management suite implementations

Crowther adds, “Our tremendous success and growth in a short time reflects the strengths of our strategy, our close relationships with our customers, and the efforts of our professionals around the globe. Building upon this momentum, we will continue to offer customers the management, technology and software products they need to solve business problems, maximize revenue and achieve optimal pricing in an outcomes-based world.”

NJBIZ Ranks Alliance Life Sciences in Top 10 Among Technology Consultant Service Companies in New Jersey

Alliance Life Sciences has been ranked number eight among New Jersey’s technology consultant service companies by NJBIZ’s Annual Book of Lists 2014, an influential source of information for business-to-business professionals in New Jersey.

“This ranking reflects our continued growth, our record 2013 year, the quality of our employees and their dedicated approach to serving our customers,” says Alan Crowther, CEO, ALSCG.  “We are honored to be recognized by the highly respected and influential NJBIZ, and applaud their focus on critical business issues.”

ALSCG serves over 40 of the largest pharmaceutical and medical device companies, including 8 of the top-10 largest pharmaceutical manufacturers, enabling them to focus on continued investments in patient health and well-being by helping them receive fair value for their products with an integrated portfolio of services:

  • Management Consulting
  • Technology Integration
  • Solutions and Data Services

ALSCG has many specialized offerings with top strategic positions in the industry, and delivers these services with expertise across the following domains:

  • Global Pricing, Reimbursement and Market Access
  • Contract Strategy, Operations and Compliance
  • Commercial Operations and Analytics

Crowther adds, “ALSCG helps its customers maximize revenue and optimize pricing in an outcomes-based world. We employ hundreds of professionals around the globe who help firms obtain the best value for their critical healthcare initiatives. This distinction helps bring attention to our leading set of offerings and set the stage for our customers’, and our, continued success.”

Global Lifecycle Price Management – A 360 Degree Approach

When launching a new product, companies are often met with a series of challenges. Any error or miscalculation could end up costing your company a significant amount of market share. One of the biggest hurdles to overcome is pricing. Finding a price that is both competitive in the global market, as well as profitable, can be more difficult than companies realize. The key is having access to accurate and current prices of the competition, while at the same time being able to set and maintain effective prices with minimal manual upkeep. Another concern with global lifecycle price management is price erosion with products that have been on the market for a longer period of time.

For example, according to a study by the EPP (European Pricing Platform), 42% of organizations are operating on the most basic level pricing maturity. Approximately 48% are functioning on a higher level, having the right prices on the right products to the right people, but still aren’t fully integrating the commercial process of alignment with marketing and sales. While this second tier is more desirable than the first, it is still far from optimal.

Global lifecycle price management issues can typically be broken down in 3 subcategories.

Product Launch Challenges

These issues can be some of the toughest to deal with when launching a new product. An effective launch starts by determining the best country sequence in which to launch your product, where a mere 1% in price difference can end up costing millions of dollars in net present value, or NPV. Managing all the details and data for launch planning is also critical, especially in knowing the effect they have on pricing. Also, you must take into account the need for change as the project develops, and often times manage this with changing parameters, to keep pace with the project evolution.

Price Maintenance & Compliance Challenges

The next obstacle is maintaining the strength of products that are already on the market. As conditions change, so too must the price on a product. This helps to avoid price erosion, which can cost millions of dollars every year. Here you must also be able to quickly and accurately check reference prices, which is a crucial step in being able to set an effective price in any country. This is a highly effective way to protect your company from any errors in government price publications, as well as to assist in generating accurate reports.

Loss-Of-Exclusivity & Mature Products

When managing older products, the key is to be able to monitor and manage with minimal manual effort and resources. Once a product launch is successful to the point of near self-sufficiency, it’s time to move on to the next project. Having to divert resources to an old project means diverting time and energy away from new ventures, and this can be costly in the long run. Your business must be equipped with the right tools. Software that can efficiently predict the potential impact of price erosion means adjustments can be made before they end up becoming costly issues.

Prevention is Key

What it all comes down to is the proper amount of preparation. By planning ahead and exercising the proper caution and forethought, charting a course to success is easier than one might think.

In the study conducted by the EPP, 88% of organizations declared intention to invest in pricing software for reasons such as, price monitoring, reporting, price guidance and deal making. Alliance Life Sciences specializes in helping life sciences companies operate at peak efficiency with a full suite of global lifecycle price management software designed and developed to aid in managing your business and making sure you hit the right price for maximum profit.

For more information, an on-demand webinar is available on market access operational excellence. http://youtu.be/KEg55rrBfh0

Video Series on Pricing & Market Access Issues in Pharma

Sophie Murdoch, VP of Consulting Services for ALSCG, is featured in a 3-part video series from Health Network Communications on Pricing & Market Access Issues in Pharma. The videos answer key questions that pharma manufacturers are facing today:

  • How are global austerity measures impacting pharma?
  • How can the industry work with payers to ensure that the best treatments get to patients?
  • What developments do you foresee over the next 12 months that will impact pharmaceutical uptake?

