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Volume 38, Number 5 • October 2019 • medadnews.com • $100TOP 50 PHARMACEUTICAL COMPANIES

T H E M A G A Z I N E O F P H A R M A C E U T I C A L B U S I N E S S A N D M A R K E T I N G

COMPANY OF THE YEARMERCK

Merck’s extraordinary success with the immuno-oncologic Keytruda has pushed the company back to the pinnacle of the pharma industry.

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T H E M A G A Z I N E O F P H A R M A C E U T I C A L B U S I N E S S A N D M A R K E T I N G

HEALTHCARE COMMUNICATIONS AGENCIES

IN YOUR MOVEMENTS AND YOUR MOMENTS

Uncontrolled, involuntary, jerky movements define Parkinson’s disease (PD)

dyskinesia, but that’s only half the story. Dyskinesia occurs as a result of

disease progression and treatment with levodopa medications.

Nature calls everyone

Naturyon

It just shouldn’t call so often at night

K

Job Number: 22562

Revision Nm: 0

Date: 11/16/18

YMC

AAI-55124

FINDING EMOTIONS IN

EVERY MOLECULE,

CELL, PATHOGEN,

AND ANTIBODYAt AbelsonTaylor, we get emotional about science.

For us, there’s real emotion buried in everything

from molecules to K-M curves. So we get down to

the cellular level to find emotion in the science that

lets us tell a human story. One that HCPs will connect

with. Because we’re not just inspired by science—

we feel the data.

AGENCY OF THE YEAR CATEGORY I

For the second year running, TBWA\WorldHealth closed out the year with 100 percent client retention;

phenomenal organic growth and new business; an increase in talent acquisition, development, and

retention; and seamless integration of new companies and initiatives into the network.

TBWA WORLDHE

ALTH

AGENCY OF THE YEAR CATEGORY II

2018 saw Fingerpaint set out to celebrate

its success, further solidify the foundation

that got it this far, and harness the unbridled

enthusiasm within its walls and channel it

into taking the next 50 years by storm.

AGENCY OF THE YEAR CATEGORY III

2018 was year of gratitude for Dudnyk – gratitude for continued partnerships with

clients, for the opportunity to support patients with rare and serious diseases;

for continued growth, and for enhanced philanthropic work.

Steven Michaelson

and Judy Capano

What are your thoughts

about PhRMA recently

updating direct-to-

consumer ad guidelines to

include pricing information?

Sharon Callahan, CEO,TBWA\

WorldHealth: Transparency is always

a good thing, more information

on therapies rather than less, if the

information is accurate and credible.

I think the PhRMA initiative is useful.

Whereas the CMS proposal takes one

metric (list price) that everyone knows

is totally misleading and � ts it into a

60-second TV commercial with zero

context. Conversely, the PhRMA initiative

provides more meaningful information

(average price paid) and some valuable

context. Wendy Blackburn, Executive Vice

President, Intouch Group: While there

are many questions yet to be answered,

it’s clear that a focus on pricing and

pricing transparency is here to stay.

Pharmaceutical manufacturers need to

be prepared for this new reality, whether

it’s the recent PhRMA guidelines, the

CMS mandate, or future regulation to be

announced. But I see it as an opportunity

– an opportunity to be more patient-

centric. For years, research has pointed to

a desire from both consumers and HCPs

for clearer pricing information. Now is the

time to � ll this need and demonstrate

pharma’s commitment to transparency

– going beyond, even, what the industry

and government are mandating – to

provide more clarity. Steve Hamburg, Managing Partner,

Chief Creative O� cer, Calcium:

The requirement to include pricing

information in DTC television advertising,

including the “list price and average,

estimated or typical patient out-of-

pocket costs, or other context about the

potential cost of the medicine” is arguably

the most controversial and problematic

of the updated PhRMA “principles.” This

principle, along with several others, is

expected to be adopted on April 15, 2019,

in response to the administration’s e� orts

to lower drug prices and in an e� ort avert

further legislative action.

While intended to provide increased

transparency, this new requirement

will, in practice, create an added level of

complexity to the already information-

packed landscape of the typical DTC spot.

There are other issues as well. First of all,

prices don’t necessarily correlate with

value; what may appear to be expensive

simply on a cost basis could be invaluable

on a therapeutic basis. Cost is only

one dimension – and arguably not the

most important dimension – of a drug’s

potential value to a patient’s life.

What’s more, list prices themselves

don’t necessarily indicate what patients

will actually pay at the pharmacy counter,

since insurers typically determine the

“out of pocket” costs. Moreover, list prices

don’t re� ect the discounts and rebates

often negotiated by insurers and PBMs.

And, most chillingly of all, list prices could

act as a deterrent or disincentive for

consumers to seek additional information

and dialogue about the latest drugs that

could potentially improve or even save

their lives.Transparency is a good thing, and

information is empowering to healthcare

consumers. Yet, when that information is

too narrow and simplistic, and is delivered

without enough context, the result can

be even greater complexity, confusion,

and disempowerment. And that’s not a

healthy for anyone.Mark Willmann, Head of Fingerpaint’s

Morristown, NJ, O� ce: We’re fortunate

to work with partners that are transparent

in every part of their business. This

recent change in guidelines will provide

consumers access to information ranging

from clinical trial recruiting, real-time

registrational trial results, and now, brand

list price. PhRMA’s decision to add context to the

information by providing an estimated

out-of-pocket expense and details on

patient-assistance programs will help

patients understand the � nancial aspects

of taking their medicine.

This recent update, along with

modernizing the ine� cient supply

chain, is a step in the right direction as

we � nd better ways to spend our limited

healthcare dollars.Eric Densmore, SVP, Account Director,

AbelsonTaylor: a. Proponents of the

amendment claim they want consumers

to be more informed and consider the

price of a drug, just like they’d consider

the price of car. Those purchases don’t

seem all that similar to me, but let’s see

how it plays out.b. Motivation: When people buy a car,

it’s often an emotional decision. A new

car can be a status symbol, so spending a

bit than you can a� ord isn’t uncommon.

When considering a new drug, it’s likely

because you or a loved one su� er from

the condition being discussed and hope

it might be able to help. Both emotional,

but not the same.c. The Bait: Car dealers focus on making

the o� er seem “too good to be true”. Drug

ads focus on the bene� t/risk of the drug

to appeal to viewers (or their loved ones)

that su� er from a condition to talk to their

doctor to see if might be able to help

them. Not the same.

d. The Gate Keeper: Last time I was in a

car dealership, the salesmen didn’t seem

too concerned about what was best for

me. His focus was on upselling me to

4WD and a rich Corinthian leather interior.

Conversely, doctors are concerned about

what’s best for you and if the drug you

saw the ad for isn’t right for you, we can

trust them to suggest something that is.

Not the same.e. The Price: How much does a car

cost? Certainly not the sticker price

and not the advertised price either.

Manufacturer rebates, loyalty rebates

and good old fashion negotiation make

it hard to pin down the “real” price. What

number would we suggest � ashing on

a commercial to “educate” consumers

on the cost of a drug? AMP? WAC? Or

just the amount the patient would pay

with a co-pay card? This aspect of the

experience is the same. Clear as mud, but,

unfortunately, the same.

f. The Outcome: If the price of a car

scares you, you don’t buy a car and life

goes on. If the price of a drug scares you,

you don’t talk to a doctor and, in some

cases, life might not go on. That’s not at

all the same and, in my opinion, reason

enough to NOT include drug prices in ads.

g. I want patients to have more

conversations with their doctors about

their health and I don’t think including

drug prices will help with that.

Dan Sontupe, EVP Payer Strategy, The

Bloc Value Builders: The theory behind

increased transparency on pricing is a

valid one; however, the challenge lies

in the de� nition of “pricing”. What CMS

is trying to do, by including the “list

price” of each drug, will create wholesale

confusion. Is there a consumer anywhere

in the United States who actually pays

for a product at list price? In fact, does

anyone pay list price for anything in this

country? To that end, why do we even

put sticker prices on cars? Essentially, continued on page 6

healthcare agency roundtable

Healthcare Agency Roundtable

Leadership representing the 2018 Manny Award agency and network winners and

� nalists share their views on various healthcare industry trends and developments.

annualreport

NEW VENTURES:

For the eleventh year, Med

Ad News has chosen new

Pharmaceutical Marketing

Ventures to Watch that could

change the way pharmaceutical

products are marketed and sold.

MOBILE MARKETING:

The steady advance of consumer

tech giants Google and Amazon

into the healthcare space means

that the industry will have to

adapt the tools of AI, voice and

chatbots into their

marketing, just as their consumer

brethren already have.

MEDICARE REBATES:

A CMO perspective and a white

paper explore the potential

e� ects of Medicare

rebate policy changes.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • December 2018 • Volume 37, Number 6 • $25

18 • MED AD NEWS DECEMBER 2018

his past October, the Med

Ad News staff began its an-

nual search for the future of

pharmaceutical marketing.

We sought out young companies, spin-

offs, offerings, and ventures to profile

that are providing the most innovative

and interesting products, services, or

marketing opportunities to pharma-

ceutical companies and the healthcare

community. This year’s three profilees

are all exercises in technology with a hu-

man touch – a comprehensive AI engine

built for life sciences that began its life

as a way to win at Jeopardy, a digital

platform to connect IBS patients with

a difficult-to-find therapy, and a part-

nership bringing together creative ex-

perience with data tools to more quickly

diagnose and treat patients with rare

diseases. Here are Med Ad News’ new-

est Pharmaceutical Marketing Ventures

to Watch.

C ognitive Core is Intouch Group’s

artificial intelligence engine, cus-

tom-built for pharma. The offer-

ing powers a variety of AI activities for

Intouch clients – chatbots, patient ad-

herence programs, Veeva digital sales

aid rep interactions – and that list is rap-

idly growing as brand managers seek out

new ways to harness AI.

“Cognitive Core started out as an ex-

periment back in 2012,” says Abidur

Rahman, Intouch’s senior director of

innovation and new technology devel-

opment. “The experiment was to prove

that robust AI systems could be built

without massive super-computers like

IBM Watson. The news of Watson com-

peting on Jeopardy had just come out.

In fact, the first version of Cognitive

Core was named ‘Sherlock,’ and its pri-

mary capability was playing Jeopardy. I

led a small team of developers to build

a working prototype of Sherlock during

a 24-hour hackathon, where Sherlock

won the grand prize.”

With that win in the team’s pocket,

they began looking for ways to make the

technology relevant to pharma clients.

“An opportunity presented itself when

one of our clients became interested in

creating an AI-based virtual assistant,”

Rahman says. “We went back to the

drawing board and discovered that when

it comes to implementing natural lan-

guage processing (NLP) and intelligent

agents such as chatbots in pharma, ex-

isting technologies and platforms were

not adequate. So, we took the lessons

from Sherlock and built a pharma-cen-

tric AI platform that could be trained on

pharma-specific data and used to pro-

vide NLP, predictive intelligence, con-

tent analysis for adverse events, phar-

ma-centric workflow automation, and

much more.”In its first iteration, used to accompany

a new drug launch in 2012, Intouch’s AI

could already take typed text questions

from an online form, deconstruct them

into every possible variation, evaluate

its known knowledge base for the set of

content predicted to have the highest

probability of answering the question,

and deliver the result back to the user,

all in a matter of seconds.

“Although complex in the behind-the-

scenes functionality, the first iteration

appeared to be very simple in its imple-

mentation,” says David Windhausen,

executive VP, Intouch Solutions. “On the

surface, it appeared to be just an FAQ

section on a website. But behind the

scenes, it was utilizing machine learning

to understand a vast knowledge base of

content; natural language processing

to parse through all of the variants of

a question; and predictive analytics to

ascertain the best response to give back

to the user. All the while using the ‘lan-

guage of pharma’ to communicate about

the disease state and to understand and

track any instances of an adverse event.”

Since its initial launch, Intouch lead-

ers say the platform has undergone ma-

jor areas of advancement in the type of

content it supports, the number of data

sources that can be part of its knowledge

base, the number of systems it can be in-

tegrated with to track user interactions,

the methods used to train the machine

learning aspect of the system, its own

natural language processing engine, and

the types of end-user experiences that

can be created. Today, Cognitive Core

has the ability to integrate with patient

support solutions to track information

regarding its interactions, Salesforce

systems like Veeva to help direct the ac-

tions of sales reps in a manner that pre-

dicts the needs of HCPs, and a multitude

of user experiences, from online banners

to zero-UI interfaces such as Alexa, Siri,

and Google Assistant.

Of course, building a machine learn-

ing-based system like Cognitive Core

specifically for pharma requires a thor-

ough understanding of how content is

created and regulated in the space, the

data security and privacy constraints,

and empathy for how end-users will in-

teract with this system to address their

healthcare questions and concerns.

“To address the needs for regulatory

compliance, we began by creating a pro-

prietary AI engine so that we had com-

plete insight into how CC would answer

questions and could demonstrate the al-

gorithm to pharma-compliance bodies,”

Windhausen says. “We have also worked

directly with pharma medical review

boards to create specific workflows for

managing and approving content at the

speed required to support the system’s

ongoing training needs.”

The data security aspects of the system

take into consideration all levels of data

security needs, from the management

of personally identifiable information to

HIPAA requirements, and can be cus-

tomized to the specific business needs

and implementation.

“And finally, CC has the ability to un-

derstand the user’s persona in order to

respond to their personal needs and can

even customize the response based on

the channel of interaction,” Windhau-

sen says. “For instance, a response to an

inquiry via text can be kept short with

perhaps a relevant link to other informa-

tion, but a response via an Echo Show

can be done via video.”

Each implementation of Cognitive

Core is customized to the exact client

need. CC can be used to power some-

thing as simple as an online FAQ page

but can also be used as a platform to

create a multichannel, integrated expe-

rience for patient services or field sales

management. The engine is “trained”

with the specific content and knowledge

required for each application. For a pa-

tient services use case, it may be trained

with all the specific information pertain-

ing to the disease state or the brand. CC

can also be integrated with patient sup-

port platforms to give end users the abil-

ity to track disease state adherence and

journey information, alert their personal

care network of their progress, or even

just provide the patient with the date of

their next appointment. As a platform

for field sales team support, CC can be

integrated with platforms like Veeva

Systems to provide sales reps with a

more in-depth view of their upcoming

schedule, the ability to record a call, or

just act upon suggested courses of ac-

tion.“Cognitive Core is meant to integrate

with other platforms and client inter-

faces,” Rahman told Med Ad News. “In

some cases, it can connect to Salesforce

and gather relevant information, predict

next events and provide user-friendly

information over email, SMS, phone or

any other connected devices. In other

cases, it can remain in the background

and, for example, provide nurses with

data and robotic automation for an ex-

isting lengthy process.”

To support all this functionality, In-

touch has a dedicated Cognitive Core

team that includes AI developers, con-

tent analysts and creators, workflow au-

tomation experts as well as supporting

teams that handle adverse events, prod-

uct complaints and more.

“Under the hood, Cognitive Core

is inspired by many academic papers

in AI and algorithms that have been

developed at universities over sever-

al decades,” Rahman says. “However,

Ad-ventures in marketing XI

By Joshua Slatko • josh.slatko@medadnews.com

TNew Ventures

specialfeature

Cognitive Core

For the eleventh year, Med Ad News has chosen new Pharmaceutical Marketing Ventures

to Watch that could change the way pharmaceutical products are marketed and sold.

Cognitive Core is Intouch Group’s AI engine, custom-built for pharma.

inside

22 • MED AD NEWS DECEMBER 2018

hen it comes to the future of

mobile marketing in phar-

ma, just look at the consumer

space. While one of the big

presentations at Digital Pharma East

in Philadelphia concerned a company’s

surprisingly successful Facebook initia-

tive to get women to talk about the sex-

ual and other discomforts of menopause,

consumer counterparts are forging

ahead with the use of AI and chatbots.

The tech-forward people in pharma and

healthcare, however, are in the process of

gently persuading skittish clients about

the benefits of these technologies while

working with them to reduce the risks.

According to HubSpot’s “Ultimate List

of Marketing Statistics for 2018” (www.

hubspot.com/marketing-statistics),

the number of voice queries increased

3,400 percent between 2008 and 2017.

In 2015, 19 percent of people used Siri at

least daily, and 37 percent used Siri, 23

percent used Microsoft’s Cortana and

19 percent used Amazon’s Alexa at least

monthly. In 2016, 20 percent of search

queries on Google’s mobile app and on

Android devices were voice searches.

Even more significantly, two-thirds of

people who use digital voice assistants,

such as Amazon Echo or Google Home,

use their smartphones less often.

By 2020, 30 percent of all web searches

will be done without the use of a screen,

according to Gartner,

David Kopp, the CEO of Healthline,

a media company that provides health

information and apps and websites that

connect patients into disease-specific

communities, says the number of mobile

users has increased dramatically.

“We see about 77 percent of our traf-

fic on our website is on a mobile device,

whether a smartphone, which is 71 per-

cent, or a tablet, which is 6 percent,”

Kopp told Med Ad News. “We’re over the

three-quarter mark for mobile engage-

ment, and I think that’s very reflective of

society in general.”For health marketers, that increase in

mobile usage is “a meaningfully different

point.”“When you get over the three-quarter

point, it’s not just the majority of your

traffic is mobile and the majority of your

digital marketing needs to be thought of

as mobile, it’s that your campaign will be

made or broken on the back of mobile

performance,” Kopp says.

Pharma is already using AI in its dig-

ital ad buying, says Sean Hartigan, se-

nior VP, strategic planning, at the digital

agency Intouch Solutions.

“We’re actually using AI right now,

seamlessly behind the scenes to actually

buy ad space and ads that intercept peo-

ple while they’re on their smart phones.,

so it’s no different than when they’re on

their desktop,” Hartigan told Med Ad

News. “Most of the data we’re seeing col-

Growing voice for mobile

By Christiane Truelove • chris.truelove@medadnews.com

Mobile Marketing

specialfeatureW

Pharma continues to lag behind the consumer space in the use of mobile marketing technologies, but the steady

advance of consumer tech giants Google and Amazon into the healthcare space means that the industry will have

to adapt the tools of AI, voice and chatbots into their marketing, just as their consumer brethren already have.

S ean Hartigan and David Sakadelis say their pharma clients are

skittish about the use of chatbots and AI, with an understand-

ing of these technologies more influenced by the grim future of

Skynet in the “Terminator” movie franchise rather than the reality of

where AI is right now.

“The pharma companies, they don’t fully understand the technol-

ogy yet, they’re not quite there yet,” says Sakadelis VP, group director,

head of technology at Heartbeat. “But I do see some movement there,

they finally understand that native apps don’t see a lot of adoption

or a lot of utilization. So they think about chatbots and where they

fit in. Unfortunately I don’t think they really understand technologies

like AI fully. There’s some apprehension to it, they’re not sure how this

works from a regulatory perspective, and the other thing is, when

they are touching on these new approaches, to voice and AI, they’re

pigeonholing it into, ‘This is an augmentation to live person support,’

rather than something that can connect better to the patient and

drive things like adherence.”

According to Sakadelis, Heartbeat does a lot of knowledge sharing

with clients about new technologies. “We have a program here,

Experiential Technologies, we call it Ex for short,” he says. “It’s a lab

program. The business problems don’t change in pharma. There are a

lot of typical problems that we are always trying to solve through our

campaigns and our solutions. Technology is changing and constantly

evolving, so we try and connect new technologies or something that

has evolved to a business case or problem for our clients, and we do

some experimentation around that to see if it solves a problem.”

Through Heartbeat’s connections to non-health Publicis agencies

such as Sapient and Digitas LBI, Sakadelis gets to talk with non-health

creatives and marketers about what’s happening in the consumer

space and how that can be brought into pharma.

“Our opportunity to introduce that with our clients is through our

lab program,” Sakadelis says. “We can just throw something against

the wall and see if it sticks. We can talk about virtual reality and aug-

mented reality. We bring clients in and they love to engage with this

technology, and we try and help them connect the dots in ways that

lead to solving their problems in new ways, through new technolo-

gies. More often than not, it doesn’t lead to some campaign. It’ll be a

very watered-down version of it. But we keep pushing it. We’ll keep

moving the needle on it.”

One of the programs Heartbeat did was centered around chatbots,

where the participants tried to tackle challenges such as adherence

and patient support through AI, machine learning, and chatbots.

“What we found is, on the surface, everyone heard of AI and

chatbots, and think that the thing [AI] is off and learning on its own,”

Sakadelis told Med Ad News.

Part of that apprehension was the publicity about how Microsoft’s

Tay the Twitter chatbot was trained to say racist things within 24

hours. Of course this made pharma executives fearful about using

chatbots. To counter that fear, Heartbeat’s workshop participants did an ex-

periment, centered around creating a simple chatbot for registration

purposes, “but we wanted to have more than sort of a multiple choice

approach, which pharma is taking on quite a bit because that seems

safe,” Sakadelis says. In a multiple choice approach, the chatbot says something, and

the human can only respond in one of three ways. “We wanted to do

more than that, we wanted to incorporate natural language under-

standing, this ability to type in something and the system interprets it

into what is called an intent,” Sakadelis says. “Through this experiment,

we learned that there is a couple of ways of doing this, and there is a

way to keep it a bit more open-ended where the system learns from

things that folks are saying to it, but there are also ways to cap that

and control it a bit more.”

Using this method, chatbots can be trained on very specific termi-

nology that can be translated to very specific intent.

While some limits on AI and chatbot learning are needed,

“There’s a fear that if it becomes so guided and so scripted, the user

experience really suffers,” Sakadelis says, “And if you’re looking to use

these technologies to create a more humanistic approach to patient

engagement, you kind of fail in that way.”

AI has come a long way, but is nowhere near “Terminator” aware-

ness. “A lot of this is still just really pattern recognition,” Sakadelis says.

“It relies on the quality of the data that we’re using to supply the logic

to the machine learning so that it can make recommendations. There

are a lot of companies at the forefront of this, like Google, which just

has the mass of data needed to support more intelligent systems, but

as a whole, AI is not really there yet.”

Despite the fears and the tech barriers, patients – pharma’s cus-

tomers – want chatbots.

“People want that frictionless experience, they’re getting it from

retailers, they’re getting it from everyone outside of pharma,” says

Hartigan, senior VP of strategic planning at Intouch Solutions . “So on

our mobile devices, we kind of want the same thing from pharma. We

want that simple, intuitive, all-about-me experience that a chatbot or

a voice assistant can help us with, in lieu of maybe even having to talk

with a human being because that can get uncomfortable, because

we love our anonymity.”

To try and get pharma clients to the point of trying out what con-

sumer companies are already doing in mobile marketing, Hartigan

says cross-functional teams must be involved. “That’s marketing and

sales and med affairs, and technology, and even the C-suite,” he says.

“If the C-suite doesn’t have this vision, for a completely customer-cen-

tered journey that we’re going to provide to our doctors and patients

through digital and through the use of data, on phones, everywhere,

if the C-suite has not bought in, forget it.”

Hartigan says any tech initiative in pharma must be introduced

in steps. “Pharma loves to do things in phases, and it’s probably the

best way to go is do pilots, and introduce a new way of doing things

through this cross-functional team effort,” he says. “And then once

people see it’s not scary, then you can expand what you’re doing and

do more of it. But you have to start small.”

The medical, legal, and regulatory executives also need to be

brought on board early.

“The ultimate thing is to get that cross-functional team and the

C-suite to a line, and then once that happens, you can do your cre-

ative review with your MLR and say, ‘Look, all these teams looked at it.

We looked at it from risk mitigation, we looked at it from complexity,

we looked at it through all these lenses that we have to consider, and

we have a plan that we know that will work and will mitigate risk,’”

Hartigan told Med Ad News.

When informing its clients about new technologies, Intouch, like

Heartbeat, regularly gets all the potential end users together, includ-

ing regulatory, for innovation labs.

“You shut the door and you put the chains on it, and you make

people fight it out for what they can do vs. what they can’t do,”

Hartigan says. “And it does work, we’ve done it for large pharmas for

everything from clinical trial programs to just branded programs

for both patients and doctors. It’s collaboration, communication,

goal-setting that everybody’s aligned to, and then you can do the risk

mitigation with regulatory.”

The regulatory executives must be included from the beginning of

any project. “Don’t just bring it to them, and say, boom, here it is, this

is what we want to do,” Hartigan says. “Then they’re like, ‘Whoa, wait a

minute, you crazy dreamers!’”

Pharma must also bring in the constituents – doctors, patients,

pharmacists and payers – “because at the end of the day, we’re

talking to ourselves. If we just do it with our internal client people and

the agency people we have to do it with some of the people we’re

doing it for. And then if regulatory can see the end users chiming in

to see the value in this forward-thinking stuff we’re doing, they’re

more likely, of the risk-mitigation makes sense, to approve a pilot,”

Hartigan told Med Ad News.

Because privacy concerns are already being expressed by many

consumers, pharma has to be even more stringent. “We’re trying to

make sure that we’re really transparent and that our privacy policies

about data collection are something that consumer and public can

get comfortable with,” Hartigan says.

There are already advancements in biometrics that can help assist

with keeping mobile data private, such as voice recognition and facial

recognition, signature recognition, and fingerprint recognition. But

biometrics can also be used in interesting ways in mobile campaigns

themselves.“For example, dermatological products in pharma might make

use of facial recognition for something,” Hartigan says. “And signature

recognition right now is being used for sampling by reps and doctors.

All of these new biometric technological features can be added more

and more to pharma as we go.”

And to Hartigan, “the sexy part about mobile going forward is

being more surgical with what we’re learning and prescriptive back

in speed to market, back to these people as they’re engaging with us

on mobile.”Heartbeat has built a proof-of-concept mobile messaging service

for people with diabetes, Sakadelis says. The service would be some-

thing that is prescribed by the physician at the point of care through

EHR system, using verbal consent.

The service pulls some information about the enrolled patient out

of the EHR – the IC10 code, the patient’s first name, and their phone

number – and by engaging with the patient through SMS, the service

directs the patient to a HIPAA-compliant interface where they can

engage with a virtual assistant.

The virtual assistant then can make recommendations about diet,

exercise, nutrition counseling, and where patients can find these

support services. The suggestions are made based on the patient’s

progress on how they are doing with their condition.

“And we can offer those value-added services to each of the phar-

ma brands,” Sakadelis says. “If they want a program to support the

patient through patient advocates, we can offer to connect the pa-

tient at the right moment. Or human in the loop support for patient

advice, or getting them to their next appointment with Uber Health.”

Presently, Heartbeat is looking for a health system to partner with

on the diabetes messaging chatbot. “Ultimately we see this support-

ing the health systems and pharma,” Sakadelis told Med Ad News.

Getting pharma into new mobile tech

24 • MED AD NEWS DECEMBER 2018

or chief medical officers

(CMO) of health systems,

a world without Medicare

rebates complicates the se-

lection of a preferred treatment while

also opening opportunities for improved

clinical and financial outcomes. This

is the result of Medicare rebates being

eliminated, potentially being replaced by

patient assistance programs (PAP) and

greater use of ‘beyond the pill’ programs

that provide services directly to patients.

This world without pharma rebates will

force treatment differentiation on the

basis of factors beyond rebate pricing to

include ‘beyond the pill’ offerings.

Medicare has long allowed pharma-

ceutical companies to provide rebates

to stakeholders to gain preferred status.

This allowance came with a prohibition

on pharmaceutical sponsored patient

assistance programs (PAP). Recent-

ly, the Trump administration has pro-

posed eliminating rebates in Medicare

by withdrawing the “safe harbor” in

anti-kickback laws that has permitted

pharmaceutical manufacturers the abili-

ty to negotiate with payers for formulary

placement.This safe harbor began almost 50

years ago when Congress passed the

Anti-Kickback Statute, which prevent-

ed pharmaceutical manufacturers from

offering inducements to patients to use

their products over others. But Congress

amended the law to give the Secretary of

Health and Human Services the power to

determine which practices deserve “safe

harbor” from kickback enforcement;

pharmaceutical rebates was gained this

safe harbor status.This brave new world will cause many

winners and losers.

T he losers will come as a result of

stakeholders who are currently

heavily reliant on the current phar-

maceutical rebates for profits and with

no ability to take advantage of the switch

to value-based engagement offerings.

Specifically, these losers will include

pharmaceutical manufacturers who are

heavily reliant on securing preferred

status through rebates and are unable

to maintain position through “Beyond

the Pill” services and articulation of their

value ex-rebates.Beyond these pharmaceutical man-

ufacturers are pharmaceutical benefit

managers (PBM) and pharmaceutical

drug plans (PDP). Both of these groups

because their primary focus is the phar-

maceutical spend, benefit greatly from

pharmaceutical rebates. These groups

are actually harmed financially through

increased spend from increased adher-

ence with no benefit from improved

clinical outcomes and reduction in total

cost of care since this is far outside their

responsibility.

W inners in this brave new world

start with patients who should

receive lower out-of-pocket

spending through both direct price re-

duction and PAP. Patients will also ben-

efit from a more personalized approach

as pharma develops targeted services

for subpopulations including caregiver

resources, financial services like PAPs,

clinical services such as adherence pro-

grams and connecting patients to advo-

cacy groups.Additional winners include those fo-

cused on population health, responsible

for total cost of care such that increased

adherence is viewed as a benefit in its

reduction of expenditures through im-

proved clinical outcomes. Historically

this group was limited to the payers re-

sponsible for all care, but as risk is shift-

ing to health systems through account-

able care organizations and bundled

payments, health systems are also posi-

tioned to win in this shift. Adherence-re-

lated services will be important in mak-

ing sure patients take their prescribed

drugs for better clinical outcomes and

securing a win with this shift.

W ith rebate based contracting

gone, new value based engage-

ments will require offerings

beyond the pill’s clinical benefit and

pricing. This includes beyond the pill

offerings which were described in the

Harvard Business Review – “How Phar-

ma Can offer More than the Pills.” In

this piece Sachin H. Jain described how

medicines alone are often not enough

for patients to achieve optimal clinical

outcomes. Instead resources provided

in support of the treatment could have

impact on clinical outcomes through

improved adherence or even a placebo

effect based on patients’ perception of a

treatment’s benefit.Many pharmaceutical companies al-

ready offer “beyond the pill” resources

such as disease specific management

apps as well as recent offering through

text-based reminder programs – all in an

effort to increase adherence and improve

outcomes.With no ability to differentiate a prod-

uct based on rebates, resources such as

‘beyond the pill’ will be utilized to in-

crease a product’s value in the eyes of

health systems through their ability to

improve accountable clinical and finan-

cial outcomes. These factors, currently

not very impactful on current clinical

pathways, may change the listing of pre-

ferred treatments and include accessing

these resources.The potential for the allowance of pa-

tient assistance programs (PAP), which

may be offered in exchange for elimi-

nating rebates will likewise change pre-

ferred treatments and available resourc-

es within clinical pathways. Given that

the providing of PAP would directly re-

duce patient out-of-pocket (OOP) spend-

ing, adherence will be improved. There is

significant research to support the fact

that increasing patient cost sharing was

associated with declines in medication

adherence, which in turn was associated

with poorer health outcomes. i

From a health system’s perspective,

PAP can be of benefit when utilized to im-

prove adherence and occurring through

the managed care organization’s utili-

zation management process. However,

health systems view PAPs as problematic

when they are used to circumvent the use

of a health system’s preferred treatment.

As such, clinical pathways may have to

call out the ability to restrict the use of

PAPs until the preferred treatment has

been accessed following the plan’s pre-

scribed utilization path. After which,

PAP can be used solely for adherence

purposes rather than means to bypass

preferred treatment use.

This reduction in patient OOP through

use of PAP improves adherence which

in turn would improve clinical and fi-

nancial outcomes. Multiple studies have

demonstrated the impact of reducing

patient out-of-pocket on adherence. ii iii iv

Additionally, including the PAP resource

in a health systems’ clinical pathway can

be beneficial to not only patients through

lower OOP, but improved clinical out-

comes as well as improved financial out-

comes for the health plan.

T he articulation of pharmaceutical

product value continues to start

with clinical efficacy. However, in

drug classes where clinical attributes like

safety and efficacy are considered equiv-

alent among products in a class and no

ability for rebating advantage, the sole

differentiation may be “beyond the pill”

benefits. Again, CMOs responsible for

population health clinical and financial

outcomes are positioned to benefit from

a world with no pharmaceutical rebates

but one where products offer resourc-

es that improve adherence resulting in

better clinical and financial outcomes

for patients and payers through new val-

ue-based engagements. medadnews

CMO perspective on world

without Medicare rebates

Medicare Rebates

extrafeature By Med Ad News staff

By Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMD

Chief Medical Officer, The Access Group, an Eversana company

F

Losers

Footnotes:i Eaddy MT, Cook CL, O’Day, Burch SP,

Cantrell, CR. How Patient Cost-Sharing

Trends Affect Adherence and Outcomes.

PT. 2012 Jan; 37(1): 45–55.

ii Eaddy MT, Cook CL, O’Day, Burch SP,

Cantrell, CR. How Patient Cost-Sharing

Trends Affect Adherence and Outcomes.

