Orphan Drug Commercialisation and Market Access in Emerging Markets

A FirstWord Dossier Advisory report

June 2016

ADVISORY REPORT

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Orphan Drug Commercialisation and Market Access in Emerging MarketsADVISORY REPORT

June 2016

Orphan Drug Commercialisation and Market Access in Emerging Markets

Published June 2016© Copyright 2016 Doctor’s Guide Publishing Limited

Part of the FirstWord Dossier family of reports exploring important trends and challenging issues affecting pharma, FirstWord Dossier Advisory Reports and Highlights provide actionable insights derived from deep-dive primary research with thought leaders from across the stakeholder spectrum through an in-depth report and a management summary of key findings ensuring clients are up to speed and can bring others up to speed quickly.

All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.

This report contains information from numerous sources that Doctor’s Guide Publishing Limited believes to be reliable but for which accuracy cannot be guaranteed. Doctor’s Guide Publishing Limited does not accept responsibility for any loss incurred by any person who acts or who fails to act as a result of information published in this document. Any views and opinions expressed by third parties and reproduced in this document are not necessarily the views and opinions of Doctor’s Guide Publishing Limited. Any views and opinions expressed by individuals and reproduced in this document are not necessarily the views and opinions of their employers.

Cover image: © cherezoff | AdobeStock

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Orphan Drug Commercialisation and Market Access in Emerging MarketsADVISORY REPORT

June 2016

All Contents Copyright © 2016 Doctor’s Guide Publishing Limited. All Rights Reserved i

Contents

Executive summary 1

Research Strategy 3

Glossary 5

SWOT Analysis: Market Access for Orphan Drugs in Emerging Markets 7

Introduction 8

Market shaping for orphan medicines in emerging markets 9

Access to orphan drugs in emerging markets is inconsistent 9

On paper, access is better than might be expected 13

In emerging markets, market shaping has a broader definition 15

Disease guidelines can give local experts a voice 17

Emerging-market physicians and patients are eager to engage 18

Market access and pricing for orphan medicines in emerging markets 19

Registries, not risk shares, can address payer uncertainty 19

Conditional Coverage Has Limited Scope in Emerging Markets 21

Named Patient Programmes are a Time-Limited Solution 23

Orphan Drugs’ High-Price, Low-Budget Impact Business Model is Problematic 26

Market Segmentation is a Critical Success Factor 29

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Orphan Drug Commercialisation and Market Access in Emerging MarketsADVISORY REPORT

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Middle East & Africa 31

SWOT Analysis: Middle East & Africa 32

Some Middle Eastern populations have unique rare disease characteristics 33

Wealthy populations and first-class infrastructure, but pricing is a challenge 34

Pricing and reimbursement barriers in the Middle East & Africa 36

Market access is highly specific to the local context 36

Latin America 38

SWOT Analysis: Latin America 39

Niche reimbursement, and court injunctions, drive the opportunity in Latin America 40

Some Latin American payers cannot meet their policy commitments 42

Eastern Europe & Central Asia 44

SWOT Analysis: Central & Eastern European Emerging Markets 45

Russia is the largest market, but is challenging for foreign companies 46

European Union and Periphery: Transitioning from Price Markets to HTA markets 48

Asia and the Pacific Rim 51

SWOT Analysis: Asia and the Pacific Rim 52

Rare Diseases Struggle to Gain Acceptance in China and India 53

Mid-Sized Asian Markets Offer Small Opportunities for Orphan Drugs 56

Conclusions 57

About the author 59

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Orphan Drug Commercialisation and Market Access in Emerging MarketsADVISORY REPORT

June 2016

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Research Strategy

This advisory report includes quotes from structured interviews with seven senior market access executives from globally leading orphan drug manufacturing companies, as well as three consultants. A full discussion guide was prepared for each interviewee, with questions developed specifically for each market or topic of interest. All interviewees currently hold responsibilities for their respective regions, or have a special expertise in countries included in this survey, having previously led value dossier submissions and/or payer negotiations.

The primary research insights are bolstered by real-world case studies and references from secondary web-based research. The secondary research was conducted in April and May 2016, and was in English for all regions except Latin America, where research was gathered in the local languages (Spanish and Portuguese). All hyperlinks included in the footnotes of this report were current as of June 3rd, 2016.

Key interview questions answered by our experts

nWhich are the most dynamic orphan drug markets in your region/country of responsibility?

nWhich stakeholders are critical to market access for orphan drugs?

nWhat are the greatest threats to market access in terms of policy, infrastructure, local gold standard therapies, etc.?

nHow do local registration requirements and processes differ for orphan drugs, if at all?

nWhat standards do payers require regarding economic and pricing submissions?

nHow do payers allocate budget to orphan drugs, and what are the financial constraints?

nWhat partnerships with local stakeholders are desirable, and what will the business impact be?

nWhat is the value to payers of co-investing in diagnosis and screening?

nWhat interim market access arrangements or data-driven channels are achievable? For example, Named Patient Programmes, patient registries and Risk-Sharing Agreements?

