Prioritizing Patients Over Profits
Australian pharma company ‘For Benefit Medicines’ introduces an innovative patient-centric model.
Imagine a pharmaceutical company that distributes all profits to patient support and medical research...
Enter For Benefit Medicines (FBM), established by Dr Barry Frost, in partnership with John Hurley. Frost holds a PhD in pharmacology and has spent 35 years working for four different major pharmaceutical companies. With a rich and varied experience in pharma, it has been the ‘for benefit’ model that has interested him most over the past few years. After reading an article in the Harvard Business Review (November 2011 edition) entitled “The For Benefit Enterprise,” Frost was intrigued by the documented case studies that enhanced his evolving vision.
To take this concept to the next level, we decided to look at the idea of whether we could develop a model where the patient in a given disease state could actually have a say and help others now, and in the future, by supporting a brand or a series of brands that funded patient support.
The opening paragraph of the article reads as follows: “We are in a new era. For-profit businesses are tackling social and environmental issues, nonprofits are developing sustainable business models, and governments are forging market-based approaches to service delivery. Out of this blurring of traditional boundaries, a different model of enterprise is emerging, driven by entrepreneurs who are motivated by social aims.” This dovetailed perfectly with Frost’s thinking. He discovered that the ‘for benefit’ model has been used in many areas of business but not, to his knowledge, in the pharma industry. The concept subsequently led to the formation of his company.
“The model was based on the idea that every pharma company aims to be patient-centric or patient-focused,” says Frost. “To take this concept to the next level, we decided to look at the idea of whether we could develop a model where the patient in a given disease state could actually have a say and help others now, and in the future, by supporting a brand or a series of brands that funded patient support.” By helping patients today, Frost envisages assisting medical research that can assist patient’s tomorrow. As he explains, “Traditionally, the doctor and the pharmacist are the decision-makers. But, once the doctor has selected a therapy, is there any reason why the patient shouldn’t be involved in brand selection to benefit fellow patients?”
The rationale for proceeding with the model
Frost notes that as brands went off-patent in Australia due to the reimbursement system, all brands were priced the same at patent expiry and thus there was an opportunity to differentiate on something other than price. It became clear to him that patients and doctors might be able to influence brand choice, especially when a brand would reinvest its profits into the health system.
Influenced by a family member’s recent experience of breast cancer, Frost decided to focus initially on marketing generic versions of the breast cancer drugs Anastrozole and Letrozole. These drugs are used by women for a period of five years after surgery. “Together, these two products make up over 94% of the aromatase inhibitor market,” says Frost, “and by providing doctors with two medications, it will mean they have a choice." He estimates there are already about 30,000 patients in Australia on these medications, and aims to achieve 50% of these prescriptions on an annual basis. Achieving this goal would generate about AU$ 5 million per year.
The profits he generates through the sale of these drugs will be donated to the two largest breast cancer organizations in Australia in the areas of patient support and medical research - Breast Cancer Network Australia (BCNA) and The Breast Cancer Institute of Australia. Penelope Davies, Media Manager for BCNA, provided the following excerpt from CEO Christine Nolan’s statement in response to the exciting news: “We are very grateful that the Directors of FBM are determined to keep their profits in Australia to benefit people affected by breast cancer. The funds coming to BCNA will help people living with breast cancer now, while the research funding will help those diagnosed in the future.”
I believe this company will grow very quickly as it's the right model at the right time. This is a model that will engage patients, doctors, payers and governments. I believe it will also engage talented people who want to work for a more purposeful company.
Frost predicts that the premise of his company will empower cancer patients. He feels that, if pharma companies have learned anything about patient centricity, it’s that patients often feel fairly helpless and that consulting and engaging with them is a way for them to reclaim their power. By knowing that they are helping people in the future who suffer from the same disease, Frost believes that this will improve patient satisfaction and patient retention, leading to improved patient outcomes. Hence, the company’s tagline: “Now Every Cloud has a Silver Lining.”
A game-changer for pharma
It is Frost’s firm belief that his disruptive innovation could be a game-changer in the industry. A pharma exec, who wishes to remain anonymous, agrees: “There is a trend happening whereby some originators of a new drug are realizing that smaller companies can be more successful in commercializing a drug than the big giants. This is where For Benefit Medicines (and others like them) could develop into large companies in the future.” He elucidates further, “If the company is highly successful in commercializing products, it could easily win more in-license deals in the future. While the in-license model would mean that a large percentage of the profits would continue to return to the parent company, a good proportion of the remaining profits would directly benefit patients and medical research.”
Commenting on the fact that this is a small start-up, the pharma exec continues, “While at the moment they have only two generic breast cancer drugs, I believe this company will grow very quickly as it's the right model at the right time. This is a model that will engage patients, doctors, payers and governments. I believe it will also engage talented people who want to work for a more purposeful company.” He also feels that the current two generics could quickly turn into in-license and co-marketing deals from small to medium pharmaceutical companies, and eventually their own funded R&D arm. “Things could rapidly escalate when other players enter the market,” he says. “Some governments could even go down this path themselves - or even a rich philanthropist funding the initial in-license deals.” With this type of enthusiastic response from someone with many years in the pharma industry, it’s clear that FBM could have created a winning future formula.
Anticipated response to the new patient-centric model
Since FBM launched only at the end of November 2015, it is difficult for Frost to anticipate what the rest of the pharma industry will do. However, he welcomes the fact that other companies might follow their path, as he has always been passionate and committed to improving the lives of patients. He continues to feel strongly that the pharma industry needs to keep improving to deliver better patient value. Indeed, he questions whether, despite the word ‘patient centricity’ being discussed widely, any pharma company really fully embraces it? In order to succeed, he believes that pharma companies need the ability to link more closely to patients, to really understand their disease and the key issues they face every day. In his opinion, FBM achieves this, “and as the model progresses, we will have better insights to improve patient care.”
Frost doesn’t envisage that physicians would need to change their therapeutic decisions in order to support his company. They could, however, switch to the brand of drugs marketed by FBM for those patients who wanted the satisfaction of knowing that the company profits would go towards medical research or towards Australian patient support.
The future of FBM
Continuing his life-long commitment to providing patients with as much information as possible to ensure they are as informed as they can be about their disease and the medication they’re taking, Frost hopes to expand the FBM catalogue of generic medications. “This would widen the distribution of profits generated to other patient groups and medical research organizations,” he says. In time, he hopes that the company’s ambit of drug sales will include other therapeutic areas, such as prostate cancer, multiple sclerosis, Alzheimer’s, and Parkinson’s disease. Alzheimer’s is receiving particular attention at present, with Hillary Clinton outlining a proposed $2 billion research fund under her proposed future administration to establish a cure by 2025.
Asked how he will measure the success of his new company, Frost explains that he will benchmark against the share of the market that he is able to achieve. It would need to be substantial in order to realize the multi-million-dollar donation to medical research organizations that he envisages. Ultimately, irrespective of his company’s new model, he is clear that all aspects of the pharma industry should revolve around the patient. He concludes, “Selling in a ‘patient-centric’ way is all about providing the means, so that the patient is at the center of deciding health outcomes via well respected patient organizations and effective clinical trial organizations.”
Since you're here...
... and value our content, you should sign-up to our newsletter. Sign up here