OR WAIT null SECS
Ernst & Young recently released its annual biotechnology industry report, Beyond Borders: Matters of Evidence, stating that while the major players are performing well, it is essential that small- to mid-size biotech companies focus on demonstrating the value of products in their pipelines instead of just creating a drug that works.
Ernst & Young recently released its annual biotechnology industry report, Beyond Borders: Matters of Evidence, stating that while the major players are performing well, it is essential that small- to mid-size biotech companies focus on demonstrating the value of products in their pipelines instead of just creating a drug that works. If not, they will lose out in a challenging environment, especially now that there is a global shift towards evidence-based healthcare.
To succeed, companies must understand the needs of payers and patients, and make sure that their products are demonstrably aligned with the “value leakages” that matter most to these two constituencies. Issues such as reimbursement and pricing must be taken into account if companies are to make the most of their products.
“In today’s increasingly outcomes-focused, evidence-driven health care systems, biotech companies cannot afford to pursue an R&D strategy that only focuses on whether or not their drug works. They need to also understand whether it will be valued and reimbursed by payers,” said Glen Giovannetti, Ernst & Young’s global life sciences leader, in a press statement. “If you wait to address questions of value only as a product launch approaches, you do so at your own peril because pharma alliance partners-still the most viable exit option for most biotechs-now consider such data to be key drivers of their product and company valuations.”
The report identified what it calls an ‘implementation gap’ at most small- to mid-size biotech companies when it comes to gathering evidence to demonstrate how their products add value and improve health outcomes. According to Ernst & Young, “this gap has implications on the future ability of these companies to raise capital, obtain attractive deal valuations and be successfully reimbursed for their drugs upon approval.”
A survey of US and European biotech executives from 62 companies was carried out to explore how companies are adapting to evidence-based healthcare systems and the results indicate that far more focus is being placed on efficiency initiatives rather than on measures to collect evidence that will demonstrate product value.
The following key findings were reported by Ernst & Young: 94% agreed that it is “important” or “very important” for biotech companies to have a strategic focus on matters of efficiency and matters of evidence. However, when asked about implementation regarding matters of evidence, most companies indicated that they are unlikely to undertake specific evidence-focused initiatives. Of the respondents who rated evidence measures as “important” or “very important,” 11% have added payer/reimbursement expertise to their management teams, 13% have brought such expertise to their clinical development teams and only 4% have included people with such expertise in their boards of directors. On the contrary, for initiatives focussing on matters of efficiency, no such implementation gap was observed.
Ernst & Young urged companies to revisit their approaches to R&D and monitor evolving standards of care. It is important to identify the biggest unmet needs or failures that payers focused on the most. Companies can then align their offerings to fill these “value leakages” and design clinical trials that will provide compelling evidence for payers, for example, through head-to-head or adaptive trials.
Giovannetti advised biotech companies to debunk any myths that are holding them back, stressing that the shift to evidence is happening faster than anticipated, and it will affect companies regardless of their size, maturity or disease focus. “Many evidence-focused initiatives-engaging stakeholders earlier on issues of value and reimbursement, rethinking trial design or exploring pre-competitive data collaborations-don’t cost much and could even avoid of the expense of additional studies,” he said. “The question is not whether you can afford to do this, but whether you can afford not to.”