PT. 2012 Jan; 37(1): 45–55.

iii Farias, Albert J., PhD, MPH*; Hansen,

Ryan N., PhD†; Zeliadt, Steven B., PhD‡,§;

Ornelas, India J., PhD‡; Li, Christopher I.,

MD, PhD||,¶; Thompson, Beti, PhD‡,¶

The Association Between Out-of-Pocket

Costs and Adherence to Adjuvant Endo-

crine Therapy Among Newly Diagnosed

Breast Cancer Patients American Journal

of Clinical Oncology: July 2018 - Volume

41 - Issue 7 - p 708–715iv Farias AJ, Du XL. Association Between

Out-Of-Pocket Costs, Race/Ethnicity, and

Adjuvant Endocrine Therapy Adherence

Among Medicare Patients With Breast

Cancer. J Clin Oncol. 2017 Jan;35(1):86-

95. Epub 2016 Oct 28

Winners

Value based Engagement

Articulating Value

16

20

22

By Andrew Humphreys • andrew.humphreys@medadnews.com

Steve Hamburg

Mark Willmann

Wendy Blackburn

Sharon Callahan

1

rti� cial intelligence may not be the answer to every question about pharma marketing in

2019, but it seems to be lurking underneath the answers to most of them. E� cient analytics for big data? AI will make it possible. Getting the right content to the sales force at the right time? AI can do it. Figuring out where customers are in their journeys and how to best reach them there? AI will � nd them. The growth in voice search? Gotta have AI for that, of course. What’s next in patient services? AI. Down the hall in the R&D department? AI. Even the in-dustry’s political issue du jour, pricing transparency and reform, has an AI angle, since payers are surely using it to determine whether their spend is being justi� ed by outcomes.

All that said, for all that pharma marketers talk about how AI will transform their business, the answer to the question of when is a little less clear. As the babysitter always said if you asked when your parents would be home ... “Soon.”

MedAdNews: What was the word of the year in pharma marketing for 2018? What will the word of the year be in 2019? Why?

Harrison Boulay, digital strategist, Butler/Till Health Group: 2018: Interactivity. This year saw pharma marketing implement proven CPG strategies like chatbots and messag-ing campaigns that engage directly with both HCPs and patients, along with advanced social media cam-paigns designed to create meaning-ful dialogues between brands and their consumer base.

2019: Arti� cial Intelligence. Phar-ma marketing has serious hurdles when targeting potential patients directly. The use of big data, machine learning, and consolidating insights

leveraging AI will represent the cut-ting edge for teams in 2019.

Susan Dorfman, chief commercial o� cer, CMI/Compas: 2018: Genuine. In 2018, pharma really took on earned and shared media as part of its overall paid and owned tactics. The industry owned it for the � rst time, where it was a lot more genuine; the integra-tion of true social. Pharma was part of the customers’ journey.

2019: Daring. In 2019, daring will be the leading theme of the year, and this is the year for pharma advertisers to be daring. Our stakeholders – particularly the patients – need us to be more daring in helping them get access to medication and making that medication more available, and we can do the right thing by supporting them. This includes sharing informa-tion, pushing the envelope in how we interact, listening to them, and helping by providing a� ordability and availability of medication.

Matt Nespoli, digital media director, Butler/Till Health Group: 2018: E� ciency. E� ciency is a priority when technology is in place to make things happen smarter and faster. The idea of personalization in marketing is not new, but can be scary in the Pharma marketplace. 2018 was a year of not missing out on opportunities to create tailored experiences within patient and HCP marketing. Data plays a key role in de� ning accessi-bility and automation of that data is helping provide the best patient and physician outcomes.

2019: Disruption. The need to focus on improving the customer expe-rience has always played a key role for commerce providers. In 2019, the likes of Amazon, CVS, Walmart, and Walgreens will look to focus on their futures within the Healthcare space competing not only against each other, but with Google and Facebook.

This disruption has come into focus recently when acquisitions started to occur causing patients, physicians and insurers to look at these companies more seriously. Amazon bought a small online pharmacy called PillPack, CVS and Aetna formed a union, and big box stores like Walgreens and Walmart have opportunities to di� er-entiate themselves from independent pharmacies. Disruption will continue to grow when technology and data continues to scale for these leading healthcare players.

Andrew Schirmer, CEO, Ogilvy Health: The word of the year for 2018 is a toss-up between data and technology. The words aren’t inter-changeable, but you’d have to look pretty hard to � nd one without the other in any recent treatise, thought piece or POV. That said, for 2018, I have to give the toss-up to data. Last year was the year that the entire industry embraced the idea of using quanti� able data sources to drive insight, opportunity, channel strategy, and performance, leading to more e� ective and e� cient marketing and communications programs.

While data has always been at the core of the life sciences and bio-pharmaceutical industries, we saw great strides last year in marketers deploying the same rigor around data science, measurement and analytics to drive all manner of multichannel e� orts reaching healthcare providers, payers and patient-consumers alike. This work will continue to acceler-

ate, but with the added in� uence of companies from outside of the industry bringing tools, platforms and approaches into both the pharmaceu-tical and broader health space. 2019 will be the year that technology � nally takes its rightful seat at the table, en-abling data to create more � repower in and out of the advertising, market-ing and communications realms. So, the word for 2019 is HealthTech.

Big tech companies’ move into healthcare will continue this year with new o� erings ranging from Amazon’s PillPack to Apple’s EKG interface to UberHealth’s ER ride service. These, and other non-traditional healthcare companies, will continue to develop technology that addresses health and wellness needs across a wide range of demographics, from GenZ and Millennials through an aging but technologically savvy population who actually utilizes the lion’s share of the healthcare provided in this country. Voice tech, AI, and machine learning will all become part of the discussion for marketers and agencies alike as all players form partnerships, develop prototypes and create pilots to deter-mine how best to use emerging tech-nologies to solve age-old problems.

Technology will also play a more fundamental role in de� ning how HCPs get drug and disease manage-ment information, how they manage patients in their practice, how patients manage their own health (and that of their families), and how both sides work to improve the doctor-patient

continued on page 6

Hungry AIsArti� cial intelligence generated plenty of chatter amongst the pharma marketing intelligentsia in 2018. Will 2019 be the year when the industry fully embraces it as more than just a tactic?

special feature agenda 2019 special

By Joshua Slatko • josh.slatko@medadnews.com

A

inside

14 • MED AD NEWS FEBRUARY 2019

ed Ad News’ spe-cial report returns with an overview of 10 company pipelines to keep

an eye on in 2019 and beyond, including some frequent “Big Pharma” spenders as well as several up-and-coming R&D players making a first-time appearance in this annual compilation.

Top biopharma companies’ return on R&D investment reaches nine-year low

The cost of developing a new medicine has nearly doubled since 2010 while 12 of the top biopharmaceutical companies combined to generate the lowest return on R&D invest-ment in nine years, according to an annual study performed by the Deloitte Centre for Health Solutions. According to the analysis, despite a continuing steady stream of new medi-cines reaching major markets around the globe, the average return expected to be achieved from the late-stage pipelines of 12 leading biopharma players dropped 1.9 percent during 2018 compared with 3.7 per-cent in 2017. Overall, the R&D return in 2018 for the large-cap biopharma companies fell by 8.2 percentage points since the 2010 amount of 10.1 percent.

Research shows that returns have been impacted by the growing cost of bringing a medicine to the marketplace. The average cost of bringing a new medicine to market has increased to $2.17 billion, compared to $1.19 billion in 2010, according to Deloitte’s key findings. Forecast peak sales for new drugs decreased from 2017 to $407 million, where-as the 2010 value was $816 million – a decline that reflects a growing concentration on relatively small targeted patient groups, resulting in multiple niche treatments.

“Despite the launch of many successful products, growing development costs and regu-latory constraints are making it more difficult than ever for companies to redeem their R&D investment,” noted Colin Terry, a partner in Deloitte’s Life Sciences practice.

Deloitte also analyzed four smaller, more specialized com-panies. That biopharma cohort was expected to produce an average return rate of 9.3 percent during 2018 versus 12.5 percent in 2017. “This fall was driven by the commercializa-tion of five major drugs in 2018,” the Deloitte analysis explains.

“However, these smaller firms continue to outperform their peers, finding success in releasing high-value products. These products have added $70 billion of projected lifetime sales to the commercial portfolio across the four companies. The extension cohort have also in-creased their forecast peak sales per asset from $952 million in 2013 to $1,165 million in 2018.”

The 12 large-cap biopharma companies analyzed by Deloitte are Pfizer, Roche, Novartis, Sano-fi, GlaxoSmithKline, Johnson & Johnson, AstraZeneca, Merck & Co., Eli Lilly, Bristol-Myers Squibb, Takeda and Amgen. The smaller cohort consisted of Bio-gen, Celgene, Gilead Sciences and AbbVie.

Despite the projected return on R&D investment falling to the lowest level since the study started in 2010, Deloitte analysts say there are oppor-tunities to reverse this trend, which will require new ways of working and a complete digital transformation to unlock R&D productivity and deliver the next generation of scientific breakthroughs. “Companies need to act now and embrace new ways of working, embed new technologies and seek out talent with the right skill sets to maximize their return on investment in pharmaceutical innovation. Our recommen-dations cover three main focus areas for transformation: technology, collaboration and geography, underpinned by a strong leadership response.”

Record-breaking 59 novel drugs approved by FDA during 2018

The U.S. Food and Drug Ad-ministration granted marketing clearance to 59 novel drugs during 2018 – in the form of new molecular entities (NMEs) under New Drug Applications (NDAs) or as new therapeutic bi-ologics under Biologics License Applications (BLAs) – compared to 46 in 2017 and 22 in 2016. In the past decade, the FDA’s Center for Drug Evaluation and Research’s (CDER) averaged about 33 novel medicine approvals per year. These totals do not include drugs approved by FDA’s Center for Biologics Evaluation and Research (CBER), which are separately tracked. CDER’s previous high mark of 53 new product approvals was recorded in 1996.

Among 34 novel approvals in 2018 to help patients with rare or orphan diseases, CDER approved the first medicine to treat patients with a rare

inherited form of rickets, a condition that leads to impaired bone growth and development. CDER gave the green light to the first orally administered drug to treat Fabry disease, a rare and serious disorder that can cause many adverse symp-toms, including damage to the kidneys and heart. The U.S. regulatory agency cleared for marketing a new drug to treat phenylketonuria (PKU), a rare dietary condition in which pa-tients are born with an inability to break down protein-contain-ing foods and certain sweeten-ers, and which can lead to brain and nerve damage.

According to CDER, 19 of the 59 novel drugs approved during 2018 represent first-in-class status, which is one indicator of a drug’s potential for strong positive impact on the health of the American people.

A total of 43 out of the 59 novel drug approvals were designated in one or more ex-pedited categories of Fast Track, Breakthrough, Priority Review, and/or Accelerated Approval.

CDER approved 56 of the 59 novel drugs of 2018 (95 percent) on the “first cycle” of review, meaning without a “complete response” letter from the FDA that necessitates re-submission with additional information, resulting in more time before the drug can be cleared for marketing. From 2011 through 2017, CDER approved 250 novel drugs, of which 205 (82 percent) were granted approval during the first cycle.

Big Pharma adopting agile real estate strategies and enhanced entrepreneurial approaches to reinvent R&D

For Big Pharma, finding new blockbuster drugs is becoming increasingly challenging and expensive, according to life sciences experts from profes-sional services firm JLL. Since 2013, smaller enterprises have increased innovation and deliv-ery, bringing a disproportionate amount of new products to the market, JLL analysts say. In 2019, JLL predicts that Big Pharma will adopt agile real estate strategies and enhanced entrepreneurial approaches to reinvent R&D, to compete with smaller compa-nies that have dominated the space.

“Given that a majority of the baseline pharma challenges have been solved, it is the current need for more complex treatments that is driving the need to invest significantly more into R&D,” according to

the experts. “As this impact is seen in the length of research, cost of development and lack of deliverable drugs to bring to the market, Big Pharma will be forced to reevaluate their business model, figuring out how they can invest in startups, buy pipelines, bring incubator spaces into the market, create flexible labs space, and much more. As these new industry realities transform how new products are discovered, manufactured and brought to market – it will drive real estate and facilities decisions.”

JLL has identified four trends that are poised to transform the pharma industry during 2019 and beyond:

• Venture capital will continue to floor biopharmaceutical innovators.

• Incubator labs will share the cost burden for drug discovery.

• Flex space will unlock innovation and savings in R&D operations desperate for a facelift.

• High-risk, high-reward mid-tier pharmaceutical com-panies will focus on flexibility and non-core services.

“Without productive, efficient R&D processes that deliver strong revenues to drive reinvestment into continuing innovation, the business model falls apart,” says Roger Hum-phrey, executive managing director and leader of JLL’s Life Sciences group. “In 2019, Big Pharma will focus on solving the R&D conundrum through investing in startups, buying pipelines, bringing incubator spaces into the market, creating flexible lab spaces, embarking on joint ventures and more.”

For more details about the four pharma trends to watch in 2019 and beyond with analysis

from Roger Humphrey, please visit: https://www.pharmalive.com/big-pharma-poised-for-disruption-in-2019-while-mid-tier-companies-double-down-on-innovation

The second-best drug pipeline in the industry is expected to drive 10

percent long-term EPS growth and deliver about 18-23 percent long-term total returns from today’s price,” wrote Seeking Alpha analysts on Jan. 28, 2019. “AbbVie’s medium-term future growth hinges on five key drugs:

• Blood cancer drug Imbru-vica, estimated $9.6 billion in 2024 annual sales (17 percent CAGR growth between 2017 and 2024)

• Endometriosis drug Orilissa, $1 billion in annual peak sales (recently launched)

• Cancer drug Venclexta, $3 billion in annual peak sales

• Immunology drugs risankizumab and upadacitinib, $10-12 billion in combined peak annual sales”

The first-in-class, oral, once-daily therapy Imbruvica (ibrutinib) is FDA-approved in six distinct diseases: chronic lymphocytic leukemia, small lymphocytic lymphoma, Waldenström’s macroglobu-linemia, along with previously treated mantle cell lymphoma, previously treated marginal zone lymphoma, and previ-ously treated chronic graft-versus-host disease. Imbruvica is being studied alone and in combination with other treatments in several blood and solid tumor cancers and other

serious illnesses. According to AbbVie, the blockbuster medicine has a robust clinical oncology development program, with more than 130 ongoing clinical studies. As of late January, there were 30 ongoing company-sponsored trials – 14 of which were in Phase III – and more than 100 investigator-sponsored trials and external collaborations that were active globally. More than 135,000 patients worldwide have been treated with the Bruton’s tyrosine kinase (BTK) inhibitor in clinical practice and studies.

Orilissa (elagolix) became the first FDA-approved oral treatment for the management of moderate-to-severe pain associated with endometriosis in more than a decade after receiving U.S. regulatory clear-ance in July 2018. Orilissa is the first oral gonadotropin-releas-ing hormone (GnRH) antagonist specifically developed for women with moderate-to-se-vere endometriosis pain. The orally administered, nonpeptide small-molecule GnRH receptor antagonist is being investigated in diseases that are mediated by ovarian sex hormones, including uterine fibroids and endometriosis. As of November

TOP 10 PIPELINESTO WATCHAbbVieAlexionArgenxBluebird BioBristol-Myers Squibb/CelgeneFibroGenGileadGlaxoSmithKlineNovartisVertex

Top 10 Pipelines To Watch annual report top 10 pipelines

The return on R&D investment for leading biopharmaceutical manufacturers fell to a nine-year low while the U.S. FDA approved a record-breaking amount of novel medicines during 2018.

By Andrew Humphreys • andrew.humphreys@medadnews.com

MABBVIE

The return on R&D investment for leading biopharmaceutical manufacturers fell to a nine-year low while the U.S. FDA approved a record-breaking amount of novel medicines during 2018.

FEBRUARY 2019 MED AD NEWS • 21

or the pharma industry, the new year kicked off with committees in the

House and Senate questioning the high prices of basic drugs such as insulin and the Trump administration proposing new regulations for Medicare drug plans that would change the way drug discounts are negotiated. And ICER, the in-dependent body that assesses the clinical value of drugs, in January announced two new programs: one is an interna-tional collaborative to develop methods for value-based pricing of potential cures, and the other will assess whether the most significant prescrip-tion drug price increases are supported by new clinical evidence.

Additionally, one company that provides a system in which pharma, PBMs, and HHS can centralize the contract and rebate negotiation process hopes that a partnership with another company that assesses the clinical and outcomes value of drugs can introduce efficiencies and clarity into the processes that will ultimately provide the best prices for pa-tients. But as policy makers and pharma advocates continue to debate, the answers of how to tie price to outcomes and affordability – as well as how drugs are currently priced – remain unclear.

Hearings, proposed rules set the stage

In January, after newly elected Democrats took over the House, the House Oversight Committee – led by Rep. Elijah Cummings, D-Md. – an-nounced an investigation into 12 pharmaceutical compa-nies and their drug-pricing methods.

“For years, drug compa-nies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits,” Cummings said in a statement. “The goals of this investigation are to determine why drug companies are increasing prices so dramati-cally, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.”

In late January, the House Oversight Committee and the Senate Finance Committee – led by Senator Chuck Grassley, R-Iowa – brought in pharma executives, patient advocates, and health experts to discuss the damaging effects of high

insulin prices. While no one who testified was doubtful on the therapeutic value of insulin, there were a lot of questions from legislators about why insulin prices had gone up.

A study by the Health Care Cost Institute (HCCI) found that between 2012 and 2016, insulin spending by each type 1 diabetes patient went up by $2,841, to $5,705 per person on insulin in 2016. The cost of diabetes supplies such as testing strips and other pre-scription drugs was $4,119, a 22 percent increase during that time period. “The increase in gross spending on insulin was larger than any other category, nearly doubling between 2012 and 2016,” HCCI reported.

In looking at the usage and types of insulins, HCCI says the price of all insulin products increased between 2012 and 2016. “The average point-of-sale price nearly doubled, rising from 13 cents per unit to 25 cents per unit,” experts say. “That translates to an increase from $7.80 a day in 2012 to $15 a day in 2016 for someone using an average amount of insulin (60 units per day).”

At the end of January, the Trump administration pro-posed new rules for Medicare Part D plans in an attempt to lower drug prices. The way the system works at present is that drug companies set a price for their products and then phar-macy benefit managers nego-tiate a discount in the form of a rebate, on behalf of insurance plans. PBMs keep some of that money for themselves and the insurers use some of it to help lower premiums across the board. However, the Trump administration proposal would ban those rebates in Medicare plans and force PBMs to just accept a flat fee for their work. While Part D premiums would go up, Health and Human Services expects that senior patients will save more at the pharmacy counter.

“Part D plans have ways to avoid premium increases, including more use of generics, tougher negotiation, or lower overhead,” according to HHS Secretary Alex Azar, in February 1 remarks to the Bipartisan Policy Center. “We believe Part D plans will use these tools to keep premiums steady, because they already compete incredibly aggressively on premiums. That part of our system works relatively well. The biggest problem, the pain point, is patients’ out-of-pocket spending at the pharmacy.”

While the proposal would only apply to Medicare plans,

Azar seemingly doubled down on it, in his remarks to the Bipartisan Policy Center, when he called on Congress to end rebate practices all across the market. “Congress has an op-portunity to follow through on their calls for transparency, too, by passing our proposal into law immediately and extend-ing it into the commercial drug market,” he said.

During October 2018, Health and Human Services unveiled a proposal for a new international pricing reference for Medicare Part B drugs. “Spe-cifically, CMS intends to test whether phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices; allowing private-sector vendors to negotiate prices for drugs, take title to drugs, and compete for physician and hospital business; and chang-ing the 4.3 percent (post-se-quester) drug add-on payment in the model to reflect 6 percent of historical drug costs translated into a set payment amount, would lead to higher quality of care for beneficiaries and reduced expenditures to the Medicare program,” HHS executives say in the advanced notice of proposed rulemaking.

In its December response to the Part B proposal, the Inter-national Society for Pharma-coeconomics and Outcomes Research (ISPOR) stated that international reference pricing in Medicare Part B could have some potential advantages.

The scientific organization surveyed its membership, and some possible advantages were suggested.

“Use of IRP might result in overall price reductions in that program and generate some cost savings that could be used elsewhere in other parts of Medicare, other government programs, or tax reductions,” ISPOR executives stated. “It could make pricing for these drugs more homogeneous across developed countries, which might be perceived as fairer by many U.S. citizens. It could motivate drug compa-nies to negotiate more strongly with other countries to achieve pricing that could help share the global R&D burden cost in a way that U.S. citizens might regard as more appropriate.”

Another advantage to international reference pricing might be from a health technology assessment (HTA) perspective, ISPOR says, in which the clinical and econom-ic effectiveness of a therapy across countries and geogra-phies might be evaluated more

consistently.“To date, there are signifi-

cant variations across countries in the HTA methodology used to measure and understand variations in outcomes across patient populations,” ISPOR says. “A more unified approach to pricing could simplify the value assessment and evidence comparisons across geographies, reducing dupli-cative effort by both payers and drug companies across jurisdictions, and thereby strengthening payor under-standing of decision-making relative to prices as well as sending clearer signals to drug developers as to likely returns on investment.”

The disadvantages to IRP, ac-cording to ISPOR, are changes in behavior of both payers in the referenced countries and the manufacturers supplying them.

“If Country A references prices in Country B, then drug manufacturers treat the two markets as linked when they set prices. If prices in Country B were lower than those in Coun-try A, then they may increase prices in Country B, or stop supplying Country B so there is no price to be referenced by Country A,” ISPOR says. “Either action will reduce the impact of reference pricing on the prices in Country A.”

If prices are raised in Country B, then overall returns to R&D will increase and patients in Country A will benefit from more innovation, but two things are likely to happen, according to ISPOR.

“Firstly, revenues may fall (and therefore returns on innovation) because Country B buys less – for example, reducing the sub-populations for whom the drug is made available,” these experts say. “Secondly, as noted above, the payer in Country B and the manufacturer may agree on higher list prices and larger confidential discounts, such that, the net price paid in Country B is unchanged. How-ever, the list price rises such that Country A gains no benefit from referencing Country B.”

Despite all the government hearings and proposals, don’t expect a lot of movement on the pricing issue in 2019, says Jeremy Schafer, senior VP and director of the Access Experi-ence Team, Precision for Value.

“The primary issue is that the true net pricing system in the United States is incredibly complex and convoluted,” Schafer told Med Ad News. “In fairness to manufacturers, their hands are somewhat tied. Rebate and discount contracts with PBMs and pharmacies are confidential, meaning that open disclosure can’t be done without violating contracts and revealing competitive strategy. In addition, the way that PBMs pass the lower net cost onto employers and health plans is

not something the manufac-turer can influence.

“The result is that while employers and health plans enjoy a lower net cost post-re-bates, the patients are stuck in a system where they may pay a coinsurance reflective of the list price. The Trump adminis-tration has discussed a radical change to the rebate system that would instead focus on net cost, but there hasn’t been much movement in this area. In the end, neither manufac-turers nor PBMs have much to gain by more transparent pricing. It gives up potential competitive advantage for both organization types and would probably end up costing them more. As a result, more aggressive change may come from the government who, at the moment, appears more interested in just bringing pric-es down rather than making them more transparent.”

(For more about the proposed Medicare Part B reference plan and recom-mendations on how pharma companies could prepare if the program is implemented, see “Will the U.S. adopt global reference pricing?” on page 26).

PhRMA tries to push back

In 2018, PhRMA member companies voluntarily pledged to share information about what patients could potentially pay for specific products as part of its DTC advertising. Eli Lilly was the first, launching a website in conjunction with its DTC advertising for Trulicity, lillypricinginfo.com/trulicity. The site shows Trulicity’s “list price” of $730.20 a month.

The site then breaks down the potential cost by patient type. If a patient has employ-er-sponsored insurance, “About 94 percent of Trulicity prescrip-tions cost between $0-$30 per month, and the remaining 6 percent cost an average of $195 per month,” the site says. “What you pay for Trulicity will depend on your insurance plan. Each plan has different preferred drug lists and out-of-pocket amounts, and most include an annual deductible. If you haven’t met your deduct-ible, you’ll see higher prices until the deductible is met, then your out-of-pocket cost will likely drop.”

Estimates are also provided

for Medicare patients, Medicaid patients, and for those without insurance or whose insurance companies refuse to include Trulicity on their formularies, there is the truly bad news: “If you do not have prescription drug coverage or your insur-ance does not cover Trulicity, you can expect to pay the list price shown above, plus any additional pharmacy charges depending on where you purchase your medicine.”

Schafer says he is “doubtful” that moves such as Lilly’s will change public perception of pharma companies and their pricing practices, “although every little bit helps.”

“In addition to the opaque-ness of the pricing system, manufacturers are likely challenged by the decline in public trust for the industry,” Schafer explains. “If people do not trust the entity providing the information, then the likelihood that the information will resonate will be low.”

He suggests that the phar-ma companies partner with medical organizations or even the government to validate the accuracy of the information offered by the industry and build trust.

“If the information is made available and understandable to patients, it may spur more pressure from the patient side onto PBMs to demand chang-es to benefits that will allow more patients to reap savings directly,” he says.

The pharma industry “would be well served by communicat-ing to patients and everyday consumers the monumental changes that medications in particular categories have brought to society,” Schafer told Med Ad News.

“Many times the value dis-cussion is focused on an indi-vidual brand which can get lost in the deluge of negative news that consumers see every day,” he says. “Instead, pharma could communicate how drugs have helped dramatically alter the rate of cardiovascular death, have made some cancers ‘curable,’ and have changed the survival picture for people with diseases like hemophilia. When presenting “value” to PBMs and payers, however, the focus should be on the individual drug with informa-tion on savings that payers can identify and quantify. While

The unanswered question of value

special feature value of medicines

With Congressional hearings on drug prices, proposed rules for Medicare plans, and new ICER efforts to link outcomes to value, finding answers on how to price and pay for drugs is still difficult.

By Christiane Truelove • chris.truelove@medadnews.com

F Eli Lilly and Co. became the first pharma company to launch a website offering pricing information for one of its drugs, in this case the diabetes drug Trulicity.

With Congressional hearings on drug prices, proposed rules for Medicare plans, and new ICER e� orts to link outcomes to value, � nding answers on how to price and pay for drugs is still di� cult.

24 • MED AD NEWS FEBRUARY 2019

he Medical Advertising Hall of Fame hon-ored 2019 inductees Carol DiSanto and Charlene Prounis on Feb. 7th at The Pierre in New York City. DiSanto is well-recog-

nized as a trailblazer and formerly served as president of the healthcare communications agency Cline, Da-vis & Mann. Prounis is a renowned entrepreneur and co-founder of the healthcare communications agencies Flashpoint Medica and Accel Healthcare.

This marks the first time in the history of the presti-gious program that each honoree is a women. The gala affair included a tribute to late MAHF co-founder David Gideon, who passed away during 2018. Gideon’s pas-sion and leadership made MAHF the most coveted and respected honors program in healthcare marketing.

“There’s no question that co-founding the MAHF is the thing my father was most proud of in his career,” his daughter Anne, who now serves as executive director of the MAHF, told Med Ad News. “Out of all aspects of his professional life, he found this work the most fulfilling. He enjoyed working with people who were motivated by wanting to give back to the industry, not personal profit or aggrandizement. Seeing it grow from just doc-umenting the history of the industry and honoring its founders to becoming an educational resource was the ultimate success story to him. I couldn’t be more proud to be his daughter or more honored to continue his leg-acy with the MAHF.”

DiSanto started her career in consumer advertising at Esty working on OTC products from Whitehall Lab-oratories/American Home Products. She joined Cline, Davis & Mann (CDM) during 1987 and launched the first OTC consumer product the agency had at the time, Equalactin from Pfizer. When Viagra’s market intro-duction was on the horizon in the late 1990s, DiSanto and her consumer expertise were recruited as the DTC lead, partnering with professional lead Kyle Barich, re-sulting in the industry’s most successful launch at the time. In the early 2000s, DiSanto’s leadership skills were at the forefront when she was appointed director of client services for CDM. During 2009, she became President and Managing Partner. In her more than 27 years at CDM, DiSanto strategically grew agency talent from 60 employees dedicated to a single healthcare cli-ent to more than 1,000 people within 8 divisions focus-ing on 40-plus clients.

“I’m absolutely honored and humbled to have been selected for induction. It means the world to me that so many folks who I worked with over the years wrote let-ters to the MAHF board in support of my nomination, that is pretty special,” DiSanto told Med Ad News. “For me, it’s always been about the people, and I am lucky to have worked with some of the best, most talented and fun people in this industry.”

According to DiSanto, “As far as all the buzz around both inductees being women this year, I think it’s abso-lutely fantastic – and once again demonstrates to both men and women that anything is possible with hard work and perseverance.

“I am proud to be the fourth ‘CDMer’ (Cline, Davis & Mann) to be inducted into the MAHF behind (the late) Morgan Cline (2004), Clyde Davis (2005) and Fred Mann (2006). I learned so much from all three and I am eternally grateful that they hired me in August 1987. Their decision to do so changed my life,” DiSanto says.

“I’m probably the most proud of being associated with the The CDM Group’s Grace value (we had four values; Substance, Style, Conviction and Grace). It’s who I am, it’s how I am wired and it lets me sleep deeply at the end of each day.”

Prounis started her career as a sales representative for Searle, followed by her first job in pharma adver-

tising at Grey Healthcare Group. During 1999, Prounis launched her first agency – Accel Healthcare – which in five years grew to become a $20 million company and was eventually sold to Omnicom.

She helped launch her next agency, Flashpoint Med-ica, during 2005 and the agency grew rapidly, recog-nized as “Agency of the Year” in 2010 and garnering more than 60 creative awards. The firm’s blue-chip companies included Amgen, Genentech, Celgene, Gil-ead, Novartis, and Pfizer.

During her time at Flashpoint, Prounis was recog-nized in 2014 as Med Ad News’ “Industry Person of the Year.” Prounis has been deeply dedicated to advancing the role of women in the healthcare industry and was very active in the Healthcare Businesswomen’s Asso-ciation (HBA). For this exemplary service, she is the only person to have received the prestigious HBA STAR award twice. Prounis is serving on the board of health-care communications firm, W20.

About being inducted into the MAHF, Prounis told Med Ad News, “I feel very honored to receive such a dis-tinguished award and proud of the fact that two women were inducted this year. We’ve been working women, working moms, who worked our way to the top, and most importantly, we are role models for other young women that they, CAN DO IT TOO!”

Regarding the meaning of the MAHF, Prounis shared the following thoughts with Med Ad News: “The MAHF honors those that have come before us and left a lasting legacy. When I think back on my career and the legacy with which I hope to inspire others, three things stand out: believe in yourself enough to take the big risks, to lead with heart and to give back – through mentoring and volunteering at the HBA and MAHF.

“I was a two-time entrepreneur with successful ad agencies, Accel and Flashpoint, that started because of the small act of courageous self-confidence and the philosophy to put people first. We created a company culture where people thrived – and so did the agency. As a board member for the MAHF I shifted the focus

from only honoring Hall of Famers to an educational focus for the young executives through new educa-tional programs like ‘Young Executives Night Out’, ‘View from the Top,’ ‘Future Famers’ and mentor-ing breakfasts,” notes Prounis.

“I am grateful to the MAHF for recognizing these qualities of, risk taking, leading with heart and giving back because not only have they made such a dif-ference in my career, but these are the val-ues that inspire others, and we can continue to build a great industry.”

The MAHF was founded in 1996 with a mission to preserve the history and heritage of the med-ical advertising profession and honor those who found-ed and built the industry through their induction into a Hall of Fame. Since the MAHF’s founding, the organi-zation’s mission has been broadened to include recog-nition of past excellence in creative work through the Heritage Advertising Awards, and creation of educa-tional resources through a Young Executive’s Program that holds multiple educational seminars each year.

As the MAHF enters a third decade of service to the industry, the organization is pursuing more educational programs and expansion to cover digital communica-tions. For more info about the MAHF, please contact Anne Gideon at anne@pch-systems.com. medadnews

Medical Advertising Hall of Fame 2019extra feature medical advertising hall of fame

TBy Andrew Humphreys • andrew.humphreys@medadnews.com

Carol DiSanto Charlene Prounis

David Gideon

The Medical Advertising Hall of Fame honored 2019 inductees Carol DiSanto and Charlene Prounis on Feb. 7th at The Pierre in New York City.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • February 2019 • Volume 38, Number 1 • $25

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24

top10 pipelines

value of medicines

MAHF

hen it comes to the use of arti� cial intelligence, AI – as it has been classically de� ned in science � ction – is not truly here yet. In 2019, there are no self-aware robots or bodiless nonhu-man intelligences prowling the internet. What we do have are Siri and Alexa, Google’s “Computer,” consumer chat-bots, and little machine learning algo-rithms such as DeepLab and SPADE that can create weird, hilarious, and some-what disturbing names (often all three at the same time) for craft beers, kittens, and even burlesque shows.But pharma has been getting into

the AI wave. Mostly it has been on the clinical research side, using machine learning to plow through mountains of data to narrow down R&D targets or compile evidence. In June, Sano� announced a partner-

ship with Google to create a virtual In-novation Lab with the goal of changing how Sano� develops new treatments.

“We stand on the forefront of a new age for biology and human health, with the opportunity to transform healthcare through partnerships with pioneering technology and analytics companies,” says Ameet Nathwani, M.D., chief digital o� cer, chief medical o� cer and execu-tive VP of medical at Sano� . “Combining Sano� ’s biologic innovations and scien-ti� c data with Google’s industry-leading capabilities, from cloud computing to state-of-the-art arti� cial intelligence, we aspire to give people more control over their health and accelerate the discov-ery of new therapies.”The collaboration focuses on three

key objectives: to better understand pa-tients and diseases, to increase Sano� ’s operational e� ciency, and to improve the experience of Sano� ’s patients and customers.

“Life sciences companies are looking to data driven, digital innovation to help fuel the creation of accessible health-care solutions,” says Thomas Kurian,

CEO, Google Cloud. “We look forward to collaborating with Sano� to help accel-erate the cycle of healthcare innovation to populations throughout the world.”What about marketing?On the pharma marketing side. AI prog-

ress as been much slower. According to Justin Chase, executive VP of innovation and media at Intouch Solutions, the agency had been trying to convince clients last year that AI could do a lot for them. “We were trying to sell in these arti� cial intelligence powered ecosystems” such as AI powered patient support programs, receiving data from wearables and other sources,” he says.

