Intelligence.360: Harbingers of Change

China Architects Sweeping Reform
The Chinese government released plans to reform its healthcare system, and in the process extend healthcare coverage to 90 percent of the country’s 1.3 billion people by 2011. This plan is unprecedented in size and scale, and will have implications for years to come on the development of
the world’s fifth largest pharmaceutical market.

Proposed Japanese Pricing Scheme Would Rejuvenate Innovation
The Federation of Pharmaceutical Manufacturer Associations of Japan (FPMAJ), representing three industry associations in unison, presented a proposal to Japan’s Central Social Insurance Medical Council on overhauling the country’s current pricing scheme. This proposal, if implemented, could rejuvenate the branded market and accelerate the development of the generics market at the same time.

FDA Raises Approval Hurdles for Diabetes Medications
The U.S. Food and Drug Administration issued new guidance for Type 2 Diabetes therapies in the pipeline, requiring that they be proven to not increase cardiovascular risk. This guidance creates a new marker of specificity for companies going through the regulatory process, and provides a harbinger of change for future clinical and safety data needed to ensure product approval in the U.S.

South Korea Mandates Economic Evaluation for National Reimbursement of Pharmaceuticals
South Korea became the first Asian country to use health economic data to determine how it will allocate its healthcare budget, by requiring that new drugs entering the market be subject to a Health Technology Assessment (HTA) prior to being approved for reimbursement. How this plays out in practice will be closely watched by both emerging and developed countries.

Global Sourcing of API Overwhelms the FDA
Violations in Good Manufacturing Practices (GMPs) at an active pharmaceutical ingredient (API) producer in China claimed 149 lives and caused Baxter to recall its heparin sodium injection — bringing to light an increasing issue regarding the importation of API and U.S. FDA inspection capabilities. Ensuring the safety of the drug supply is an increasingly critical issue to be dealt with not only by regulatory agencies, but also by pharmaceutical manufacturers.

R&D Companies Expand into Biosimilars
Merck & Co. announced that it was creating a new unit, Merck BioVentures, to produce new and follow-on biologics. With this, Merck became the first major, pureplay R&D pharmaceutical manufacturer to venture into the biosimilars market. Implications of this move are numerous for branded and generic manufacturers, and emphasize the importance of this developing segment.

The Polypill to Prevent Cardiovascular Disease Among the Masses
A number of companies raced to introduce a cardiovascular polypill that has the potential to combat heart disease in emerging markets. This combination of generic cardiovascular treatments redefines innovation and provides a low-cost method for expanding access to medicines and improving the quality of life in emerging markets and other countries.

Over-the-Counter Market Attractive to Pharmaceutical Manufacturers, Once Again
In 2008, underlying OTC market growth surged significantly ahead of prescription market growth to take an undisputed lead, making the investment in the consumer health business a point of attraction, again, for pharmaceutical manufacturers.

Shake Ups in R&D
A number of “big pharma” companies undertook bold moves designed to spark innovation, improve productivity, and introduce a commercial focus into the scientific realm. These R&D changes highlight the accelerating need to reinvent the current R&D model, and focus more specifically on areas that will bear fruit.

Permits “Top-Up” Payments for Drugs Not Covered by NHS
The National Health Service (NHS) reversed its policy on allowing patients to “top up” their NHS care, by allowing patients who opt to pay privately for treatments currently not reimbursed, to retain access to related NHS care for that condition. Not only is this a significant step for the U.K. health system, but at a time when many countries are moving toward more government involvement in healthcare it highlights the challenges of addressing expanded access, while maintaining patient choice and quality of care.