Presentation is loading. Please wait.

Presentation is loading. Please wait.

Pharmaceutical Industry Dynamics that drove the formation & growth of the Competitive Intelligence function Neil Mahoney – President Global Business Management.

Similar presentations


Presentation on theme: "Pharmaceutical Industry Dynamics that drove the formation & growth of the Competitive Intelligence function Neil Mahoney – President Global Business Management."— Presentation transcript:

1 Pharmaceutical Industry Dynamics that drove the formation & growth of the Competitive Intelligence function Neil Mahoney – President Global Business Management Concepts 126 Clinton Road Fairfield, NJ

2 Agenda for Presentation Government Impact on Industry Dynamics Portfolio Planning Impact CI Function and its Operations Role of Internal CI versus Consultants Key Counter Intelligence Concepts Summary and Conclusions

3 Index of CPI versus HCPI from Index based on 1964 Prices Kefauver Hearings Impact Nixon Wage & Price Controls HMO Acts of 1973,76,78 Hatch Waxman Act of 1984 Clinton Healthcare Debacle 1992 CPI: Consumer Price Index; HCPI: Healthcare CPI (Rx and Medical Supplies ) Source: Bureau of Labor Statistics Prescription Drug User Fee Act 1992 GATT Update 1995 Medicare 1965 EU Created 1993

4 Total Drug Development Time from Synthesis to Approval Source: DiMasi, J.A., New Drug Development in U.S , Clinical Pharmacology & Therapeutics 2001.

5 Generic Share of U.S. Rx Unit Market Source: IMS Health 2001

6 NCE Lifecycle Sales Analysis Average Percent of Peak Sales Potential Source: IMS (Based on 816 NCEs launched since 1983) NCE = New Chemical Entity = New Molecular Entity Hatch Waxman Exclusivity

7 NCE Lifecycle Sales Analysis Average Percent of Peak Sales Potential by Brand and Generic % Share Source: IMS (Based on 816 NCEs launched since 1983) NCE = New Chemical Entity = New Molecular Entity Hatch Waxman Exclusivity 96%95% 100% 76% 71%

8 USA is key to NCE Success % Sales of NCE Launches – Source: IMS Health, MIDAS

9 Comparison of Average Price Per Rx in 2000 Indexed to 1995 Pricing for NME and IMD Pre 1995 Standard IMD Standard NME Priority IMD Priority NME Sources: Scott-Levin SPA data; Internal analysis NME: New Molecular Entity IMD: Incrementally Modified Drug

10 Field Force Expansions Exemplify Increased Investment Spend to Accelerate Market Penetration Thousands of Field Reps Source: Scott-Levins Sales Force Trends

11 Industry Tries to Improve Discovery Process Utilizes new Technologies: - High Throughput Screening - Combinatorial Chemistry - Genomics for Target and Lead Finding Evaluate Strategic Opportunities - Disease Strategy for Target Areas - Platform Technologies - Target Product Profiles

12 Ethical Pharmaceuticals R&D Expenditures $Billions

13 Clinical Development Projects per Phase Sources: Pharmaprojects, UBS Warburg, CDER/FDA

14 Industry Supplements internal R&D with BD&L/M&A Activity Source: Evaluate, Internal Analysis

15 The Industry Compensates by Shifting Emphasis to Blockbuster Drugs Lilly Merck SGP Wyeth AZN J&J BMS Aventis Abbott GSK Novartis Roche Sources: Evaluate, IMS Health - Midas Pfizer

16 The trend for blockbusters is improving Source: IMS Health: MIDAS, Dec 2001 Number of products achieving global sales over $500 million

17 But, only a small % of NCEs Become Blockbusters $1.8 Billion or > $920 Million - $1.8 Billion $460 Million - $920 Million $180 Million - $460 Million < $180 Million 1.0% 2.0% 6.0% 90.0% Sales Total Per Annum % Achieving Average for all Drugs -- $265 Million per Annum Sources: PriceWaterhouse Coopers, SCRIP