While clients understood that value AI could provide, they were cautious. “They were not ready to go from 0 to 60 in 2.5 with this whole AI thing,” Chase told Med Ad News. Then there were the promises that

IBM was making with Watson, which was supposed to change every aspect of the pharma industry. “They over-promised and underdelivered,” Chase says. So trying to sell AI solutions in the wake of Watson’s failures was di� cult.

Paul Balagot, chief experience o� -cer at precisione� ect, says Silicon Valley tech companies are trying to close the gap between the application of their technology with pharma’s needs. On the � ip side, pharma companies and biotech companies are looking for stra-tegic partnerships to leverage many of these technical innovations.This means even with the disappoint-

ment stemming from Watson, pharma companies started putting their own solutions into play. Novo Nordisk has a chatbot called “Ask Sophia” in which patients can ask very speci� c questions about Novo Nordisk products. Although Ask Sophia seems like a so-

phisticated step forward, according to Ritesh Patel, chief digital o� cer at Ogil-vy Health, the chatbot is a less than ideal example of AI.

“Have you played around with it? You should, I did. I got a glass of wine at 1 in the morning and pretended I was a pa-tient su� ering from diabetes,” Patel says. “I logged on and said, ‘Hey Sophia, I’ve got diabetes, will I get gout?’ And the response was, ‘I can’t help you with that right now, please call this number.’ And then I said, ‘Hey Sophia, I’m fat, I’m over-weight, am I susceptible to diabetes, do I have to exercise?’ And the answer came back, ‘I can’t help you with that right now, please call this number.’”According to Patel, what Novo Nor-

disk has done “to much fanfare, though the execution is not that good” is that it took the most frequently asked ques-tions being received at the call center by MSLs and put them in a chatbot.

Ultimately, Ask Sophia is not real-ly AI. “It’s just a guided conversation,” Patel says. “The machine’s not doing anything, it’s just guiding you through conversation trees.” There are more sophisticated chat-

bots around, such as Conversation Health Guides in Toronto, and Colgate’s Brush With Me. Both use machine learn-ing and natural language processing to discuss teens’ health concerns and HPV vaccination (Conversation Health Guides) and help moms teach very young children how to brush their teeth.

Both are “learning” programs, taking the responses and using them to � g-ure out what information questioners were seeking. The Colgate program uses Google’s assistant, which had 400 kids teach it “kidspeak” before it was launched.

In less speci� c ways than Ask Sophia, AI has impacted pharma marketing in three areas, according to Pratap Khed-kar, managing principal, ZS Associates. These areas are enriching insights, opti-mizing decisions, and enabling actions.

For example, AI is being used to im-prove physician engagement by doing marketing promotion in a better way. “Currently physicians get inundated with promotion – from reps, emails, alerts, all the internet channels – to the point where a high value doctor may get hit 2,800 times a year by pharma as a whole,” Khedkar says. “None of this pro-motion recognizes the individual phy-sician’s preference for certain channels, or certain content and messages. The touches are uncoordinated and pile up on top of each other without the right cadence. AI is being used to streamline all of this – predicting which physicians will engage with certain channels, pre-dicting the content a� nity of a physi-cian, designing the right sequence of touches to maximize an individual’s en-gagement and eventually prescribing behavior.”

According to Khedkar, this leads to AI

creating a “Next Best Action” with each physician every day that the rep needs to do. “There is enough data now to do all this, as well as automated software systems to enable the actions at a micro level,” he says. “The intent is to person-alize and harmonize all the contacts to every individual physician.”Measurements have shown the im-

pact on engagement and prescribing behavior is substantial, with a 6 to 7 percent increase in sales. “Prediction has also been applied to which is the right customer, based on their propensity to write or switch in the near term, and this leads to dynamic targeting using AI,” Khedkar told Med Ad News.According to Patel, there have been

trials in using AI to serve up ads and training them using machine learning.

“You’d create an ad, which will then be broken up into image, text, back-ground, call to action, format, and size,” he says. “You then service it up and let the machine learn which pieces work really well and what’s resenting with whom. The machine then compiles the ideal ad unit.”Although there have been pilots of

this AI use, “then you have regulatory in the way,” Patel explains.“Everything has to be preapproved

so how can you dynamically create an ad unit that works really well?” Patel says. “You need to come back to approv-als. You could say, ‘OK, here is the ad unit that works really well, can you please ap-prove it,’ and then you can serve it.”

These medical and regulatory con-cerns about messaging may have lim-ited Ask Sophia’s capabilities, according to Patel. “I bet medical and legal said, ‘I want to know and preapprove this con-versation.’” He also guesses the chatbot was not trained with patient answers, but with the call center agent input. “It’s like taking the FAQs from a website and making them an AI.”Intouch Solutions has built its own

AI engine, called Cognitive Core, which was featured in Med Ad News’ December 2018 feature “Ad-ventures in Marketing XI.” The o� ering powers a variety of AI activities for Intouch clients – chatbots, patient adherence programs, Veeva dig-ital sales aid rep interactions – and that list is rapidly growing as brand manag-ers seek out new ways to harness AI.

One area where AI can be a great deal of assistance is the SEO process, which Chase called “wildly ine� cient.”“Roughly 50, 60, 70, 80 percent of this

process is back o� ce, for most brands there are 10,000 search terms or key-words, and each one of those keywords needs to be classi� ed,” Chase explains. “What category, what theme, what is it related to, is it related to treatment, to research, to clinical trials? They’re going continued on page 6

Harnessing the ghost in the machineWhile a number of factors are constraining the usefulness of AI

tools for pharma marketers, experts believe that the use and

sophistication of these tools will evolve.

special feature

AI

special

By Christiane Truelove • chris.truelove@medadnews.com

inside

10 • MED AD NEWS AUGUST 2019

MedAdNews: What AR/VR work have you seen out in the wild of pharma that is inter-esting?

Fabio Gratton: The large majority of what people are doing falls into two key areas. One is training and education and the oth-er is tradeshows. If you go to ASCO or ASH, most of the big companies are using AR or VR. But a majority of the time, it’s still being used as an engagement gimmick, not nec-essarily because this was the best way the information could be communicated but because, “Hey, this is going to get people into our booth.” It’s effective as an attrac-tor. We’ve done some AR ourselves in the past and you could certainly get people to line up at your booth. I’ve seen people putting on the goggles and standing in front of screens and walking around fling-ing at things, “Grabbing the cells” or doing other things you don’t really need to do in the real world – but it’s a good distraction from the regular tradeshow stuff and some-thing interesting. So most of what I’ve seen has been aimed more towards creating an interesting way to get people to interact with your brand or to interact with your science than exploring the full capabilities of the technology. I think there’s – while I’m using the word gimmicky, I’m not trying to

make it sound insignificant. Engagement is always important. People remember the things that they’re engaged with, right? So if I’m more likely to remember your mechanism of action from a tradeshow because I put on these goggles versus the person who just had it playing on a screen as they walk by, well, that’s important. So, it does serve a purpose beyond just being gimmicky distractor at tradeshows. But I just don’t think I’ve seen many substantive applications in marketing, parallel to, say, conducting a surgery through VR, with the doctor controlling a robot from 1,200 miles away. That’s interesting. That’s really genuinely saving a life. When you consid-er AR/VR applications like that, you want to see that kind of value on the marketing side too, applications that drive some new kind of value, and we just aren’t seeing very many of them yet.

MedAdNews: Are there areas or disease states where marketers are perhaps a little further along towards that goal?Fabio Gratton: Some of the best applica-

tions I’ve seen are when people are trying to simulate the perspective of the patient – for example, in ophthalmology. Oph-thalmology is about the visual field. So to

being able to have a doctor put on glasses and see what a cataract might look like or what a treatment might look like or what a patient sees, that can be very powerful because it’s actually connected to the visu-al field – the virtual reality is adding some-thing really substantive. It’s hard to simulate what a patient sees. If you can do that, you can create empathy, a connection to not only what the products do but what a pa-tient is feeling. I’ve seen good uses of that. There were some good examples at the Cannes Awards, where they’re trying to im-merse the user in the patient’s perspective, showing what a patient might see when they, say, have a heart attack, or other expe-riences like that. Those sorts of applications of AR and VR are creating more of a human connection, as opposed to, “Hey, reach your hand into the cell and spin this virus.” But we haven’t seen as many of those because they have to be a bit more clinically accurate for medical-legal-regulatory to be comfort-able. So they’re more time- and cost-inten-sive. And considering that immersive is still considered relatively innovative and cut-ting-edge, people aren’t allocating the dol-lars to those kinds of things. We don’t see as many really relevant applications because they’re more complicated and expensive to execute.

MedAdNews: Aside from cost, what else is slowing down the adoption of those sorts of AR/VR applications?

Fabio Gratton: It’s actually a lot like the classic chasm I saw in digital back when we were starting our agency during 2000 – the people that know the tech well do not know the health well yet and vice versa. We’ve got extraordinary creative and sci-entific people in healthcare agencies, but they do not yet have their hands or minds around this technology. And we’ve got people who are incredible at developing immersive experiences technologically, but they are in outside, non-healthcare shops, not sitting in healthcare agencies, and they do not usually have that core healthcare expertise.

MedAdNews: So we have to wait for the health shops’ technology departments to catch up and close that gap.Fabio Gratton: Yes, or build stronger part-

nerships between the technology shops and the agencies getting the work. Agen-cies are selling the work and then they are trying to figure out a way to do it to max-imize their revenue versus looking to the outside partnerships with the tech people that know how to do it really well. If I were an agency, I would not want to build that capability in-house because it’s complex and sophisticated and it’s changing all the time too. So, why would you want to keep chasing all the new hardware? Unless you’re going to create an entire offering based on immersive technologies, why not just continue to be the creative shops that companies want you to be and find good partners who are keeping up with the tech. But agencies sometimes do not like to do that because they do not like to give up rev-enue, unfortunately.

MedAdNews: So where do you see AR and VR sneaking in to the message in a substan-tive rather than gimmicky way? What are other spaces or disease areas, aside from ophthalmology?

Fabio Gratton: As long as there’s a hard-ware requirement, a specialized hardware requirement, we’re going to have some challenges. As long as some piece of hard-ware is required – goggles, perhaps – that is not native in the smartphone devices we’re already buying, then we’re going to have a gap because not everybody can access it. If we’re limited by the availability of that hardware, we’ll be stuck with very unique circumstances like tradeshows, like sales reps, and like events where you can control the hardware experience. But the place where we might see more advance-ments is in augmented technologies, aug-mented realities, rather than virtual reality. To distinguish, AR can be an overlay on our world that helps us augment it through things like the Holo Lens, the Microsoft Holo Lens, versus the Oculus where you’re pretty much immersing yourself in a com-plete virtual world. So augmented proba-bly has some more near-term applications because everything already has a camera on it, and everything with a camera comes T s augmented reality (AR) technology continues to mature, more life science

companies are expanding its use, enabling a new class of innova-tive content for field teams to bring treatments to light. Wheth-er demonstrating a new therapy, showing how a new medical device works, or providing details about a complex disease state, AR can improve customer en-gagement, education, and brand differentiation. Augmented reality works by

projecting virtual images onto the physical world with the help of a mobile device – most

commonly a tablet or smart-phone – to create an interactive hybrid environment. Most likely you have experimented with the technology in your personal life, perhaps without even realizing it. If you have ever used a mobile app that helps you digitally paint your walls, decide where to place a couch, or measure physical spaces, that’s augmented reality.

The technology for AR is no longer a novelty. Today, there are thousands of AR applications supporting industries such as retail, military and defense,

gaming, real estate, advertis-ing, and education. eMarketer projects that, throughout 2019, nearly 70 million people in the United States will use AR. With tech giants such as Apple and Google investing in the devices and software that deliver AR, the

technology continues to advance rapidly, consistently unlocking new use cases.

AR comes into its own for life sciencesIndustry analysts predict the global AR market in healthcare to

grow at a 23 percent compound annual rate between 2017 to 2023. The technology is already in use in areas such as patient and doctor education, surgical visual-ization, and disease simulation to enhance patient treatments and outcomes.

For example, one AR applica-tion blends data from MRI and CT scans to map a patient’s body, projecting the exact location of veins or internal organs so that medical staff can hit the mark the first time. A different

application reconstructs tumors in 3D so surgeons can view X-rays in real-time to reduce radiation exposure. Another constructs 3D visuals of organs from different

angles for greater precision in stitches.

Augmented reality also helps increase retention and under-standing for doctors and patients by presenting complex ideas in interactive formats. For instance, one global pharmaceutical com-pany uses a 3D heart modeling application to demonstrate the movement of medicine through the organ and its effects as part of a new treatment. Both

healthcare providers (HCPs) and patients can better understand the science by seeing how it works in the body through AR. Yan Fossat, VP of Klick Labs at

Klick Health, explained that by “giving someone the ability to in-stantly see a disease or condition on their own skin, or enabling them to see what someone with, say, macular degeneration sees is more impactful than other forms of visual and textual represen-tation.”

Companies have even begun to find AR applications for their research and manufacturing processes. Researchers can model cell signaling and turn

different receptors on and off to visualize the downstream effects. In manufacturing, AR can

be used to allow subject matter experts to virtually explore large pieces of equipment to find fixes for improved efficiency and

maintenance. Launching new products with augmented reality

One of the most impactful areas

for AR for life sciences companies is in the commercialization of new products. As more complex therapies come to market, AR is proving a natural fit in helping businesses explain the complex science and unique delivery mechanisms involved. Aug-mented reality empowers brand

teams and content firms to create detailed, immersive experiences that better engage with HCPs, generate excitement about a new therapy, and instill greater confidence during the early phases of the commercialization

process. Satisfying HCP’s preference for

digital engagement, AR provides a captivating format to present new drugs and medical devices using familiar devices as the pre-sentation platform. It lets HCPs explore the mechanisms of new therapies that were previously prohibitive to demonstrate in a hospital or physician office due to weight, size, or security restraints.

Most importantly, AR enables life sciences companies to tell a compelling story, illustrating how a body experiences a disease and then how it reacts to the new treatment during different stages of the disease. HCPs learn more clearly how a new product can help patients throughout the progression of the disease state so they can communicate this to patients.

“There just hasn’t been any other medium in the past that allows interactive modeling live in real time,” says Sanjiv Mody, CEO and founder of PIXACORE. “With the right content and use case, AR helps pharmaceutical field teams get more than the

average two or three minutes with a doctor.”

Better HCP engagement and deeper understandingAR provides a more interactive and engaging experience than traditional 3D modeling for greater retention of complex

concepts. Now, instead of hearing or reading about results from a new drug or device, HCPs can virtually interact with it to visualize the effects and practice procedures. Field reps can either hold their mobile device and make

their pitch, or turn over their AR-equipped iPad so the HCP can directly engage with the content. In addition to field personnel serving as facilitators, doctors can take a 360-degree perspective to do a deeper dive and gain important insights about the intricacies of a molecule or medical device. The results in a

more memorable experience compared to an often static, two-dimensional presentation. However, not everything translates well into AR. The tra-

ditional formats remain the best option in certain cases. For exam-ple, dense content contained in medical journals may not be an appropriate use case for AR. According to Mody, “Neither

AR nor VR technology should be used just for the sake of novelty when other media could tell the story better and make a more meaningful impact.”

Getting started with ARCreating AR applications requires

content creation, deployment, and maintenance supported by dedicated resources. Some cloud-based enterprise software solu-tions now embed AR capabilities into customer relationship man-agement (CRM) processes so that users can start to leverage AR in a more efficient way, as they would with any detailing content. With AR capabilities available through existing, familiar software, life sciences companies can begin to experiment with the technology through smaller pilot program across channels, in a controlled environment with a limited audience. Cloud-based AR appli-

cations also enable life sciences companies to seamlessly capture and learn from the effects of AR on customers, learn, and then share those insights with agency partners.

“A controlled environment is the best way to create content, test it, get feedback and make refinements. Once you have the AR application carefully programmed, introduce it in a

few test-kitchens,” Mody says. “Like any new technology rollout, take measured steps with AR ini-tiatives, and learn from structured use cases before a full-blown launch. A roadmap is imperative to success.”

As AR continues to rapidly ma-ture, more life sciences compa-nies should consider its use as an impactful tool to communicate, educate, and engage customers and patients on innovations that improve brand preference and patient outcomes.

Arno Sosna is general manager, CRM, Veeva Systems

Augmenting pharma

special feature

AR/VR

Augmented reality finds its stride

By Joshua Slatko • josh.slatko@medadnews.com

By Arno Sosna

Med Ad News spoke with digital guru Fabio Gratton about the present and future

of augmented and virtual reality technologies in pharma and healthcare.

Photo courtesy of Intouch Group

Med Ad News spoke with digital guru Fabio Gratton about the present and future of augmented and virtual reality technologies in pharma and healthcare.

14 • MED AD NEWS AUGUST 2019

umira continues to maintain a stranglehold as the top-sell-ing prescription medicine globally, a reign that started in

2012 after former heavyweight champion Lipitor lost patent exclusivity. The auto-immune disorder medicine’s 2018 world-wide sales exceeded $20 billion combined between marketers AbbVie and Japan’s Eisai, with $19.94 billion accounted for by the North Chicago-based biopharmacuet-ical company. For the first six months of 2019, AbbVie reported worldwide sales of nearly $9.32 billion while Eisai’s total came in at about $210 million.

The world’s fully human anti-TNF-α monoclonal antibody, Humira entered the U.S. marketplace during January 2003. The medicine has received FDA approval throughout the years for the treatment of rheumatoid arthritis, juve-nile idiopathic arthritis, psoriatic arthri-tis, ankylosing spondylitis, adult and pe-diatric Crohn’s disease, ulcerative colitis, plaque psoriasis, hidradenitis suppurati-va, and uveitis.Direct biosimilar competition in cer-

tain international markets has affected Humira sales since October 2018. AbbVie has fended off biosimilar launches in the

United States until late 2023.According to EvaluatePharma’s “World Preview 2019, Outlook to 2024” report, Merck’s blockbuster anti-PD-1 therapy Keydruda will have surpassed Humira as the No. 1 ranked prescription drug in terms of global sales by 2024. The human-ized monoclonal antibody has received U.S. marketing clearance for 21 oncology indications as of early August 2019 span-ning melanoma, non-small cell lung can-cer, small cell lung cancer, head and neck cancer, classical Hodgkin lymphoma, pri-mary lediastinal large B-cell lymphoma, urothelial carcinoma, microsatellite insta-bility-high (MSI-H) cancer, gastric cancer, esophageal cancer, cervical cancer, hepa-tocellular carcinoma, Merkel cell carcino-ma, and renal cell carcinoma.“A $1.5 billion increase in sales for

Humira ensured AbbVie’s blockbuster

remained the top-selling product world-wide in 2018,” according to EP’s 12 an-nual world preview/outlook edition that was released in June 2019. “However, following a number of biosimilar launch-es in Europe and biosimilars set to hit the US in 2023, the 2024 EvaluatePharma consensus forecast for Humira has de-creased by $2.8 billionn compared to that given in last year’s report. This decrease, coupled with a strong year for Keytruda in terms of product sales, positive data from ongoing clinical trials and further FDA approvals, will allow Keytruda to pip Humira to the post and take the number one spot for 2024 forecasted sales.”

Keytruda worldwide sales totaled $7.17 billion for 2018, placing the medicine as the world’s 4th best seller according to Med Ad News’ Top 200 Medicines annu-al report, following a ranking of No. 22 for 2017 based on global sales of about $3.81 billion. For first-half 2019, sales for the checkpoint inhibitor climbed up to $4.9 billion compared to $3.13 billion during the January-June 2018 period. medadnews

The king of medicines

annual report

top 200 medicines Humira’s dominance continues as the world’s top-selling prescription product as the

biologic therapy became the first drug to exceed $20 billion in annual global sales.

By Andrew Humphreys • andrew.humphreys@medadnews.comH

TOP 200 PRESCRIPTION MEDICINES BY 2018 GLOBAL SALES

Rank 2018 Medicine 2018 sales ($ in millions)

2017 sales ($ in millions)2016 sales ($ in millions) 2018 reporting company

Primary disease/medical use

First approval date and/or launch date

1 Humira20,358 18,922 16,504 AbbVie and Eisai

Rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn’s

disease, plaque psoriasis, juvenile idiopathic arthritis, ulcerative colitis, axial

spondyloarthropathy, hidradenitis suppurativa, pediatric enthesitis-related

arthritis, panuveitis, Behcet’s disease (Japan) U.S. launch: January 2003

2 Revlimid9,685 8,187+ 6,974+ Celgene and BeiGene

Multiple myeloma, myelodysplastic syndromes, mantle cell lymphoma U.S. approval: Dec. 27, 2005 China approval: 2013

3 Opdivo7,550

5,7594,709 Bristol-Myers Squibb and Ono Pharmaceutical

Metastatic melanoma, advanced renal cell carcinoma, non-small cell lung

cancer, squamous cell carcinoma of the head and neck, classical Hodgkin

lymphoma, bladder cancerU.S. launch: December 2014 Japan launch: September 2014EU approval: June 2015

4 Keytruda7,171

3,8091,402 Merck & Co. Non small-cell lung cancer, advanced melanoma, previously treated recurrent

or metastatic head and neck cancer, classical Hodgkin lymphoma, urothelial

carcinoma, microsatellite instability-high cancerU.S. approval: September 2014

5 Eylea7,164

6,3885,649

Regeneron Pharmaceuticals, Bayer, Santen Pharmaceutical Wet age-related macular degeneration (wet AMD), macular edema following

central retinal vein occlusion (CRVO), diabetic macular edema (DME) U.S. launch: November 2011 (Wet AMD) EU launch: Fourth-quarter 2012 (Wet AMD)

6 Herceptin7,136

7,1696,932 Roche and Chugai Pharmaceutical Breast cancer

U.S. approval: Sept. 25, 1998 Japan launch: June 2001

7 Enbrel 7,126

8,2339,237 Amgen, Pfizer, Takeda Pharmaceutical Rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, ankylosing

spondylitis, polyarticular juvenile idiopathic arthritisU.S. launch: November 1998

8 Avastin7,000

6,8366,933 Roche and Chugai Pharmaceutical Colorectal cancer, lung cancer, kidney cancer, cervical cancer, ovarian cancer,

glioblastoma

U.S. approval: Feb. 26, 2004 Japan launch: June 2007

9 Rituxan/MabThera 6,901+ 7,551+ 7,461+Roche, Chugai Pharmaceutical, Zenyaku Kogyo

Non-Hodgkin lymphoma, chronic lymphocytic leukemia, follicular

lymphoma, rheumatoid arthritis, granulomatosis with polyangiitis (Wegener’s

granulomatosis) and microscopic polyangiitis with glucocorticoids, B-cell

lymphoproliferative disorders (Japan), pediatric nephrotic syndrome (Japan)

Rituxan U.S. approval: Nov. 26, 1997 MabThera EU approval: June 2, 1998 Japan launch: September 2001

10 Xarelto6,768

6,3975,748 Bayer and Johnson & Johnson Deep-vein thrombosis, pulmonary embolism, reduce risk of stroke and

systemic embolism in patients with nonvalvular atrial fibrillation Canada approval: Sept. 16, 2008 EU launch: Oct. 2, 2008 U.S. launch: July 2011

11 Eliquis 6,4384,872

3,343 Bristol-Myers Squibb Reduce risk of stroke and systemic embolism in patients with nonvalvular

atrial fibrillation; deep-vein thrombosis and pulmonary embolism EU approval/launch: May 2011 U.S. launch: February 2013

12 Remicade6,437

7,7338,835 Johnson & Johnson, Merck, Mitsubishi Tanabe Pharma

Plaque psoriasis, rheumatoid arthritis, psoriatic arthritis, Crohn’s disease,

ulcerative colitis, ankylosing spondylitis

U.S. launch: September 1998

13 Prevnar 13/Prevenar 13 5,802+ 5,6936,034 Pfizer and Daewoong Pharmaceutical Pneumococcal disease and pneumococcal pneumonia

Prevenar 13 EU approval: Dec. 9, 2009

Prevnar 13 U.S. approval: Feb. 24, 2010

14 Imbruvica 5,5834,037

2,831 AbbVie and Johnson & Johnson Chronic lymphocytic leukemia, mantle cell lymphoma, Waldenstrom’s

macroglobulinemia

U.S. approval: Nov. 13, 2013

EU approval: Oct. 21, 2014

15 Stelara5,156

4,0113,232 Johnson & Johnson

Plaque psoriasis

U.S. launch: Second-half 2009

16 Lyrica4,970

5,0654,966 Pfizer

Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy,

fibromyalgia, neuropathic pain due to spinal cord injury EU approval: July 6, 2004 U.S. launch: Sept. 21, 2005

17 Genvoya4,691

3,7311,501 Gilead Sciences and Torii Pharmaceutical HIV

U.S. and EU approval: November 2015 Japan launch: July 8, 2016

18Neulasta/Peglasta/G-Lasta 4,685

4,7164,802 Amgen and Kyowa Hakko Kirin

Neutropenia

Neulasta U.S. launch: April 2002G-Lasta Japan launch: Nov. 28, 2014

19 Tecfidera4,274

4,2143,968 Biogen

Relapsing forms of multiple sclerosis

U.S. launch: April 2013 EU launch: Early February 2014

20 Lantus4,213

5,4656,752 Sanofi

Diabetes

U.S. approval: April 20, 2000

21 Ibrance4,118

3,1262,135   Pfizer

Breast cancer

U.S. approval: Feb. 3, 2015

22 Januvia/Tesavel/Glactiv 3,957+ 4,013+ 4,201+ Merck & Co., Ono Pharmaceutical, Almirall, Daewoong Pharmaceutical

Type 2 diabetes

Januvia U.S. launch: October 2006 Tesavel Spain launch: April 2009 Glacitv Japan launch: Dec. 11, 2009

Humira’s dominance continues as the world’s top-selling prescription product as the biologic therapy is the � rst drug to exceed $20 billion in annual global sales.

AUGUST 2019 MED AD NEWS • 21

he Cannes Lions International Festival of Creativ-

ity’s 2019 Health Track consisting of the Pharma

Lions and Health & Wellness Lions occurred in

June along the scenic French Riviera.

GlaxoSmithKline’s “Breath of Life” campaign captured the

Cannes Pharma Grand Prix, marking the first time in three

years that the event’s leading recognition was awarded. Mc-

Cann Health Shanghai was the healthcare communications

agency behind GSK’s COPD disease awareness campaign. In

addition, “Breath of Life” was awarded a Gold Lion.

McCann Health Shanghai was additionally recognized as

2019 Agency of the Year, while McCann Health was awarded

the 2019 Healthcare Network of the Year honor at Cannes.

AREA 23, an FCB Health Network company, won one gold,

one silver and one bronze Pharma Lion for “One Word” and

“Get Up Alarm Clock.” New York-based agency AREA 23 de-

veloped the “One Word” campaign for the Constant Therapy

stroke-recovery app for client The Learning Corp. For Eli Lilly,

AREA 23 built the world’s first social media alarm clock, pro-

jecting messages of strength onto patients’ ceiling to help

them not just wake up but get up.“I’m so proud of these campaigns and the teams that put

in the blood, sweat and tears to bring them to life,” says Tim

Hawkey, chief creative officer of AREA 23. “While we’re be-

yond thrilled to bring home some gold hardware, Lilly’s ‘Get

Up Alarm Clock’ and the ‘Constant Therapy’ app have helped

people live better, healthier lives – the ultimate reward for our

hard work. We are so, so grateful for our brave clients, who can

see past many of our self-imposed pharma boundaries and

embrace the need for breakthrough creativity and innovation

in healthcare marketing.”According to Rich Levy, chief creative officer at Klick Health,

“I was personally inspired by several pieces. I was especially

taken by the brilliance of the idea behind ‘Breath of Life’ from

GSK and McCann Health Shanghai and ‘One Word’ for The

Learning Corp. from AREA 23. (In full disclosure, until joining

Klick Health a few months ago, I worked for the parent com-

pany of AREA 23). Both ideas are great ideas and beautifully

executed.”Robin Shapiro, global president of TBWA\WorldHealth,

headed the 2019 Pharma Lions jury. The Pharma Lions jury

also consisted of Adam Weiss, managing director/creative

director, CDM Japan; Andrew Spurgeon, executive creative

director, Langland UK; Bianca Eichner, VP and general man-

ager, WE Communications Germany; Emily Spilko, executive

creative director, Evoke USA; Kathleen Nanda, executive VP

and group creative director, FCB Health USA; Laura Florence,

executive creative director, Havas Health & You Brazil; Nan-

da Marth, executive creative director, Sudler UK; Praful Akali,

founder and managing director, Medulla Communications

India; and Xavier Sánchez, founding Partner and global chief

creative officer, The Bloc Partners/Umbilical Global.

Shaheed Peera, executive creative director of Publicis Life-

Brands, helmed the 2019 Health & Wellness Lions as jury

president. The other jury members were Augé Reichenberg,

EVP and chief creative officer, Havas Health U.S.; Bernardo

Romero, executive creative director, Healthcare & Wellness,

Grey U.S.; Berta Loran, creative director, Global Healthcare,

Spain; Carlos André Eyer, creative VP, NBS, Brazil; Christian Geis,

digital creative director, Wefra, Germany; Geet Rathi, creative

and design director, TBWA\India; Matt Eastwood, global chief

creative officer, McCann Health, global; Phyllis Cheng, VP of

healthcare, FleishmanHillard, Singapore; Sinead Murphy, cre-

ative director, Syneos Health U.K.; and Toby Pickford, chief cre-

ative officer, Ogilvy Health, Australia.The following passages represent perspectives on a variety

of topics from some of the industry personnel who attended

Lions Health 2019 ...

The Creative Health RevolutionShaheed PeeraExecutive Creative DirectorPublicis LifeBrands, Publicis Resolute and Real Science

(PLBRS)President, 2019 Health & Wellness Jury, Cannes Lions Health

When I first came into pharma advertising al-most a decade ago, the work that the industry was creating and award-ing at the time felt like an alternative universe compared to general market creative. Back then, there was a dearth of strategy, media, craft and great ideas in health advertising. It didn’t make much sense to me, as the products were amazing and changed lives. Not in the way that Coca-Cola can make

someone happy; we are talking about treatments that save

lives. Really amazing!Another observation that I made was that no one ever

wanted to admit they worked in health. The ultimate goal

was to get into consumer agencies and erode any memory

of working on pharmaceutical brands.What I believed in back then – and still believe now – is

that if our industry can demonstrate great work, it can in-

spire the best creative talent to join our ranks and make

healthcare communications the number one place for cre-

ativity.Proof of the creative health revolution was apparent as

I had the pleasure and privilege to serve as President of this

year’s Health & Wellness jury at Cannes Lions Health. My mum

was very proud, and to be fair, I also was a bit chuffed to be the

youngest and first British Asian to hold the position.

The rise of health and wellness award shows has shone a

spotlight on our industry and has started to help showcase

the value of what we do and the societal benefits we can

create for brands who are brave enough to think and act

differently. When Burger King and IKEA enter a health and

wellness advertising award show, you know that health is

becoming part of everyone’s business.Healthcare communications has always been a bit like

Hogwarts. Invisible to most people, massive when you get

there, and filled with magic you haven’t yet discovered. There

is a creative revolution in healthcare right now. Our documen-

tary hasn’t been made yet and there’s never been a more im-

portant time to star in it. The industry is ready and waiting for

new ideas, more diversity and talent. So, who’s in?Creative CrossroadsAnnie Heckenberger VP, Group Creative DirectorDigitas Health

No Fearless Girl. Not even #LikeAGirl. No Stratos space jump. No Fuelband. The work that rose to the top of the celebrated at Cannes this year – was largely unremarkable.The most interesting work this year – work that I kept coming back to day after day in the lower lev-el of the Palais displaying “The Work” – was cre-ative steeped in cultural relevancy and truth that struck an emotional chord.For an industry that champions innovation, innovation

was in spare supply. Ditto for humor. Shortlisted and award-

ed campaign creative was anchored to big, weighty issues of

varying social importance and the word “Purpose” seemed

to drip off tongues up and down the Croisette.Of course, there were some standouts – IKEA’s ThisAbles

campaign struck a much-needed chord for an underserved

Lions Health 2019 Takeaways

extra feature

Lions Health 2019T

Publicis Health

The Cannes Lions International Festival of Creativity’s 2019 Health Track consisting of the Pharma Lions and Health & Wellness Lions occurred in June along the scenic French Riviera.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • August 2019 • Volume 38, Number 4 • $25

10

14

21

AR/VR

TOP 200 MEDICINES

LIONS HEALTH

W

n the United States,

even as the current

administration is

proposing ways to

rein in high drug prices, the

question of value – for payers

and for patients – rarely comes

into the public debate. Unlike

Europe, where the price and

value of therapies gets set by

government-level health tech-

nology assessment (HTA), in

the United States, each private

insurer has their own HTA sys-

tems, but the federal govern-

ment does not. With new and

ever more expensive therapies

for rare diseases coming into or

about to enter the market, all of

these bodies are struggling with

the value question – whether

these therapies are eff ective,

and if they are worth the high

prices being asked by pharma

and biotech companies.

Enter the Institute for Clinical

and Economic Review (ICER). A

private, nonprofi t organization

that issues reports about the

eff ectiveness and value of ther-

apies, ICER is trying to establish

unoffi cial national benchmarks

for cost eff ectiveness and value.

ICER made headlines in April

and May with evaluations of

drugs for spinal muscle atro-

phy and Duchenne muscular

dystrophy. Even as manufactur-

ers hotly dispute ICER’s fi nd-

ings, and private payers have

diff erent budgeting goals that

ICER’s methods do not take

into account, experts believe

that manufacturers are going to

have to better address the ques-

tions the organization raises.

