Prescription medicines trends: an overview and perspective on two therapy areas

Transcription

1 Prescription medicines trends: an overview and perspective on two therapy areas Sarah Rickwood, Vice President, IQVIA Copyright 217 IQVIA. All rights reserved.

2 We will discuss four issues Global prescription medicine volume growth is decelerating Global prescription medicine value spend has also decelerated Antibiotics are a therapy class challenged by unmet need but innovation deficit Orphan drugs for rare diseases see high levels of innovation but budget challenge 1

3 A word on value measurements Where IQVIA data is expressed at value level in this presentation, this is at ex-manufacturer level, list price List price List price is a price level for a medicine either publically available or estimated from public sources, from which nonpublically available discounts or rebates may be made, meaning the actual price the manufacturer realises is in fact lower. These non publically available rebates/discounts can be substantial- it is now estimated that the average discount in the US to private insurers is now 41%, up from 28% in 212*. These rebates and discounts are also almost entirely non transparent, with confidentiality agreements between buyer and supplier frequent. Ex-manufacturer level This means that margins added by wholesalers, retail pharmacies and any other elements of the distribution chain to the patient are not captured, nor are any other tariffs of taxes. In many countries these are regulated margins. In some countries they are not. A certain level of mark-up added by distributors is the necessary cost of delivering medicines to patients safely, securely, and reliably by commercial enterprise. However, in some countries where distribution margins are unregulated and/or distribution is inefficient and involves many actors, mark-ups can substantially increase the cost of medicines to the patient. * Wells Fargo report, January 218 2

4 Trn Standard Units, Total world, audited and unaudited Global prescription medicines volume growth slows; Pharmerging markets have seen the strongest slowdown 5, CAGR CAGR CAGR % 4, 2% 3, 5% 4% 3% 2, 8% 1, 2% % 1% Pharmerging Others Source: IQVIA Institute, Oct 217. Pharmerging is a group of IQVIA defined pharmerging markets characterized by less than $3k GDP/capita and greater than $1bn absolute prescription medicines market growth potential between 214 and 219. The markets are: China Brazil India Russia Mexico Turkey Poland Saudi Arabia Indonesia Egypt Philippines Pakistan Vietnam Bangladesh Argentina Algeria Colombia South Africa Chile Nigeria Kazakhstan

5 Pharmaceutical volume per capita varies widely in pharmerging countries, as does the potential for growth RUSSIAN FEDERATION POLAND KAZAKHSTAN BRAZIL CHILE TURKEY EGYPT COLOMBIA SOUTH AFRICA SAUDI ARABIA ARGENTINA ALGERIA VIETNAM THAILAND PAKISTAN CHINA INDIA BANGLADESH MEXICO PHILIPPINES INDONESIA NIGERIA Pharma SU volume per capita index for Pharmerging countries for 217 and 222 Original branded products (protected or unprotected) represent 7-15% of pharmerging medicine volumes and 19-34% of list price ex manufacturer value; most volume/value is nonoriginal high income markets Volume in SU per capita = = 1, = 1, Index of SU Per Capita to Developed Markets Average in 217 SU Per Capita Incremental to 222 Source: IQVIA Institute, Oct 217. Pharmerging is a group of IQVIA defined pharmerging markets characterized by less than $3k GDP/capita and greater than $1bn absolute prescription medicines market growth potential between 214 and 219. The markets are: China Brazil India Russia Mexico Turkey Poland Saudi Arabia Indonesia Egypt Philippines Pakistan Vietnam Bangladesh Argentina Algeria Colombia South Africa Chile Nigeria Kazakhstan Note: High Income markets are known for wider adoption of newer therapies whose clinical importance is often understated in Standard Units. Pharmerging markets are known for historically less well resourced health systems and often use oral and older medicines to a greater extent. The index may overstate the gains being made by Pharmerging markets relative to more clinical or health outcomes based measures. Although the South African market has been strongly affected by weak economic growth, changes in data coverage may also affect this market s recent history.

