Why patient access means market access
Peter Mansell talks to Dr Robert Sebbag, vice-president, Access to Medicines at Sanofi-Aventis, about how access to medicines initiatives are becoming integral to pharmas strategic thinking
Corporate altruism in the developing world is a commendable impulse.
Given the power of consumer activism, the ubiquity of a hawk-eyed media, and the growing interest in ethical shareholding, it is also increasingly an impulse few companies can afford to ignore.
In the pharmaceutical sector, widening access to modern or even generic medicines in countries where few patients can obtain or afford the most basic forms of healthcare helps to paper over some of industrys self-confessed missteps in the past, when it aggressively pursued intellectual property rights to the exclusion of more practical or humanitarian concerns. (For Mal Barnards take on pharma and the developing world, see Pharma ignoring Africa is a risk too big to take.)
Moreover, boosting R&D investment in vaccines or therapies for neglected diseases goes some way towards righting the glaring imbalances that in the past have seen only around 10% of biomedical research funds directed at conditions accounting for 90% of the global burden of disease.
These efforts do not mean the profit motive has been set aside.
Indeed, some would argue that corporate altruism is at its most effective when yoked firmly to a desire to make money. (For Mal Barnards take on corporate altruism, see Its time for pharma to get serious about CSR.)
Clearly, though, one of the reasons developing countries have been a low priority for industry in the past is simply because the diseases prevalent in those countries did not pay, or could not be paid for.
That picture is fast changing.
It is not just that industry had its consciousness raised by issues such as AIDS in South Africa; it is also that the sources of revenue are tilting towards pharmerging markets, along with the shifts in disease profiles, lifestyles, and wealth creation/distribution that will eventually bring at least some parts of the developing world more into line with the West.
Many pharmaceutical companies are already running large clinical trials in developing countries, for reasons of cost, access to patients, and ethnic diversity, but also as a kind of advance guard for cultivating the markets of the future.
If clinical trials are an opportunity to learn about local epidemiology, patient needs, healthcare systems, and regulatory structures, then access to medicines programs in least developed countries (LDCs) are about tackling some of the issues identified at root and, in doing so, shaping the local healthcare environment in ways that will make it more amenable to Western medicine. (For information on Pfizers approach to LDC markets, see Pfizers eCard and adherence in emerging markets.)
It is not surprising, then, that access to medicines activities are becoming more integral to pharmaceutical multinationals strategic thinking.
Patient access to medicines in LDCs means access to patientsand that, ultimately, means market access.
As Dr. Robert Sebbag, vice-president, Access to Medicines at Sanofi-Aventis, comments: I believe that the growth of our industry will come from the South.
Heading south
In the pharmaceutical market worldwide, you see that about 50% of profit is made in the US, 25% in Europe and Japan, and the rest in some emerging countries, Sebbag notes.
But in the US and Europe the growth is flat or even decreasing. We can be sure that were not going to see a big innovation every year, a big blockbuster. Thats why companies are completely convinced that the growth will come from the South, where 70% of the population has no access. (For eyeforpharmas surveys of the pharmerging markets, see The Middle East: A pharma market in the making, Reassessing Russia's pharma market; Breaking into the Brazilian pharma market; Cracking the Chinese pharma market, and How to get ahead in 'pharmerging' markets.)
It is also why, Sebbag points out, pharmaceutical companies such as S-A have been diversifying heavily into areas like consumer medicines and generics as a bridge to new markets.
S-A has recently acquired generic companies Zentiva in the Czech Republic, Kendrick in Mexico, and Medley in Brazil, as well as setting up a generics joint venture with Nichi-Iko in Japan.
Its very important to be in these markets, because [the industry] has very few new products coming from research, Sebbag comments. (For more on the future of R&D, see Will big pharma become a collection of marketing and distribution firms?.)
While new innovations will come from fields such as biology and better knowledge of the human genome, we are in the middle of the river, he adds.
We need to make volume, to reduce margins and increase volume even in the United States with the Obama plan.
The key in emerging markets is to have affordability and to be sure that we can have some return.
New business models
To achieve all this, though, we need to think about a new business model, Sebbag emphasizes.
A more flexible approach can help to nurture health as a long-term stimulus to economic development and, in turn, to viable new markets for medicines across the spectrum, from neglected diseases to the chronic diseases already besetting developed countries.
We are seeing tiered pricing policies according to the income of the population, we are thinking about micro-insurance, Sebbag notes.
What is important now is that everyone under the [UNs] Millennium Development Goals is convinced that health will play a very important role in [economic] development Its unacceptable when you have the technical means but no access to these means.
GlaxoSmithKline has grabbed much of the attention in access to medicines of late.
The companys chief executive officer, Andrew Witty, has made corporate social responsibility in developing and even middle-income markets a centerpiece of the new business model now emerging in an era of healthcare cost containment, demand for value, globalization, and multiple stakeholder management.
GSK ranked first among originator companies in the 2010 Access to Medicines Index, launched in June 2008 by the non-profit Access to Medicines Foundation as a means for investors and other stakeholders to measure and compare pharmaceutical companies performance in areas such as public policy, research pricing, and patents.