In the crosshairs

Right before the Memorial Day

holiday weekend, ICER came

out with its draft report tar-

geting two marketed drugs for

Duchenne muscular dystrophy

– Sarepta Therapeutics’ Exon-

dys 51 and PTC Therapeutics’

Emfl aza – as well as another

drug, golodirsen, being devel-

oped by PTC that targets anoth-

er genetic mutation responsible

for Duchenne. The condition is

an X-linked neuromuscular dis-

ease in which loss of expression

of the protein dystrophin results

in a progressive loss of muscle

function and an early death.

About 13,000 boys in the Unit-

ed States are aff ected.

ICER concluded in its anal-

ysis that there was not enough

clinical evidence that Exondys

51 was cost-eff ective, and simi-

larly viewed golodirsen as well.

And the organization stated that

Emfl aza had only a modest clin-

ical benefi t and would have to

priced lower to be considered

cost eff ective. Sarepta and PTC

both disputed the fi ndings.

According to Sarepta, “ICER’s

approach is fatally fl awed as it

relates to rare and genetic dis-

ease for a number of reasons. As

a result, we have chosen not to

participate in reviews by ICER

until it adapts its model to ad-

dress the inherent limitations

and biases that compromise its

evaluations of therapies intend-

ed to treat patients with serious,

rare diseases.”

The company also says,

“Through its conclusions, ICER

sends a clear message to inno-

vators that developing rare dis-

ease therapeutics is not worth

the eff ort, and to patients – of-

ten children who are dying with

no other treatment options –

that their lives are not worth the

investment.”

As for the spinal muscular

atrophy drugs Spinraza and

Zolgensma, ICER concluded

in April that while both med-

icines provided substantial

health benefi ts, the price for

Biogen’s Spinraza is too high

to align fairly with these ben-

efi ts, and urged fair pricing for

Novartis’ Zolgensma to support

sustainable access to innova-

tion. Spinraza’s list price in the

United States is $125,000 per

injection, which puts the treat-

ment cost at $750,000 in the

fi rst year and $375,000 annual-

ly after that.

Spinal muscular atrophy

(SMA) is a rare, genetic neuro-

muscular disease with the most

severe cases aff ecting infants and

young children. About 500 new

cases are diagnosed each year.

Zolgensma was approved May

24 by the FDA. After the approv-

al and the announced price for

the product, ICER published an

addendum to the April report

concluding that the price set by

Novartis falls within the upper

bound of ICER’s value-based

price benchmark range.

“Insurers were going to cover

Zolgensma no matter the price,

and Novartis has spoken pub-

licly about considering prices

that approached $5 million,”

says Steven D. Pearson, M.D.,

M.Sc., president of ICER. “It

is a positive outcome for pa-

tients and the entire health

system that Novartis instead

chose to price Zolgensma at

a level that more fairly aligns

with the benefi ts for these

children and their families.”

Don’t get frozen by ICER

Even though pharmaceutical

companies may not like ICER’s

methods of determining value,

the organization’s infl uence is

growing – and payers are listen-

ing.In August 2018, CVS/Care-

mark made headlines by an-

nouncing that it would allow

Caremark clients to exclude

drugs from their formularies

that did not meet ICER’s bench-

mark of $100,000 per quality

adjusted life years (QALY).

FDA-designated “break-

through” therapies are excluded

from the program, which is fo-

cusing on expensive, “me-too”

medications that are not cost

continued on page 6

The values in value frameworks

Pharma companies may not like their products being the

subject of ICER reports, but they can provide a jumping-

o� point for manufacturers to expand the conversation of

the value of new medicines in the rare disease area.

special feature

payer access

special

By Christiane Truelove • chris.truelove@medadnews.com

inside

10 • MED AD NEWS JUNE 2019

his past May 8, Health and

Human Services Secretary

Alex Azar announced a � nal

rule from the Centers for Medicare

and Medicaid Services that will re-

quire direct-to-consumer television

advertisements for prescription phar-

maceuticals covered by Medicare

or Medicaid to include the list price

– the Wholesale Acquisition Cost – if

that price is equal to or greater than

$35 for a month’s supply or the usual

course of therapy.

Not a surprise. HHS had pro-

posed the rule back in October, and

at least one industry player – J&J

with its brand Xarelto – had already

pre-empted the � nal rule by putting

list prices in the company’s TV ads in

February. But the rule leaves plenty of

room for debate and interpretation,

and its potential impact remains very

much unclear. So brand managers

must ask themselves, what now?

“The new HHS rule is a positive

step toward transparency,” says Steve

Trokenheim, partner at Beghou Con-

sulting. “It’s bene� cial for patients

to be able to see drug list prices. A

well-de� ned, standardized price

point such as wholesale acquisition

cost [WAC] limits the potential for

consumer confusion. Additionally, by

requiring pharmaceutical manufac-

turers to list a drug’s cost based on its

typical course of treatment (e.g., a 30-

day prescription, or the time period

most often prescribed), patients will

be able to more easily compare di� er-

ent drugs.”

In response to this rule, Troken-

heim suggests that pharmaceutical

manufacturers will need to rethink

how they approach pricing. “Current-

ly, there’s a persistent upward pres-

sure on list prices,” he says. “After all,

if a manufacturer believes its product

delivers better results than a compet-

itor’s product, why shouldn’t it seek

a higher list price? The transparen-

cy that will result from this HHS rule

will force manufacturers to operate

within the con� nes of a competitive

marketplace. As a result, it could reori-

ent price pressures downward. If con-

sumers know a drug’s price and those

of similar products, pharmaceutical

companies will likely need to lower

prices to remain competitive.”

Also, the new HHS rule allows

pharmaceutical companies to com-

pare their own drug prices to those

of competitors – as long as they do

not mislead consumers. “This rule

may be open to some interpretation,

though,” Trokenheim says. “Hopefully,

consumers won’t see two companies

both claiming their drugs are cheaper

than the competition’s!”

But even if the new rules are a pos-

itive step towards transparency, the

fear of confusion in the mind of the

consumer is very real, which means

marketers have to think through ways

to reduce or remove that confusion.

“Because what people ultimately

pay varies greatly state by state and

by insurance status and a number of

other factors, including list price in TV

ads will likely cause a lot of confusion

for consumers,” says Martha Peter-

son, senior VP, media, CMI/Compas.

“In study after study we’ve seen that

while pharma websites aren’t the

� rst go-to for consumers for health

information, they maintain a consis-

tently high place in terms of trust. So

as more consumers seek information

from trustworthy sources, it will be

important for pharma to have that

ready everywhere consumers may

search – and that includes pharma

websites, publisher sites like Mayo

Clinic and WebMD, social sites and

search engines. Pricing is an adher-

ence issue, and if pharma companies

can bring that conversation out of

CRM and into general advertising and

media, we can start providing better

solutions and ultimately solve that is-

sue for them.”

Of course, a move towards price

transparency is not new in healthcare,

though it may be new for prescription

drugs. “We’ve seen this story before

with hospital prices, with doctor’s

charges, where price transparency in

reality is not what most consumers

pay, at least the price that’s being

shown, and so it can become a con-

fusing number for consumers,” says

Benjamin Isgur, head of PwC’s Health

Research Institute. “So my reaction is

mixed. Is it good that we’re moving

towards more of price transparency?

Yes, it absolutely is. Do we have a lot

more to do so it actually becomes

useful for consumers? Absolutely.”

What more to do? Isgur is hoping

for a solution that goes beyond mere

numbers in a TV or print ad, what he

calls “static transparency. He is advo-

cating for an industry-wide online

tool that would allow patients to in-

put their insurance and other relevant

information and get actual pricing for

their actual circumstances.

“We can’t be satis� ed with a stat-

ic level of transparency; we need a

dynamic level of transparency,” Isgur

told Med Ad News.

And no matter how the pricing in-

formation is communicated at � rst,

brand managers will also have to do

the same thing they do for all their

ads: measure impact.

“I would look at this as a � rst step,”

Isgur says. “People are going to have

to be patient. Over the next year or

two, we’re going to probably hear

some backlash, ‘Oh, that wasn’t that

useful,’ from some people. We’ll also

hear some, ‘Wow, that’s really sur-

prising. I had no idea what the retail

price of that drug was, even though

I’m not paying for that, it still is a num-

ber that’s stuck in my head,’ right? So

there’s going to be some kind of ed-

ucation that’s going to be going on.

We will need a little bit of time to see

what changes patient behavior and

what doesn’t.”

But however the � rst generation

of price transparency turns out, Isgur

insists that future communications

with patients has to go beyond the

numbers to the value behind the

products. “Consumers understand

the concept of value,” he says. “They

understand that sometimes expen-

sive things are worth it. When you’re

a brand manager, you have to focus

on value. You have to be able to show

outcomes, show how your product

changes lives. Then, costs will be put

into context. Is this drug helping you

live a better life? Are you still able

work because you’re taking this drug?

Is it stopping you from having a trans-

plant or a bigger intervention that

would cost more money and mean

more time away from your life? Those

are the types of things consumers

want to hear and understand when

they’re making choices. When you

show high value, consumers are will-

ing to pay for that value, and so are

employers and other types of payers.”

The health economist Jane Sara-

sohn-Kahn has similar faith in con-

sumers, but is also similarly dubious

about the impact of the current HHS

rules. “The patient has been morph-

ing into a health consumer for the

past decade, given the advent of

‘consumer-directed health plans,’”

she says. “Now that high-deductibles

are mainstream health plan designs,

that health consumer is now a major

payor. As a payor, that person has re-

tail-style expectations from the health

care industry as s/he expects from

other daily consumer touchpoints.

These include service levels, trans-

parency, and tools to help streamline

daily living based on a person’s prefer-

ences and values.”

According to Sarasohn-Kahn, HHS’

price disclosure plans don’t speak to

personalized health or healthcare

costs, given the fact that a retail list

price for a prescription drug is not

what the health consumer actually

pays. “And that varies by the N of 1

patient-as-plan-member, whether

they can access a coupon, have a co-

insurance share, and other granular

aspects of the individual’s plan. A key

takeaway for the Rx brand marketer

is to deeply understand the patients

who are prescribed their product

– patient personae in terms of pay-

ment, personal values, and elasticities

of demand for the product vis-à-vis

competitors and other products and

services that could complement or

substitute for the marketer’s product.”

So what to do? Just as Isgur sug-

gests, add and communicate value.

“This is the opportunity to go ‘be-

yond the pill’ in that we’re now in an

era where the patient’s values and

sense of “value” (price versus utility)

converge,” Sarasohn-Kahn told Med

Ad News. “The mass market/retail pric-

ing will no doubt confuse the patient,

and potentially position the drug as a

luxury good beyond one’s reach (I.e.,

household budget). That would fur-

ther alienate health consumers’ vis-

à-vis ‘Big Pharma’ unless marketers

and the industry add value that helps

people navigate their condition and

the healthcare system.”

Coming from the agency angle, Fa-

bio Gratton, currently of Sonic Health

and formerly of Ignite Health, is won-

dering why HHS’ rules apply only to

television.

“If this is really about transparency

and protection, it should be universal,”

Gratton told Med Ad News. “It should

apply to every single company that

has a product, whether they’re mar-

keting online, or marketing in news-

papers, or marketing in other chan-

nels. Why is this limited to television?

The argument, of course, is that, ‘Well,

hey, two-thirds of all spending in di-

rect-to-consumer advertising is on

television.’ But the reality is that most

people are getting their information

online.”Still, Gratton believes J&J set a

good example when the company

pre-empted the rules with its price

information about Xarelto.

“J&J made a choice,” he says. “They

did research, which is admirable, and

then they did a really good job of just

trying to say, “Look, let’s create this

framework of what three-fourths of

all patients will spend in this range,

given dosing, site of care, copay, de-

ductible, support program. There are

all of these variables and insurance

coverages that make it so di� erent

for everybody, so they tried to come

up with an equation to show, ‘This is

probably where you’ll be.’”

One of Gratton’s concerns, though,

is that, given the number of compa-

nies and a lack of standardization, pa-

tients may end up having to compare

apples with battleships.

“What happens when every com-

pany is left to their own devices on

how they frame up drug pricing?”

he says. “Now every company is like,

‘You know what? I think that most

patients will pay this because I’m only

looking at 66 percent, not 75 percent,’

or, ‘I want to show that the average

patient has Medicare, Medicaid, blah,

blah, blah, so I’m going to use all of

those factors too.’ You’re picking one

channel, television, and on top of

that you’re not standardizing the way

it’s supposed to be communicated ...

it’s going to confuse the consumer

because now you’ve got companies

with drug prices, companies without

drug prices, you’ve got drug prices

being communicated in completely

di� erent ways.”

Why the focus on television? Grat-

ton has a sneaking suspicion.

“Many of us in the agency world

believe that the real goal is to push

companies away from television ad-

vertising, so less people will demand

certain brands and hopefully costs

will go down. I think the hypothesis

is that it becomes a deterrent to do

TV DTC and suddenly money will be

saved.”

But, of course, pharmaceutical

companies have plenty of other ways

to get their messages out.

“I have a feeling that marketers are

going to re-channel their dollars, � nd

di� erent ways to engage consumers,

still try without having to disclose

anything and then ultimately end up

in the same place where we are now,”

Gratton told Med Ad News. “All this

rule is going to do is cause pharma-

ceutical companies to � nd a di� erent

way to engage patients.”

That’s not to say that transparency

isn’t worth pursuing; it just has to be

done uniformly and in an accessible

way. And Gratton’s solution is similar

to Isgur’s. “I would create a drug pric-

ing calculator, a universal one where

you could say, ‘This is the drug, this is

my plan,’ and then it would spit out,

based on your drug, your plan, your

age, your condition, this is what you

might expect,” Gratton says. “And at

the end of every commercial it could

say, go to universaldrugpricingsite.

com to � nd out how much this drug

will cost for you.” medadnews

What now? special feature

DTC

special

HHS has announced its new price transparency

rules for direct-to-consumer TV ads. Now the

industry has to sort out what to do about them.

By Joshua Slatko • josh.slatko@medadnews.com

T

Top brands by 2018 DTC spend

Brand Company

Spend

(thousands)

HumiraAbbVie

$486,847

LyricaP� zer

$272,246

XeljanzP� zer

$257,133

ChantixP� zer

$212,262

TrulicityLilly

$206,724

Excludes social media spend

Source: Kantar Media

Top companies

by 2018 DTC spend

CompanySpend (thousands)

P� zer

$1,195,476

AbbVie

$621,360

Lilly

$467,210

Allergan

$333,264

Novartis

$308,013

Excludes social media spend

Source: Kantar Media

DTC TV spend by prescription category (2018 data is for

1/1 thru 10/13, or about 78.4 percent of the full year)

Category

2016

(in millions)

2017

(in millions)

2018

(in millions)

Diabetes and blood disorders

$787.8$874

$689.9

Osteoporosis and arthritis

$398.9$440.9

$422.1

Stroke, cholesterol, and heart disease$382.3

$413.6$392.5

Psoriasis, skin, and nails

$295.4$418.6

$434.6

Bladder and gastrointestinal

$305$406.9

$252.3

Cancer

$116.6$308.3

$281.6

Asthma and COPD

$213.8$245.6

$176.8

Depression, bipolar, and insomnia$219.2

$175.5$230

Men’s and women’s health

$243.5$120.9

$72.2

Source: iSpot.tv

HHS has announced its new price

transparency rules for direct-to-

consumer TV ads.

Now the industry has

to sort out what to

do about them.

12 • MED AD NEWS JUNE 2019

FDA approval deluge

The Food and Drug Administration set a U.S. reg-

ulatory agency record with 59 novel drugs and

biologics approved during 2018. During the first

five months of 2019, the FDA cleared for marketing

potential game-changing therapies for biotech-

nology and biopharmaceutical companies as reg-

ulatory clearance was granted for a variety of first-

in-class medicines, promising prescription drugs

with blockbuster hype, as well as new indications

for established brands.

The most expensive prescription product in the

world was cleared for marketing by the U.S. FDA

on May 24. Zolgensma represents the first gene

therapy for pediatric patients with spinal muscular

atrophy (SMA). Zolgensma (onasemnogene abep-

arvovec-xioi) is approved in the United States for

the treatment of pediatric patients younger than

2 years old with SMA including those who are

pre-symptomatic at diagnosis. The adeno-associat-

ed virus vector-based gene therapy is designed to

address the genetic root cause of SMA by replacing

the defective or missing SMN1 gene to halt disease

progression with a single, one-time infusion. SMA

is a muscle-wasting disease and leading genetic

cause of infant mortality that affects about one in

every 11,000 births.

Zolgensma represents the first approved thera-

peutic in a proprietary platform to treat rare, mono-

genic diseases using gene therapy. The Novartis

drug is undergoing regulatory review in other ma-

jor markets and is anticipated to receive regulatory

approval in Japan and the European Union in 2019.

Zolgensma came to Novartis via the April 2018

acquisition of the clinical-stage gene therapy com-

pany AveXis for $8.7 billion. Novartis management

saw AveXis and Zolgensma as an opportunity to

transform the care of SMA and expand the Swiss

company’s position as a gene therapy and neuro-

science leader. The one-time disease-modifying

therapy is projected to exceed $2 billion in annual

sales during 2023.

The annualized cost of Zolgensma is $425,000

for five years, for a total of $2.125 million. “Zolgens-

ma is a historic advance for the treatment of SMA

and a landmark one-time gene therapy,” says No-

vartis CEO Vas Narasimhan. “Our goal is to ensure

broad patient access to this transformational medi-

cine and to share value with the healthcare system.”

May 24 was a big day for Novartis as the com-

pany also won U.S. marketing approval for anoth-

er anticipated blockbuster medicine, Piqray, as

the first treatment specifically for patients with a

PIK3CA mutation in HR+/HER2- advanced breast

cancer. Piqray (alpelisib, formerly BYL719) was

approved by U.S. regulators in combination with

fulvestrant for treating postmenopausal women

– and men – with hormone receptor positive, hu-

man epidermal growth factor receptor-2 negative

(HR+/HER2-), PIK3CA-mutated, advanced or met-

astatic breast cancer, as detected by an FDA-ap-

proved test following progression on or after an

endocrine-based regimen.

PIK3CA represents the most commonly mutat-

ed gene in HR+/HER2- breast cancer; 40 percent of

patients living with HR+/HER2- breast cancer have

this mutation. Such mutations are associated with

tumor growth, resistance to endocrine treatment

and a poor overall prognosis. The kinase inhibitor

Piqray targets the effect of PIK3CA mutations and

may help overcome endocrine resistance in HR+

advanced breast cancer.

PI3K inhibitors traditionally have struggled to

reach the marketplace, and even some of those

successful in doing have been saddled with regu-

latory conditions such as a non-first-line setting ap-

proval and a black-box safety warning that hamper

future market potential. For example, during 2018

Roche halted clinical development of taselisib after

investigators reported “a slight, 2-month progres-

sion-free survival advantage for the drug – along

with a sketchy safety profile common to the class

– combined with fulvestrant hormone therapy in

a Phase III study of metastatic breast cancer.” In an-

other instance, Verastem won accelerated approv-

al from the FDA in September 2018 for the PI3K

drug Copiktra (duvelisib) for treating adults with

relapsed or refractory chronic lymphocytic leuke-

mia/small lymphocytic lymphoma after at least

two prior therapies. In addition to the third-line

setting approval, use of Copiktra is associated with

a boxed warning.

A brighter future is anticipated for Piqray, which

is the first novel drug approved under the FDA On-

cology Center of Excellence Real-Time Oncology

Review pilot program, which allows for faster eval-

uation of breakthrough cancer medicines. Novartis

launched Piqray with a reported list price of about

$15,500 for a 28-day supply.

“Within the next 2 years, Novartis expects 10 or

more planned drug launches that could possibly

reach blockbuster status,” says Terry Chrisomalis,

who runs the Biotech Analysis Central pharma

service on Seeking Alpha Marketplace. “I say the

company is on the right track based on its two lat-

est approvals. Zolgensma should definitely hit into

high gear as it makes its way to the market. Piqray is

an approved breast cancer drug that offers a more

targeted approach to treating those breast cancer

patients with the PIK3CA mutation.”

Pfizer’s Vyndaqel (tafamidis meglumine) and

Vyndamax (tafamidis) received a green light from

the FDA during May. The drugs were approved for

treating cardiomyopathy of wild-type or hereditary

transthyretin-mediated amyloidosis (ATTR-CM) in

adults to reduce cardiovascular mortality and car-

diovascular-related hospitalization. The two oral

formulations of the first-in-class transthyretin sta-

bilizer tafamidis represent the only medicines ap-

proved by the FDA for the treatment of ATTR-CM.

Pfizer has touted tafamidis as a potential block-

buster medicine. Industry trackers have projected

annual sales to exceed $1 billion in 2024, with a po-

tential peak amount of $2 billion.

“Once rejected by the FDA, Pfizer’s tafamidis is

back and ready to disrupt a rare disease field only

recently tapped by Alnylam and Ionis. And the

pharma giant’s entrant, now dubbed Vyndaqel,

comes with a much lower price tag,” FiercePharma

anaylsis says. “The oral drug will bear a list price

of $225,000 per year ... That’s far lower than the

$450,000 list price both Alnylam and Ionis are field-

ing with their rival meds Onpattro and Tegsedi,

respectively. And the Pfizer meds are pills where its

competitors are both injections.”

Biopharma company AbbVie received FDA

clearance in May for Venclexta (venetoclax) in

combination with Gazyva (obinutuzumab) for

previously untreated patients with chronic lym-

phocytic leukemia or small lymphocytic lympho-

ma. The FDA granted Breakthrough Therapy des-

ignation for the combo therapy, and early filing of

the clinical data was provided under the Real-Time

Oncology Review pilot program, which resulted in

approval in just over two months following sub-

mission of the complete application.

Venclexta was initially granted accelerated ap-

proval by FDA during April 2016 for the treatment

of patients with CLL with 17p deletion, as detected

by an FDA-approved test, who have received at

least one prior therapy. Global sales approaching

$3 billion in 2024 have been forecast for Venclex-

ta, which is developed by AbbVie and Roche. The

product is jointly commercialized by AbbVie and

Genentech – a member of the Roche Group – in

the United States and by AbbVie outside of the U.S.

Abbvie also won a significant marketing approv-

al from the FDA in April at a time during which the

company’s blockbuster psoriasis medicine Humira

– the world’s top-selling prescription drug – is fac-

ing patent pressures and biosimilar competition

outside the United States. Approved for marketing

in Canada and Japan earlier in 2019, Skyrizi (risanki-

zumab-rzaa) received U.S. approval on April 23 as a

treatment for plaque psoriasis. The interleukin-23

inhibitor was cleared by U.S. regulators for the treat-

ment of moderate-to-severe plaque psoriasis in

adults who are candidates for systemic therapy or

phototherapy. Skyrizi is part of a collaboration be-

tween Boehringer Ingelheim and AbbVie, with the

latter leading development and commercialization

of the new product globally.

Industry analysts believe that Skyrizi should ben-

efit from best-in-category efficacy (i.e. market share

gains) and continued rapid market expansion. The

product is predicted to generate between $500

million to $1 billion in the second year of launch,

which began in May 2019 in the United States. Clar-

ivate Analytics’ Cortellis Competitive Intelligence

database projected 2023 sales of $1.74 billion.

Mega-merger:

Bristol-Myers Squibb and Celgene

Bristol-Myers Squibb Co. rang in 2019 by

entering into a definitive merger agreement

to acquire Celgene Corp. in a cash and stock

transaction with an equity value of $74 billion. The

transaction will create a leading focused specialty

biopharmaceutical company well-positioned

to address the needs of patients with cancer,

inflammatory and immunologic disease and

cardiovascular disease via high-value innovative

medicines and leading scientific capabilities.

The transaction remains on track to close during

third-quarter 2019, subject to the satisfaction

of customary closing conditions and regulatory

approvals. Bristol-Myers Squibb’s completed

purchase of Celgene would represent the second-

largest acquisition ever in the pharma industry,

trailing only Pfizer’s takeover of Warner-Lambert

during 1999.

The Bristol-Myers Squibb-Celgene combination

is expected to create the leading oncology

company and a top-five immunology franchise

with strength in solid tumor and blood cancers. Yet,

some Wall Street analysts have questioned if the

combination – which the companies said would

create $2.5 billion in cost savings and raise earnings

– would solve separate challenges that have been

facing Bristol-Myers Squibb and Celgene.

“Bristol’s most important cancer

immunotherapy and growth driver, Opdivo, has

State of the Bio Industry annual report

bio

This annual compilation reviews new developments, trends and outlooks in areas such as

biotechnology, biosimilars, biopharmaceuticals, biologics, biomarkers and biosimulation.

Analysis of 7 new drugs forecast to enter the market in 2019

and achieve blockbuster sales of over $1 billion by 2023

Drug

Disease

20192023 Company (Headquarters)

Upadacitinib *§†|

(ABT-494) 

Rheumatoid arthritis 

$53

million

$2.20

billionAbbVie (US)

Zolgensma ∆†|‡§

(onasemnogene abeparvovec; AVXS-101) Spinal muscular atrophy 

$449

million

$2.09

billion

AveXis (US)

(a Novartis subsidiary) 

Roxadustat *§

(FG-4592; AZD-9941; ASP-1517) 

Anemia in chronic kidney

disease patients on dialysis 

$30

million

$1.97

billion

AstraZeneca (UK)

FibroGen (US)

Astellas (JPN)

Ultomiris ∆§|

(ravulizumab; ALXN-1210) 

Paroxysmal nocturnal

hemoglobinuria  

$170

million

$1.93

billionAlexion (US) 

Skyrizi *|

(risankizumab; BI-655066; ABBV-066)

Psoriasis  

$132

million

$1.74

billion

Boehringer Ingelheim (DE)

AbbVie (US)

AR-101 *†|‡ ‡‡

Peanut allergy 

$35

million

$1.17

billionAimmune Therapeutics (US)

LentiGlobin ∆†|‡

(betibeglogene darolentivec) 

Beta-thalassemia in

transfusion-

dependent patients  

$11

million

$1.12

billionbluebird bio (US)

Data was obtained from the Cortellis Competitive Intelligence database as of March 5, 2019. Cortellis is the suite of life science intelligence solutions from Clarivate

Analytics.

Forecasts are in U.S. dollars.

*=immune-related disease. ∆=genetic disorder. †=Breakthrough Therapy designation. ‡=Fast Track designation. |=Orphan Drug designation. §=Priority Review.

‡‡=first-in-class.

By Andrew Humphreys • andrew.humphreys@medadnews.com

This annual compilation reviews

new developments, trends

and outlooks in areas such as

biotechnology,

biosimilars,

biopharmaceuticals,

biologics, biomarkers

and biosimulation.

16 • MED AD NEWS JUNE 2019

Dan Chichester

Chief Experience O� cer

Ogilvy Health

y grandfather was an engineer.

He started with a slide rule and

evolved with the industry to

work with computers, where

he became fascinated with the concept of

GIGO – Garbage In, Garbage Out. In our

industry, this translates to garbage code or

data put into a system results in a trashy

outcome. In the pharma ecosphere, as we

advance from singular brand projects to

more comprehensive customer engage-

ments, I think there’s a similarity in the idea

of EIEO: Experience In, Experience Out. In

today’s world, it’s now incumbent on mar-

keters to aim toward creating a holistic,

delightful brand experience that involves,

informs, and even entertains. In turn, your

brand can earn increased loyalty and a

customer advocate who is motivated to do

more business with you.

In healthcare, we are fortunate to have

access to code that analyzes data and pro-

vides us with customer insights. As market-

ers, we can now understand these individ-

ual customers better than ever before. We

know what we need and want to do when it

comes to reaching them. But what does all

that power and possibility do for them?

Reality check: Customers do not wake up

thinking about our brands. They all wake

up thinking about themselves. Don’t we all?

The driving question is always, “What’s in it

for me?” This is not necessarily selfi sh be-

havior, so much as it is self-awareness.

When it comes to customer experience,

I’ve thought about the trends that could

be used to illustrate this point. But when it

comes to what’s next, I’m with Nick Can-

non, who said, ”Nobody can predict the

future. You just have to give your all to the

relationship you’re in…caring for your sig-

nifi cant other through good times and bad.”

I can’t think of anyone more signifi cant to

us as healthcare marketers than those who

are struggling with their health – they are

the ones who need our help.

My colleague, Brandie Linfante, senior

VP, digital engagement strategist, notes,

“Advanced brand building should look to

include experiential opportunities where

they apply. It should solve for patients’ un-

met needs and provide a solution or allow

healthcare professionals to experience a

moment in the life of a patient and build

empathy. Use technology for a purpose, not

just for the sake of showcasing tech.”

For that reason, my vision for tomorrow

is focused on Purposeful Intent: what

drives the digital interaction – the two-way

exchange between an individual and your

brand. That intent should be threefold:

Logical: Unearth data-driven insights

that inform content ideation, storytelling

arcs, and distribution strategies.

Emotional: Create programs that make

customers feel good and people want to use.

Personal: Deliver timely, relevant, use-

ful value and information that is easy for

the customer to fi nd and engage with in a

way that works for them. So what can we

do with this Purposeful Intent? Let’s think

about these fi ve Interactive Intentions of

Experience: Storytelling, Conversation,

Memories, Value, and You.

Interactive storytelling

Digital is at its best when it creates a world

that humans can easily understand and

navigate. In the visual world of the “expe-

rience age,” static encounters do little to

stir the imagination. Make your customers

active participants. That’s the potential of

choose-your-own-adventure and branch-

ing videos, immersive virtual reality (VR),

augmented reality’s overlays on the real

world, and role-playing games and sim-

ulations. Explore a product launch, data,

or conference coverage. Choose a scene or

scenario, enter into it, and make the story

yours by fully engaging with it (then expand

upon that with networking for shared story

experiences).

Building out varied paths creates added

value when individuals are given the ability

to control the fl ow of that experience. With

that comes a better understanding of a pro-

cedure, or a disease state, and therefore, a

direct infl uence on behavior change.

Interactive conversation

Voice is our most natural form of commu-

nication, so there’s no surprise that talking

to our machines – via smart speakers, voice

interfaces, and chatbots – can present a

truly great experience. There’s a naturally

collaborative essence to these dialogues,

with a low barrier of entry for experimen-

tation and a high potential for emotional

and therapeutic benefi ts. From patient

care plans, discharge instructions, behavior

change support, to sales rep training, and

even sales rep/doctor role-playing – these

voice agents can answer common questions

and address needs with scientifi c rigor, but

still remain human and approachable. Add-

ing to the higher-level experience, bots and

skills can be taught to identify situations

where professional medical intervention

should be alerted and engaged.

Conversational experience will require

new thinking from marketers. How often

is your brand talking? How does the voice

“feel like” your brand? Will you use Alexa’s

voice? Or will you incorporate recorded

narration with a brand-tailored voice?

Typical web and mobile communications

are not designed around direct human in-

teraction. Voice interaction off ers a mean-

ingful opportunity to engage in personal

and connective ways, as related by increas-

ingly common patient experiences, along

the lines of, “If the day is getting late and

I haven’t achieved my goals, I would think

that I have to get my exercise in or answer

to Alexa in the morning.”

Interactive memories

Beautiful experiences leave deep, long-last-

ing traces in memory. For this reason, an

experience needs to be more than trans-

actional to be a success, it needs to go that

much further and address customers’ feel-

ings (especially in health care, where emo-

tions can be heightened). Think about how

a certain piece of music can trigger a mem-

ory and bring that moment rushing back.

That said, “your song” is probably not going

to be “my song.” The key is in tailoring the

customer experience to the individual, with

choices that align to their personal tastes,

preferences, or habits.

Digital defaults to the eyes and ears, but

what about those other senses that can

form memories and create lasting bonds?

Capitalizing on smell and touch, even taste,

to heighten experience can evoke an emo-

tional response. Multisensory engagement

can provide immersive enrichment, a form

of physical interaction with a brand, that

people will remember richly, deeply, and

over time.

Interactive value

Marketers ask, “What is the overall eco-

nomic value that these eff orts will bring to

the brand’s business?” Remember that real-

ity check mentioned above? Patients, care-

givers, health practitioners ask, “What’s in

it for me?”

An enriching experience can answer this

by giving them something useful: not a sales

pitch, not an in-their-face marketing mes-

sage. What does the patient need? A truly

utilitarian site, program, or app that an-

swers that query becomes something that a

person can’t live without. And that will stay

with them. The goal is to develop an en-

counter that marries awareness and func-

tion. Use the experience to say something

that evokes action and creates meaningful

engagement with and for the customer.

Interactive you

Likes, dislikes, hopes, and fears. What you

know about patients and doctors is not only

a key to who they are and what content will

resonate with them, it is essential to build-

ing a great experience that delivers the most

personalized and meaningful content.

Everyone wants to feel that they are

heard. So it’s incumbent on us to learn from

data in order to interact with customers via

an experience that’s unique to each person.

As individuals, we go to the trouble to create

our own detailed personas. But as market-

ers, do we service the specifi c personas of

“Stalwart Susan” or “Anxious Andy”? Con-

sider the relevance of what you are creating,

fi nd out what matters to each customer,

and develop a personalized interface. In the

end, this makes the person feel even more

special and connected to the brand.

If a patient’s journey is lacking a singular

element of personalization, the experience

may not feel like it is helping, even when

it is. If that “you” factor is there, however,

there’s an instant bond between the patient

and the tool, which invariably results in loy-

alty and affi nity toward a brand.

Exercising Purposeful Intent

The brand experience isn’t one moment, or

a stand-alone tactic. It’s a holistic vision for

the transformation of the brand over time.

Look at the patient journey as a mapping

experience. What makes them joyful or

anxious? What do they do in those instanc-

es? And what could they do in those scenar-

ios? What will they notice, and what will

they remember? Making a point to contin-

ually keep the broader view of a customer’s

issues and activities at the forefront has the

potential to address unmet needs, fuel dif-

ferentiation, and get people talking about

your brand.