18 History of Key Pharmaceutical Mergers 1989 Bristol-Myers Squibb Smithkline Beecham 1993 Rhone Poulenc-Rorer 2000 Pharmacia/Monsanto Pfizer/Warner-Lambert Glaxo & SmithKline 2003 Pfizer/Pharmacia 1995 Glaxo Wellcome Pharmacia & Upjohn Hoechst Marion Roussel 1998 Roche/Boehringer Mannheim 2001 Abbott/Knoll BMS/Dupont 1999 Aventis AstraZeneca Sanofi-Synthelabo 1996 Novartis 1994 Roche/Syntex Wyeth/Cyanamid 1992 Marion Merrell Dow Functional Portfolio/ Geographic Portfolio Geographic Functional Critical Mass Functional/ Geographic 2004 Sanofi-Aventis

19 Pharmaceutical Industry Stratification ($Billions) Pre Cox-2 Issues Pfizer GSK J&J Merck Novartis Roche AZN Lilly BMS Abbott Wyeth Bayer Sanofi-Aventis Takeda SGP Pharmaceutical Revenues for 2004 Market Capitalization 9/04 Sources: Lotus-One-Source, Evaluate, Internal Analysis

20 Pharmaceutical Industry Stratification ($Billions) Post Cox-2 Issues Market Capitalization 2/05 Pharmaceutical Revenues for 2004 Pfizer J&J GSK Sanofi-Aventis Roche Novartis Merck AZN BMS Wyeth LillyAbbott SGP Bayer

21 What are the next set of Govt actions? Medicare adding drug benefit for elderly will put more burden on the Federal budgets and spur Congress to find ways to reduce price of prescriptions Import of medication from foreign sources where local government dictates pricing will undermine freedom of pricing in the U.S. market

22 Price Pressures will Drive Consolidations in order to Maintain Earning Levels Sales M&S R&D G&A Price Units EBIT Sales Units Price M&S R&D G&A EBIT Price Pressures limits Industry ability to use price for growth Industry continues to consolidate in order to cut infrastructure costs: -Reduce sales reps - Eliminate TA areas in Research -Reduce duplication in support functions Consolidations protects Earnings growth & Capital value

23 Summary Points on Industry Dynamics Govt regulations have changed the industry dynamics requiring it to become more efficient Govt price pressures will increase as Rx drug benefit is expanded and parallel importation rules are relaxed, which will drive more consolidations These dynamics forced the industry to improve the planning processes

24 Agenda for Presentation Government impact on Industry Dynamics Portfolio Planning Impact CI Function and its Operations Role of Internal CI versus Consultants Key Counter Intelligence Concepts Summary and Conclusions

25 Portfolio Planning Process 1. Perform Environmental Analysis 3. Conduct Internal Assessment 2. Create a Vision of the Future 4. Decide on a Strategic Position 5. Develop Strategy Actions 7. Manage the Planning Process 6. Develop a Plan

26 Planning Process in the 1980s Focus was on internal portfolio opportunities External view emphasized market research data for current competitors (Static View) A cursory run from PharmaProjects constituted competitive assessment for future environment A Plan was more of a wish list of what management needed to meet growth rates and not what could be accomplished in a changing competitive environment

27 What does Market Research tell you? The met and unmet needs of the current customers (focus on providers) The perception of current products The marketing positioning and differentiation among current products –Pricing –Key attributes –Promotion program –Detailing support

28 This Static View was inadequate for Impactful Portfolio Planning It failed to predict changes in the market place due to: –New technologies –Process improvements by competitors –New competitive segments (Generics, Biotech) –Managed Care impact on segmentation of market Which resulted in misallocation of resources for optimizing portfolio

29 Changes to Improve Planning Process Evaluate Strategic Opportunities - Disease Strategy for Target Areas - Platform Technologies - Target Product Profiles More analysis on pipeline developments (ethical, biotech and generic segment) to determine impact on internal development portfolio

