The Changing Pharmacy Marketplace

I had the opportunity to listen to a few executives talk about how the marketplace is changing.  While I don’t think any of it was surprising, it did bring up some interesting discussion points.

The discussion focused on five themes:

• The fact that the small molecule market is essentially going generic and will be a low cost market.
• The fact that biologics is the focus and is where innovation and the spend will be.
• The challenge of wiring healthcare to get that last mile to the physician.
• The unknown implications of health reform and exchanges.
• The continued focus on the consumer as central to healthcare.

I thought it was very interesting that several people talked about this evolution from brand to generic to biologics as the “circle of life” where there was a natural redistribution of cost.

I thought the discussion around personalized medicine was interesting especially as it dealt with the non-biologics and looking at where there were still opportunities to differentiate in the small molecule world.

One of the more interesting discussions was on whether bio-similars were really a “generic” type strategy or a new type of innovation.  Given the clinical work and other hurdles that are imagined for bringing bio-similars to the market, it isn’t expected that you’re going to see massive price drops.  And, if they aren’t therapeutically equivalent, then they become another option within the category.  As one person pointed out, the likely scenario is more of a step therapy strategy where if the bio-similars (or bio-betters as one person called them) are less expensive that the original biologic AND there is no difference in likelihood of success with an initial patient then you would simply require patients to start with the bio-similar.

There was some interesting discussion on the use of biologics from a prevention perspective which was only touched on.

One person talked about the blurring of the brand and generic manufacturer demarkations, but I think Teva’s already done that over the past few years. 

There was some discussion of current state tactics around copay cards and how they are used.  The question being whether this is to drive lower consumer costs, avoid switching, or avoid generic substitution.  This led to the classic debate of patient – physician versus payer. 

The biggest thing that scared me was some of the discussion around how DC and politics can play a role in determining care versus allowing for evidence-based standards of care to drive decisions.  As I was taught in consulting, you should make your decisions based on facts not on opinions.