That said, you can’t just ask patients what

they want, because it won’t be “a good expe-

rience.” All they think they want is simply to

get better, or at the very least, to get back to

their status quo.

Back to Brandie, “It is incumbent on us

to make brands more relevant and relat-

able, socially conscious and aware, and

off er personal experiences and emotional

connections. Great brand building makes

a product a problem solver and creates an

environment that begets customer loyal-

ty.”Tech is only a tool. Customer Experience

is the diff erentiator. It should give people a

clearer picture of their world, so they can

make the best health decisions for them-

selves. Viewing experiences as tangible things

helps marketers better understand the re-

lationships that are established between

patients and brands. From websites to sim-

ulations, to programs that include mental

and emotional support, we must always ask

– how does it make a patient, a caregiver, or

a healthcare provider feel?

Person, patient, caregiver, provider – we

are all the heroes of our own stories. Pro-

vide a great experience, and that is a story

everyone can benefi t from, as ROI and ROE

(Return on Experience) are inextricably

linked.Jaron Lanier, considered the father of

VR, said, “I’ve always felt that the hu-

man-centered approach to computer sci-

ence leads to more interesting…and more

heroic adventures…” Can there be any

more heroic adventure than helping people

get the health care they need and deserve?

That’s a future worth investing in.

Here’s to engineering great experienc-

es. medadnews

Return on experience special feature

customer/patient experience

special

Dan Chichester

I’ve learned that people will forget

what you said, people will forget

what you did, but people will

never forget how you made them

feel. — Maya Angelou

M

Improving the quality of patients’

lives is dependent upon the ability

to e� ectively locate and engage with

patients, as well as

support the therapeutic

onboarding and

adherence of patient

populations.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • June 2019 • Volume 38, Number 3 • $25

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TOP 50 PHARMACEUTICAL COMPANIES

T H E M A G A Z I N E O F P H A R M A C E U T I C A L B U S I N E S S A N D M A R K E T I N G

COMPANY OF THE YEAR

MERCK Merck’s extraordinary

success with the immuno-oncologic

Keytruda has pushed the company back to the pinnacle of the pharma

industry.

hen it comes to the use of arti� cial intelligence, AI – as it has been classically de� ned in science � ction

– is not truly here yet. In 2019, there are no self-aware robots or bodiless nonhu-man intelligences prowling the internet. What we do have are Siri and Alexa, Google’s “Computer,” consumer chat-bots, and little machine learning algo-rithms such as DeepLab and SPADE that can create weird, hilarious, and some-what disturbing names (often all three at the same time) for craft beers, kittens, and even burlesque shows.

But pharma has been getting into the AI wave. Mostly it has been on the clinical research side, using machine learning to plow through mountains of data to narrow down R&D targets or compile evidence.

In June, Sano� announced a partner-ship with Google to create a virtual In-novation Lab with the goal of changing how Sano� develops new treatments.

“We stand on the forefront of a new age for biology and human health, with the opportunity to transform healthcare through partnerships with pioneering technology and analytics companies,” says Ameet Nathwani, M.D., chief digital o� cer, chief medical o� cer and execu-tive VP of medical at Sano� . “Combining Sano� ’s biologic innovations and scien-ti� c data with Google’s industry-leading capabilities, from cloud computing to state-of-the-art arti� cial intelligence, we aspire to give people more control over their health and accelerate the discov-ery of new therapies.”

The collaboration focuses on three key objectives: to better understand pa-tients and diseases, to increase Sano� ’s operational e� ciency, and to improve the experience of Sano� ’s patients and customers.

“Life sciences companies are looking to data driven, digital innovation to help fuel the creation of accessible health-care solutions,” says Thomas Kurian,

CEO, Google Cloud. “We look forward to collaborating with Sano� to help accel-erate the cycle of healthcare innovation to populations throughout the world.”

What about marketing?

On the pharma marketing side. AI prog-ress as been much slower.

According to Justin Chase, executive VP of innovation and media at Intouch Solutions, the agency had been trying to convince clients last year that AI could do a lot for them. “We were trying to sell in these arti� cial intelligence powered ecosystems” such as AI powered patient support programs, receiving data from wearables and other sources,” he says.

While clients understood that value AI could provide, they were cautious. “They were not ready to go from 0 to 60 in 2.5 with this whole AI thing,” Chase told Med Ad News.

Then there were the promises that IBM was making with Watson, which was supposed to change every aspect of the pharma industry. “They over-promised and underdelivered,” Chase says. So trying to sell AI solutions in the wake of Watson’s failures was di� cult.

Paul Balagot, chief experience o� -cer at precisione� ect, says Silicon Valley tech companies are trying to close the gap between the application of their technology with pharma’s needs. On the � ip side, pharma companies and biotech companies are looking for stra-tegic partnerships to leverage many of these technical innovations.

This means even with the disappoint-ment stemming from Watson, pharma companies started putting their own solutions into play. Novo Nordisk has a chatbot called “Ask Sophia” in which patients can ask very speci� c questions about Novo Nordisk products.

Although Ask Sophia seems like a so-phisticated step forward, according to Ritesh Patel, chief digital o� cer at Ogil-vy Health, the chatbot is a less than ideal example of AI.

“Have you played around with it? You should, I did. I got a glass of wine at 1 in the morning and pretended I was a pa-tient su� ering from diabetes,” Patel says. “I logged on and said, ‘Hey Sophia, I’ve got diabetes, will I get gout?’ And the response was, ‘I can’t help you with that right now, please call this number.’ And then I said, ‘Hey Sophia, I’m fat, I’m over-weight, am I susceptible to diabetes, do I have to exercise?’ And the answer came back, ‘I can’t help you with that right now, please call this number.’”

According to Patel, what Novo Nor-disk has done “to much fanfare, though the execution is not that good” is that it took the most frequently asked ques-tions being received at the call center by MSLs and put them in a chatbot.

Ultimately, Ask Sophia is not real-ly AI. “It’s just a guided conversation,” Patel says. “The machine’s not doing anything, it’s just guiding you through conversation trees.”

There are more sophisticated chat-bots around, such as Conversation Health Guides in Toronto, and Colgate’s Brush With Me. Both use machine learn-ing and natural language processing to discuss teens’ health concerns and HPV vaccination (Conversation Health Guides) and help moms teach very young children how to brush their teeth.

Both are “learning” programs, taking the responses and using them to � g-ure out what information questioners were seeking. The Colgate program uses Google’s assistant, which had 400 kids teach it “kidspeak” before it was launched.

In less speci� c ways than Ask Sophia, AI has impacted pharma marketing in three areas, according to Pratap Khed-kar, managing principal, ZS Associates. These areas are enriching insights, opti-mizing decisions, and enabling actions.

For example, AI is being used to im-prove physician engagement by doing marketing promotion in a better way. “Currently physicians get inundated with promotion – from reps, emails, alerts, all the internet channels – to the point where a high value doctor may get hit 2,800 times a year by pharma as a whole,” Khedkar says. “None of this pro-motion recognizes the individual phy-sician’s preference for certain channels, or certain content and messages. The touches are uncoordinated and pile up on top of each other without the right cadence. AI is being used to streamline all of this – predicting which physicians will engage with certain channels, pre-dicting the content a� nity of a physi-cian, designing the right sequence of touches to maximize an individual’s en-gagement and eventually prescribing behavior.”

According to Khedkar, this leads to AI

creating a “Next Best Action” with each physician every day that the rep needs to do. “There is enough data now to do all this, as well as automated software systems to enable the actions at a micro level,” he says. “The intent is to person-alize and harmonize all the contacts to every individual physician.”

Measurements have shown the im-pact on engagement and prescribing behavior is substantial, with a 6 to 7 percent increase in sales. “Prediction has also been applied to which is the right customer, based on their propensity to write or switch in the near term, and this leads to dynamic targeting using AI,” Khedkar told Med Ad News.

According to Patel, there have been trials in using AI to serve up ads and training them using machine learning.

“You’d create an ad, which will then be broken up into image, text, back-ground, call to action, format, and size,” he says. “You then service it up and let the machine learn which pieces work really well and what’s resenting with whom. The machine then compiles the ideal ad unit.”

Although there have been pilots of this AI use, “then you have regulatory in the way,” Patel explains.

“Everything has to be preapproved so how can you dynamically create an ad unit that works really well?” Patel says. “You need to come back to approv-als. You could say, ‘OK, here is the ad unit that works really well, can you please ap-prove it,’ and then you can serve it.”

These medical and regulatory con-cerns about messaging may have lim-ited Ask Sophia’s capabilities, according to Patel. “I bet medical and legal said, ‘I want to know and preapprove this con-versation.’” He also guesses the chatbot was not trained with patient answers, but with the call center agent input. “It’s like taking the FAQs from a website and making them an AI.”

Intouch Solutions has built its own AI engine, called Cognitive Core, which was featured in Med Ad News’ December 2018 feature “Ad-ventures in Marketing XI.” The o� ering powers a variety of AI activities for Intouch clients – chatbots, patient adherence programs, Veeva dig-ital sales aid rep interactions – and that list is rapidly growing as brand manag-ers seek out new ways to harness AI.

One area where AI can be a great deal of assistance is the SEO process, which Chase called “wildly ine� cient.”

“Roughly 50, 60, 70, 80 percent of this process is back o� ce, for most brands there are 10,000 search terms or key-words, and each one of those keywords needs to be classi� ed,” Chase explains. “What category, what theme, what is it related to, is it related to treatment, to research, to clinical trials? They’re going

continued on page 6

Harnessing the ghost in the machineWhile a number of factors are constraining the usefulness of AI tools for pharma marketers, experts believe that the use and sophistication of these tools will evolve.

special feature AI special

By Christiane Truelove • chris.truelove@medadnews.com

inside

10 • MED AD NEWS AUGUST 2019

MedAdNews: What AR/VR work have you seen out in the wild of pharma that is inter-esting?

Fabio Gratton: The large majority of what people are doing falls into two key areas. One is training and education and the oth-er is tradeshows. If you go to ASCO or ASH, most of the big companies are using AR or VR. But a majority of the time, it’s still being used as an engagement gimmick, not nec-essarily because this was the best way the information could be communicated but because, “Hey, this is going to get people into our booth.” It’s effective as an attrac-tor. We’ve done some AR ourselves in the past and you could certainly get people to line up at your booth. I’ve seen people putting on the goggles and standing in front of screens and walking around fling-ing at things, “Grabbing the cells” or doing other things you don’t really need to do in the real world – but it’s a good distraction from the regular tradeshow stuff and some-thing interesting. So most of what I’ve seen has been aimed more towards creating an interesting way to get people to interact with your brand or to interact with your science than exploring the full capabilities of the technology. I think there’s – while I’m using the word gimmicky, I’m not trying to

make it sound insignificant. Engagement is always important. People remember the things that they’re engaged with, right? So if I’m more likely to remember your mechanism of action from a tradeshow because I put on these goggles versus the person who just had it playing on a screen as they walk by, well, that’s important. So, it does serve a purpose beyond just being gimmicky distractor at tradeshows. But I just don’t think I’ve seen many substantive applications in marketing, parallel to, say, conducting a surgery through VR, with the doctor controlling a robot from 1,200 miles away. That’s interesting. That’s really genuinely saving a life. When you consid-er AR/VR applications like that, you want to see that kind of value on the marketing side too, applications that drive some new kind of value, and we just aren’t seeing very many of them yet.

MedAdNews: Are there areas or disease states where marketers are perhaps a little further along towards that goal?

Fabio Gratton: Some of the best applica-tions I’ve seen are when people are trying to simulate the perspective of the patient – for example, in ophthalmology. Oph-thalmology is about the visual field. So to

being able to have a doctor put on glasses and see what a cataract might look like or what a treatment might look like or what a patient sees, that can be very powerful because it’s actually connected to the visu-al field – the virtual reality is adding some-thing really substantive. It’s hard to simulate what a patient sees. If you can do that, you can create empathy, a connection to not only what the products do but what a pa-tient is feeling. I’ve seen good uses of that. There were some good examples at the Cannes Awards, where they’re trying to im-merse the user in the patient’s perspective, showing what a patient might see when they, say, have a heart attack, or other expe-riences like that. Those sorts of applications of AR and VR are creating more of a human connection, as opposed to, “Hey, reach your hand into the cell and spin this virus.” But we haven’t seen as many of those because they have to be a bit more clinically accurate for medical-legal-regulatory to be comfort-able. So they’re more time- and cost-inten-sive. And considering that immersive is still considered relatively innovative and cut-ting-edge, people aren’t allocating the dol-lars to those kinds of things. We don’t see as many really relevant applications because they’re more complicated and expensive to execute.

MedAdNews: Aside from cost, what else is slowing down the adoption of those sorts of AR/VR applications?

Fabio Gratton: It’s actually a lot like the classic chasm I saw in digital back when we were starting our agency during 2000 – the people that know the tech well do not know the health well yet and vice versa. We’ve got extraordinary creative and sci-entific people in healthcare agencies, but they do not yet have their hands or minds around this technology. And we’ve got people who are incredible at developing immersive experiences technologically, but they are in outside, non-healthcare shops, not sitting in healthcare agencies, and they do not usually have that core healthcare expertise.

MedAdNews: So we have to wait for the health shops’ technology departments to catch up and close that gap.

Fabio Gratton: Yes, or build stronger part-nerships between the technology shops and the agencies getting the work. Agen-cies are selling the work and then they are trying to figure out a way to do it to max-imize their revenue versus looking to the outside partnerships with the tech people that know how to do it really well. If I were an agency, I would not want to build that capability in-house because it’s complex and sophisticated and it’s changing all the time too. So, why would you want to keep chasing all the new hardware? Unless you’re going to create an entire offering based on immersive technologies, why not just continue to be the creative shops that companies want you to be and find good partners who are keeping up with the tech. But agencies sometimes do not like to do that because they do not like to give up rev-enue, unfortunately.

MedAdNews: So where do you see AR and VR sneaking in to the message in a substan-tive rather than gimmicky way? What are other spaces or disease areas, aside from ophthalmology?

Fabio Gratton: As long as there’s a hard-ware requirement, a specialized hardware requirement, we’re going to have some challenges. As long as some piece of hard-ware is required – goggles, perhaps – that is not native in the smartphone devices we’re already buying, then we’re going to have a gap because not everybody can access it. If we’re limited by the availability of that hardware, we’ll be stuck with very unique circumstances like tradeshows, like sales reps, and like events where you can control the hardware experience. But the place where we might see more advance-ments is in augmented technologies, aug-mented realities, rather than virtual reality. To distinguish, AR can be an overlay on our world that helps us augment it through things like the Holo Lens, the Microsoft Holo Lens, versus the Oculus where you’re pretty much immersing yourself in a com-plete virtual world. So augmented proba-bly has some more near-term applications because everything already has a camera on it, and everything with a camera comes

Ts augmented reality (AR) technology continues to mature, more life science

companies are expanding its use, enabling a new class of innova-tive content for field teams to bring treatments to light. Wheth-er demonstrating a new therapy, showing how a new medical device works, or providing details about a complex disease state, AR can improve customer en-gagement, education, and brand differentiation.

Augmented reality works by projecting virtual images onto the physical world with the help of a mobile device – most commonly a tablet or smart-phone – to create an interactive hybrid environment. Most likely you have experimented with the technology in your personal life, perhaps without even realizing it. If you have ever used a mobile app that helps you digitally paint your walls, decide where to place a couch, or measure physical spaces, that’s augmented reality.

The technology for AR is no longer a novelty. Today, there are thousands of AR applications supporting industries such as retail, military and defense, gaming, real estate, advertis-ing, and education. eMarketer projects that, throughout 2019, nearly 70 million people in the United States will use AR. With tech giants such as Apple and Google investing in the devices and software that deliver AR, the

technology continues to advance rapidly, consistently unlocking new use cases.

AR comes into its own for life sciences

Industry analysts predict the global AR market in healthcare to grow at a 23 percent compound annual rate between 2017 to 2023. The technology is already in use in areas such as patient and doctor education, surgical visual-ization, and disease simulation to enhance patient treatments and outcomes.

For example, one AR applica-tion blends data from MRI and CT scans to map a patient’s body, projecting the exact location of veins or internal organs so that medical staff can hit the mark the first time. A different application reconstructs tumors in 3D so surgeons can view X-rays in real-time to reduce radiation exposure. Another constructs 3D visuals of organs from different

angles for greater precision in stitches.

Augmented reality also helps increase retention and under-standing for doctors and patients by presenting complex ideas in interactive formats. For instance, one global pharmaceutical com-pany uses a 3D heart modeling application to demonstrate the movement of medicine through the organ and its effects as part of a new treatment. Both healthcare providers (HCPs) and patients can better understand the science by seeing how it works in the body through AR.

Yan Fossat, VP of Klick Labs at Klick Health, explained that by “giving someone the ability to in-stantly see a disease or condition on their own skin, or enabling them to see what someone with, say, macular degeneration sees is more impactful than other forms of visual and textual represen-tation.”

Companies have even begun to find AR applications for their research and manufacturing processes. Researchers can model cell signaling and turn different receptors on and off to visualize the downstream effects. In manufacturing, AR can be used to allow subject matter experts to virtually explore large pieces of equipment to find fixes for improved efficiency and maintenance.

Launching new products with augmented reality

One of the most impactful areas

for AR for life sciences companies is in the commercialization of new products. As more complex therapies come to market, AR is proving a natural fit in helping businesses explain the complex science and unique delivery mechanisms involved. Aug-mented reality empowers brand teams and content firms to create detailed, immersive experiences that better engage with HCPs, generate excitement about a new therapy, and instill greater confidence during the early phases of the commercialization process.

Satisfying HCP’s preference for digital engagement, AR provides a captivating format to present new drugs and medical devices using familiar devices as the pre-sentation platform. It lets HCPs explore the mechanisms of new therapies that were previously prohibitive to demonstrate in a hospital or physician office due to weight, size, or security restraints.

Most importantly, AR enables life sciences companies to tell a compelling story, illustrating how a body experiences a disease and then how it reacts to the new treatment during different stages of the disease. HCPs learn more clearly how a new product can help patients throughout the progression of the disease state so they can communicate this to patients.

“There just hasn’t been any other medium in the past that allows interactive modeling live in real time,” says Sanjiv Mody, CEO and founder of PIXACORE. “With the right content and use case, AR helps pharmaceutical field teams get more than the

average two or three minutes with a doctor.”

Better HCP engagement and deeper understanding

AR provides a more interactive and engaging experience than traditional 3D modeling for greater retention of complex concepts. Now, instead of hearing or reading about results from a new drug or device, HCPs can virtually interact with it to visualize the effects and practice procedures.

Field reps can either hold their mobile device and make their pitch, or turn over their AR-equipped iPad so the HCP can directly engage with the content. In addition to field personnel serving as facilitators, doctors can take a 360-degree perspective to do a deeper dive and gain important insights about the intricacies of a molecule or medical device. The results in a more memorable experience compared to an often static, two-dimensional presentation.

However, not everything translates well into AR. The tra-ditional formats remain the best option in certain cases. For exam-ple, dense content contained in medical journals may not be an appropriate use case for AR.

According to Mody, “Neither AR nor VR technology should be used just for the sake of novelty when other media could tell the story better and make a more meaningful impact.”

Getting started with AR

Creating AR applications requires

content creation, deployment, and maintenance supported by dedicated resources. Some cloud-based enterprise software solu-tions now embed AR capabilities into customer relationship man-agement (CRM) processes so that users can start to leverage AR in a more efficient way, as they would with any detailing content. With AR capabilities available through existing, familiar software, life sciences companies can begin to experiment with the technology through smaller pilot program across channels, in a controlled environment with a limited audience. Cloud-based AR appli-cations also enable life sciences companies to seamlessly capture and learn from the effects of AR on customers, learn, and then share those insights with agency partners.

“A controlled environment is the best way to create content, test it, get feedback and make refinements. Once you have the AR application carefully programmed, introduce it in a few test-kitchens,” Mody says. “Like any new technology rollout, take measured steps with AR ini-tiatives, and learn from structured use cases before a full-blown launch. A roadmap is imperative to success.”

As AR continues to rapidly ma-ture, more life sciences compa-nies should consider its use as an impactful tool to communicate, educate, and engage customers and patients on innovations that improve brand preference and patient outcomes.

Arno Sosna is general manager, CRM, Veeva Systems

Augmenting pharmaspecial feature AR/VR

Augmented reality finds its stride

By Joshua Slatko • josh.slatko@medadnews.com

By Arno Sosna

Med Ad News spoke with digital guru Fabio Gratton about the present and future of augmented and virtual reality technologies in pharma and healthcare.

Photo courtesy of Intouch Group

Med Ad News spoke with digital guru Fabio Gratton about the present and future of augmented and virtual reality technologies in pharma and healthcare.

14 • MED AD NEWS AUGUST 2019

umira continues to maintain a stranglehold as the top-sell-ing prescription medicine globally, a reign that started in

2012 after former heavyweight champion Lipitor lost patent exclusivity. The auto-immune disorder medicine’s 2018 world-wide sales exceeded $20 billion combined between marketers AbbVie and Japan’s Eisai, with $19.94 billion accounted for by the North Chicago-based biopharmacuet-ical company. For the first six months of 2019, AbbVie reported worldwide sales of nearly $9.32 billion while Eisai’s total came in at about $210 million.

The world’s fully human anti-TNF-α monoclonal antibody, Humira entered the U.S. marketplace during January 2003. The medicine has received FDA approval throughout the years for the treatment of rheumatoid arthritis, juve-nile idiopathic arthritis, psoriatic arthri-tis, ankylosing spondylitis, adult and pe-diatric Crohn’s disease, ulcerative colitis, plaque psoriasis, hidradenitis suppurati-va, and uveitis.

Direct biosimilar competition in cer-tain international markets has affected Humira sales since October 2018. AbbVie has fended off biosimilar launches in the

United States until late 2023.According to EvaluatePharma’s “World

Preview 2019, Outlook to 2024” report, Merck’s blockbuster anti-PD-1 therapy Keydruda will have surpassed Humira as the No. 1 ranked prescription drug in terms of global sales by 2024. The human-ized monoclonal antibody has received U.S. marketing clearance for 21 oncology indications as of early August 2019 span-ning melanoma, non-small cell lung can-cer, small cell lung cancer, head and neck cancer, classical Hodgkin lymphoma, pri-mary lediastinal large B-cell lymphoma, urothelial carcinoma, microsatellite insta-bility-high (MSI-H) cancer, gastric cancer, esophageal cancer, cervical cancer, hepa-tocellular carcinoma, Merkel cell carcino-ma, and renal cell carcinoma.

“A $1.5 billion increase in sales for Humira ensured AbbVie’s blockbuster

remained the top-selling product world-wide in 2018,” according to EP’s 12 an-nual world preview/outlook edition that was released in June 2019. “However, following a number of biosimilar launch-es in Europe and biosimilars set to hit the US in 2023, the 2024 EvaluatePharma consensus forecast for Humira has de-creased by $2.8 billionn compared to that given in last year’s report. This decrease, coupled with a strong year for Keytruda in terms of product sales, positive data from ongoing clinical trials and further FDA approvals, will allow Keytruda to pip Humira to the post and take the number one spot for 2024 forecasted sales.”

Keytruda worldwide sales totaled $7.17 billion for 2018, placing the medicine as the world’s 4th best seller according to Med Ad News’ Top 200 Medicines annu-al report, following a ranking of No. 22 for 2017 based on global sales of about $3.81 billion. For first-half 2019, sales for the checkpoint inhibitor climbed up to $4.9 billion compared to $3.13 billion during the January-June 2018 period. medadnews

The king of medicines annual report top 200 medicines

Humira’s dominance continues as the world’s top-selling prescription product as the biologic therapy became the first drug to exceed $20 billion in annual global sales.

By Andrew Humphreys • andrew.humphreys@medadnews.com

H

TOP 200 PRESCRIPTION MEDICINES BY 2018 GLOBAL SALESRank 2018 Medicine 2018 sales

($ in millions)2017 sales ($ in millions)

2016 sales ($ in millions) 2018 reporting company Primary disease/medical use First approval date and/or launch date

1 Humira 20,358 18,922 16,504 AbbVie and Eisai

Rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn’s disease, plaque psoriasis, juvenile idiopathic arthritis, ulcerative colitis, axial spondyloarthropathy, hidradenitis suppurativa, pediatric enthesitis-related arthritis, panuveitis, Behcet’s disease (Japan)

U.S. launch: January 2003

2 Revlimid 9,685 8,187+ 6,974+ Celgene and BeiGene Multiple myeloma, myelodysplastic syndromes, mantle cell lymphoma U.S. approval: Dec. 27, 2005 China approval: 2013

3 Opdivo 7,550 5,759 4,709 Bristol-Myers Squibb and Ono Pharmaceutical

Metastatic melanoma, advanced renal cell carcinoma, non-small cell lung cancer, squamous cell carcinoma of the head and neck, classical Hodgkin lymphoma, bladder cancer

U.S. launch: December 2014 Japan launch: September 2014EU approval: June 2015

4 Keytruda 7,171 3,809 1,402 Merck & Co.Non small-cell lung cancer, advanced melanoma, previously treated recurrent or metastatic head and neck cancer, classical Hodgkin lymphoma, urothelial carcinoma, microsatellite instability-high cancer

U.S. approval: September 2014

5 Eylea 7,164 6,388 5,649Regeneron Pharmaceuticals, Bayer, Santen Pharmaceutical

Wet age-related macular degeneration (wet AMD), macular edema following central retinal vein occlusion (CRVO), diabetic macular edema (DME)

U.S. launch: November 2011 (Wet AMD) EU launch: Fourth-quarter 2012 (Wet AMD)

6 Herceptin 7,136 7,169 6,932 Roche and Chugai Pharmaceutical Breast cancer U.S. approval: Sept. 25, 1998

Japan launch: June 2001

7 Enbrel 7,126 8,233 9,237 Amgen, Pfizer, Takeda Pharmaceutical

Rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, ankylosing spondylitis, polyarticular juvenile idiopathic arthritis U.S. launch: November 1998

8 Avastin 7,000 6,836 6,933 Roche and Chugai Pharmaceutical

Colorectal cancer, lung cancer, kidney cancer, cervical cancer, ovarian cancer, glioblastoma

U.S. approval: Feb. 26, 2004 Japan launch: June 2007

9 Rituxan/MabThera 6,901+ 7,551+ 7,461+

Roche, Chugai Pharmaceutical, Zenyaku Kogyo

Non-Hodgkin lymphoma, chronic lymphocytic leukemia, follicular lymphoma, rheumatoid arthritis, granulomatosis with polyangiitis (Wegener’s granulomatosis) and microscopic polyangiitis with glucocorticoids, B-cell lymphoproliferative disorders (Japan), pediatric nephrotic syndrome (Japan)

Rituxan U.S. approval: Nov. 26, 1997 MabThera EU approval: June 2, 1998 Japan launch: September 2001

10 Xarelto 6,768 6,397 5,748 Bayer and Johnson & Johnson

Deep-vein thrombosis, pulmonary embolism, reduce risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation

Canada approval: Sept. 16, 2008 EU launch: Oct. 2, 2008 U.S. launch: July 2011

11 Eliquis 6,438 4,872 3,343 Bristol-Myers Squibb Reduce risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation; deep-vein thrombosis and pulmonary embolism

EU approval/launch: May 2011 U.S. launch: February 2013

12 Remicade 6,437 7,733 8,835 Johnson & Johnson, Merck, Mitsubishi Tanabe Pharma

Plaque psoriasis, rheumatoid arthritis, psoriatic arthritis, Crohn’s disease, ulcerative colitis, ankylosing spondylitis

U.S. launch: September 1998

13 Prevnar 13/Prevenar 13 5,802+ 5,693 6,034 Pfizer and Daewoong

Pharmaceutical Pneumococcal disease and pneumococcal pneumonia Prevenar 13 EU approval: Dec. 9, 2009 Prevnar 13 U.S. approval: Feb. 24, 2010

14 Imbruvica 5,583 4,037 2,831 AbbVie and Johnson &

JohnsonChronic lymphocytic leukemia, mantle cell lymphoma, Waldenstrom’s macroglobulinemia

U.S. approval: Nov. 13, 2013 EU approval: Oct. 21, 2014

15 Stelara 5,156 4,011 3,232 Johnson & Johnson Plaque psoriasis U.S. launch: Second-half 2009

16 Lyrica 4,970 5,065 4,966 Pfizer Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury

EU approval: July 6, 2004 U.S. launch: Sept. 21, 2005

17 Genvoya 4,691 3,731 1,501 Gilead Sciences and Torii Pharmaceutical HIV U.S. and EU approval: November 2015

Japan launch: July 8, 2016

18Neulasta/Peglasta/G-Lasta

4,685 4,716 4,802 Amgen and Kyowa Hakko Kirin Neutropenia Neulasta U.S. launch: April 2002

G-Lasta Japan launch: Nov. 28, 2014

19 Tecfidera 4,274 4,214 3,968 Biogen Relapsing forms of multiple sclerosis U.S. launch: April 2013 EU launch: Early February 2014

20 Lantus 4,213 5,465 6,752 Sanofi Diabetes U.S. approval: April 20, 2000

21 Ibrance 4,118 3,126 2,135   Pfizer Breast cancer U.S. approval: Feb. 3, 2015

22 Januvia/Tesavel/Glactiv 3,957+ 4,013+ 4,201+

Merck & Co., Ono Pharmaceutical, Almirall, Daewoong Pharmaceutical

Type 2 diabetesJanuvia U.S. launch: October 2006 Tesavel Spain launch: April 2009 Glacitv Japan launch: Dec. 11, 2009

Humira’s dominance continues as the world’s top-selling prescription product as the biologic therapy is the � rst drug to exceed $20 billion in annual global sales.

AUGUST 2019 MED AD NEWS • 21

he Cannes Lions International Festival of Creativ-ity’s 2019 Health Track consisting of the Pharma Lions and Health & Wellness Lions occurred in June along the scenic French Riviera.

GlaxoSmithKline’s “Breath of Life” campaign captured the Cannes Pharma Grand Prix, marking the first time in three years that the event’s leading recognition was awarded. Mc-Cann Health Shanghai was the healthcare communications agency behind GSK’s COPD disease awareness campaign. In addition, “Breath of Life” was awarded a Gold Lion.

McCann Health Shanghai was additionally recognized as 2019 Agency of the Year, while McCann Health was awarded the 2019 Healthcare Network of the Year honor at Cannes.

AREA 23, an FCB Health Network company, won one gold, one silver and one bronze Pharma Lion for “One Word” and “Get Up Alarm Clock.” New York-based agency AREA 23 de-veloped the “One Word” campaign for the Constant Therapy stroke-recovery app for client The Learning Corp. For Eli Lilly, AREA 23 built the world’s first social media alarm clock, pro-jecting messages of strength onto patients’ ceiling to help them not just wake up but get up.

“I’m so proud of these campaigns and the teams that put in the blood, sweat and tears to bring them to life,” says Tim Hawkey, chief creative officer of AREA 23. “While we’re be-yond thrilled to bring home some gold hardware, Lilly’s ‘Get Up Alarm Clock’ and the ‘Constant Therapy’ app have helped people live better, healthier lives – the ultimate reward for our hard work. We are so, so grateful for our brave clients, who can see past many of our self-imposed pharma boundaries and embrace the need for breakthrough creativity and innovation in healthcare marketing.”

According to Rich Levy, chief creative officer at Klick Health, “I was personally inspired by several pieces. I was especially taken by the brilliance of the idea behind ‘Breath of Life’ from GSK and McCann Health Shanghai and ‘One Word’ for The Learning Corp. from AREA 23. (In full disclosure, until joining Klick Health a few months ago, I worked for the parent com-pany of AREA 23). Both ideas are great ideas and beautifully executed.”

Robin Shapiro, global president of TBWA\WorldHealth, headed the 2019 Pharma Lions jury. The Pharma Lions jury also consisted of Adam Weiss, managing director/creative director, CDM Japan; Andrew Spurgeon, executive creative director, Langland UK; Bianca Eichner, VP and general man-ager, WE Communications Germany; Emily Spilko, executive creative director, Evoke USA; Kathleen Nanda, executive VP and group creative director, FCB Health USA; Laura Florence, executive creative director, Havas Health & You Brazil; Nan-da Marth, executive creative director, Sudler UK; Praful Akali, founder and managing director, Medulla Communications India; and Xavier Sánchez, founding Partner and global chief creative officer, The Bloc Partners/Umbilical Global.

Shaheed Peera, executive creative director of Publicis Life-Brands, helmed the 2019 Health & Wellness Lions as jury president. The other jury members were Augé Reichenberg, EVP and chief creative officer, Havas Health U.S.; Bernardo Romero, executive creative director, Healthcare & Wellness, Grey U.S.; Berta Loran, creative director, Global Healthcare, Spain; Carlos André Eyer, creative VP, NBS, Brazil; Christian Geis, digital creative director, Wefra, Germany; Geet Rathi, creative and design director, TBWA\India; Matt Eastwood, global chief creative officer, McCann Health, global; Phyllis Cheng, VP of healthcare, FleishmanHillard, Singapore; Sinead Murphy, cre-ative director, Syneos Health U.K.; and Toby Pickford, chief cre-ative officer, Ogilvy Health, Australia.

The following passages represent perspectives on a variety of topics from some of the industry personnel who attended Lions Health 2019 ...

The Creative Health Revolution

Shaheed PeeraExecutive Creative DirectorPublicis LifeBrands, Publicis Resolute and Real Science (PLBRS)President, 2019 Health & Wellness Jury, Cannes Lions Health

When I first came into pharma advertising al-most a decade ago, the work that the industry was creating and award-ing at the time felt like an alternative universe compared to general market creative. Back then, there was a dearth of strategy, media, craft and great ideas in health advertising. It didn’t make much sense to me, as the products were amazing and changed lives. Not in the way that Coca-Cola can make someone happy; we are talking about treatments that save lives. Really amazing!

