How Can Insight-Driven Commercial

Models Deliver Value in Cardiovascular

Therapeutic Markets?

The Source for Critical Information and Insight TM

1 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
Contents
The fast-changing dynamics of the pharma industry
require re-evaluation of analytical models and
streamlining of insight-development processes to
ensure sustainability................................................... 3
Stakeholder value expectations are the highest in
the cardiovascular therapeutic area, where insight
will play a vital role in future growth models................ 4
Growth Model 2.0: Analytical processes that
integrate portfolio management, competitive
intelligence, and stakeholder engagement will be
central to future sustainability..................................... 5
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2 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
Function: Market Access........................................... 6
Function: Competitive Intelligence /
Strategic Planning...................................................... 7
Function: Research & Development........................... 8
New commercial models integrating insight-
development processes will be the cornerstones
of success................................................................. 9
Meet the Author....................................................... 11
The IHS Global Insight Healthcare
and Pharmaceuticals Practice.................................. 11
How can IHS help you?........................................... 11
The Source for Critical Information and Insight TM
The fast-changing dynamics of the pharma industry require re-evaluation of analytical
models and streamlining of insight-development processes to ensure sustainability.
The pharmaceutical industry is going through a
period of significant change driven by the rise of
generic drug markets, payer-centric commercial
models, the growth of pharmerging markets, and
outcomes-based decision making.
In 2009, the industry grew at a rate of 7% to $837
billion1, largely because of both horizontal and vertical
consolidation. Key growth factors included the
increasing demand for major therapies in emerging
markets and the rise of specialist-driven markets.
The pharmaceutical industry typically consists of many
independent, highly concentrated sub-markets aligned
to therapeutic categories. Companies compete aggres-
sively in each category, often using a dual strategy:
Market dominance in one particular disease class
ƒƒ
Risk-benefit-based portfolio diversification for
ƒƒ
the remaining disease classes
Market leadership in each category is largely
governed by a company’s depth of technological
capability and the market penetration of its
existing portfolios.
1 Source: IMS
3 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
So What’s Changed?
Over the last 50 years, intrinsic innovation was the
main driver of industry growth. During this time,
“Evolving analytical
pharmaceutical companies typically invested models need to
around 15% of their net revenues in Research and
Development (R&D), relying heavily on the success harness consolidated
of single blockbuster products.
information sources
Escalating R&D costs, declines in productivity, and
failures of many late-stage pipeline assets have raised in order to allow
doubts about the traditional blockbuster-dependent
approach. Many industry experts foresee a payer- efficient, intelligent
centric growth model driven by coordinated insight- decision making.”
development processes as the next frontier of success.
Although industry growth is expected to continue, the
nature and structure of growth is evolving rapidly. On one
hand, there are tremendous opportunities in the emerging
markets, and on the other hand, there is a tightening com-
petitive and regulatory landscape in developed markets. A robust insight-development process relies on
effective information compilation and ensures a
What Does It Mean? coordinated flow of information from one business
In order for pharmaceutical companies to successfully function to another. It will help pharmaceutical
navigate the opportunities and challenges of this evolv- companies increase commercialization efficiency
ing landscape, it has become ever more important for by engaging proactively with various stakeholders
them to optimize their insight-development processes. (payers, regulators, patients, and physicians).
Stakeholder value expectations are the highest in the cardiovascular
therapeutic area, where insight will play a vital role in future growth models.
The cardiovascular therapeutic segment and its
subsequent disease markets are the leading areas of
growth in the pharmaceutical industry. They command
the largest market for prescription drugs and in 2009
generated $110 billion in sales, accounting for about
13.5% 2 of the total market.
Over the last 30 years, pharmaceutical companies
have invested heavily in the cardiovascular arena to
develop and commercialize molecules for various
indications. Competition within the field has intensified
as a result of:
ƒƒRise in the level of investment
ƒƒStakeholder commitment towards deployment
of resources
ƒƒHigh unmet clinical needs
ƒƒExpected greater returns on employed capital
ƒƒTechnological advances
ƒƒGreater disease understanding
The increased competition has not only led to significant
developments in the treatment landscape, but has also
altered the dynamics of the therapeutic category by
placing greater emphasis on the value of cardiac care.
2 Source: Adpated from Cowan Report 2009
4 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
What has driven the rise in stakeholder
value expectations?
Demographic Shifts
According to the World Health Organization (WHO),
the high prevalence of cardiovascular disorders is
attributed to aging populations, coupled with advances
in diagnostic technologies. The aging population is
driving the heightened emphasis on social care in
healthcare systems worldwide.
Payer-centric Solutions
There has been a considerable shift in the balance
of power between payers and pharmaceutical
companies. Patient solutions have evolved towards
payer-centric approaches that rely on outcome-
and evidence-based decisions. The quality of
care, improved patient outcomes, and cost of
affordability are the principal areas of controversy
between stakeholders.
Growth of the Generic Drugs Market
A recent study indicated a higher level of generic
availability in cardiovascular markets than branded
products due to cost-containment strategies in
healthcare systems worldwide. This has led to a
significant pressure on margins for existing players
in the category.
Specialty-focused R&D
There is an ongoing trend in cardiovascular towards
more specialized therapies, as this approach
offers greater competitive advantage and ensures
sustainability. This carries significant upward risk
and a higher cost base, but has the potential to
deliver far greater value for all stakeholders.
Growth Model 2.0: Analytical processes that integrate portfolio management, competitive
intelligence, and stakeholder engagement will be central to future sustainability.
Cardiovascular therapeutic markets need a strategic
re-focus because of stakeholders’ high value
expectations. Key future success factors will centre on:
Portfolio Diversity and Optimization
Diversification ensures optimized allocation of finite
resources towards projects with greater return on
capital at an acceptable level of risk. The level of
diversification depends on a company’s core strategy
and its relative position in the market. Successful
diversification strategies rely on up-to-date market
information and agile analytical models.
Dynamic Competitive Intelligence
Integrated intelligence processes act as principal
levers of success in a highly competitive environment
by ensuring faster movement of information between
markets and decision makers.
Evidence- and Outcome-based Decision Models
Success in the new pharmaceutical landscape will
largely depend on how fast companies implement
outcome-driven strategies. Quality and consistency
of information are core foundations of outcome-
based models.
5 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
Prioritized Stakeholder Engagement
The evolving market dynamics place greater emphasis
on the need for much broader engagement between “The development and
various stakeholders.
commercialization
An effective engagement strategy depends on
information sharing and processing in order to landscape has shifted
make value-driven conclusions.
to a more value-
Opportunities Ahead
There are tremendous opportunities for growth within driven framework.”
the segment, but the development and commercial-
ization landscape has shifted to a more value-driven
framework. To gain market access, newer therapies
and solutions must exceed existing value expectations
and increase the total level of cardiac care.
In order to achieve future growth, pharmaceutical
companies will need to effectively monitor information
across many verticals and integrate those information
paradigms into insight-development processes.
In the following case studies, we examine the
significance of information and insight-development
practises for three functions within the pharmaceutical
industry: market access, strategic planning, and R&D.
Function: Market Access