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Orphan Drug Commercialisation and Market Access in Emerging MarketsADVISORY REPORT

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Our experts

nGeneral Manager (Emerging Markets), leading orphan drug company.

n International Marketing Director, Europe-based orphan drug manufacturer

nOrphan Disease Area Lead, Top 10 global pharmaceutical company

nRegional Manager (Central & Eastern Europe), leading orphan drug company

nRegional Manager (Latin America), leading orphan drug company

nMarket Access Director, Rare cancers-focused biopharmaceutical company

nMarket Access Director (Brazil), leading orphan drug company

nColombia Director, Top 10 biopharmaceutical company

nAd Rietveld, Partner, RJW & Partners

nCharles Rowlands, Managing Director, Parioforma Consulting

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Emerging-market physicians and patients are eager to engageOnce this analysis is complete, it is nevertheless important not to be overcautious when it comes to market shaping activity in emerging markets. One positive driver for market shaping is local physicians’ greater eagerness to engage, compared with their colleagues in advanced markets. As connectivity with advanced markets continues to improve, driven by specialist conferences and online databases of scientific literature, healthcare professionals in emerging markets are able to access the latest knowledge. According to the experts interviewed for this report, these individuals can become highly motivated to pursue access for their patients, as they have experience with local routes to market of which pharmaceutical companies are unaware.

“The physicians are not of such a high standard in emerging markets. Their level of medical education is lower even though there is knowledge transfer all the time. We have to educate them, but they are very keen on receiving information and they have a willingness to get the product.”

International Marketing Director, Europe-based orphan drug manufacturer.

The experts also take the view that patient associations are more willing partners for industry in emerging markets. This is partly due to the problem of funding, and in some less open societies, governments can be suspicious of their motivations. For example, the first patients’ association established in China opened its doors as recently as 2000, and it is reported13 that 10 new disease-area groups are springing up in China each year. Yet for stakeholders in rare diseases, the Chinese government is highly vigilant over any activity that could be misconstrued as undue influence, and in many Asian countries, patients suffering from rare diseases face a level of social stigma that would not be acceptable in some Western countries. Mindful of these problems, one expert from a Europe-based orphan drug manufacturer takes a balanced view, noting that despite these challenges patient groups in emerging markets are more agile than their counterparts in advanced markets.

“Patient associations are key in finding the patient, but in emerging markets, many of these groups are under construction. The good thing is that in emerging markets, patient groups move faster than developed countries, so you have one part of the population that is not healthy, and another that have access.”

International Marketing Director, Europe-based orphan drug manufacturer.

13 Life Sciences Connect (2016). Rare Disease Patient Groups Emerging as Key Stakeholders in Asia. Retrieved from http://ipscience.thomsonreuters.com/blog/rare-disease-patient-groups-emerging-as-key-stakeholders-in-asia/

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Orphan Drug Commercialisation and Market Access in Emerging MarketsADVISORY REPORT

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Russia is the largest market, but is challenging for foreign companiesDespite the lack of a comprehensive public reimbursement system, Russia offers a number of potential avenues for coverage of orphan medicines in the region’s largest marketplace. The most well-known federal funding stream for low-population disorders is the so-called ‘Programme of the Seven Nosologies,’ a scheme initiated in 2008 as a supplement to pharmaceutical coverage for certain privileged population groups. The programme provides drug coverage for diseases including haemophilia, cystic fibrosis, Gaucher’s disease, chronic myeloid leukaemia and multiple sclerosis.75 However, there have been complaints that the programme is highly restrictive, with frequent budget overspends, and the rationale for inclusion in the programme appears to be unrelated to disease prevalence or severity. The programme has also received criticism for a lack of transparency in access requirements and the infrequency with which it is revised to take account of new health technologies.

“In Russia, there is an opportunity to include the drug in the Essential Drug List (EDL) and the programme of the Seven Nosologies (e.g. rare diseases such as Gaucher’s disease and haemophilia). The EDL however is in the course of being updated; data requirements and legislation in the different regions of Russia are in continuous evolution and country access leads patiently follow those changes.”

Pricing & Reimbursement Director, Rare Cancers-focused Biopharmaceutical Company

Given the barriers inherent in accessing this special programme, an alternative focus for orphan drug manufacturers in Russia is the possibility of access to the federal Essential Drug List, or to any number of regional reimbursement lists. Unfortunately, experts interviewed for this report commented that regional coverage outside the wealthy urban centres of Moscow and St. Petersburg is difficult to attain, either due to a lack of budget or an unwillingness to fund high-cost medicines. Irregularities in regional tenders are also a significant business risk. In a 2014 survey of managers at Russian affiliates of Western pharmaceutical companies, corruption was cited as the second-most significant challenge in the marketplace, after ineffective regulation.76

Even prior to market access, the Russian product licensing process is estimated to last an average of 17 months,77 which amounts to an important time and effort consideration in companies’ global launch sequencing and commercialisation strategies. According to

75 Ravnoepravo.ru (2012). Medicine for the elite. Retrieved from http://www.ravnoepravo.ru/en/news/news/more/article/medicine-for-the-elite-997/

76 Deloitte (2015). 2015 life sciences outlook Russia. Retrieved from http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-2015-life-sciences-report-russia.pdf

77 IMS Consulting Group (2015). Pricing & Market Access Outlook. Retrieved from https://www.imshealth.com/files/web/Global/Services/P&MA_2015.pdf

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