Another observation that I made was that no one ever wanted to admit they worked in health. The ultimate goal was to get into consumer agencies and erode any memory of working on pharmaceutical brands.

What I believed in back then – and still believe now – is that if our industry can demonstrate great work, it can in-spire the best creative talent to join our ranks and make healthcare communications the number one place for cre-ativity.

Proof of the creative health revolution was apparent as I had the pleasure and privilege to serve as President of this year’s Health & Wellness jury at Cannes Lions Health. My mum was very proud, and to be fair, I also was a bit chuffed to be the youngest and first British Asian to hold the position.

The rise of health and wellness award shows has shone a spotlight on our industry and has started to help showcase the value of what we do and the societal benefits we can create for brands who are brave enough to think and act differently. When Burger King and IKEA enter a health and wellness advertising award show, you know that health is becoming part of everyone’s business.

Healthcare communications has always been a bit like Hogwarts. Invisible to most people, massive when you get there, and filled with magic you haven’t yet discovered. There is a creative revolution in healthcare right now. Our documen-tary hasn’t been made yet and there’s never been a more im-portant time to star in it. The industry is ready and waiting for new ideas, more diversity and talent. So, who’s in?

Creative Crossroads

Annie Heckenberger VP, Group Creative DirectorDigitas Health

No Fearless Girl. Not even #LikeAGirl. No Stratos space jump. No Fuelband. The work that rose to the top of the celebrated at Cannes this year – was largely unremarkable.

The most interesting work this year – work that I kept coming back to day after day in the lower lev-el of the Palais displaying “The Work” – was cre-ative steeped in cultural relevancy and truth that struck an emotional chord.

For an industry that champions innovation, innovation was in spare supply. Ditto for humor. Shortlisted and award-ed campaign creative was anchored to big, weighty issues of varying social importance and the word “Purpose” seemed to drip off tongues up and down the Croisette.

Of course, there were some standouts – IKEA’s ThisAbles campaign struck a much-needed chord for an underserved

Lions Health 2019 Takeawaysextra feature Lions Health 2019

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Publicis Health

The Cannes Lions International Festival of Creativity’s 2019 Health Track consisting of the Pharma Lions and Health & Wellness Lions occurred in June along the scenic French Riviera.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • August 2019 • Volume 38, Number 4 • $25

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AR/VR

TOP 200 MEDICINES

LIONS HEALTH

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n the United States, even as the current administration is proposing ways to

rein in high drug prices, the question of value – for payers and for patients – rarely comes into the public debate. Unlike Europe, where the price and value of therapies gets set by government-level health tech-nology assessment (HTA), in the United States, each private insurer has their own HTA sys-tems, but the federal govern-ment does not. With new and ever more expensive therapies for rare diseases coming into or about to enter the market, all of these bodies are struggling with the value question – whether these therapies are eff ective, and if they are worth the high prices being asked by pharma and biotech companies.

Enter the Institute for Clinical and Economic Review (ICER). A private, nonprofi t organization that issues reports about the eff ectiveness and value of ther-apies, ICER is trying to establish unoffi cial national benchmarks for cost eff ectiveness and value. ICER made headlines in April and May with evaluations of drugs for spinal muscle atro-phy and Duchenne muscular dystrophy. Even as manufactur-ers hotly dispute ICER’s fi nd-ings, and private payers have diff erent budgeting goals that ICER’s methods do not take into account, experts believe that manufacturers are going to

have to better address the ques-tions the organization raises.

In the crosshairs

Right before the Memorial Day holiday weekend, ICER came out with its draft report tar-geting two marketed drugs for Duchenne muscular dystrophy – Sarepta Therapeutics’ Exon-dys 51 and PTC Therapeutics’ Emfl aza – as well as another drug, golodirsen, being devel-oped by PTC that targets anoth-er genetic mutation responsible for Duchenne. The condition is an X-linked neuromuscular dis-ease in which loss of expression of the protein dystrophin results in a progressive loss of muscle function and an early death. About 13,000 boys in the Unit-ed States are aff ected.

ICER concluded in its anal-ysis that there was not enough clinical evidence that Exondys 51 was cost-eff ective, and simi-larly viewed golodirsen as well. And the organization stated that Emfl aza had only a modest clin-ical benefi t and would have to priced lower to be considered cost eff ective. Sarepta and PTC both disputed the fi ndings.

According to Sarepta, “ICER’s approach is fatally fl awed as it relates to rare and genetic dis-ease for a number of reasons. As a result, we have chosen not to participate in reviews by ICER until it adapts its model to ad-dress the inherent limitations

and biases that compromise its evaluations of therapies intend-ed to treat patients with serious, rare diseases.”

The company also says, “Through its conclusions, ICER sends a clear message to inno-vators that developing rare dis-ease therapeutics is not worth the eff ort, and to patients – of-ten children who are dying with no other treatment options – that their lives are not worth the investment.”

As for the spinal muscular atrophy drugs Spinraza and Zolgensma, ICER concluded in April that while both med-icines provided substantial health benefi ts, the price for Biogen’s Spinraza is too high to align fairly with these ben-efi ts, and urged fair pricing for Novartis’ Zolgensma to support sustainable access to innova-tion. Spinraza’s list price in the United States is $125,000 per injection, which puts the treat-ment cost at $750,000 in the fi rst year and $375,000 annual-ly after that.

Spinal muscular atrophy (SMA) is a rare, genetic neuro-muscular disease with the most severe cases aff ecting infants and young children. About 500 new cases are diagnosed each year.

Zolgensma was approved May 24 by the FDA. After the approv-al and the announced price for the product, ICER published an addendum to the April report

concluding that the price set by Novartis falls within the upper bound of ICER’s value-based price benchmark range.

“Insurers were going to cover Zolgensma no matter the price, and Novartis has spoken pub-licly about considering prices that approached $5 million,” says Steven D. Pearson, M.D., M.Sc., president of ICER. “It is a positive outcome for pa-tients and the entire health system that Novartis instead chose to price Zolgensma at a level that more fairly aligns with the benefi ts for these children and their families.”

Don’t get frozen by ICER

Even though pharmaceutical companies may not like ICER’s methods of determining value, the organization’s infl uence is growing – and payers are listen-ing.

In August 2018, CVS/Care-mark made headlines by an-nouncing that it would allow Caremark clients to exclude drugs from their formularies that did not meet ICER’s bench-mark of $100,000 per quality adjusted life years (QALY).

FDA-designated “break-through” therapies are excluded from the program, which is fo-cusing on expensive, “me-too” medications that are not cost

continued on page 6

The values in value frameworks Pharma companies may not like their products being the subject of ICER reports, but they can provide a jumping-o� point for manufacturers to expand the conversation of the value of new medicines in the rare disease area.

special feature payer access special

By Christiane Truelove • chris.truelove@medadnews.com

inside

10 • MED AD NEWS JUNE 2019

his past May 8, Health and Human Services Secretary Alex Azar announced a � nal

rule from the Centers for Medicare and Medicaid Services that will re-quire direct-to-consumer television advertisements for prescription phar-maceuticals covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy.

Not a surprise. HHS had pro-posed the rule back in October, and at least one industry player – J&Jwith its brand Xarelto – had already pre-empted the � nal rule by putting list prices in the company’s TV ads in February. But the rule leaves plenty of room for debate and interpretation, and its potential impact remains very much unclear. So brand managers must ask themselves, what now?

“The new HHS rule is a positive step toward transparency,” says Steve Trokenheim, partner at Beghou Con-sulting. “It’s bene� cial for patients to be able to see drug list prices. A well-de� ned, standardized price point such as wholesale acquisition cost [WAC] limits the potential for consumer confusion. Additionally, by requiring pharmaceutical manufac-turers to list a drug’s cost based on its typical course of treatment (e.g., a 30-day prescription, or the time period most often prescribed), patients will be able to more easily compare di� er-ent drugs.”

In response to this rule, Troken-heim suggests that pharmaceutical manufacturers will need to rethink how they approach pricing. “Current-ly, there’s a persistent upward pres-sure on list prices,” he says. “After all, if a manufacturer believes its product delivers better results than a compet-itor’s product, why shouldn’t it seek a higher list price? The transparen-cy that will result from this HHS rule will force manufacturers to operate within the con� nes of a competitive marketplace. As a result, it could reori-ent price pressures downward. If con-sumers know a drug’s price and those of similar products, pharmaceutical companies will likely need to lower prices to remain competitive.”

Also, the new HHS rule allows pharmaceutical companies to com-pare their own drug prices to those of competitors – as long as they do not mislead consumers. “This rule may be open to some interpretation, though,” Trokenheim says. “Hopefully, consumers won’t see two companies both claiming their drugs are cheaper than the competition’s!”

But even if the new rules are a pos-itive step towards transparency, the fear of confusion in the mind of the consumer is very real, which means

marketers have to think through ways to reduce or remove that confusion. “Because what people ultimately pay varies greatly state by state and by insurance status and a number of other factors, including list price in TV ads will likely cause a lot of confusion for consumers,” says Martha Peter-son, senior VP, media, CMI/Compas. “In study after study we’ve seen that while pharma websites aren’t the � rst go-to for consumers for health information, they maintain a consis-tently high place in terms of trust. So as more consumers seek information from trustworthy sources, it will be important for pharma to have that ready everywhere consumers may search – and that includes pharma websites, publisher sites like Mayo Clinic and WebMD, social sites and search engines. Pricing is an adher-ence issue, and if pharma companies can bring that conversation out of CRM and into general advertising and media, we can start providing better solutions and ultimately solve that is-sue for them.”

Of course, a move towards price transparency is not new in healthcare, though it may be new for prescription drugs. “We’ve seen this story before with hospital prices, with doctor’s charges, where price transparency in reality is not what most consumers pay, at least the price that’s being shown, and so it can become a con-fusing number for consumers,” says Benjamin Isgur, head of PwC’s Health Research Institute. “So my reaction is mixed. Is it good that we’re moving towards more of price transparency? Yes, it absolutely is. Do we have a lot more to do so it actually becomes useful for consumers? Absolutely.”

What more to do? Isgur is hoping for a solution that goes beyond mere numbers in a TV or print ad, what he calls “static transparency. He is advo-cating for an industry-wide online tool that would allow patients to in-put their insurance and other relevant information and get actual pricing for their actual circumstances.

“We can’t be satis� ed with a stat-ic level of transparency; we need a dynamic level of transparency,” Isgur told Med Ad News.

And no matter how the pricing in-formation is communicated at � rst, brand managers will also have to do the same thing they do for all their ads: measure impact.

“I would look at this as a � rst step,” Isgur says. “People are going to have to be patient. Over the next year or two, we’re going to probably hear some backlash, ‘Oh, that wasn’t that useful,’ from some people. We’ll also hear some, ‘Wow, that’s really sur-prising. I had no idea what the retail price of that drug was, even though I’m not paying for that, it still is a num-

ber that’s stuck in my head,’ right? So there’s going to be some kind of ed-ucation that’s going to be going on. We will need a little bit of time to see what changes patient behavior and what doesn’t.”

But however the � rst generation of price transparency turns out, Isgur insists that future communications with patients has to go beyond the numbers to the value behind the products. “Consumers understand the concept of value,” he says. “They understand that sometimes expen-sive things are worth it. When you’re a brand manager, you have to focus on value. You have to be able to show outcomes, show how your product changes lives. Then, costs will be put into context. Is this drug helping you live a better life? Are you still able work because you’re taking this drug? Is it stopping you from having a trans-plant or a bigger intervention that would cost more money and mean more time away from your life? Those are the types of things consumers want to hear and understand when they’re making choices. When you show high value, consumers are will-ing to pay for that value, and so are employers and other types of payers.”

The health economist Jane Sara-sohn-Kahn has similar faith in con-sumers, but is also similarly dubious about the impact of the current HHS rules. “The patient has been morph-ing into a health consumer for the past decade, given the advent of ‘consumer-directed health plans,’” she says. “Now that high-deductibles are mainstream health plan designs, that health consumer is now a major payor. As a payor, that person has re-tail-style expectations from the health care industry as s/he expects from other daily consumer touchpoints. These include service levels, trans-parency, and tools to help streamline daily living based on a person’s prefer-ences and values.”

According to Sarasohn-Kahn, HHS’ price disclosure plans don’t speak to personalized health or healthcare costs, given the fact that a retail list price for a prescription drug is not what the health consumer actually pays. “And that varies by the N of 1 patient-as-plan-member, whether they can access a coupon, have a co-insurance share, and other granular aspects of the individual’s plan. A key takeaway for the Rx brand marketer is to deeply understand the patients who are prescribed their product – patient personae in terms of pay-ment, personal values, and elasticities of demand for the product vis-à-vis competitors and other products and services that could complement or substitute for the marketer’s product.”

So what to do? Just as Isgur sug-gests, add and communicate value.

“This is the opportunity to go ‘be-yond the pill’ in that we’re now in an era where the patient’s values and sense of “value” (price versus utility) converge,” Sarasohn-Kahn told Med Ad News. “The mass market/retail pric-ing will no doubt confuse the patient, and potentially position the drug as a luxury good beyond one’s reach (I.e., household budget). That would fur-ther alienate health consumers’ vis-à-vis ‘Big Pharma’ unless marketers and the industry add value that helps people navigate their condition and the healthcare system.”

Coming from the agency angle, Fa-bio Gratton, currently of Sonic Health and formerly of Ignite Health, is won-dering why HHS’ rules apply only to television.

“If this is really about transparency and protection, it should be universal,” Gratton told Med Ad News. “It should apply to every single company that has a product, whether they’re mar-keting online, or marketing in news-papers, or marketing in other chan-nels. Why is this limited to television? The argument, of course, is that, ‘Well, hey, two-thirds of all spending in di-rect-to-consumer advertising is on television.’ But the reality is that most people are getting their information online.”

Still, Gratton believes J&J set a good example when the company pre-empted the rules with its price information about Xarelto.

“J&J made a choice,” he says. “They did research, which is admirable, and then they did a really good job of just trying to say, “Look, let’s create this framework of what three-fourths of all patients will spend in this range, given dosing, site of care, copay, de-ductible, support program. There are all of these variables and insurance coverages that make it so di� erent for everybody, so they tried to come up with an equation to show, ‘This is probably where you’ll be.’”

One of Gratton’s concerns, though, is that, given the number of compa-nies and a lack of standardization, pa-tients may end up having to compare apples with battleships.

“What happens when every com-pany is left to their own devices on how they frame up drug pricing?” he says. “Now every company is like, ‘You know what? I think that most patients will pay this because I’m only looking at 66 percent, not 75 percent,’ or, ‘I want to show that the average patient has Medicare, Medicaid, blah, blah, blah, so I’m going to use all of those factors too.’ You’re picking one channel, television, and on top of that you’re not standardizing the way it’s supposed to be communicated ... it’s going to confuse the consumer because now you’ve got companies with drug prices, companies without drug prices, you’ve got drug prices being communicated in completely di� erent ways.”

Why the focus on television? Grat-ton has a sneaking suspicion.

“Many of us in the agency world believe that the real goal is to push companies away from television ad-vertising, so less people will demand

certain brands and hopefully costs will go down. I think the hypothesis is that it becomes a deterrent to do TV DTC and suddenly money will be saved.”

But, of course, pharmaceutical companies have plenty of other ways to get their messages out.

“I have a feeling that marketers are going to re-channel their dollars, � nd di� erent ways to engage consumers, still try without having to disclose anything and then ultimately end up in the same place where we are now,” Gratton told Med Ad News. “All this rule is going to do is cause pharma-ceutical companies to � nd a di� erent way to engage patients.”

That’s not to say that transparency isn’t worth pursuing; it just has to be done uniformly and in an accessible way. And Gratton’s solution is similar to Isgur’s. “I would create a drug pric-ing calculator, a universal one where you could say, ‘This is the drug, this is my plan,’ and then it would spit out, based on your drug, your plan, your age, your condition, this is what you might expect,” Gratton says. “And at the end of every commercial it could say, go to universaldrugpricingsite.com to � nd out how much this drug will cost for you.” medadnews

What now? special feature DTC special

HHS has announced its new price transparency rules for direct-to-consumer TV ads. Now the industry has to sort out what to do about them.

By Joshua Slatko • josh.slatko@medadnews.com

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Top brands by 2018 DTC spend

Brand Company Spend (thousands)

Humira AbbVie $486,847

Lyrica P� zer $272,246

Xeljanz P� zer $257,133

Chantix P� zer $212,262

Trulicity Lilly $206,724

Excludes social media spend

Source: Kantar Media

Top companies by 2018 DTC spend

Company Spend (thousands)

P� zer $1,195,476

AbbVie $621,360

Lilly $467,210

Allergan $333,264

Novartis $308,013

Excludes social media spend

Source: Kantar Media

DTC TV spend by prescription category (2018 data is for 1/1 thru 10/13, or about 78.4 percent of the full year)

Category 2016 (in millions)

2017 (in millions)

2018 (in millions)

Diabetes and blood disorders $787.8 $874 $689.9

Osteoporosis and arthritis $398.9 $440.9 $422.1

Stroke, cholesterol, and heart disease $382.3 $413.6 $392.5

Psoriasis, skin, and nails $295.4 $418.6 $434.6

Bladder and gastrointestinal $305 $406.9 $252.3

Cancer $116.6 $308.3 $281.6

Asthma and COPD $213.8 $245.6 $176.8

Depression, bipolar, and insomnia $219.2 $175.5 $230

Men’s and women’s health $243.5 $120.9 $72.2

Source: iSpot.tv

HHS has announced its new price transparency rules for direct-to-consumer TV ads. Now the industry has to sort out what to do about them.

12 • MED AD NEWS JUNE 2019

FDA approval deluge

The Food and Drug Administration set a U.S. reg-ulatory agency record with 59 novel drugs and biologics approved during 2018. During the first five months of 2019, the FDA cleared for marketing potential game-changing therapies for biotech-nology and biopharmaceutical companies as reg-ulatory clearance was granted for a variety of first-in-class medicines, promising prescription drugs with blockbuster hype, as well as new indications for established brands.

The most expensive prescription product in the world was cleared for marketing by the U.S. FDA on May 24. Zolgensma represents the first gene therapy for pediatric patients with spinal muscular atrophy (SMA). Zolgensma (onasemnogene abep-arvovec-xioi) is approved in the United States for the treatment of pediatric patients younger than 2 years old with SMA including those who are pre-symptomatic at diagnosis. The adeno-associat-ed virus vector-based gene therapy is designed to address the genetic root cause of SMA by replacing the defective or missing SMN1 gene to halt disease progression with a single, one-time infusion. SMA is a muscle-wasting disease and leading genetic cause of infant mortality that affects about one in every 11,000 births.

Zolgensma represents the first approved thera-peutic in a proprietary platform to treat rare, mono-genic diseases using gene therapy. The Novartis drug is undergoing regulatory review in other ma-jor markets and is anticipated to receive regulatory approval in Japan and the European Union in 2019.

Zolgensma came to Novartis via the April 2018 acquisition of the clinical-stage gene therapy com-pany AveXis for $8.7 billion. Novartis management saw AveXis and Zolgensma as an opportunity to transform the care of SMA and expand the Swiss company’s position as a gene therapy and neuro-science leader. The one-time disease-modifying

therapy is projected to exceed $2 billion in annual sales during 2023.

The annualized cost of Zolgensma is $425,000 for five years, for a total of $2.125 million. “Zolgens-ma is a historic advance for the treatment of SMA and a landmark one-time gene therapy,” says No-vartis CEO Vas Narasimhan. “Our goal is to ensure broad patient access to this transformational medi-cine and to share value with the healthcare system.”

May 24 was a big day for Novartis as the com-pany also won U.S. marketing approval for anoth-er anticipated blockbuster medicine, Piqray, as the first treatment specifically for patients with a PIK3CA mutation in HR+/HER2- advanced breast cancer. Piqray (alpelisib, formerly BYL719) was approved by U.S. regulators in combination with fulvestrant for treating postmenopausal women – and men – with hormone receptor positive, hu-man epidermal growth factor receptor-2 negative (HR+/HER2-), PIK3CA-mutated, advanced or met-astatic breast cancer, as detected by an FDA-ap-proved test following progression on or after an endocrine-based regimen.

PIK3CA represents the most commonly mutat-ed gene in HR+/HER2- breast cancer; 40 percent of patients living with HR+/HER2- breast cancer have this mutation. Such mutations are associated with tumor growth, resistance to endocrine treatment and a poor overall prognosis. The kinase inhibitor Piqray targets the effect of PIK3CA mutations and may help overcome endocrine resistance in HR+ advanced breast cancer.

PI3K inhibitors traditionally have struggled to reach the marketplace, and even some of those successful in doing have been saddled with regu-latory conditions such as a non-first-line setting ap-proval and a black-box safety warning that hamper future market potential. For example, during 2018 Roche halted clinical development of taselisib after investigators reported “a slight, 2-month progres-sion-free survival advantage for the drug – along

with a sketchy safety profile common to the class – combined with fulvestrant hormone therapy in a Phase III study of metastatic breast cancer.” In an-other instance, Verastem won accelerated approv-al from the FDA in September 2018 for the PI3K drug Copiktra (duvelisib) for treating adults with relapsed or refractory chronic lymphocytic leuke-mia/small lymphocytic lymphoma after at least two prior therapies. In addition to the third-line setting approval, use of Copiktra is associated with a boxed warning.

A brighter future is anticipated for Piqray, which is the first novel drug approved under the FDA On-cology Center of Excellence Real-Time Oncology Review pilot program, which allows for faster eval-uation of breakthrough cancer medicines. Novartis launched Piqray with a reported list price of about $15,500 for a 28-day supply.

“Within the next 2 years, Novartis expects 10 or more planned drug launches that could possibly reach blockbuster status,” says Terry Chrisomalis, who runs the Biotech Analysis Central pharma service on Seeking Alpha Marketplace. “I say the company is on the right track based on its two lat-est approvals. Zolgensma should definitely hit into high gear as it makes its way to the market. Piqray is an approved breast cancer drug that offers a more targeted approach to treating those breast cancer patients with the PIK3CA mutation.”

Pfizer’s Vyndaqel (tafamidis meglumine) and Vyndamax (tafamidis) received a green light from the FDA during May. The drugs were approved for treating cardiomyopathy of wild-type or hereditary transthyretin-mediated amyloidosis (ATTR-CM) in adults to reduce cardiovascular mortality and car-diovascular-related hospitalization. The two oral formulations of the first-in-class transthyretin sta-bilizer tafamidis represent the only medicines ap-proved by the FDA for the treatment of ATTR-CM.

Pfizer has touted tafamidis as a potential block-buster medicine. Industry trackers have projected annual sales to exceed $1 billion in 2024, with a po-tential peak amount of $2 billion.

“Once rejected by the FDA, Pfizer’s tafamidis is back and ready to disrupt a rare disease field only

recently tapped by Alnylam and Ionis. And the pharma giant’s entrant, now dubbed Vyndaqel, comes with a much lower price tag,” FiercePharma anaylsis says. “The oral drug will bear a list price of $225,000 per year ... That’s far lower than the $450,000 list price both Alnylam and Ionis are field-ing with their rival meds Onpattro and Tegsedi, respectively. And the Pfizer meds are pills where its competitors are both injections.”

Biopharma company AbbVie received FDA clearance in May for Venclexta (venetoclax) in combination with Gazyva (obinutuzumab) for previously untreated patients with chronic lym-phocytic leukemia or small lymphocytic lympho-ma. The FDA granted Breakthrough Therapy des-ignation for the combo therapy, and early filing of the clinical data was provided under the Real-Time Oncology Review pilot program, which resulted in approval in just over two months following sub-mission of the complete application.

Venclexta was initially granted accelerated ap-proval by FDA during April 2016 for the treatment of patients with CLL with 17p deletion, as detected by an FDA-approved test, who have received at least one prior therapy. Global sales approaching $3 billion in 2024 have been forecast for Venclex-ta, which is developed by AbbVie and Roche. The product is jointly commercialized by AbbVie and Genentech – a member of the Roche Group – in the United States and by AbbVie outside of the U.S.

Abbvie also won a significant marketing approv-al from the FDA in April at a time during which the company’s blockbuster psoriasis medicine Humira – the world’s top-selling prescription drug – is fac-ing patent pressures and biosimilar competition outside the United States. Approved for marketing in Canada and Japan earlier in 2019, Skyrizi (risanki-zumab-rzaa) received U.S. approval on April 23 as a treatment for plaque psoriasis. The interleukin-23 inhibitor was cleared by U.S. regulators for the treat-ment of moderate-to-severe plaque psoriasis in adults who are candidates for systemic therapy or phototherapy. Skyrizi is part of a collaboration be-tween Boehringer Ingelheim and AbbVie, with the latter leading development and commercialization of the new product globally.

Industry analysts believe that Skyrizi should ben-efit from best-in-category efficacy (i.e. market share gains) and continued rapid market expansion. The product is predicted to generate between $500 million to $1 billion in the second year of launch, which began in May 2019 in the United States. Clar-ivate Analytics’ Cortellis Competitive Intelligence database projected 2023 sales of $1.74 billion.

Mega-merger: Bristol-Myers Squibb and Celgene

Bristol-Myers Squibb Co. rang in 2019 by entering into a definitive merger agreement to acquire Celgene Corp. in a cash and stock transaction with an equity value of $74 billion. The transaction will create a leading focused specialty biopharmaceutical company well-positioned to address the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease via high-value innovative medicines and leading scientific capabilities.

The transaction remains on track to close during third-quarter 2019, subject to the satisfaction of customary closing conditions and regulatory approvals. Bristol-Myers Squibb’s completed purchase of Celgene would represent the second-largest acquisition ever in the pharma industry, trailing only Pfizer’s takeover of Warner-Lambert during 1999.

The Bristol-Myers Squibb-Celgene combination is expected to create the leading oncology company and a top-five immunology franchise with strength in solid tumor and blood cancers. Yet, some Wall Street analysts have questioned if the combination – which the companies said would create $2.5 billion in cost savings and raise earnings – would solve separate challenges that have been facing Bristol-Myers Squibb and Celgene.

“Bristol’s most important cancer immunotherapy and growth driver, Opdivo, has

State of the Bio Industry annual report bio

This annual compilation reviews new developments, trends and outlooks in areas such as biotechnology, biosimilars, biopharmaceuticals, biologics, biomarkers and biosimulation.

Analysis of 7 new drugs forecast to enter the market in 2019 and achieve blockbuster sales of over $1 billion by 2023

Drug Disease 2019 2023 Company (Headquarters)

Upadacitinib *§†| (ABT-494)  Rheumatoid arthritis  $53

million$2.20 billion AbbVie (US)

Zolgensma ∆†|‡§(onasemnogene abeparvovec; AVXS-101)  Spinal muscular atrophy  $449

million$2.09 billion

AveXis (US)(a Novartis subsidiary) 

Roxadustat *§(FG-4592; AZD-9941; ASP-1517) 

Anemia in chronic kidney disease patients on dialysis 

$30 million

$1.97 billion

AstraZeneca (UK)FibroGen (US)Astellas (JPN)

Ultomiris ∆§|(ravulizumab; ALXN-1210) 

Paroxysmal nocturnal hemoglobinuria  

$170 million

$1.93 billion Alexion (US) 

Skyrizi *|(risankizumab; BI-655066; ABBV-066) Psoriasis   $132

million$1.74 billion

Boehringer Ingelheim (DE)AbbVie (US)

AR-101 *†|‡ ‡‡ Peanut allergy  $35 million

$1.17 billion Aimmune Therapeutics (US)

LentiGlobin ∆†|‡(betibeglogene darolentivec) 

Beta-thalassemia in transfusion-dependent patients  

$11 million

$1.12 billion bluebird bio (US)

Data was obtained from the Cortellis Competitive Intelligence database as of March 5, 2019. Cortellis is the suite of life science intelligence solutions from Clarivate Analytics.

Forecasts are in U.S. dollars.

*=immune-related disease. ∆=genetic disorder. †=Breakthrough Therapy designation. ‡=Fast Track designation. |=Orphan Drug designation. §=Priority Review. ‡‡=first-in-class.

By Andrew Humphreys • andrew.humphreys@medadnews.com

This annual compilation reviews new developments, trends and outlooks in areas such as biotechnology, biosimilars, biopharmaceuticals, biologics, biomarkers and biosimulation.

16 • MED AD NEWS JUNE 2019

Dan ChichesterChief Experience O� cerOgilvy Health

y grandfather was an engineer. He started with a slide rule and evolved with the industry to work with computers, where

he became fascinated with the concept of GIGO – Garbage In, Garbage Out. In our industry, this translates to garbage code or data put into a system results in a trashy outcome. In the pharma ecosphere, as we advance from singular brand projects to more comprehensive customer engage-ments, I think there’s a similarity in the idea of EIEO: Experience In, Experience Out. In today’s world, it’s now incumbent on mar-keters to aim toward creating a holistic, delightful brand experience that involves, informs, and even entertains. In turn, your brand can earn increased loyalty and a customer advocate who is motivated to do more business with you.

In healthcare, we are fortunate to have access to code that analyzes data and pro-vides us with customer insights. As market-ers, we can now understand these individ-ual customers better than ever before. We know what we need and want to do when it comes to reaching them. But what does all that power and possibility do for them?

Reality check: Customers do not wake up thinking about our brands. They all wake up thinking about themselves. Don’t we all? The driving question is always, “What’s in it for me?” This is not necessarily selfi sh be-havior, so much as it is self-awareness.

When it comes to customer experience, I’ve thought about the trends that could be used to illustrate this point. But when it comes to what’s next, I’m with Nick Can-non, who said, ”Nobody can predict the future. You just have to give your all to the relationship you’re in…caring for your sig-nifi cant other through good times and bad.” I can’t think of anyone more signifi cant to us as healthcare marketers than those who are struggling with their health – they are the ones who need our help.

My colleague, Brandie Linfante, senior VP, digital engagement strategist, notes, “Advanced brand building should look to include experiential opportunities where they apply. It should solve for patients’ un-met needs and provide a solution or allow healthcare professionals to experience a moment in the life of a patient and build empathy. Use technology for a purpose, not just for the sake of showcasing tech.”

For that reason, my vision for tomorrow is focused on Purposeful Intent: what drives the digital interaction – the two-way exchange between an individual and your brand. That intent should be threefold:

Logical: Unearth data-driven insights that inform content ideation, storytelling arcs, and distribution strategies.

Emotional: Create programs that make customers feel good and people want to use.

Personal: Deliver timely, relevant, use-ful value and information that is easy for the customer to fi nd and engage with in a way that works for them. So what can we

do with this Purposeful Intent? Let’s think about these fi ve Interactive Intentions of Experience: Storytelling, Conversation, Memories, Value, and You.

Interactive storytelling

Digital is at its best when it creates a world that humans can easily understand and navigate. In the visual world of the “expe-rience age,” static encounters do little to stir the imagination. Make your customers active participants. That’s the potential of choose-your-own-adventure and branch-ing videos, immersive virtual reality (VR), augmented reality’s overlays on the real world, and role-playing games and sim-ulations. Explore a product launch, data, or conference coverage. Choose a scene or scenario, enter into it, and make the story yours by fully engaging with it (then expand upon that with networking for shared story experiences).

Building out varied paths creates added value when individuals are given the ability to control the fl ow of that experience. With that comes a better understanding of a pro-cedure, or a disease state, and therefore, a direct infl uence on behavior change.

Interactive conversation

Voice is our most natural form of commu-nication, so there’s no surprise that talking to our machines – via smart speakers, voice interfaces, and chatbots – can present a truly great experience. There’s a naturally collaborative essence to these dialogues, with a low barrier of entry for experimen-tation and a high potential for emotional and therapeutic benefi ts. From patient care plans, discharge instructions, behavior change support, to sales rep training, and even sales rep/doctor role-playing – these voice agents can answer common questions and address needs with scientifi c rigor, but still remain human and approachable. Add-ing to the higher-level experience, bots and skills can be taught to identify situations where professional medical intervention should be alerted and engaged.

Conversational experience will require new thinking from marketers. How often is your brand talking? How does the voice

“feel like” your brand? Will you use Alexa’s voice? Or will you incorporate recorded narration with a brand-tailored voice?

Typical web and mobile communications are not designed around direct human in-teraction. Voice interaction off ers a mean-ingful opportunity to engage in personal and connective ways, as related by increas-ingly common patient experiences, along the lines of, “If the day is getting late and I haven’t achieved my goals, I would think that I have to get my exercise in or answer to Alexa in the morning.”

Interactive memories

Beautiful experiences leave deep, long-last-ing traces in memory. For this reason, an experience needs to be more than trans-actional to be a success, it needs to go that much further and address customers’ feel-ings (especially in health care, where emo-tions can be heightened). Think about how a certain piece of music can trigger a mem-ory and bring that moment rushing back. That said, “your song” is probably not going to be “my song.” The key is in tailoring the customer experience to the individual, with choices that align to their personal tastes, preferences, or habits.

Digital defaults to the eyes and ears, but what about those other senses that can form memories and create lasting bonds? Capitalizing on smell and touch, even taste, to heighten experience can evoke an emo-tional response. Multisensory engagement can provide immersive enrichment, a form of physical interaction with a brand, that people will remember richly, deeply, and over time.

Interactive value

Marketers ask, “What is the overall eco-nomic value that these eff orts will bring to the brand’s business?” Remember that real-ity check mentioned above? Patients, care-givers, health practitioners ask, “What’s in it for me?”

An enriching experience can answer this by giving them something useful: not a sales pitch, not an in-their-face marketing mes-sage. What does the patient need? A truly utilitarian site, program, or app that an-swers that query becomes something that a person can’t live without. And that will stay with them. The goal is to develop an en-counter that marries awareness and func-tion. Use the experience to say something that evokes action and creates meaningful engagement with and for the customer.