30 Management Recognized Need for Better Insights on Competitors Activities Thus, CI units began to emerge in different functions within organizations to address the competitive issues that had blindsided them CI functions required broader skill sets than Market Research departments since the scope encompassed responsibilities and issues across the business chain, including processes as well as product issues

31 CI supports Portfolio Management 1. Perform Environmental Analysis 3. Conduct Internal Assessment 2. Create a Vision of the Future 4. Decide on a Strategic Position 5. Develop Strategy Actions 7.Manage the Planning Process – CI tracks competitor activity to ensure achievement of plan objectives - Monitor competitor activity at tactical/product level to ensure no major impact on environmental view 6. Develop a Plan Competitive Intelligence supports optimization of future portfolio

32 Strategic and Operational Levels Senior Management -M&A Evaluations Investor Relations -Wall Street Monitoring Corporate Planning -Divisional Challenges Licensing-Product Evaluations Development-Clinical Tracking Marketing-Market Dynamics Strategic Level Support Operational Level Support

33 Goal for CI Functions CI ultimate goal is to serve as backbone of portfolio and operational planning process Tactical collection of competitive processes and product developments should result in projections of future competitive environment This allows management to allocate resources to win or hold market share in the future environment and maximize return on investments

34 Agenda for Presentation Government impact on Industry Dynamics Portfolio Planning Impact CI Function and its Operations Role of Internal CI versus Consultants Key Counter Intelligence Concepts Summary and Conclusions

35 What is Competitive Intelligence? Competitive Intelligence is a process that gathers and analyses information from various sources on specific business issues to develop insights that management can use in decision making Competitive Intelligence improves various aspects of the planning process including product positioning, sales forecasting, and resource allocation to enhance portfolio optimization, thus improving financial performance

36 CI has various mandates Benchmarking Across Competitors –Comparison across group of competitors Company Level Analysis –Portfolio view of key competitors Functional Issues –Explore process, system, or structure Product Level Support –Licensing evaluations –Competitive pipeline tracking –Promotional support or message changes

37 CI needs and focus varies across the business chain Research LicensingDevelopmentTech OpsMarketingLCM Disease Analysis Platforms Technologies Targets Potential Products Mechanism of Action Company Reviews Competitive Bidders Clinical Endpoints Potential Claims Time to Market Clinical Issues Bulk Sources Cost Analyses Technical Assessments Phase III & IV Market Dynamics Environment New Formulations Patents Regulatory issues Generic Launches

38 CI Work Process Model R&D - Private ADIS R&D Insight R&D Focus IDdb3 Pharmaprojects Decision Resources – DB4 Product/Company Investment Reports SEC Reports IMS Audits Promotional Audits External Human Collection Internal Human Collection Product Evaluations Detailed Reports Summary Reports Summarize Analyze Recommend Databases Dissemination Alerts Internet Publications ClinicalTrials Disease Advocates

39 Three Levels of Databases Private R&D Databases Several vendors gather information from publications, congresses, press releases, R&D days, and patent filings to reflect pipeline developments in Pharma and Biotech industries. Private Commercial Databases Several vendors gather information from surveys and audits on such items as revenues, units, prescriptions, sales forces, product detailing, promotional spending, CME, and journals. Agencies sell analyst reports and other published data. Public Databases Government agencies, industry groups, patient advocacy groups, individuals, special interest groups, university sites, and medical sites offer multiple opportunities to gather information.

40 Uses of Various Databases R&D databases establishes framework of players in area, some insights on progress and positioning, possibly hospitals and physicians involved Private commercial databases provides insights into portfolio developments and promotional support levels and priorities Public databases give insight into portfolio, possible trial locations, physicians involved, and provides leads for primary interviewing

41 Review of Private R&D Databases DatabasePublisher Start Date UpdatesRecords ADIS R&D InsightADIS Intl1986Weekly7,182 IDdb3Current Drugs1991Daily17,500 IMS R&D FocusIMS Health1991Weekly13,600 NDA PipelineF-D-C Reports1990Monthly14,589 PharmaprojectPJB Publications 1980Weekly20,090 Note: Record totals are from January 2002, except IDdb3 from 2001

