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young sales representatives involved in the pharmaceutical marketing  industry needed to be educated on ethics, integrity and professionalism

Arguably, one of the factors which may make pharmaceutical sales representatives digress from ethics and professional integrity are today’s challenging market conditions in the pharmaceutical industry. What makes this market challenging?  In this columnist’s view, it is none other than the imbalance between sales tactics and the need to adhere to ethical practices. Let’s take a very simple example. Some sales representatives of pharmaceutical companies sneak into cabins of doctors when hundreds of patients wait in queues impatiently. This alone is a violation of ethics. It is nonsensical to say that sales representatives should be banished from the industry, particularly when there is a free and open market. But whoever comes in should play by the rules and ethics.  

For Sri Lankan pharmaceutical sales representatives to adopt ethical practices, they must understand the basics of our value

PHARMACEUTICAL INDUSTRY ANALYSIS Brazil has the 11th largest pharmaceutical market globally with annual sales topping US$17bn. Brazil launched a major 10-year biotechnology initiative in 2007 that provides incentives for private-sector R&D and production. There are some 550 pharmaceutical firms in Brazil. Of the top ten companies by sales in 2008, the first six are all foreign multinational drug makers. Sanofi-Aventis (US$1,229mn in sales) and Novartis (US$1,116mn) are clear leaders, followed by Roche (US$735mn), Pfizer (US$666mn) AstraZeneca (US$584mn) and Eli Lilly (US$545mn). Local firms Aché (US$456mn), EMS Sigma Pharma (US$445mn), Eurofarma (US$424mn) and Biosintética (US$382mn) fill the remaining spots. While this shows the strength of innovation for foreign drugmakers, the presence of five local firms highlights strong competition, as well as the growing use of generic drugs in Brazil. Other leading local producers include Aché/Biosintética, Medley and Libbs. From 2009-2014 BMI forecasts a CAGR of 11.63% for patented drug market in US dollar terms. The projected continuation of sales expansions is one of the key reasons that multinational research-based drugmakers continue to invest in Brazil despite generic competition having eroded some market potential since their inception in 2000. Industry association PróGenéricos has estimated that generics will account for 30% of the market by 2010. Investment reportedly totaled around US$400mn between 1999 and 2006, illustrating not only an expansion of capacity, but also the repositioning of product lines in favor of genuine generics. SOURCE: Business Monitor International

“AstraZeneca is the perfect example of a company which has shown all the signs of panic over the past five years,” said Rea. “The stress of an underwhelming pipeline has led it to make bad decisions on top of bad decisions, and although it enjoyed some top line growth by flogging its sales model, the same primary care sales model has led to poor decisions in many areas.”

This year there were two major factors which contributed to Johnson & Johnson’s number one ranking. It successfully brought to market Abiraterone (Zytiga) - a lyase and steroid synthesis inhibitor for use in the treatment of prostate cancer - and furthermore it was a major riser in the Access to Medicine Index, which is of increasing global importance.”

“Roche, which kept its number 3 spot on the Index, saw the first combined launch of a drug and companion diagnostic device, but on the negative side it had to close phase III development of dalcetrapib, a potentially $20bn product. “Sanofi, although rising one place to rank fifth, suffered a massive climbdown with Zaltrap in colorectal cancer launching at a suicidally high price which it continued to defend against increasing criticism. It eventually cut costs to 50 per cent but the damage had been done. “And AstraZeneca is the perfect example of a company which has shown all the signs of panic over the past five years. The stress of an underwhelming pipeline has led it to make bad decisions on top of bad decisions, and although it enjoyed some top line growth by flogging its sales model, the same primary care sales model has led to poor decisions in many areas.”

he United States will command a smaller piece of the pie while still being the largest single drug market. I

The U.S. still spends more per capita on medicine than any other nation

As per-capita income increases, say, from $500 to $5,000, a medicine’s cost as a percent of that income drops by an order of magnitude

Scheduling cases can be challenging as cases may occur earlier/later than planned. Trauma cases are rarely ever planned. “The entire OR staff is ready to go and we are waiting for the rep to arrive.”