6 Spending US$Bn Growth Constant US$ Global Market Spending, based on list price, to grow 3-6% in value in the next five years 1,6 1,4 1,2 1, 8 Global pharma spending and growth Resurgence of spend on innovative medicines in high income markets, list price growth in US, peak Hepatitis C spend 12% 1% 8% 6% 216 IQVIA estimate of difference between list price and net sales for the US=33%, or $148bn 216 IQVIA estimate of difference between list and net for rest of world= 18% or $96bn Heavy small molecule genericisation Economic austerity in US/Europe/Japan Moderating growth of pharmerging medicine spend 4% 2% An estimate of the difference between list price and net value is therefore 25% globally, but with substantial caveats % Spending Growth Source: IQVIA Market Prognosis, Sept 217; IQVIA Institute, Oct 217- Outlook for Global Medicines through 221 5

7 Below this list price picture, rebates and discounts have grown strongly, although recently moderating in US Global and US difference between gross (MIDAS list price) and estimated net pharmaceutical market value (29-16) 35% 3% 25% 2% 15% 1% 5% % Rest of World US Rest of World Data Calculation based on the ratio of MIDAS sales and company reported Net sales on a product by product basis Starting universe of 297 products representing 11% of MIDAS sales (216) and 9% of RoW sales 216 RoW value (18% discount) constructed from 112 data points Caveats Crude calculation no distinction possible between high and low income economies outside US, but this is likely skewed to high income countries Starting universe of products are company reported so typically new products or those with significant sales for a publically quoted company. No Generics contribution. Notes: US calculation from IQVIA Institute; RoW calculation using a universe of 297 products representing 21% of MIDAS sales in 216; Anomalous products excluded Source: IQVIA Thought Leadership Analysis, IQVIA Analytics Link, IQVIA Institute; IQVIA MIDAS MAT Q

8 Inefficient use of existing medicines generates avoidable costs: non compliance is the biggest cost, antibiotics misuse third The inefficient use of existing medications, whether on or off patent, incurs substantial, avoidable costs for healthcare systems Estimated avoidable costs (212) bn USD Non-adherence 57% 269 Non-adherence to prescribed medicines regimens is the single greatest avoidable cost- although a perennially challenging issue, even small improvements would result in substantial savings Delayed evidence-based treatment practise Antibiotic misuse 11% 54 Medication errors 13% 62 9% 42 Antibiotic misuse (antibiotic use for non bacterial infections) was the third largest source of waste, and, although it has seen recent substantial effort to address, cost 212 healthcare systems $54bn in avoidable spend Suboptimal generic use 6% 3 Mismanaged polypharmacy in the elderly Total avoidable costs 1% 4% Source: IQVIA European Thought Leadership; IQVIA Institute 212 Responsible use of Medicine 7

9 Antibiotics and orphan drugs: opposite ends of the innovation spectrum How do medicines challenge healthcare systems? What is the impact of regulation and commercial activity? Antibiotics Orphan drugs Market features Payer/provider actions Commercial impacts Regulation/policy High prevalence conditions, acute Established treatment paradigm High share of generic standard of care Focus on generics for the broadest population Focus on reducing unit cost (where payers are institutions or governments) Action to reduce mis-use (but still a major problem and source of unnecessary medicine spend) New products may see restricted use as antibiotic of last resort - sales are low Commercial launch of new antibiotics was historically frequent but is now rare Significant global legislation and action to manage antibiotic use and contain resistance GAIN provision as part of 212 FDA safety and innovation act (US) aims to improve commercial attractiveness with additional 5 years exclusivity EU Innovative Medicines Initiative ND4BB program and setting up of JPIAMR since 1999 Extremely low individual prevalence conditions (although there are many of them) chronic Emerging/radically changing treatment paradigm No or low share of generics Cost per patient is high and a growing concern in high income markets Individual products can have low sales, but collectively treatments for rare diseases are a growing element of high income market medicine spend Orphan drugs increasingly the subject of strict price negotiation and health technology assessment Commercial launch of new orphan drug treatments was historically rare but is now frequent and increasing However, only an estimated 5% of rare diseases currently have a pharmacotherapy 1983 Orphan drug act (US), 2 Regulation (EC) 141/2 (EU) both have given substantial encouragement to companies developing drugs for rare diseases Japan, Singapore and Australia have also enacted legislation which encourages development of orphan drugs 8