Market access is one of the most important Deciphering the value drivers Conclusion
functions in the pharmaceutical industry and is Identify the value drivers for different stakeholders
ƒƒ For companies to mitigate all the key challenges and
directly responsible for late-stage commercialization and potential strategies to overcome reimbursement develop a strategic road map, information processes
of a company’s drug pipeline. hurdles play a central role. Timely, consistent, and analytically
Understand the role of clinical variables from a
ƒƒ rich information serves as a fundamental building block
Market access is typically a three-stage process
payer’s perspective for an integrated market-access strategy. An integrated
commencing with regulatory approval, reimbursement
data source that incorporates different verticals of
or pricing approval, and formulary inclusion.
Creating value propositions to fully capitalize information will effectively minimize the time-to-market
To gain market access for different assets, a pharma- existing Pricing and Reimbursement (P&R) challenges by providing greater insight.
ceutical company must develop an evidence-based opportunities
approach focused on three fundamental principles: Identify market-access barriers and model payer
ƒƒ
Demonstration of clinical and economic value
ƒƒ perception towards different scenarios
ƒƒNumber of competitors
Price evolution according to market conditions
ƒƒ ƒƒGenetics growth rate
Early timetable integrating clinical and economic
ƒƒ ƒƒMarket size
Current Market ƒƒPositioning of current assets
endpoints Scenario ƒƒPrive evolution of each asset
ƒƒCompetitor pipeline
The key challenges faced by market access assets
professionals: ƒƒClinical trial results
ƒƒPipleine monitoring Pipeline Clinical
and analysis Dynamics Landscape
Understanding the pricing and access landscape ƒƒEndpoint data
Interpret and forecast payer behavior for new
ƒƒ ƒƒAdverse events assessment
ƒƒPost-marketing trial information
products given the current barriers to market entry
ƒƒEvolution of clinical guidelines
Analyze the impact of current trends on the
ƒƒ Regulatory
clinical landscape Environment
ƒƒCountry risk assessment
Optimise potential value propositions to gain
ƒƒ ƒƒRegulatory guidelines
ƒƒEngagement scenarios
faster market access
Figure showing the information
dimensions of Market Access and
the critical information needs.