Interactive you

Likes, dislikes, hopes, and fears. What you know about patients and doctors is not only a key to who they are and what content will resonate with them, it is essential to build-ing a great experience that delivers the most personalized and meaningful content.

Everyone wants to feel that they are heard. So it’s incumbent on us to learn from data in order to interact with customers via an experience that’s unique to each person. As individuals, we go to the trouble to create our own detailed personas. But as market-ers, do we service the specifi c personas of “Stalwart Susan” or “Anxious Andy”? Con-sider the relevance of what you are creating, fi nd out what matters to each customer,

and develop a personalized interface. In the end, this makes the person feel even more special and connected to the brand.

If a patient’s journey is lacking a singular element of personalization, the experience may not feel like it is helping, even when it is. If that “you” factor is there, however, there’s an instant bond between the patient and the tool, which invariably results in loy-alty and affi nity toward a brand.

Exercising Purposeful Intent

The brand experience isn’t one moment, or a stand-alone tactic. It’s a holistic vision for the transformation of the brand over time. Look at the patient journey as a mapping experience. What makes them joyful or anxious? What do they do in those instanc-es? And what could they do in those scenar-ios? What will they notice, and what will they remember? Making a point to contin-ually keep the broader view of a customer’s issues and activities at the forefront has the potential to address unmet needs, fuel dif-ferentiation, and get people talking about your brand.

That said, you can’t just ask patients what they want, because it won’t be “a good expe-rience.” All they think they want is simply to get better, or at the very least, to get back to their status quo.

Back to Brandie, “It is incumbent on us to make brands more relevant and relat-able, socially conscious and aware, and off er personal experiences and emotional connections. Great brand building makes a product a problem solver and creates an environment that begets customer loyal-ty.”

Tech is only a tool. Customer Experience is the diff erentiator. It should give people a clearer picture of their world, so they can make the best health decisions for them-selves.

Viewing experiences as tangible things helps marketers better understand the re-lationships that are established between patients and brands. From websites to sim-ulations, to programs that include mental and emotional support, we must always ask – how does it make a patient, a caregiver, or a healthcare provider feel?

Person, patient, caregiver, provider – we are all the heroes of our own stories. Pro-vide a great experience, and that is a story everyone can benefi t from, as ROI and ROE (Return on Experience) are inextricably linked.

Jaron Lanier, considered the father of VR, said, “I’ve always felt that the hu-man-centered approach to computer sci-ence leads to more interesting…and more heroic adventures…” Can there be any more heroic adventure than helping people get the health care they need and deserve? That’s a future worth investing in.

Here’s to engineering great experienc-es. medadnews

Return on experience special feature customer/patient experience special

Dan Chichester

I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.

— Maya Angelou

M

Improving the quality of patients’ lives is dependent upon the ability to e� ectively locate and engage with patients, as well as support the therapeutic onboarding and adherence of patient populations.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • June 2019 • Volume 38, Number 3 • $25

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Volume 38, Number 2 • April 2019 • medadnews.com • $100

T H E M A G A Z I N E O F P H A R M A C E U T I C A L B U S I N E S S A N D M A R K E T I N G

HEALTHCARE COMMUNICATIONS AGENCIES

IN YOUR MOVEMENTS AND YOUR MOMENTSUncontrolled, involuntary, jerky movements define Parkinson’s disease (PD)

dyskinesia, but that’s only half the story. Dyskinesia occurs as a result of disease progression and treatment with levodopa medications.

Nature calls everyoneNatu ryonIt just shouldn’t call so often at night

KJob Number: 22562Revision Nm: 0Date: 11/16/18YMCAAI-55124

FINDING EMOTIONS IN EVERY MOLECULE, CELL, PATHOGEN, AND ANTIBODYAt AbelsonTaylor, we get emotional about science. For us, there’s real emotion buried in everything from molecules to K-M curves. So we get down to the cellular level to find emotion in the science that lets us tell a human story. One that HCPs will connect with. Because we’re not just inspired by science—we feel the data.

AGENCY OF THE YEAR CATEGORY IFor the second year running, TBWA\WorldHealth closed out the year with 100 percent client retention;

phenomenal organic growth and new business; an increase in talent acquisition, development, and retention; and seamless integration of new companies and initiatives into the network.

TBWA WORLDHEALTH

AGENCY OF THE YEAR CATEGORY II

2018 saw Fingerpaint set out to celebrate its success, further solidify the foundation

that got it this far, and harness the unbridled enthusiasm within its walls and channel it

into taking the next 50 years by storm.

AGENCY OF THE YEAR CATEGORY III2018 was year of gratitude for Dudnyk – gratitude for continued partnerships with

clients, for the opportunity to support patients with rare and serious diseases; for continued growth, and for enhanced philanthropic work.

Steven Michaelson and Judy Capano

rti� cial intelligence may not be the answer to every question about pharma marketing in

2019, but it seems to be lurking underneath the answers to most of them. E� cient analytics for big data? AI will make it possible. Getting the right content to the sales force at the right time? AI can do it. Figuring out where customers are in their journeys and how to best reach them there? AI will � nd them. The growth in voice search? Gotta have AI for that, of course. What’s next in patient services? AI. Down the hall in the R&D department? AI. Even the in-dustry’s political issue du jour, pricing transparency and reform, has an AI angle, since payers are surely using it to determine whether their spend is being justi� ed by outcomes.

All that said, for all that pharma marketers talk about how AI will transform their business, the answer to the question of when is a little less clear. As the babysitter always said if you asked when your parents would be home ... “Soon.”

MedAdNews: What was the word of the year in pharma marketing for 2018? What will the word of the year be in 2019? Why?

Harrison Boulay, digital strategist, Butler/Till Health Group: 2018: Interactivity. This year saw pharma marketing implement proven CPG strategies like chatbots and messag-ing campaigns that engage directly with both HCPs and patients, along with advanced social media cam-paigns designed to create meaning-ful dialogues between brands and their consumer base.

2019: Arti� cial Intelligence. Phar-ma marketing has serious hurdles when targeting potential patients directly. The use of big data, machine learning, and consolidating insights

leveraging AI will represent the cut-ting edge for teams in 2019.

Susan Dorfman, chief commercial o� cer, CMI/Compas: 2018: Genuine. In 2018, pharma really took on earned and shared media as part of its overall paid and owned tactics. The industry owned it for the � rst time, where it was a lot more genuine; the integra-tion of true social. Pharma was part of the customers’ journey.

2019: Daring. In 2019, daring will be the leading theme of the year, and this is the year for pharma advertisers to be daring. Our stakeholders – particularly the patients – need us to be more daring in helping them get access to medication and making that medication more available, and we can do the right thing by supporting them. This includes sharing informa-tion, pushing the envelope in how we interact, listening to them, and helping by providing a� ordability and availability of medication.

Matt Nespoli, digital media director, Butler/Till Health Group: 2018: E� ciency. E� ciency is a priority when technology is in place to make things happen smarter and faster. The idea of personalization in marketing is not new, but can be scary in the Pharma marketplace. 2018 was a year of not missing out on opportunities to create tailored experiences within patient and HCP marketing. Data plays a key role in de� ning accessi-bility and automation of that data is helping provide the best patient and physician outcomes.

2019: Disruption. The need to focus on improving the customer expe-rience has always played a key role for commerce providers. In 2019, the likes of Amazon, CVS, Walmart, and Walgreens will look to focus on their futures within the Healthcare space competing not only against each other, but with Google and Facebook.

This disruption has come into focus recently when acquisitions started to occur causing patients, physicians and insurers to look at these companies more seriously. Amazon bought a small online pharmacy called PillPack, CVS and Aetna formed a union, and big box stores like Walgreens and Walmart have opportunities to di� er-entiate themselves from independent pharmacies. Disruption will continue to grow when technology and data continues to scale for these leading healthcare players.

Andrew Schirmer, CEO, Ogilvy Health: The word of the year for 2018 is a toss-up between data and technology. The words aren’t inter-changeable, but you’d have to look pretty hard to � nd one without the other in any recent treatise, thought piece or POV. That said, for 2018, I have to give the toss-up to data. Last year was the year that the entire industry embraced the idea of using quanti� able data sources to drive insight, opportunity, channel strategy, and performance, leading to more e� ective and e� cient marketing and communications programs.

While data has always been at the core of the life sciences and bio-pharmaceutical industries, we saw great strides last year in marketers deploying the same rigor around data science, measurement and analytics to drive all manner of multichannel e� orts reaching healthcare providers, payers and patient-consumers alike. This work will continue to acceler-

ate, but with the added in� uence of companies from outside of the industry bringing tools, platforms and approaches into both the pharmaceu-tical and broader health space. 2019 will be the year that technology � nally takes its rightful seat at the table, en-abling data to create more � repower in and out of the advertising, market-ing and communications realms. So, the word for 2019 is HealthTech.

Big tech companies’ move into healthcare will continue this year with new o� erings ranging from Amazon’s PillPack to Apple’s EKG interface to UberHealth’s ER ride service. These, and other non-traditional healthcare companies, will continue to develop technology that addresses health and wellness needs across a wide range of demographics, from GenZ and Millennials through an aging but technologically savvy population who actually utilizes the lion’s share of the healthcare provided in this country. Voice tech, AI, and machine learning will all become part of the discussion for marketers and agencies alike as all players form partnerships, develop prototypes and create pilots to deter-mine how best to use emerging tech-nologies to solve age-old problems.

Technology will also play a more fundamental role in de� ning how HCPs get drug and disease manage-ment information, how they manage patients in their practice, how patients manage their own health (and that of their families), and how both sides work to improve the doctor-patient

continued on page 6

Hungry AIsArti� cial intelligence generated plenty of chatter amongst the pharma marketing intelligentsia in 2018. Will 2019 be the year when the industry fully embraces it as more than just a tactic?

special feature agenda 2019 special

By Joshua Slatko • josh.slatko@medadnews.com

A

inside

14 • MED AD NEWS FEBRUARY 2019

ed Ad News’ spe-cial report returns with an overview of 10 company pipelines to keep

an eye on in 2019 and beyond, including some frequent “Big Pharma” spenders as well as several up-and-coming R&D players making a first-time appearance in this annual compilation.

Top biopharma companies’ return on R&D investment reaches nine-year low

The cost of developing a new medicine has nearly doubled since 2010 while 12 of the top biopharmaceutical companies combined to generate the lowest return on R&D invest-ment in nine years, according to an annual study performed by the Deloitte Centre for Health Solutions. According to the analysis, despite a continuing steady stream of new medi-cines reaching major markets around the globe, the average return expected to be achieved from the late-stage pipelines of 12 leading biopharma players dropped 1.9 percent during 2018 compared with 3.7 per-cent in 2017. Overall, the R&D return in 2018 for the large-cap biopharma companies fell by 8.2 percentage points since the 2010 amount of 10.1 percent.

Research shows that returns have been impacted by the growing cost of bringing a medicine to the marketplace. The average cost of bringing a new medicine to market has increased to $2.17 billion, compared to $1.19 billion in 2010, according to Deloitte’s key findings. Forecast peak sales for new drugs decreased from 2017 to $407 million, where-as the 2010 value was $816 million – a decline that reflects a growing concentration on relatively small targeted patient groups, resulting in multiple niche treatments.

“Despite the launch of many successful products, growing development costs and regu-latory constraints are making it more difficult than ever for companies to redeem their R&D investment,” noted Colin Terry, a partner in Deloitte’s Life Sciences practice.

Deloitte also analyzed four smaller, more specialized com-panies. That biopharma cohort was expected to produce an average return rate of 9.3 percent during 2018 versus 12.5 percent in 2017. “This fall was driven by the commercializa-tion of five major drugs in 2018,” the Deloitte analysis explains.

“However, these smaller firms continue to outperform their peers, finding success in releasing high-value products. These products have added $70 billion of projected lifetime sales to the commercial portfolio across the four companies. The extension cohort have also in-creased their forecast peak sales per asset from $952 million in 2013 to $1,165 million in 2018.”

The 12 large-cap biopharma companies analyzed by Deloitte are Pfizer, Roche, Novartis, Sano-fi, GlaxoSmithKline, Johnson & Johnson, AstraZeneca, Merck & Co., Eli Lilly, Bristol-Myers Squibb, Takeda and Amgen. The smaller cohort consisted of Bio-gen, Celgene, Gilead Sciences and AbbVie.

Despite the projected return on R&D investment falling to the lowest level since the study started in 2010, Deloitte analysts say there are oppor-tunities to reverse this trend, which will require new ways of working and a complete digital transformation to unlock R&D productivity and deliver the next generation of scientific breakthroughs. “Companies need to act now and embrace new ways of working, embed new technologies and seek out talent with the right skill sets to maximize their return on investment in pharmaceutical innovation. Our recommen-dations cover three main focus areas for transformation: technology, collaboration and geography, underpinned by a strong leadership response.”

Record-breaking 59 novel drugs approved by FDA during 2018

The U.S. Food and Drug Ad-ministration granted marketing clearance to 59 novel drugs during 2018 – in the form of new molecular entities (NMEs) under New Drug Applications (NDAs) or as new therapeutic bi-ologics under Biologics License Applications (BLAs) – compared to 46 in 2017 and 22 in 2016. In the past decade, the FDA’s Center for Drug Evaluation and Research’s (CDER) averaged about 33 novel medicine approvals per year. These totals do not include drugs approved by FDA’s Center for Biologics Evaluation and Research (CBER), which are separately tracked. CDER’s previous high mark of 53 new product approvals was recorded in 1996.

Among 34 novel approvals in 2018 to help patients with rare or orphan diseases, CDER approved the first medicine to treat patients with a rare

inherited form of rickets, a condition that leads to impaired bone growth and development. CDER gave the green light to the first orally administered drug to treat Fabry disease, a rare and serious disorder that can cause many adverse symp-toms, including damage to the kidneys and heart. The U.S. regulatory agency cleared for marketing a new drug to treat phenylketonuria (PKU), a rare dietary condition in which pa-tients are born with an inability to break down protein-contain-ing foods and certain sweeten-ers, and which can lead to brain and nerve damage.

According to CDER, 19 of the 59 novel drugs approved during 2018 represent first-in-class status, which is one indicator of a drug’s potential for strong positive impact on the health of the American people.

A total of 43 out of the 59 novel drug approvals were designated in one or more ex-pedited categories of Fast Track, Breakthrough, Priority Review, and/or Accelerated Approval.

CDER approved 56 of the 59 novel drugs of 2018 (95 percent) on the “first cycle” of review, meaning without a “complete response” letter from the FDA that necessitates re-submission with additional information, resulting in more time before the drug can be cleared for marketing. From 2011 through 2017, CDER approved 250 novel drugs, of which 205 (82 percent) were granted approval during the first cycle.

Big Pharma adopting agile real estate strategies and enhanced entrepreneurial approaches to reinvent R&D

For Big Pharma, finding new blockbuster drugs is becoming increasingly challenging and expensive, according to life sciences experts from profes-sional services firm JLL. Since 2013, smaller enterprises have increased innovation and deliv-ery, bringing a disproportionate amount of new products to the market, JLL analysts say. In 2019, JLL predicts that Big Pharma will adopt agile real estate strategies and enhanced entrepreneurial approaches to reinvent R&D, to compete with smaller compa-nies that have dominated the space.

“Given that a majority of the baseline pharma challenges have been solved, it is the current need for more complex treatments that is driving the need to invest significantly more into R&D,” according to

the experts. “As this impact is seen in the length of research, cost of development and lack of deliverable drugs to bring to the market, Big Pharma will be forced to reevaluate their business model, figuring out how they can invest in startups, buy pipelines, bring incubator spaces into the market, create flexible labs space, and much more. As these new industry realities transform how new products are discovered, manufactured and brought to market – it will drive real estate and facilities decisions.”

JLL has identified four trends that are poised to transform the pharma industry during 2019 and beyond:

• Venture capital will continue to floor biopharmaceutical innovators.

• Incubator labs will share the cost burden for drug discovery.

• Flex space will unlock innovation and savings in R&D operations desperate for a facelift.

• High-risk, high-reward mid-tier pharmaceutical com-panies will focus on flexibility and non-core services.

“Without productive, efficient R&D processes that deliver strong revenues to drive reinvestment into continuing innovation, the business model falls apart,” says Roger Hum-phrey, executive managing director and leader of JLL’s Life Sciences group. “In 2019, Big Pharma will focus on solving the R&D conundrum through investing in startups, buying pipelines, bringing incubator spaces into the market, creating flexible lab spaces, embarking on joint ventures and more.”

For more details about the four pharma trends to watch in 2019 and beyond with analysis

from Roger Humphrey, please visit: https://www.pharmalive.com/big-pharma-poised-for-disruption-in-2019-while-mid-tier-companies-double-down-on-innovation

The second-best drug pipeline in the industry is expected to drive 10

percent long-term EPS growth and deliver about 18-23 percent long-term total returns from today’s price,” wrote Seeking Alpha analysts on Jan. 28, 2019. “AbbVie’s medium-term future growth hinges on five key drugs:

• Blood cancer drug Imbru-vica, estimated $9.6 billion in 2024 annual sales (17 percent CAGR growth between 2017 and 2024)

• Endometriosis drug Orilissa, $1 billion in annual peak sales (recently launched)

• Cancer drug Venclexta, $3 billion in annual peak sales

• Immunology drugs risankizumab and upadacitinib, $10-12 billion in combined peak annual sales”

The first-in-class, oral, once-daily therapy Imbruvica (ibrutinib) is FDA-approved in six distinct diseases: chronic lymphocytic leukemia, small lymphocytic lymphoma, Waldenström’s macroglobu-linemia, along with previously treated mantle cell lymphoma, previously treated marginal zone lymphoma, and previ-ously treated chronic graft-versus-host disease. Imbruvica is being studied alone and in combination with other treatments in several blood and solid tumor cancers and other

serious illnesses. According to AbbVie, the blockbuster medicine has a robust clinical oncology development program, with more than 130 ongoing clinical studies. As of late January, there were 30 ongoing company-sponsored trials – 14 of which were in Phase III – and more than 100 investigator-sponsored trials and external collaborations that were active globally. More than 135,000 patients worldwide have been treated with the Bruton’s tyrosine kinase (BTK) inhibitor in clinical practice and studies.

Orilissa (elagolix) became the first FDA-approved oral treatment for the management of moderate-to-severe pain associated with endometriosis in more than a decade after receiving U.S. regulatory clear-ance in July 2018. Orilissa is the first oral gonadotropin-releas-ing hormone (GnRH) antagonist specifically developed for women with moderate-to-se-vere endometriosis pain. The orally administered, nonpeptide small-molecule GnRH receptor antagonist is being investigated in diseases that are mediated by ovarian sex hormones, including uterine fibroids and endometriosis. As of November

TOP 10 PIPELINESTO WATCHAbbVieAlexionArgenxBluebird BioBristol-Myers Squibb/CelgeneFibroGenGileadGlaxoSmithKlineNovartisVertex

Top 10 Pipelines To Watch annual report top 10 pipelines

The return on R&D investment for leading biopharmaceutical manufacturers fell to a nine-year low while the U.S. FDA approved a record-breaking amount of novel medicines during 2018.

By Andrew Humphreys • andrew.humphreys@medadnews.com

MABBVIE

The return on R&D investment for leading biopharmaceutical manufacturers fell to a nine-year low while the U.S. FDA approved a record-breaking amount of novel medicines during 2018.

FEBRUARY 2019 MED AD NEWS • 21

or the pharma industry, the new year kicked off with committees in the

House and Senate questioning the high prices of basic drugs such as insulin and the Trump administration proposing new regulations for Medicare drug plans that would change the way drug discounts are negotiated. And ICER, the in-dependent body that assesses the clinical value of drugs, in January announced two new programs: one is an interna-tional collaborative to develop methods for value-based pricing of potential cures, and the other will assess whether the most significant prescrip-tion drug price increases are supported by new clinical evidence.

Additionally, one company that provides a system in which pharma, PBMs, and HHS can centralize the contract and rebate negotiation process hopes that a partnership with another company that assesses the clinical and outcomes value of drugs can introduce efficiencies and clarity into the processes that will ultimately provide the best prices for pa-tients. But as policy makers and pharma advocates continue to debate, the answers of how to tie price to outcomes and affordability – as well as how drugs are currently priced – remain unclear.

Hearings, proposed rules set the stage

In January, after newly elected Democrats took over the House, the House Oversight Committee – led by Rep. Elijah Cummings, D-Md. – an-nounced an investigation into 12 pharmaceutical compa-nies and their drug-pricing methods.

“For years, drug compa-nies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits,” Cummings said in a statement. “The goals of this investigation are to determine why drug companies are increasing prices so dramati-cally, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.”

In late January, the House Oversight Committee and the Senate Finance Committee – led by Senator Chuck Grassley, R-Iowa – brought in pharma executives, patient advocates, and health experts to discuss the damaging effects of high

insulin prices. While no one who testified was doubtful on the therapeutic value of insulin, there were a lot of questions from legislators about why insulin prices had gone up.

A study by the Health Care Cost Institute (HCCI) found that between 2012 and 2016, insulin spending by each type 1 diabetes patient went up by $2,841, to $5,705 per person on insulin in 2016. The cost of diabetes supplies such as testing strips and other pre-scription drugs was $4,119, a 22 percent increase during that time period. “The increase in gross spending on insulin was larger than any other category, nearly doubling between 2012 and 2016,” HCCI reported.

In looking at the usage and types of insulins, HCCI says the price of all insulin products increased between 2012 and 2016. “The average point-of-sale price nearly doubled, rising from 13 cents per unit to 25 cents per unit,” experts say. “That translates to an increase from $7.80 a day in 2012 to $15 a day in 2016 for someone using an average amount of insulin (60 units per day).”

At the end of January, the Trump administration pro-posed new rules for Medicare Part D plans in an attempt to lower drug prices. The way the system works at present is that drug companies set a price for their products and then phar-macy benefit managers nego-tiate a discount in the form of a rebate, on behalf of insurance plans. PBMs keep some of that money for themselves and the insurers use some of it to help lower premiums across the board. However, the Trump administration proposal would ban those rebates in Medicare plans and force PBMs to just accept a flat fee for their work. While Part D premiums would go up, Health and Human Services expects that senior patients will save more at the pharmacy counter.

“Part D plans have ways to avoid premium increases, including more use of generics, tougher negotiation, or lower overhead,” according to HHS Secretary Alex Azar, in February 1 remarks to the Bipartisan Policy Center. “We believe Part D plans will use these tools to keep premiums steady, because they already compete incredibly aggressively on premiums. That part of our system works relatively well. The biggest problem, the pain point, is patients’ out-of-pocket spending at the pharmacy.”

While the proposal would only apply to Medicare plans,

Azar seemingly doubled down on it, in his remarks to the Bipartisan Policy Center, when he called on Congress to end rebate practices all across the market. “Congress has an op-portunity to follow through on their calls for transparency, too, by passing our proposal into law immediately and extend-ing it into the commercial drug market,” he said.

During October 2018, Health and Human Services unveiled a proposal for a new international pricing reference for Medicare Part B drugs. “Spe-cifically, CMS intends to test whether phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices; allowing private-sector vendors to negotiate prices for drugs, take title to drugs, and compete for physician and hospital business; and chang-ing the 4.3 percent (post-se-quester) drug add-on payment in the model to reflect 6 percent of historical drug costs translated into a set payment amount, would lead to higher quality of care for beneficiaries and reduced expenditures to the Medicare program,” HHS executives say in the advanced notice of proposed rulemaking.

In its December response to the Part B proposal, the Inter-national Society for Pharma-coeconomics and Outcomes Research (ISPOR) stated that international reference pricing in Medicare Part B could have some potential advantages.

The scientific organization surveyed its membership, and some possible advantages were suggested.

“Use of IRP might result in overall price reductions in that program and generate some cost savings that could be used elsewhere in other parts of Medicare, other government programs, or tax reductions,” ISPOR executives stated. “It could make pricing for these drugs more homogeneous across developed countries, which might be perceived as fairer by many U.S. citizens. It could motivate drug compa-nies to negotiate more strongly with other countries to achieve pricing that could help share the global R&D burden cost in a way that U.S. citizens might regard as more appropriate.”

Another advantage to international reference pricing might be from a health technology assessment (HTA) perspective, ISPOR says, in which the clinical and econom-ic effectiveness of a therapy across countries and geogra-phies might be evaluated more

consistently.“To date, there are signifi-

cant variations across countries in the HTA methodology used to measure and understand variations in outcomes across patient populations,” ISPOR says. “A more unified approach to pricing could simplify the value assessment and evidence comparisons across geographies, reducing dupli-cative effort by both payers and drug companies across jurisdictions, and thereby strengthening payor under-standing of decision-making relative to prices as well as sending clearer signals to drug developers as to likely returns on investment.”

The disadvantages to IRP, ac-cording to ISPOR, are changes in behavior of both payers in the referenced countries and the manufacturers supplying them.

“If Country A references prices in Country B, then drug manufacturers treat the two markets as linked when they set prices. If prices in Country B were lower than those in Coun-try A, then they may increase prices in Country B, or stop supplying Country B so there is no price to be referenced by Country A,” ISPOR says. “Either action will reduce the impact of reference pricing on the prices in Country A.”

If prices are raised in Country B, then overall returns to R&D will increase and patients in Country A will benefit from more innovation, but two things are likely to happen, according to ISPOR.

“Firstly, revenues may fall (and therefore returns on innovation) because Country B buys less – for example, reducing the sub-populations for whom the drug is made available,” these experts say. “Secondly, as noted above, the payer in Country B and the manufacturer may agree on higher list prices and larger confidential discounts, such that, the net price paid in Country B is unchanged. How-ever, the list price rises such that Country A gains no benefit from referencing Country B.”

Despite all the government hearings and proposals, don’t expect a lot of movement on the pricing issue in 2019, says Jeremy Schafer, senior VP and director of the Access Experi-ence Team, Precision for Value.

“The primary issue is that the true net pricing system in the United States is incredibly complex and convoluted,” Schafer told Med Ad News. “In fairness to manufacturers, their hands are somewhat tied. Rebate and discount contracts with PBMs and pharmacies are confidential, meaning that open disclosure can’t be done without violating contracts and revealing competitive strategy. In addition, the way that PBMs pass the lower net cost onto employers and health plans is

not something the manufac-turer can influence.

“The result is that while employers and health plans enjoy a lower net cost post-re-bates, the patients are stuck in a system where they may pay a coinsurance reflective of the list price. The Trump adminis-tration has discussed a radical change to the rebate system that would instead focus on net cost, but there hasn’t been much movement in this area. In the end, neither manufac-turers nor PBMs have much to gain by more transparent pricing. It gives up potential competitive advantage for both organization types and would probably end up costing them more. As a result, more aggressive change may come from the government who, at the moment, appears more interested in just bringing pric-es down rather than making them more transparent.”

(For more about the proposed Medicare Part B reference plan and recom-mendations on how pharma companies could prepare if the program is implemented, see “Will the U.S. adopt global reference pricing?” on page 26).

PhRMA tries to push back

In 2018, PhRMA member companies voluntarily pledged to share information about what patients could potentially pay for specific products as part of its DTC advertising. Eli Lilly was the first, launching a website in conjunction with its DTC advertising for Trulicity, lillypricinginfo.com/trulicity. The site shows Trulicity’s “list price” of $730.20 a month.

The site then breaks down the potential cost by patient type. If a patient has employ-er-sponsored insurance, “About 94 percent of Trulicity prescrip-tions cost between $0-$30 per month, and the remaining 6 percent cost an average of $195 per month,” the site says. “What you pay for Trulicity will depend on your insurance plan. Each plan has different preferred drug lists and out-of-pocket amounts, and most include an annual deductible. If you haven’t met your deduct-ible, you’ll see higher prices until the deductible is met, then your out-of-pocket cost will likely drop.”

Estimates are also provided

for Medicare patients, Medicaid patients, and for those without insurance or whose insurance companies refuse to include Trulicity on their formularies, there is the truly bad news: “If you do not have prescription drug coverage or your insur-ance does not cover Trulicity, you can expect to pay the list price shown above, plus any additional pharmacy charges depending on where you purchase your medicine.”

Schafer says he is “doubtful” that moves such as Lilly’s will change public perception of pharma companies and their pricing practices, “although every little bit helps.”

“In addition to the opaque-ness of the pricing system, manufacturers are likely challenged by the decline in public trust for the industry,” Schafer explains. “If people do not trust the entity providing the information, then the likelihood that the information will resonate will be low.”

He suggests that the phar-ma companies partner with medical organizations or even the government to validate the accuracy of the information offered by the industry and build trust.

“If the information is made available and understandable to patients, it may spur more pressure from the patient side onto PBMs to demand chang-es to benefits that will allow more patients to reap savings directly,” he says.

The pharma industry “would be well served by communicat-ing to patients and everyday consumers the monumental changes that medications in particular categories have brought to society,” Schafer told Med Ad News.

“Many times the value dis-cussion is focused on an indi-vidual brand which can get lost in the deluge of negative news that consumers see every day,” he says. “Instead, pharma could communicate how drugs have helped dramatically alter the rate of cardiovascular death, have made some cancers ‘curable,’ and have changed the survival picture for people with diseases like hemophilia. When presenting “value” to PBMs and payers, however, the focus should be on the individual drug with informa-tion on savings that payers can identify and quantify. While

The unanswered question of value

special feature value of medicines

With Congressional hearings on drug prices, proposed rules for Medicare plans, and new ICER efforts to link outcomes to value, finding answers on how to price and pay for drugs is still difficult.

By Christiane Truelove • chris.truelove@medadnews.com

F Eli Lilly and Co. became the first pharma company to launch a website offering pricing information for one of its drugs, in this case the diabetes drug Trulicity.

With Congressional hearings on drug prices, proposed rules for Medicare plans, and new ICER e� orts to link outcomes to value, � nding answers on how to price and pay for drugs is still di� cult.

24 • MED AD NEWS FEBRUARY 2019

he Medical Advertising Hall of Fame hon-ored 2019 inductees Carol DiSanto and Charlene Prounis on Feb. 7th at The Pierre in New York City. DiSanto is well-recog-

nized as a trailblazer and formerly served as president of the healthcare communications agency Cline, Da-vis & Mann. Prounis is a renowned entrepreneur and co-founder of the healthcare communications agencies Flashpoint Medica and Accel Healthcare.

This marks the first time in the history of the presti-gious program that each honoree is a women. The gala affair included a tribute to late MAHF co-founder David Gideon, who passed away during 2018. Gideon’s pas-sion and leadership made MAHF the most coveted and respected honors program in healthcare marketing.

“There’s no question that co-founding the MAHF is the thing my father was most proud of in his career,” his daughter Anne, who now serves as executive director of the MAHF, told Med Ad News. “Out of all aspects of his professional life, he found this work the most fulfilling. He enjoyed working with people who were motivated by wanting to give back to the industry, not personal profit or aggrandizement. Seeing it grow from just doc-umenting the history of the industry and honoring its founders to becoming an educational resource was the ultimate success story to him. I couldn’t be more proud to be his daughter or more honored to continue his leg-acy with the MAHF.”

DiSanto started her career in consumer advertising at Esty working on OTC products from Whitehall Lab-oratories/American Home Products. She joined Cline, Davis & Mann (CDM) during 1987 and launched the first OTC consumer product the agency had at the time, Equalactin from Pfizer. When Viagra’s market intro-duction was on the horizon in the late 1990s, DiSanto and her consumer expertise were recruited as the DTC lead, partnering with professional lead Kyle Barich, re-sulting in the industry’s most successful launch at the time. In the early 2000s, DiSanto’s leadership skills were at the forefront when she was appointed director of client services for CDM. During 2009, she became President and Managing Partner. In her more than 27 years at CDM, DiSanto strategically grew agency talent from 60 employees dedicated to a single healthcare cli-ent to more than 1,000 people within 8 divisions focus-ing on 40-plus clients.

“I’m absolutely honored and humbled to have been selected for induction. It means the world to me that so many folks who I worked with over the years wrote let-ters to the MAHF board in support of my nomination, that is pretty special,” DiSanto told Med Ad News. “For me, it’s always been about the people, and I am lucky to have worked with some of the best, most talented and fun people in this industry.”

According to DiSanto, “As far as all the buzz around both inductees being women this year, I think it’s abso-lutely fantastic – and once again demonstrates to both men and women that anything is possible with hard work and perseverance.

“I am proud to be the fourth ‘CDMer’ (Cline, Davis & Mann) to be inducted into the MAHF behind (the late) Morgan Cline (2004), Clyde Davis (2005) and Fred Mann (2006). I learned so much from all three and I am eternally grateful that they hired me in August 1987. Their decision to do so changed my life,” DiSanto says.

“I’m probably the most proud of being associated with the The CDM Group’s Grace value (we had four values; Substance, Style, Conviction and Grace). It’s who I am, it’s how I am wired and it lets me sleep deeply at the end of each day.”

Prounis started her career as a sales representative for Searle, followed by her first job in pharma adver-

tising at Grey Healthcare Group. During 1999, Prounis launched her first agency – Accel Healthcare – which in five years grew to become a $20 million company and was eventually sold to Omnicom.

She helped launch her next agency, Flashpoint Med-ica, during 2005 and the agency grew rapidly, recog-nized as “Agency of the Year” in 2010 and garnering more than 60 creative awards. The firm’s blue-chip companies included Amgen, Genentech, Celgene, Gil-ead, Novartis, and Pfizer.

During her time at Flashpoint, Prounis was recog-nized in 2014 as Med Ad News’ “Industry Person of the Year.” Prounis has been deeply dedicated to advancing the role of women in the healthcare industry and was very active in the Healthcare Businesswomen’s Asso-ciation (HBA). For this exemplary service, she is the only person to have received the prestigious HBA STAR award twice. Prounis is serving on the board of health-care communications firm, W20.