42 Key R&D Database Features Drug name Trade name Originator Licensee/licensor Patent Assignee CAS Registry Number Laboratory Code Pharmacological Action Therapeutic Class Clinical indications Nomenclature Molecular formula Development status Development history Abstracts Text Chemical structure Chemical name

43 Private R&D Databases Issues Various databases rarely agree on current development status of a particular compound Data is usually 6-18 months old as it is collected from public forums, most of which require submission and review months in advance Lack specific facts or insights desired by management related to a competitors drug Phase IV trials rarely identified

44 Private Commercial Databases Issues Many managers define the commercial databases as competitive intelligence and this is their view of the function While there is valuable insights available from this data, it is retroactive data and it does not address all issues (promotional messages, Phase IV activity, etc) that may impact the future promotion of a product It is of value when combined with primary CI to give a full picture of product support

45 Value of Internal Human Collection Taps into expertise of internal associates to confirm database and external human collection inputs Captures internal experts information picked up in the course of working in a therapeutic area from attending meetings, congresses, interacting with personnel from other pharmaceutical companies, and from interactions with external vendors

46 Value of External Human Collection Primary collection captures more current information and potentially gives more relevant insight to specific company issues or hypotheses Various inputs across a large interview audience helps build the CI analysts base for projecting the competitive situation

47 Sources for External Human Collection Clinical Development: Physicians & Staff Thought Leaders Vendors and Suppliers Functional Experts Ex-employees Special Interest Groups Industry Organizations Supply Chain (Wholesalers, Retailers, MCOs) Wall Street Analysts Publications

48 Key Collection Opportunities Congresses –Collection of knowledgeable experts and company personnel in one location –Posters have lots of valuable data and insights into trail progress and potential product positioning –Company presentations are trying to build awareness of new product with physician community Company Presentations –R&D days –Wall Street meetings –Industry meetings

49 Landscape Sweep by Franchise Clinical Development Pipelines Marketing And Sales Activities Generic Activities Competitive Products in Phase II/III/IV Product Profile Protocol Design Progress Update Trial Issues Side Effects Potential Impact Therapeutic Overview Product Ranking Product Growth Promotion Support Detailing Levels DTC Symposia Physician CME Events Field pay and incentives Patents Evaluation Exclusivity Status API Status Generic Formulations Open Issues Generic Launch Timing Franchise Mgt Plan by Brand company

50 Landscape Sweep Sources Secondary data sources –R&D: Adis, IDdb3, R&D Focus, Prous, Centerwatch –M&S: IMS, Verispan, PDDA, Scott Levin –Generic: Orange Book, Patent Filings, Paragraph IV –Publications Primary interviews –R&D: KOLs, Clinical Investigators, CROs –M&S: Physicians, Pharmacy Directors, MCO –Generic: API producers, import/export agents

51 Summary of CI Process It takes various sources to build the story around a competitors product No one source usually gives the entire story, but enough pieces and an experienced CI expert can provide excellent projections of a companys product or franchise strategy Thus, CI function has a monumental task of collecting from numerous sources in an ethical manner to draw conclusions about the future, often for numerous products and issues

52 Agenda for Presentation Government impact on Industry Dynamics Portfolio Planning Impact CI Function and its Operations Role of Internal CI versus Consultants Key Counter Intelligence Concepts Summary and Conclusions

53 Role of Internal CI Group Establish CI role and customer base Create CI processes and procedures Provide planning support to operational people for portfolio planning Identify and prioritize Key Intelligence Topics (KITs) Manage and allocate CI investments Enhance and improve the CI process

54 Role of Consultants Supply manpower to supplement internal CI group to handle workload on timely basis Provide expertise and contacts to support internal CI projects Provide objective view free of internal politics and influence Serve as anonymous collector of CI for client so as not to reveal interest in area Ensure focus on key issues as needed