6 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
Function: Competitive Intelligence / Strategic Planning

Sustainable performance in today’s complex industry Market Landscape Variables Forecasted market positioning
ƒƒ
environment relies on how quickly companies process P&R environment in different countries
ƒƒ KOL opinion analysis
ƒƒ
market information and develop strategic processes to Clinical and regulatory policies
ƒƒ
gain competitive advantage.
Conclusion
Orphan drug designations
ƒƒ In order to achieve the efficient level of optimization
Competitive Intelligence (CI) is one such information- Post-marketing trial information
ƒƒ for intelligence models, insight-development processes
harnessing function. High-quality data is the play a central role.
foundation of an efficient intelligence function and
Pipeline Monitoring
Endpoints of various trials
ƒƒ An integrated data source, together with an
ensures faster development of insight-driven
Potential new entrants in same sub-therapeutic
ƒƒ advanced analytical platform, will help pharmaceutical
solutions at both the tactical and strategic levels.
category companies gain competitive advantage and ensure
Intelligence-rich data enable companies to interpret a future sustainability.
given situation, e.g., a recent trend or future forecast,
and base strategies for future developments on the
current situation and knowledge. Awareness and Culture
A key challenge for any CI function in the pharmaceuti- I nformation L andscape
A successful intelligence
cal industry is the optimization of insight-development
framework depends on
processes and implementation methodologies. Communication
the three fundamental
To develop an optimized CI process, companies building blocks of
structure and process,
need timely data focusing on:
awareness and culture,
Interpretation Collection and planning and
Current Competitor Activity implementation. This
Price cuts
ƒƒ structure is constantly
Product-labelling updates
ƒƒ reinforced through
Analysis effective compilation
Major licensing and agreement developments
ƒƒ Structure Planning
and and and utilization of
Patent expiration
ƒƒ information.
Process Implementation

7 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
Function: Research & Development

R&D is one of the most important functions in the Competitor pipeline variables
pharmaceutical industry, as it ensures future growth Indications of various trials
ƒƒ
and sustainability. Nevertheless, over the last couple of Detailed primary and secondary endpoints
ƒƒ
years, this function has come under intense pressure Regulatory
Results of completed trials
ƒƒ
because of declining productivity and rising costs
Number of enrolments in major trials
ƒƒ
of introducing new compounds. This situation is
Safety and efficacy information
ƒƒ
heightened in the cardiovascular market with its high
stakeholder value expectations. Regulatory landscape
Many pharmaceutical companies have started to Detailed information about registration trials
ƒƒ
reorganize their R&D programs by incorporating Response of regulatory agencies to clinical
ƒƒ R&D
market variables into the development structure. There results data
has been a growing debate that R&D functions must Payer behavior towards clinical outcomes
ƒƒ
not be isolated from the pricing or reimbursement
Conclusion
environment. A clinical development program must
The effectiveness of the R&D function largely depends
take into account the payer’s perspective on the
on integrating three main levers of information: Clinical Market
design, implementation, and interpretation of Environment Access
regulatory landscape, clinical environment, and
clinical variables.
market-access scenarios.
A fully integrated approach needs continuous
A fully comprehensive data source will help
monitoring and analysis of competitive, regulatory,
pharmaceutical companies develop a cost-effective
and payer activity, including: Figure: Stakeholder engagement map
and market-responsive R&D strategy by providing for R&D function
greater insight on stakeholder perspectives.