 Physicians abandon complicated devices that fail to offer guaranteed support. “We stopped using the device. We are tired of needing an in-person rep for every question or issue that arises.

) Physicians that have to switch a device in the OR can’t obtain the support they need. “I’d consider switching my business to a device that offers guaranteed real-time support.”

BIG R&D SPENDERS Company R&D Spend in Rs Crore Ranbaxy 331 Dr Reddys Labs 283 Sun Pharmaceutical 146 Wockhardt 94 Lupin 87 Cadila Healthcare 71 Torrent Pharmaceuticals 51 Biocon 27 Panacea Biotec 24  

GLOBAL BIOTECH R&D PRODUCTIVITY ON THE RISE The productivity of big pharma has been remarkable over the past 25 years. In each of the last 10 years, the pharmaceutical industry has ranked at the top of Fortune.s .most profitable. industry list. But this top ranking has eluded the industry in recent years, during which the productivity of the biotech sector. for many years poor in the aggregate.has strengthened markedly. An emerging distinction between biotech and big pharma is the productivity of R&D. According to Arthur D Levinson, chairman and CEO, Genentech, R&D spending by large pharmaceutical companies has been steadily increasing over time, while the number of new drug approvals (NDAs) coming out of these companies has been decreasing. In 2004, the pharmaceutical industry spent about $50 billion on R&D, compared to $16 billion spent on R&D by publicly traded US biotech companies, and an estimated $20 billion spent by the global biotech industry. In spite of its large R&D expenditures, big pharmas. NDAs have been declining steadily, while biotechs have accounted for an increasing share of NDAs over the past five years. In 2003, the biotech industry hit a milestone when it surpassed big pharma in the number of new drug approvals from the Food and Drug Administration (FDA) in a given year. The trend continued to favor biotech in 2004. In 2005, an estimated 35 new pharmaceutical or biotechnology products with sales potential of at least $150 million each will enter the market. Of these, 20 are expected to be products from biotechnology companies, and will be marketed directly by these companies or in collaboration with pharmaceutical partners. In addition, there are more than 700 compounds from biotech firms at various stages of development, with more than 400 compounds in clinical trials. More than four out of five therapies currently in drug development are founded on biotech discoveries or employ biotech tools.                                                                                                       Source: Ernst & Young

Key to this agenda is the changing commercial business model pharmaceutical companies are starting to address, leading to more direct deliveries to the patient. Pharmaceutical companies will have to turn more towards direct sales channels (and therefore also direct distribution models, i.e. deliveries to the patient) to reduce margins in their current business.

The white paper specifies 8 key challenges and shows what the step change should be.

Anne O’Riordan, Global Industry Managing Director of Accenture’s Life Sciences group, believes that this offers an engine for return to growth.Moody’s Credit Outlook agree and in response they have upgraded their outlook for the Pharmaceutical Sector from Negative to Stable, pointing out that “the multiyear wave of drug patent expirations that have squeezed profits should subside next year”.

Global pharmaceutical company GlaxoSmithKline has been hugely successful at supporting a culture of innovation with smaller entrepreneurial units as well as developing strengths in the consumer health markets in the Middle East and Asia.

Bristol-Meyers Squibb has also developed a very specific strategy and targeted unmet clinical needs, such as biological dugs and oncology, as well as executed some creative deals with big pharma companies and implemented fundamental internal organisational changes.

The implications for Trius (TSRX) and other leading biotechnology companies involved in antibiotics development are profound.

ost large pharmaceutical and biotechnology firms have avoided antibiotics for much of the past two decades in large part due to the intrusion of Congress into the regulatory process

The most visible sign of this shift in attitude came from Congress with the passage of the Generating Antibiotics Incentives Now Act or GAIN which became effective on October 1, 2012. This was intended to spur development of new antibiotics through streamlining a regulatory process which has been oppressive for much of the last decade. Responding to the prompting of Congress, I expect the FDA to approach regulatory approval of new antibiotics with the same sense of urgency as drugs for cancer. The end result will be quicker approval of new drugs and new indications for existing antibiotics.