Watch the videos below!

Evolving Pharmaceutical Market Access in Brazil

This is an excerpt from our whitepaper, “Evolving Pharmaceutical Market Access in Brazil: How the Latest Developments Will Change your Business Strategy”. To read the full paper, please click here.

With expectations to reach 30% of the nearly $1.2 trillion US global spend, and
50-70% of the $70 billion annual US growth forecasted in the pharmaceutical
sector by 2016, it is clear why emerging markets are considered the new
frontier. They are the new hope for a pharmaceutical industry that is seeking
new strategies and partnerships to balance the stagnation in more mature
markets.

Quickly growing, increasingly competitive, culturally, socially and economically diverse, emerging markets defy the effectiveness of a uniform approach and call for local business planning based on a comprehensive and global perspective. For this reason, international pharmaceutical companies must be willing to implement market-specific strategies and local thinking within their global business strategy. Nevertheless evolving political stances, increasing international competition, and rising local manufacturers are toughening market access environments and creating new, and sometimes unexpected, risks for drug makers.

Brazil is one of many examples showing how quickly business conditions for drug makers are changing and how important it is to identify, evaluate, and foresee such changes as early as possible to improve and consolidate market positioning. This paper provides an overview of latest trends regarding pharmaceutical taxation, strategic partnerships and generics promotion.

Brazil Facts

Latest Reforms and New Challenges 

With over $220 billion of healthcare expenditure, a strong economic growth, and drug prices adjusted annually (2.7-6.31% increase estimated in 2013), Brazil is destined to become the third largest pharmaceutical market by 2020 after US and China.

Despite its strong economic growth, Brazil is facing increasing pressure to control healthcare expenditure and, at the same time, to promote innovation and improve access to healthcare.

Pursuing this difficult task, decision makers are discussing several initiatives, some of them already converted into law, which will reshape the pharmaceutical market in the following years. In a context of increasing competition and stricter regulatory hurdles, Brazil will become a much more challenging business environment.

To read more, please click here to download the white paper.

Global Pricing Data and Advanced Analytics for Better Decisions and Competitor Edge

This is an excerpt from our whitepaper, “Global Pricing Data and Advanced Analytics for Better Decisions and Competitor Edge”. To read the full paper, please click here.

Increasing price transparency and global competition are key challenges faced by companies across all industries. Today’s pricing decisions cannot be based on instinct or informal methods due to the high level of risk incurred through inaccurate practices.

Analytical pricing strategies are used across all global industries. Strategic decisions based on pricing data and advanced analytics have been long-established and are an integral part of price setting for the financial industry. Benchmarking competitor prices on an hourly basis and ensuring pricing decisions are optimized are practices used by the travel industry. So why not apply the same principles to pharmaceutical pricing? Basing decisions on data and analytics empowers the decision maker and allows full confidence in the choices made.

Data and analytics have become powerful tools for pharmaceutical organizations in their strive to stay ahead of competitors. Best practice shows that better data and analytical models improve decision making and thus provide better business outcomes. Within the pharma industry, data forms the basis of many decisions; clinical data defines whether or not a drug is effective; sales data defines market share; and advanced data models drive cost effectiveness decisions made by health technology authorities.

So how does pricing data play a part in strategic pricing and market access? With so many new innovative pricing schemes and tactics, pharmaceutical competitor price intelligence is crucial in optimizing prices and staying ahead of the competition. The use of data analytics can help move pricing behavior from reactive to proactive decisions based on predicted market conditions.

How can pricing data and analytics be used within pharma?

Test for Competitor Response: Competitors do not evolve in isolation—they are responding to the relevant companies in the industry, if they have the freedom, knowl­edge, and capability to do so. Knowing how the launch of a direct competitor affects the price of your product across markets is essential in knowing how to react.

Business Transformation: Data allows you to visualize what is happening in the outside world and to shape competitor actions. Modeling allows you to make the best use of the data to help predict competitor actions and optimize business strategies. Transforming business decisions based on data and models enables organizations to keep ahead of competitors and make business processes more efficient. This is particularly essential for capturing growth in emerging markets where policy and pricing is not so clear.

To read more, click here to download our whitepaper.

Anti-TNF Biosimilar Prices – How low will they go?

Benoit Donze – Pricing and Market Access Consultant

The patents of two anti-TNF agents are due to expire over the next two years, in 2014[1] for J&J’s Remicade®, and in 2015[2] for Amgen’s Enbrel®. Their loss of exclusivity will clear the way for the arrival of biosimilar agents, defined[3] as medicinal products which are similar to a biological medicinal product. The market access uptake of those biosimilars will be clearly facilitated by the economic crisis and by the payers’ willingness to reduce their healthcare expenditures. Thereby, biosimilars could represent one of the most important sources of savings over the next decade.

