Delivering “winning” performance in today’s biopharmaceutical landscape requires making the right therapeutic area, geography, and physician/hospital participation choices as well as determining how to deliver more stakeholder benefit than the competition, while getting paid for it. Companies that excel at doing this can be expected to deliver strong profitable growth performance, whether they have chosen to focus on branded Rx or diversify branded Rx into other businesses.
To date, successful oncology treatments have promised some of the highest returns for pharmaceutical manufacturers. The market is expected to continue to show strong growth for oncology prescription sales, driven by factors such as an aging population and lifestyle changes predisposing to disease. The industry’s status quo however, and the success of incumbents' business models are both being challenged.
Growing budgetary pressures are leading payers to demand a more robust demonstration of value from oncology treatments, increasingly being measured in terms of superiority to standard of care rather than stand-alone efficacy. Outcomes-based arrangements are directly linking drug value to price as healthcare systems seek to hedge their risk and cut costs, a goal at odds with the shift in treatment paradigm towards the greater use of expensive combination therapy regimens. Advances in technology are enabling these changes, with novel platforms expanding the potential for detection of responsive patient subsets, defined by specific immunogenic, genomic, epigenomic, proteomic, metabolomic, microbiomic and phenomic profiles in comparison with hitherto broadly defined tumor types.
Enter the age of personalized medicine - without a doubt one of the greatest trends to provide substantial patient and payer benefit for a generation. But capitalizing on this is not without significant challenge for manufacturers. We are already witnessing a dramatic reduction in eligible patient populations for novel treatments, as labels will only be awarded to highly-responding subsets, increasingly linked to companion diagnostics. Additionally we see multiple manufacturers studying similar mechanism of actions (MOAs), creating an intense competitive landscape. Consequently, this confers limitations on the depth of market penetration expected by individual therapies. These facts, in combination with shorter time-in-market and loss of exclusivity, are heavily impacting return on investment and, in an environment requiring increasing R&D spend, threatening profitability.
Pharmaceutical companies will also be required to shoulder increased R&D risk. An asset’s value only holds true against an unchanged treatment paradigm, which as the competitive landscape becomes increasingly fragmented is fast vanishing. The age of the 'one-size-fits-all' therapy is ending, and with it the blockbuster model that has for so long driven shareholder value.
To remain successful in the oncology market, change is now a necessity in order to adapt to this altering market dynamic.