10 Usage of systemic antibiotics declines in high income markets; from 216 we see the same trend for pharmerging markets Systemic antibiotics* Sales in Volume (Bn SU) +1.7% -2.7% +1.9% -3.4% % -2.3% Global Pharmerging Top7 Standard Unit volume for Systemic antibiotics falls in both pharmerging markets (low/middle income) and high income markets Volume decreases in China, Brazil, Turkey, South Africa, Thailand, Philippines, Saudi Arabia, Poland, Vietnam and Chile (1/2 pharmerging markets) Volume rises in Kazhakstan, Algeria, Egypt, Pakistan, Russia, India, Bangladesh, Argentina, Colombia, Mexico Source: IQVIA European Thought Leadership; IMS MIDAS Q3/217; *only systemic antibiotics (ATC J1) 9

11 Global New Active Substance launch has seen very little activity from systemic antibiotics 6 NAS launches # Antibiotic NASs Note: 217 NAS data is provisional and is subject toc change ; NAS=New Active Substance; Antibiotics include the following ATC3s J1A,B,C,D,E,F,G,H,K,L,M,P,X,J3A,J8 Source: IQVIA MIDAS NAS analysis Q

12 In contrast, orphan drug approvals in Europe have risen substantially since 2 legislation 2 15 Orphan drugs in Europe with European Market Authorisation by approval year (28-16) 135 in total were approved between 21 and medicines were reviewed by the EMA for orphan designation since * As of 216: 9 are approved Orphans 45 have been withdrawn 11 were refused designation 91% (82) of approved Orphan drugs in 216 (9) have sales in Europe in MIDAS Source: European Medicines Agency October 217; *to Oct 217 only 11

13 PPG% Growth of orphan drug sales value decelerates in Europe, share of total pharmaceutical list price spend is 3.5% Orphan drug share of total sales of pharmaceutical use in Europe has increased from 1.5% in 27 to 3.5% In 216 7% 6% 5% 4% 3% 2% 1% % -1% -2% -3% Share of Drug Sales ( ) Growth of drug sales (LC ) Orphans growth rate Non Orphans growth rate 1.5% 1.9% 2.2% 2.7% 2.2% 2.3% 2.6% 3.% 3.3% 3.5% Source: IQVIA MIDAS MAT Dec 216 Note: Products are classified as Orphan in any given year, but after this year may have been withdrawn, and before this year may have been non-orphan 12

14 Concluding points There is currently both volume and value deceleration in spend on Rx medicines globally Many pharmerging markets (where majority of volume and value is off patent) are substantially behind the high income markets in terms of use per head of modern medicines, and current growth rates will not close that gap Avoidable costs to healthcare systems of mis-use of prescription medicines equated to 49% of total list price Rx market value in 212, with compliance the leading cost and antiobiotic mis-use third Orphan drugs see growth of innovation with enabling legislation but costs challenge high income markets Antibiotics see innovation dearth and yet to see impact of policy on new drug approvals 13

15 21 countries IQVIA s definition of Pharmerging Markets: middle-low income countries that have significant potential for list price, ex-manufacturer market growth Pharmerging Definition GDP per capita less than $3, >$1Bn US$ or LCUS$ in absolute 5yr growth ( ) China Brazil Mexico Bangladesh India Turkey Argentina Russia Poland Algeria Saudi Arabia Colombia Indonesia South Africa Egypt Chile Philippines Nigeria Pakistan Kazakhstan Vietnam Tier 1 Tier 2 Tier 3 Tier definition > 1Bn US$ sales in 214 >15Bn US$ sales in 214 >1Bn US$ or LCUS$ in absolute 5yr growth ( ) Source: IQVIA Market Prognosis