This article examines the possible pricing implications on the original drug and the anticipated price differentials between the original biologic and its associated biosimilar.

Study of pricing impact of biosimilars on their originator

The following analysis investigates the price differential between the price of biosimilars currently available on the market and their originator to predict prices of future biosimilars. This article does not take into consideration the complexity of anti-TNF biosimilars in term of clinical development, manufacturing and ‘similarity’ to branded anti-TNF which will for sure impact the price differential.

To date, three active substances have been approved for use in Europe by the Committee for Medicinal Products for Human Use (CHMP): filgrastim (a granulocyte colony-stimulating factor), epoetin (an erythropoietin stimulator) and somatropin (a human growth hormone). The table below shows the authorised biosimilars in the EU:

The following graphs illustrate the price differentials of Neupogen®, Eprex® and Genotropin® against their lowest priced biosimilar in EU5 (France, Germany, Italy, Spain and United Kingdom). The analysis is based on lowest ex-factory price per unit of the most available presentation.The observed price difference between the two products revealed a variation of -31% and +10%. The price difference in Spain remains constant for both G-CSF and epoetins at 30%. Current legislation in Spain states that biosimilars must be priced 30% below the price of the reference biological medicine. Interestingly, in the UK, Amgen’s strategy to remain competitive involved voluntarily price cuts to the original molecule Neupogen® resulting in the price of biosimilars being 10% higher than the originator.Taking an average of the price differentials across the three original biologics (Eprex®, Neupogen® and Genotropin®) and their biosimilars results in price differentials, ranging from -7% in the UK to      -30% in Spain. The calculation is based on lowest ex-factory price per unit of the two most available presentations (filgrastim 30MU and 48MU, epoetin 2000UI and 40000UI, somatropin 5.3mg and 12mg).

Currently, there are no mandatory price reductions imposed on the original biologic therapy after the entry of biosimilars. In the UK and Germany, there are no compulsory price reductions enforced on the biosimilar. In Spain, Italy and France, legislation states that biosimilars must be priced below the originator drug, 30% in Spain, at least 20% in Italy and at 15% in France.

 

What could we expect with anti-TNFs biosimilars?

Based on the analysis above, the anticipated price points of future anti-TNF biosimilars may be around 18% below the originator in France, 20% in Germany and Italy, 30% in Spain and 7% below the price of the original medicine in the UK.

We acknowledge that there are manufacturing issues (sophisticated technologies, processes, and high investments) associated with anti-TNFs biosimilars which translate to higher development costs than those required for current biosimilars. To date, Remsima® (first Remicade® monoclonal antibody to market), is only 5% less expensive than Remicade® in South Korea.

Moreover, the clinical efficacy and safety of these new biosimilar agents has not yet been confirmed. Pricing is one factor dictating market access: the lack of experience with anti-TNF biosimilars, safety and efficacy concerns (especially for biosimilars coming from Asia), and the reluctance to switch from physicians also play a significant role.

 


[1] MP advisors – Merck – Celltrion filed first mAB Biosimilar in Europe: Remicade Challenged – Consulted in January 2013

[2] Genetic Engineering & Biotechnology News – Firms Are Upping the Stakes on mAb Biosimilar Development – Consulted in January 2013

[3] EMA – Biosimilar medicines – consulted in January 2013

One Week In

Welcome to our ALSCG Blog!

I am very excited to take the helm of Alliance Life Sciences and bring it together with the Adjility Health organization. It’s a privilege to serve both groups of employees, and all our customers.

Collectively, we have a lot to offer. We are solving complex problems across a lot of functions. We are doing great work in pricing, HEOR, contract management, clinical operations, and sales operations. We are introducing new algorithms to help our customers compete on analytics, we are creating some great technology and technology capabilities, and so on.

But what is most important in all of this is that we help our customers innovate in their work, and that we innovate in our own work. And by innovate, I mean real productivity gains and real shifts in ways of doing business. This is the source of real gain, this is how cash flow is freed up for the innovation that really matters: the research that brings new health therapies to market.

How do we show decision makers that a global trial can be executed for 3% – 5% less by optimizing site usage globally? How can a mobile app extend a pharmaceutical product into a service that has greater impact on patient outcomes?

We will spend time talking about how we are driving down the cost of our business and our customer’s business, helping manufacturers service patients and physicians better. Its not just solving a skill shortage or helping our clients with areas that are not core skills for them. Those things are nice – but we have to aim much higher, because the pressure to deliver on the industry has never been greater.

There are a lot of “first things” to get done, but one of the very first things we are doing is to get our leadership team up and active on all forms of social media, including our company blog. We have a very talented group with a lot of things to share.

Sharing these ideas with all of you, engaging in a dialogue with everyone more efficiently, is the first step in this process.

I look forward to what comes next!