Managing Biotechnology

Chapter 5Precision Marketing

Introduction

From consumer trends to regulatory scrutiny, payer power, and portfolios, many factors are leading to a new landscape for biopharma marketing strategy. Drug spending has gained top visibility, triggered in part by Gilead's launches of Sovaldi (sofosbuvir) and Harvoni (ledipasvir/sofosbuvir) and what was perceived as their high price in the large hepatitis C market, and by increased government scrutiny of pricing practices. Aging demographics across countries contribute to pressures on health budgets. Total spending on prescription drugs in the United States rose nearly 6 percent to almost $450 billion in 2016, despite generic utilization rates of nearly 90 percent. Average copays for patients covered by commercial insurers have also grown by more than 25 percent since 2010 [1].

Despite the negotiating power of government payers outside of the United States, the trend is global. According to Quintiles IMS, worldwide medicine spending is forecast to reach nearly $1.5 trillion by 2021, with a compound annual rate of growth declining from recent years but still reaching a 4 percent to 7 percent rate over the next 5 years. In that period, a key spending driver will be oncology with a compound annual growth rate of 9 percent to 12 percent, largely similar to the last 5 years [2]. Consumer pricing concerns have become top issues. According to an online Harris Poll of 2,255 US adults, 69 percent said they would choose a generic more often, ...