Evidence of health outcomes is what payers want to see. As a result, biotech companies are now focussing more on demonstrating economic value, for example, by showing survival benefit of a cancer drug or superiority to branded or generic competitors.
In an article ‘Adapting to a rapidly changing environment,’ which featured in Ernst & Young’s annual biotechnology industry report, Beyond Borders: Matters of Evidence, Denise Pollard-Knight, managing partner of Phase4 Ventures, explained that the focus is no longer on chemistry, manufacturing and control data but on data related to reimbursement. It is important that biotech companies understand the overall competitive landscape such as payer attitudes, competing products and the size of the market, amongst others.
The industry is undoubtedly undergoing change, and at a rapid rate too. Besides working on demonstrating product value to payers, companies also need to be aware that the standard of care is evolving in the background. Pollard-Knight urged companies to ensure that their clinical trials are designed flexibly so that the studies can be adapted to changing market conditions.
“In oncology, for example, new therapeutics are being approved all the time—often by combining two or more medications. If you are in Phase II trials and can’t add an arm to your study to incorporate a new therapeutic, your study may be out of date before it’s completed,” said Pollard-Knight. “You might have to adjust to other surprises as well—some compounds might get delayed and others move faster than expected, or you might learn about products you didn’t even know were in development.”
Companies should also consider how their products can be differentiated in a Phase II trial, whether through biomarkers, flexible dosing or lower toxicity thereby allowing safe administration of higher doses, or by identifying a niche their products, for example, relapsed patients or a subset of patients who cannot be treated with current therapies because of certain side effects.
A key step in this process is to put yourself in the shoes of the larger company in a partnering deal and ask what differentiation the buyer or in-licenser will want to see, according to Pollard-Knight. She emphasized that pharma companies are much more focused on pricing and reimbursement and most mergers and acquisitions are now being based on earn-outs and milestones tied to sales. Product differentiation is therefore required to succeed. Moreover, Big Pharma has higher expectations on Phase II data.
Pollard-Knight concluded that for companies to succeed in a rapidly changing competitive environment, they must keep an eye on market developments and understand the changing standard of care regardless of the development stage of their products. Product differentiation is essential and companies must understand what it takes to achieve it.