GSKs recent initiatives in this sphere have included signing up to supply vaccines against pneumococcal disease under the Global Alliance for Vaccines and Immunisations Advanced Market Commitment scheme; a more flexible approach to intellectual property, including setting up a LDC patent pool for 16 neglected tropical diseases; reducing prices in LDCs to no more than 25% of levels in the developed world; stepping up research partnerships; and ploughing 20% of profits from sales in LDCs back into local infrastructure projects.
GSK has stressed the importance of making CSR an integral part of its operations, from research through to government and stakeholder relationships. (For more on GlaxoSmithKline, GSK's approach to corporate social responsibility)
That is a course Sanofi-Aventis has been pursuing since it launched its Access to Medicines division several years ago.
Its all about access
The division is a self-contained unit, with its own staff and resources, distinct from the companys philanthropic activities or its drug donation programs.
Yet Access to Medicines also remains a fundamental component of S-As corporate strategy.
So much is evident from the companys leading presence in emerging markets, building on its traditional strength in vaccines.
Emerging markets accounted for more than 25% of S-As sales in 2009 and were its leading growth contributor, with a 19% sales increase overall at constant exchange rates and an operating margin of 42% (ignoring central administrative and R&D cost).
According to IMS data (MAT December 2009), the company is the market leader in Latin America, Brazil, Africa, Algeria and Morocco, as well as number three in Mexico and Morocco.
As the latest report of the Access to Medicines Index notes, among its peers S-A also has one of the largest numbers of products in its R&D pipeline focused on communicable diseases covered by the Index.
This effort, which also extends to conditions such as malaria, sleeping sickness, tuberculosis and leishmaniasis, is part of a four-pronged strategy encompassing: research and development, implementing new treatment strategies and improving existing treatments, education and communication at every link in the healthcare chain, and pricing and distribution policies that help to facilitate access to medicines.
An example of how the company applies differential pricing tailored to local conditions alongside discretionary IP enforcementone that also illustrates the importance of forming new partnerships across former battle lines in the access to medicines arenais the two-layer artesunate-amodiaquine (ASAQ) tablet for malaria developed by S-A with the non-profit Drugs for Neglected Diseases Initiative (DNDi).
This is an organization that, Sebbag notes, has historically not been a very good friend of the pharmaceutical industry.
As it did not have the capacity to meet the massive demand for malaria treatments worldwide, the company decided to forego its patent rights to the new formulation, while pricing and presentation are tailored to different distribution channels and affordability criteria.
In public sector markets, for example, the new formulation is sold as ASAQ Winthrop at a no profit/no loss price, equivalent to less than $0.5 per day for children under five years of age and less than $1 per day for adults.
A branded version, Coarsucam, is sold through private pharmacies at a regular price, and the combination product is also available under the Impact Malaria brand at a no profit/no loss price.
S-A subsequently reached a similar agreement for fexinidazole, an oral therapy for sleeping sickness that the DNDi had developed up to the preclinical trial phase with a variety of partners.
Most available treatments, such as S-As own Pentamidine (pentadimidine mesylate), which it supplies in partnership with the World Health Organization, are available only in more unwieldy injectable or infusion formats.
S-As predecessor Hoechst originally discovered Fexinidazole in the 1970s.
The company is responsible for the industrial development, registration, and production of the drug, which is in Phase I clinical trials and has been fast-tracked by both the US Food and Drug Administration and the European Medicines Agency. (For more on differential pricing, see Market access: Risk sharing and alternative pricing schemes.)
Flexible approach
This flexible approach is backed up by an industrial policy that accentuates volume-driven sales to compensate for lower prices as well as maintaining local employment, capability, and visibility.
S-A runs 25 manufacturing plants in the developing world, spanning countries such as Bangladesh, Pakistan, South Vietnam, Morocco, India, South Africa, and Brazil.
All of the companys malaria products are manufactured in Morocco, while South Africa is the production center for tuberculosis and Brazil for leishmaniasis.
ASAQ accounts for 20-30% of production in Morocco and is now at full capacity, so that effort will be extended to Nigeria.
Sebbag is adamant, though, that the research, development, and supply of medicines is only part of the package: Advocacy is the first step in this type of project, to explain that this is a disease and we can do something about it.
There is also a huge problem with human resources, Sebbag notes.
Even if drugs for, say, HIV are supplied completely free of charge in Africa, there is still a need for biological tests to check viral load and follow-up to ensure the patient is taking the drug every day.
These requirements are particularly acute in areas such as epilepsy and mental health, both of which also fall under S-As Access to Medicines umbrella.
Here the situation is complicated by under-diagnosis, fear, and cultural exclusion and aggravated by lack of medical input.
In some markets, you have one psychiatrist for the whole country, Sebbag says.
Yet patient numbers and disease risks for epilepsy and mental health are essentially comparable across the northern and southern hemispheres.
By addressing non-communicable first-world diseases such as epilepsy and mental health, S-A is also building a platform to tackle the growing shift of chronic diseases, such as diabetes and cancer into emerging markets.
S-A has already started differential pricing in Thailand, for example, with its long-acting insulin analogue Lantus.
By leveraging the Access to Medicines model outside its traditional parameters, starting with education and training programs, Sanofi-Aventis is taking a long-term view on globalization and the future drivers of pharmaceutical industry growth.
Through epilepsy and mental health, Sebbag explains, we open the door for chronic diseases tomorrow.