About being inducted into the MAHF, Prounis told Med Ad News, “I feel very honored to receive such a dis-tinguished award and proud of the fact that two women were inducted this year. We’ve been working women, working moms, who worked our way to the top, and most importantly, we are role models for other young women that they, CAN DO IT TOO!”

Regarding the meaning of the MAHF, Prounis shared the following thoughts with Med Ad News: “The MAHF honors those that have come before us and left a lasting legacy. When I think back on my career and the legacy with which I hope to inspire others, three things stand out: believe in yourself enough to take the big risks, to lead with heart and to give back – through mentoring and volunteering at the HBA and MAHF.

“I was a two-time entrepreneur with successful ad agencies, Accel and Flashpoint, that started because of the small act of courageous self-confidence and the philosophy to put people first. We created a company culture where people thrived – and so did the agency. As a board member for the MAHF I shifted the focus

from only honoring Hall of Famers to an educational focus for the young executives through new educa-tional programs like ‘Young Executives Night Out’, ‘View from the Top,’ ‘Future Famers’ and mentor-ing breakfasts,” notes Prounis.

“I am grateful to the MAHF for recognizing these qualities of, risk taking, leading with heart and giving back because not only have they made such a dif-ference in my career, but these are the val-ues that inspire others, and we can continue to build a great industry.”

The MAHF was founded in 1996 with a mission to preserve the history and heritage of the med-ical advertising profession and honor those who found-ed and built the industry through their induction into a Hall of Fame. Since the MAHF’s founding, the organi-zation’s mission has been broadened to include recog-nition of past excellence in creative work through the Heritage Advertising Awards, and creation of educa-tional resources through a Young Executive’s Program that holds multiple educational seminars each year.

As the MAHF enters a third decade of service to the industry, the organization is pursuing more educational programs and expansion to cover digital communica-tions. For more info about the MAHF, please contact Anne Gideon at anne@pch-systems.com. medadnews

Medical Advertising Hall of Fame 2019extra feature medical advertising hall of fame

TBy Andrew Humphreys • andrew.humphreys@medadnews.com

Carol DiSanto Charlene Prounis

David Gideon

The Medical Advertising Hall of Fame honored 2019 inductees Carol DiSanto and Charlene Prounis on Feb. 7th at The Pierre in New York City.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • February 2019 • Volume 38, Number 1 • $25

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24

top10 pipelines

value of medicines

MAHF

What are your thoughts about PhRMA recently updating direct-to-consumer ad guidelines to

include pricing information?

Sharon Callahan, CEO,TBWA\WorldHealth: Transparency is always a good thing, more information on therapies rather than less, if the information is accurate and credible. I think the PhRMA initiative is useful. Whereas the CMS proposal takes one metric (list price) that everyone knows is totally misleading and � ts it into a 60-second TV commercial with zero context. Conversely, the PhRMA initiative provides more meaningful information (average price paid) and some valuable context.

Wendy Blackburn, Executive Vice President, Intouch Group: While there are many questions yet to be answered, it’s clear that a focus on pricing and pricing transparency is here to stay. Pharmaceutical manufacturers need to be prepared for this new reality, whether it’s the recent PhRMA guidelines, the CMS mandate, or future regulation to be announced. But I see it as an opportunity – an opportunity to be more patient-centric. For years, research has pointed to a desire from both consumers and HCPs for clearer pricing information. Now is the time to � ll this need and demonstrate pharma’s commitment to transparency – going beyond, even, what the industry and government are mandating – to provide more clarity.

Steve Hamburg, Managing Partner, Chief Creative O� cer, Calcium: The requirement to include pricing information in DTC television advertising, including the “list price and average, estimated or typical patient out-of-pocket costs, or other context about the potential cost of the medicine” is arguably the most controversial and problematic of the updated PhRMA “principles.” This principle, along with several others, is expected to be adopted on April 15, 2019, in response to the administration’s e� orts to lower drug prices and in an e� ort avert further legislative action.

While intended to provide increased transparency, this new requirement

will, in practice, create an added level of complexity to the already information-packed landscape of the typical DTC spot. There are other issues as well. First of all, prices don’t necessarily correlate with value; what may appear to be expensive simply on a cost basis could be invaluable on a therapeutic basis. Cost is only one dimension – and arguably not the most important dimension – of a drug’s potential value to a patient’s life.

What’s more, list prices themselves don’t necessarily indicate what patients will actually pay at the pharmacy counter, since insurers typically determine the “out of pocket” costs. Moreover, list prices don’t re� ect the discounts and rebates often negotiated by insurers and PBMs. And, most chillingly of all, list prices could act as a deterrent or disincentive for consumers to seek additional information and dialogue about the latest drugs that could potentially improve or even save their lives.

Transparency is a good thing, and information is empowering to healthcare consumers. Yet, when that information is too narrow and simplistic, and is delivered without enough context, the result can be even greater complexity, confusion, and disempowerment. And that’s not a healthy for anyone.

Mark Willmann, Head of Fingerpaint’s Morristown, NJ, O� ce: We’re fortunate to work with partners that are transparent in every part of their business. This recent change in guidelines will provide consumers access to information ranging from clinical trial recruiting, real-time registrational trial results, and now, brand list price.

PhRMA’s decision to add context to the information by providing an estimated out-of-pocket expense and details on patient-assistance programs will help patients understand the � nancial aspects of taking their medicine.

This recent update, along with modernizing the ine� cient supply chain, is a step in the right direction as we � nd better ways to spend our limited healthcare dollars.

Eric Densmore, SVP, Account Director, AbelsonTaylor: a. Proponents of the amendment claim they want consumers to be more informed and consider the

price of a drug, just like they’d consider the price of car. Those purchases don’t seem all that similar to me, but let’s see how it plays out.

b. Motivation: When people buy a car, it’s often an emotional decision. A new car can be a status symbol, so spending a bit than you can a� ord isn’t uncommon. When considering a new drug, it’s likely because you or a loved one su� er from the condition being discussed and hope it might be able to help. Both emotional, but not the same.

c. The Bait: Car dealers focus on making the o� er seem “too good to be true”. Drug ads focus on the bene� t/risk of the drug to appeal to viewers (or their loved ones) that su� er from a condition to talk to their doctor to see if might be able to help them. Not the same.

d. The Gate Keeper: Last time I was in a car dealership, the salesmen didn’t seem too concerned about what was best for me. His focus was on upselling me to 4WD and a rich Corinthian leather interior. Conversely, doctors are concerned about what’s best for you and if the drug you saw the ad for isn’t right for you, we can trust them to suggest something that is. Not the same.

e. The Price: How much does a car cost? Certainly not the sticker price and not the advertised price either. Manufacturer rebates, loyalty rebates and good old fashion negotiation make it hard to pin down the “real” price. What number would we suggest � ashing on a commercial to “educate” consumers on the cost of a drug? AMP? WAC? Or just the amount the patient would pay with a co-pay card? This aspect of the experience is the same. Clear as mud, but, unfortunately, the same.

f. The Outcome: If the price of a car scares you, you don’t buy a car and life goes on. If the price of a drug scares you, you don’t talk to a doctor and, in some cases, life might not go on. That’s not at all the same and, in my opinion, reason enough to NOT include drug prices in ads.

g. I want patients to have more conversations with their doctors about their health and I don’t think including drug prices will help with that.

Dan Sontupe, EVP Payer Strategy, The Bloc Value Builders: The theory behind increased transparency on pricing is a valid one; however, the challenge lies in the de� nition of “pricing”. What CMS is trying to do, by including the “list price” of each drug, will create wholesale confusion. Is there a consumer anywhere in the United States who actually pays for a product at list price? In fact, does anyone pay list price for anything in this country? To that end, why do we even put sticker prices on cars? Essentially,

continued on page 6

healthcare agency roundtable

Healthcare Agency RoundtableLeadership representing the 2018 Manny Award agency and network winners and � nalists share their views on various healthcare industry trends and developments.

annualreport

NEW VENTURES:For the eleventh year, Med Ad News has chosen new Pharmaceutical Marketing Ventures to Watch that could change the way pharmaceutical products are marketed and sold.

MOBILE MARKETING:The steady advance of consumer tech giants Google and Amazon into the healthcare space means that the industry will have to adapt the tools of AI, voice and chatbots into their marketing, just as their consumer brethren already have.

MEDICARE REBATES:A CMO perspective and a white paper explore the potential e� ects of Medicare rebate policy changes.

The Magazine of Pharmaceutical Business and Marketing • medadnews.com • December 2018 • Volume 37, Number 6 • $25

18 • MED AD NEWS DECEMBER 2018

his past October, the Med Ad News staff began its an-nual search for the future of pharmaceutical marketing.

We sought out young companies, spin-offs, offerings, and ventures to profile that are providing the most innovative and interesting products, services, or marketing opportunities to pharma-ceutical companies and the healthcare community. This year’s three profilees are all exercises in technology with a hu-man touch – a comprehensive AI engine built for life sciences that began its life as a way to win at Jeopardy, a digital platform to connect IBS patients with a difficult-to-find therapy, and a part-nership bringing together creative ex-perience with data tools to more quickly diagnose and treat patients with rare diseases. Here are Med Ad News’ new-est Pharmaceutical Marketing Ventures to Watch.

Cognitive Core is Intouch Group’s artificial intelligence engine, cus-tom-built for pharma. The offer-

ing powers a variety of AI activities for Intouch clients – chatbots, patient ad-herence programs, Veeva digital sales aid rep interactions – and that list is rap-idly growing as brand managers seek out new ways to harness AI.

“Cognitive Core started out as an ex-periment back in 2012,” says Abidur Rahman, Intouch’s senior director of innovation and new technology devel-opment. “The experiment was to prove that robust AI systems could be built without massive super-computers like IBM Watson. The news of Watson com-peting on Jeopardy had just come out. In fact, the first version of Cognitive Core was named ‘Sherlock,’ and its pri-mary capability was playing Jeopardy. I led a small team of developers to build a working prototype of Sherlock during a 24-hour hackathon, where Sherlock won the grand prize.”

With that win in the team’s pocket, they began looking for ways to make the technology relevant to pharma clients. “An opportunity presented itself when one of our clients became interested in creating an AI-based virtual assistant,” Rahman says. “We went back to the drawing board and discovered that when it comes to implementing natural lan-guage processing (NLP) and intelligent agents such as chatbots in pharma, ex-isting technologies and platforms were not adequate. So, we took the lessons from Sherlock and built a pharma-cen-tric AI platform that could be trained on

pharma-specific data and used to pro-vide NLP, predictive intelligence, con-tent analysis for adverse events, phar-ma-centric workflow automation, and much more.”

In its first iteration, used to accompany a new drug launch in 2012, Intouch’s AI could already take typed text questions from an online form, deconstruct them into every possible variation, evaluate its known knowledge base for the set of content predicted to have the highest probability of answering the question, and deliver the result back to the user, all in a matter of seconds.

“Although complex in the behind-the-scenes functionality, the first iteration appeared to be very simple in its imple-mentation,” says David Windhausen, executive VP, Intouch Solutions. “On the surface, it appeared to be just an FAQ section on a website. But behind the scenes, it was utilizing machine learning to understand a vast knowledge base of content; natural language processing to parse through all of the variants of a question; and predictive analytics to ascertain the best response to give back to the user. All the while using the ‘lan-guage of pharma’ to communicate about the disease state and to understand and track any instances of an adverse event.”

Since its initial launch, Intouch lead-ers say the platform has undergone ma-jor areas of advancement in the type of content it supports, the number of data sources that can be part of its knowledge base, the number of systems it can be in-tegrated with to track user interactions, the methods used to train the machine learning aspect of the system, its own natural language processing engine, and the types of end-user experiences that can be created. Today, Cognitive Core has the ability to integrate with patient support solutions to track information regarding its interactions, Salesforce systems like Veeva to help direct the ac-tions of sales reps in a manner that pre-dicts the needs of HCPs, and a multitude of user experiences, from online banners to zero-UI interfaces such as Alexa, Siri, and Google Assistant.

Of course, building a machine learn-ing-based system like Cognitive Core specifically for pharma requires a thor-ough understanding of how content is created and regulated in the space, the data security and privacy constraints, and empathy for how end-users will in-teract with this system to address their healthcare questions and concerns.

“To address the needs for regulatory compliance, we began by creating a pro-prietary AI engine so that we had com-plete insight into how CC would answer questions and could demonstrate the al-gorithm to pharma-compliance bodies,”

Windhausen says. “We have also worked directly with pharma medical review boards to create specific workflows for managing and approving content at the speed required to support the system’s ongoing training needs.”

The data security aspects of the system take into consideration all levels of data security needs, from the management of personally identifiable information to HIPAA requirements, and can be cus-tomized to the specific business needs and implementation.

“And finally, CC has the ability to un-derstand the user’s persona in order to respond to their personal needs and can even customize the response based on the channel of interaction,” Windhau-sen says. “For instance, a response to an inquiry via text can be kept short with perhaps a relevant link to other informa-tion, but a response via an Echo Show can be done via video.”

Each implementation of Cognitive Core is customized to the exact client need. CC can be used to power some-thing as simple as an online FAQ page but can also be used as a platform to create a multichannel, integrated expe-rience for patient services or field sales management. The engine is “trained” with the specific content and knowledge required for each application. For a pa-tient services use case, it may be trained with all the specific information pertain-

ing to the disease state or the brand. CC can also be integrated with patient sup-port platforms to give end users the abil-ity to track disease state adherence and journey information, alert their personal care network of their progress, or even just provide the patient with the date of their next appointment. As a platform for field sales team support, CC can be integrated with platforms like Veeva Systems to provide sales reps with a more in-depth view of their upcoming schedule, the ability to record a call, or just act upon suggested courses of ac-tion.

“Cognitive Core is meant to integrate with other platforms and client inter-faces,” Rahman told Med Ad News. “In some cases, it can connect to Salesforce and gather relevant information, predict next events and provide user-friendly information over email, SMS, phone or any other connected devices. In other cases, it can remain in the background and, for example, provide nurses with data and robotic automation for an ex-isting lengthy process.”

To support all this functionality, In-touch has a dedicated Cognitive Core team that includes AI developers, con-tent analysts and creators, workflow au-tomation experts as well as supporting teams that handle adverse events, prod-uct complaints and more.

“Under the hood, Cognitive Core is inspired by many academic papers in AI and algorithms that have been developed at universities over sever-al decades,” Rahman says. “However,

Ad-ventures in marketing XI By Joshua Slatko • josh.slatko@medadnews.com

T

New Venturesspecialfeature

Cognitive Core

For the eleventh year, Med Ad News has chosen new Pharmaceutical Marketing Ventures to Watch that could change the way pharmaceutical products are marketed and sold.

Cognitive Core is Intouch Group’s AI engine, custom-built for pharma.

inside

22 • MED AD NEWS DECEMBER 2018

hen it comes to the future of mobile marketing in phar-ma, just look at the consumer space. While one of the big

presentations at Digital Pharma East in Philadelphia concerned a company’s surprisingly successful Facebook initia-tive to get women to talk about the sex-ual and other discomforts of menopause, consumer counterparts are forging ahead with the use of AI and chatbots. The tech-forward people in pharma and healthcare, however, are in the process of gently persuading skittish clients about the benefits of these technologies while

working with them to reduce the risks.According to HubSpot’s “Ultimate List

of Marketing Statistics for 2018” (www.hubspot.com/marketing-statistics), the number of voice queries increased 3,400 percent between 2008 and 2017. In 2015, 19 percent of people used Siri at least daily, and 37 percent used Siri, 23 percent used Microsoft’s Cortana and 19 percent used Amazon’s Alexa at least monthly. In 2016, 20 percent of search queries on Google’s mobile app and on Android devices were voice searches. Even more significantly, two-thirds of people who use digital voice assistants,

such as Amazon Echo or Google Home, use their smartphones less often.

By 2020, 30 percent of all web searches will be done without the use of a screen, according to Gartner,

David Kopp, the CEO of Healthline, a media company that provides health information and apps and websites that connect patients into disease-specific communities, says the number of mobile users has increased dramatically.

“We see about 77 percent of our traf-fic on our website is on a mobile device, whether a smartphone, which is 71 per-cent, or a tablet, which is 6 percent,”

Kopp told Med Ad News. “We’re over the three-quarter mark for mobile engage-ment, and I think that’s very reflective of society in general.”

For health marketers, that increase in mobile usage is “a meaningfully different point.”

“When you get over the three-quarter point, it’s not just the majority of your traffic is mobile and the majority of your digital marketing needs to be thought of as mobile, it’s that your campaign will be made or broken on the back of mobile performance,” Kopp says.

Pharma is already using AI in its dig-ital ad buying, says Sean Hartigan, se-nior VP, strategic planning, at the digital agency Intouch Solutions.

“We’re actually using AI right now, seamlessly behind the scenes to actually buy ad space and ads that intercept peo-ple while they’re on their smart phones., so it’s no different than when they’re on their desktop,” Hartigan told Med Ad News. “Most of the data we’re seeing col-

Growing voice for mobile By Christiane Truelove • chris.truelove@medadnews.com

Mobile Marketingspecialfeature

W

Pharma continues to lag behind the consumer space in the use of mobile marketing technologies, but the steady advance of consumer tech giants Google and Amazon into the healthcare space means that the industry will have to adapt the tools of AI, voice and chatbots into their marketing, just as their consumer brethren already have.

Sean Hartigan and David Sakadelis say their pharma clients are skittish about the use of chatbots and AI, with an understand-ing of these technologies more influenced by the grim future of

Skynet in the “Terminator” movie franchise rather than the reality of where AI is right now.

“The pharma companies, they don’t fully understand the technol-ogy yet, they’re not quite there yet,” says Sakadelis VP, group director, head of technology at Heartbeat. “But I do see some movement there, they finally understand that native apps don’t see a lot of adoption or a lot of utilization. So they think about chatbots and where they fit in. Unfortunately I don’t think they really understand technologies like AI fully. There’s some apprehension to it, they’re not sure how this works from a regulatory perspective, and the other thing is, when they are touching on these new approaches, to voice and AI, they’re pigeonholing it into, ‘This is an augmentation to live person support,’ rather than something that can connect better to the patient and drive things like adherence.”

According to Sakadelis, Heartbeat does a lot of knowledge sharing with clients about new technologies. “We have a program here, Experiential Technologies, we call it Ex for short,” he says. “It’s a lab program. The business problems don’t change in pharma. There are a lot of typical problems that we are always trying to solve through our campaigns and our solutions. Technology is changing and constantly evolving, so we try and connect new technologies or something that has evolved to a business case or problem for our clients, and we do some experimentation around that to see if it solves a problem.”

Through Heartbeat’s connections to non-health Publicis agencies such as Sapient and Digitas LBI, Sakadelis gets to talk with non-health creatives and marketers about what’s happening in the consumer space and how that can be brought into pharma.

“Our opportunity to introduce that with our clients is through our lab program,” Sakadelis says. “We can just throw something against the wall and see if it sticks. We can talk about virtual reality and aug-mented reality. We bring clients in and they love to engage with this technology, and we try and help them connect the dots in ways that lead to solving their problems in new ways, through new technolo-gies. More often than not, it doesn’t lead to some campaign. It’ll be a very watered-down version of it. But we keep pushing it. We’ll keep moving the needle on it.”

One of the programs Heartbeat did was centered around chatbots, where the participants tried to tackle challenges such as adherence and patient support through AI, machine learning, and chatbots.

“What we found is, on the surface, everyone heard of AI and chatbots, and think that the thing [AI] is off and learning on its own,” Sakadelis told Med Ad News.

Part of that apprehension was the publicity about how Microsoft’s Tay the Twitter chatbot was trained to say racist things within 24 hours. Of course this made pharma executives fearful about using chatbots.

To counter that fear, Heartbeat’s workshop participants did an ex-periment, centered around creating a simple chatbot for registration purposes, “but we wanted to have more than sort of a multiple choice approach, which pharma is taking on quite a bit because that seems safe,” Sakadelis says.

In a multiple choice approach, the chatbot says something, and the human can only respond in one of three ways. “We wanted to do more than that, we wanted to incorporate natural language under-

standing, this ability to type in something and the system interprets it into what is called an intent,” Sakadelis says. “Through this experiment, we learned that there is a couple of ways of doing this, and there is a way to keep it a bit more open-ended where the system learns from things that folks are saying to it, but there are also ways to cap that and control it a bit more.”

Using this method, chatbots can be trained on very specific termi-nology that can be translated to very specific intent.

While some limits on AI and chatbot learning are needed, “There’s a fear that if it becomes so guided and so scripted, the user experience really suffers,” Sakadelis says, “And if you’re looking to use these technologies to create a more humanistic approach to patient engagement, you kind of fail in that way.”

AI has come a long way, but is nowhere near “Terminator” aware-ness. “A lot of this is still just really pattern recognition,” Sakadelis says. “It relies on the quality of the data that we’re using to supply the logic to the machine learning so that it can make recommendations. There are a lot of companies at the forefront of this, like Google, which just has the mass of data needed to support more intelligent systems, but as a whole, AI is not really there yet.”

Despite the fears and the tech barriers, patients – pharma’s cus-tomers – want chatbots.

“People want that frictionless experience, they’re getting it from retailers, they’re getting it from everyone outside of pharma,” says Hartigan, senior VP of strategic planning at Intouch Solutions . “So on our mobile devices, we kind of want the same thing from pharma. We want that simple, intuitive, all-about-me experience that a chatbot or a voice assistant can help us with, in lieu of maybe even having to talk with a human being because that can get uncomfortable, because we love our anonymity.”

To try and get pharma clients to the point of trying out what con-sumer companies are already doing in mobile marketing, Hartigan says cross-functional teams must be involved. “That’s marketing and sales and med affairs, and technology, and even the C-suite,” he says. “If the C-suite doesn’t have this vision, for a completely customer-cen-tered journey that we’re going to provide to our doctors and patients through digital and through the use of data, on phones, everywhere, if the C-suite has not bought in, forget it.”

Hartigan says any tech initiative in pharma must be introduced in steps. “Pharma loves to do things in phases, and it’s probably the best way to go is do pilots, and introduce a new way of doing things through this cross-functional team effort,” he says. “And then once people see it’s not scary, then you can expand what you’re doing and do more of it. But you have to start small.”

The medical, legal, and regulatory executives also need to be brought on board early.

“The ultimate thing is to get that cross-functional team and the C-suite to a line, and then once that happens, you can do your cre-ative review with your MLR and say, ‘Look, all these teams looked at it. We looked at it from risk mitigation, we looked at it from complexity, we looked at it through all these lenses that we have to consider, and we have a plan that we know that will work and will mitigate risk,’” Hartigan told Med Ad News.

When informing its clients about new technologies, Intouch, like Heartbeat, regularly gets all the potential end users together, includ-ing regulatory, for innovation labs.

“You shut the door and you put the chains on it, and you make

people fight it out for what they can do vs. what they can’t do,” Hartigan says. “And it does work, we’ve done it for large pharmas for everything from clinical trial programs to just branded programs for both patients and doctors. It’s collaboration, communication, goal-setting that everybody’s aligned to, and then you can do the risk mitigation with regulatory.”

The regulatory executives must be included from the beginning of any project. “Don’t just bring it to them, and say, boom, here it is, this is what we want to do,” Hartigan says. “Then they’re like, ‘Whoa, wait a minute, you crazy dreamers!’”

Pharma must also bring in the constituents – doctors, patients, pharmacists and payers – “because at the end of the day, we’re talking to ourselves. If we just do it with our internal client people and the agency people we have to do it with some of the people we’re doing it for. And then if regulatory can see the end users chiming in to see the value in this forward-thinking stuff we’re doing, they’re more likely, of the risk-mitigation makes sense, to approve a pilot,” Hartigan told Med Ad News.

Because privacy concerns are already being expressed by many consumers, pharma has to be even more stringent. “We’re trying to make sure that we’re really transparent and that our privacy policies about data collection are something that consumer and public can get comfortable with,” Hartigan says.

There are already advancements in biometrics that can help assist with keeping mobile data private, such as voice recognition and facial recognition, signature recognition, and fingerprint recognition. But biometrics can also be used in interesting ways in mobile campaigns themselves.

“For example, dermatological products in pharma might make use of facial recognition for something,” Hartigan says. “And signature recognition right now is being used for sampling by reps and doctors. All of these new biometric technological features can be added more and more to pharma as we go.”

And to Hartigan, “the sexy part about mobile going forward is being more surgical with what we’re learning and prescriptive back in speed to market, back to these people as they’re engaging with us on mobile.”

Heartbeat has built a proof-of-concept mobile messaging service for people with diabetes, Sakadelis says. The service would be some-thing that is prescribed by the physician at the point of care through EHR system, using verbal consent.

The service pulls some information about the enrolled patient out of the EHR – the IC10 code, the patient’s first name, and their phone number – and by engaging with the patient through SMS, the service directs the patient to a HIPAA-compliant interface where they can engage with a virtual assistant.

The virtual assistant then can make recommendations about diet, exercise, nutrition counseling, and where patients can find these support services. The suggestions are made based on the patient’s progress on how they are doing with their condition.

“And we can offer those value-added services to each of the phar-ma brands,” Sakadelis says. “If they want a program to support the patient through patient advocates, we can offer to connect the pa-tient at the right moment. Or human in the loop support for patient advice, or getting them to their next appointment with Uber Health.”

Presently, Heartbeat is looking for a health system to partner with on the diabetes messaging chatbot. “Ultimately we see this support-ing the health systems and pharma,” Sakadelis told Med Ad News.

Getting pharma into new mobile tech

24 • MED AD NEWS DECEMBER 2018

or chief medical officers (CMO) of health systems, a world without Medicare rebates complicates the se-

lection of a preferred treatment while also opening opportunities for improved clinical and financial outcomes. This is the result of Medicare rebates being eliminated, potentially being replaced by patient assistance programs (PAP) and greater use of ‘beyond the pill’ programs that provide services directly to patients. This world without pharma rebates will force treatment differentiation on the basis of factors beyond rebate pricing to include ‘beyond the pill’ offerings.

Medicare has long allowed pharma-ceutical companies to provide rebates to stakeholders to gain preferred status. This allowance came with a prohibition on pharmaceutical sponsored patient assistance programs (PAP). Recent-ly, the Trump administration has pro-posed eliminating rebates in Medicare by withdrawing the “safe harbor” in anti-kickback laws that has permitted pharmaceutical manufacturers the abili-ty to negotiate with payers for formulary placement.

This safe harbor began almost 50 years ago when Congress passed the Anti-Kickback Statute, which prevent-ed pharmaceutical manufacturers from offering inducements to patients to use their products over others. But Congress amended the law to give the Secretary of Health and Human Services the power to determine which practices deserve “safe harbor” from kickback enforcement; pharmaceutical rebates was gained this safe harbor status.

This brave new world will cause many winners and losers.

The losers will come as a result of stakeholders who are currently heavily reliant on the current phar-

maceutical rebates for profits and with no ability to take advantage of the switch to value-based engagement offerings. Specifically, these losers will include pharmaceutical manufacturers who are heavily reliant on securing preferred status through rebates and are unable to maintain position through “Beyond the Pill” services and articulation of their value ex-rebates.

Beyond these pharmaceutical man-ufacturers are pharmaceutical benefit

managers (PBM) and pharmaceutical drug plans (PDP). Both of these groups because their primary focus is the phar-maceutical spend, benefit greatly from pharmaceutical rebates. These groups are actually harmed financially through increased spend from increased adher-ence with no benefit from improved clinical outcomes and reduction in total cost of care since this is far outside their responsibility.

Winners in this brave new world start with patients who should receive lower out-of-pocket

spending through both direct price re-duction and PAP. Patients will also ben-efit from a more personalized approach as pharma develops targeted services for subpopulations including caregiver resources, financial services like PAPs, clinical services such as adherence pro-grams and connecting patients to advo-cacy groups.

Additional winners include those fo-cused on population health, responsible for total cost of care such that increased adherence is viewed as a benefit in its reduction of expenditures through im-proved clinical outcomes. Historically this group was limited to the payers re-sponsible for all care, but as risk is shift-ing to health systems through account-able care organizations and bundled payments, health systems are also posi-tioned to win in this shift. Adherence-re-lated services will be important in mak-ing sure patients take their prescribed drugs for better clinical outcomes and securing a win with this shift.

With rebate based contracting gone, new value based engage-ments will require offerings

beyond the pill’s clinical benefit and pricing. This includes beyond the pill offerings which were described in the Harvard Business Review – “How Phar-ma Can offer More than the Pills.” In this piece Sachin H. Jain described how medicines alone are often not enough for patients to achieve optimal clinical outcomes. Instead resources provided in support of the treatment could have impact on clinical outcomes through improved adherence or even a placebo

effect based on patients’ perception of a treatment’s benefit.

Many pharmaceutical companies al-ready offer “beyond the pill” resources such as disease specific management apps as well as recent offering through text-based reminder programs – all in an effort to increase adherence and improve outcomes.

With no ability to differentiate a prod-uct based on rebates, resources such as ‘beyond the pill’ will be utilized to in-crease a product’s value in the eyes of health systems through their ability to improve accountable clinical and finan-cial outcomes. These factors, currently not very impactful on current clinical pathways, may change the listing of pre-ferred treatments and include accessing these resources.

The potential for the allowance of pa-tient assistance programs (PAP), which may be offered in exchange for elimi-nating rebates will likewise change pre-ferred treatments and available resourc-es within clinical pathways. Given that the providing of PAP would directly re-duce patient out-of-pocket (OOP) spend-ing, adherence will be improved. There is significant research to support the fact that increasing patient cost sharing was associated with declines in medication adherence, which in turn was associated with poorer health outcomes.i

From a health system’s perspective, PAP can be of benefit when utilized to im-prove adherence and occurring through the managed care organization’s utili-zation management process. However, health systems view PAPs as problematic when they are used to circumvent the use of a health system’s preferred treatment. As such, clinical pathways may have to call out the ability to restrict the use of PAPs until the preferred treatment has been accessed following the plan’s pre-scribed utilization path. After which, PAP can be used solely for adherence

purposes rather than means to bypass preferred treatment use.

This reduction in patient OOP through use of PAP improves adherence which in turn would improve clinical and fi-nancial outcomes. Multiple studies have demonstrated the impact of reducing patient out-of-pocket on adherence.ii iii iv

Additionally, including the PAP resource in a health systems’ clinical pathway can be beneficial to not only patients through lower OOP, but improved clinical out-comes as well as improved financial out-comes for the health plan.

The articulation of pharmaceutical product value continues to start with clinical efficacy. However, in

drug classes where clinical attributes like safety and efficacy are considered equiv-alent among products in a class and no ability for rebating advantage, the sole differentiation may be “beyond the pill” benefits. Again, CMOs responsible for population health clinical and financial outcomes are positioned to benefit from a world with no pharmaceutical rebates but one where products offer resourc-es that improve adherence resulting in better clinical and financial outcomes for patients and payers through new val-ue-based engagements. medadnews

CMO perspective on world without Medicare rebates

Medicare Rebatesextrafeature By Med Ad News staff

By Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMD Chief Medical Officer, The Access Group, an Eversana company

F

Losers

Footnotes:i Eaddy MT, Cook CL, O’Day, Burch SP, Cantrell, CR. How Patient Cost-Sharing Trends Affect Adherence and Outcomes. PT. 2012 Jan; 37(1): 45–55.

ii Eaddy MT, Cook CL, O’Day, Burch SP, Cantrell, CR. How Patient Cost-Sharing Trends Affect Adherence and Outcomes. PT. 2012 Jan; 37(1): 45–55.

iii Farias, Albert J., PhD, MPH*; Hansen, Ryan N., PhD†; Zeliadt, Steven B., PhD‡,§; Ornelas, India J., PhD‡; Li, Christopher I., MD, PhD||,¶; Thompson, Beti, PhD‡,¶

The Association Between Out-of-Pocket Costs and Adherence to Adjuvant Endo-crine Therapy Among Newly Diagnosed Breast Cancer Patients American Journal of Clinical Oncology: July 2018 - Volume 41 - Issue 7 - p 708–715

iv Farias AJ, Du XL. Association Between Out-Of-Pocket Costs, Race/Ethnicity, and Adjuvant Endocrine Therapy Adherence Among Medicare Patients With Breast Cancer. J Clin Oncol. 2017 Jan;35(1):86-95. Epub 2016 Oct 28

Winners

Value based Engagement

Articulating Value

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Daily Advantage – 20,000 DistributionThe PharmaLive Daily Advantage eNewsletter is the most relied on daily news source in the pharmaceutical industry, providing 20,000+ readers with the day’s most important news and information.

Medicine Ave News (Weekly)Covering all the latest happenings within the healthcare communications world, including agency perspectives, upcoming events and game-changing developments impacting healthcare marketing. 15,000 weekly

Custom Email CampaignPharmaLive.com eBlast Marketing program delivers your branded message to your ideal demographic. Target by business type, job function, geography and more. - $550 CPM

Leaderboard - $6,600/monthRectangle - $4,600/monthAnchor - $4,050/monthFeatured Company - $2,600/month

Leaderboard - $3,200/monthRectangle - $2,500/monthFeatured Company - $2,500/month

A marketing and media company built to quench the evolving consumption habits of B to B audiences.

16 Prospect Road, Livingston, NJ 07039973-507-6701

Thursday, April 16th, 2020Pier Sixty • New York

This unique event is one you cannot miss. Include your branding alongside this prestigious event and reach an

audience of engaged advertising professionals.

Contact your account manager today!mannyawards.com

Great work deserves recognition. Each year, agency and industry professionals come together for an evening dedicated to greatness, recognizing significant contributions to, and creative excellence in healthcare communications. Join friends and family as MedAdNews honors “the best of the best” jury-elected

nominees across carefully selected award categories.

MANNY20 2031st Annual

Awards