8 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
New commercial models integrating insight-development processes
will be the cornerstones of success
The pharmaceutical industry is in a state of flux,
and many forces are re-shaping its core structure.
Historically, pharmaceutical companies have
succeeded by discovering, developing, manufacturing,
and then marketing their products, often allocating
resources in the prioritized manner.
The sequential approach (tunnel innovation) of
resource allocation has fuelled the growth of the
blockbuster-dependent commercial model. One
of the principal drawbacks of this approach is the
peripheral position of information and how it is
used in decision-making models. Information was
disseminated from one discipline to the next, but
not within disciplines, often creating information
silos and masking.
9 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
A Rapid Evolution
With the rise of the information age, the fundamental
elements of success are evolving rapidly. Pharmaceutical
companies are challenged on several fronts, and their
major areas of concern are centred on:
ƒƒR&D technologies
ƒƒRegulatory emphasis and market access
ƒƒStakeholder engagement
ƒƒE-business and supply chain management
ƒƒMarketing and consumer demands
The role of information has changed dramatically in
such a competitive environment. The need to compile
information sources is exacerbated with the rise of the
payer-centric model and the requirement for economic
endpoints in decision making.
For future growth and success, new commercial
models must integrate insight-development processes
in order to actively engage the various cross-functional
disciplines within a company.
Pharmaceutical companies should work towards
resolving all the roadblocks in information sharing
and compilation.
An integrated information source will help ease
many concerns for different stakeholders in the
pharmaceutical industry. It should give timely,
accurate, and mission-critical information on
competitors, regulators, payers, and consumers,
thereby providing pharma companies with effective
stakeholder engagement points and helping them
achieve a sustainable growth strategy.
 Pharmaceutical
Companies
Pharmaceutical Figure highlights the evolving
Companies
Physicians/ commercial models in the
Clinical Community pharmaceutical industry and the
changing role of information in
Patient
the decision-making process.
Regulatory The blockbuster-dependent
Payer Agencies
Groups approach relies on information
sharing as a collateral function,
Information Regulatory depending on communication of
Agencies results, whereas the new payer-
centric approach requires an
integrated and cross-functional
utilization of information.
Payer
Physicians/ Groups
Patient
Clinical
Community

The blockbuster-dependent model relies on The payer-centric model works on fundamental principles
cyclical flow of information but lacks focus to of information dissemination across disciplines and between
disseminate information across disciplines, often stakeholders. It links decision-making process through
creating information silos. uniform distribution of information.

10 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
More Information
Meet the Author
Praful Mehta
Senior Healthcare Analyst, IHS
Praful.Mehta@ihs.com
Praful Mehta is a Senior
Healthcare Analyst at IHS. He
joined the company in 2010 and
is a practice leader within its
therapeutic area services. Praful has been a long-time
advisor to senior teams within the pharmaceutical
industry on issues of market competitiveness, busi-
ness integration and commercialization strategies.
Prior to working at IHS, Praful was a Vice President
at StrataPro Analytics and Consulting, where he
developed the company’s core consulting capability
for developed markets. He also led various project
teams at GlaxoSmithKline Pharmaceuticals and
Johnson & Johnson Pharmaceuticals.
Praful holds an MS degree in International
Management and Corporate Strategy from North
Eastern University / Dublin City University. He has
a BS with honors in Genetic Engineering and
Biotechnology from American University / M-IIT.
11 | How Can Insight-Driven Commercial Models Deliver Value in Cardiovascular Therapeutic Markets? Copyright © 2011 IHS.
The IHS Global Insight Healthcare
and Pharmaceuticals Practice
The IHS Global Insight Healthcare and
Pharmaceuticals practice provides a portfolio of
intelligence solutions to optimize the performance
of companies and organizations across the
pharmaceutical, biotech, and generics sectors.
Our key focus is to provide actionable insights to
support strategic decision making, particularly in the
fields of market access, pricing and reimbursement
(P&R), emerging markets, generics strategies,
therapeutic development pathways, and general
competitive intelligence.
»F
 ind out more about our healthcare and
pharmaceuticals practice
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