55 CI decides on use of Consultants Internal CI group decides on utilization of consultants –Supplement manpower –Play a specific role –Partner in CI effort Internal CI has more access to private databases and must decide on how much to share or provide information to consultants

56 Agenda for Presentation Government impact on Industry Dynamics Portfolio Planning Impact CI Function and its Operations Role of Internal CI associates and Consultants Key Counter Intelligence Concepts Summary and Conclusions

57 There are different levels of exposures Questions at R&D day Questions on Wall Street Questions at Congresses Physician interviews Industry Meetings Hacking into systems Breaking into buildings Stealing documents Bribing employees Patent filings CMPM Minutes Web Sites Press Releases Govt Reporting Bugging meeting rooms Breaking into hotels Stealing documents Intercepting faxes Planting a mole Legal Illegal

58 What are the initial steps to defend yourself? 1.Identify critical information that needs to be protected 2.Analyze the threat of competitor obtaining this critical information 3.Analyze the vulnerabilities in the organization that a competitor can exploit 4.Assess the risk of a competitor utilizing an approach to exploit the vulnerability 5.Apply appropriate countermeasures

59 Why identify critical information? A job done everyday becomes mundane Thus, the person working on it no longer understands that this is proprietary So by identifying it as critical and stressing this to the individuals involved, the awareness is raised back to the correct level of importance

60 Where do leak happen? Congresses where scientists or physicians are presenting on a compound Physicians working on your trials Suppliers Vendors Industry Meetings Field Forces Investment Analysts

61 Selling the companys potential and meeting reporting requirements cant be stopped Congresses where the company is trying to build excitement about its pipeline and build momentum with physicians Investment Analysts receive a lot of guidance and have access to senior management to encourage investment in the firms stock SEC reporting is required by government agencies

62 But some sort of balance is needed! Selling and PromotingProtecting your strategies TIMING IS THE KEY!!!

63 Misinformation can be dangerous Misinformation can be illegal if it misleads investors SEC filed fraud case against Germanys E.On AG (holding company) when it issued false statements in Germany since it also had stock on U.S. exchange

64 What are some things you can do? Form multidisciplinary watch committees Assign responsibility for handling suspicious phone calls and surveys Limit access to sensitive information Mark and control documents Limit what employees carry on trips Assume all international fax, phone and s are intercepted

65 Keep Awareness High Regular communications on subject –Training courses – updates (Pfizer has cartoons to emphasize key points sent out weekly) Annual renewal of employee confidentiality agreements by having each employee sign a new form Include in staff meetings to discuss any suspicious activity or level of balance needed

66 Points to Remember You cant protect everything You cant protect anything forever BUT Never make it easy! Never make it cheap! Dont just give it away!

67 Agenda for Presentation Government impact on Industry Dynamics Portfolio Planning Impact CI Function and its Operations Role of Novartis Industry Research (CI) Group Role of Consultants Key Counter Intelligence Concepts Summary and Conclusions

68 CI Creates the Future View Projecting how competitive pipeline products are progressing in the clinics and what the expected positioning will be once it hits the market Determining the status of generic threats against the portfolio Handling special projects across all functions when it involves investigating competitors activities

69 Thus, the CI Focus is not on Customers Clinical Developmental Physicians and Staff Thought Leaders Vendors and Suppliers Functional Experts Ex-employees Special Interest Groups Industry Organizations

70 Goal for CI Functions CI ultimate goal should be to serve as backbone of strategic and operational planning process Tactical collection of competitive processes and product developments should result in projections of future competitive environment This process allows management to better allocate resources and maximize return on investments

71 Summary of CI Role The CI function was created to improve the planning cycle by collecting detailed competitive information to project future environments Most CI departments started within a functional area supported by local management The challenge is to expand and integrate the CI function across the organization

72 Thank You ….. Q&A


Download ppt "Pharmaceutical Industry Dynamics that drove the formation & growth of the Competitive Intelligence function Neil Mahoney – President Global Business Management."

Similar presentations


Ads by Google