Challenges #2

Question 1

What is pharma?

Answer 1

A very large and complex growing part of the economy

Question 2

What was its market size in 2018 and what is it expected to reach?

Answer 2

$1.2 trillion, expected to grow to $1.5 trillion by 2023

Question 3

What becomes clear when looking at the current environment?

Answer 3

That there is a rising demand for effective medicines

Question 4

What brings opportunity?

Answer 4

The ageing population, with previously terminal illnesses now being viewed as chronic conditions

Question 5

What does the fact that previously terminal illnesses are now viewed as chronic conditions give rise to?

Answer 5

New, unmet medical needs

Question 6

What is happening to the developing world?

Answer 6

It is increasingly resembling the developed world, with the GDP of the E7 having tripled in the last 3 years

Question 7

What does the fact that this is all happening very quickly indicate?

Answer 7

A need to adapt and change in order to survive

Question 8

First major shift in the pharma landscape?

Answer 8

Globalisation

Question 9

Where was pharma’s main focus until recently?

Answer 9

Global market leaders, namely the US, China, Japan and Europe

Question 10

What are we experiencing with globalisation making people richer, and ultimately healthier?

Answer 10

The emergence of a truly global market with a rapidly expanding patient base

Question 11

As people become wealthier, what will this enable?

Answer 11

Society to pay for drugs and fuel demand for new therapies

Question 12

What exemplifies globalisation?

Answer 12

20 years ago, 20% of the Asian population were middle class; now, 1.5 billion fall in this category, representing a 15% increase that is associated with an increased demand for higher standards of living in terms of food, energy, transport, tourism and healthcare

Question 13

What do these fast growing economies with high GDP growth and fast-growing populations represent?

Answer 13

An increasingly attractive environment for pharmaceutical companies

Question 14

What have urbanisation and increasing international mobility enabled?

Answer 14

The rapid and widespread transmission of disease in a global scale

Question 15

What is now of great concern to the developed world?

Answer 15

Viruses that were previously isolated to small, impoverished countries or villages

Question 16

2 examples of urbanisation and spread of disease?

Answer 16

1. SARS virus moved from Asia to the Middle East within 3 days
2. H3N1 virus spread from China to SE Asia to Middle East rapidly

Question 17

What would be the impact of a pandemic flu in the West?

Answer 17

Huge - but will also present an exciting and lucrative opportunity for innovative players in the industry

Question 18

What has happened to healthcare spending in the US in the last 90 yrs?

Answer 18

It has gone up faster than GDP

Question 19

What does is the increased demand for healthcare spending fuelled by?

Answer 19

Changes in lifestyle, such as unhealthy eating, less sleeping, lack of exercise

Question 20

What do these changes in lifestyle result in?

Answer 20

Increasingly high obesity rates and other physical problems, such as diabetes

Question 21

How many people are living with diabetes, and what is this expected to grow to?

Answer 21

In 2019, 415 million people were living with diabetes, with 46% remaining undiagnosed. This is expected to grow to 650 million by 2040, highlighting a large, growing unmet medical need

Question 22

What are rising obesity rates correlating with?

Answer 22

Increased diagnoses of metabolic syndrome, which has been linked with some cancers

Question 23

What are the lifestyle trends consistent with?

Answer 23

An analysis predicting that the key therapy area driving healthcare spending and industry growth in the next 5 years will be oncology, with diabetes treatments continuing to rapidly evolve

Question 24

What is the 65+ population projected to be this year?

Answer 24

10% of the global population by 2020

Question 25

What factors contribute to the increased life expectancy?

Answer 25

Better living conditions Improved sanitation Better prevention of disease Growing access to medicine

Question 26

What is the proliferation of chronic disease having?

Answer 26

Serious repercussions in both developed and emerging countries

Question 27

What is true about obesity, cardiovascular diseases and diabetes?

Answer 27

These are now persistent, widespread health problems that will challenge public health systems to meet the increasing demand for drugs and treatment

Question 28

What do chronic conditions require?

Answer 28

Continuous support, treatment and other associated healthcare spending

Question 29

How many prescription drugs to older people take?

Answer 29

80% over the age of 75 take at least one prescription drug; 36% take 4 or more

Question 30

What does the 0.2oC increase in temperature per decade mean?

Answer 30

Diseases such as malaria, cholera, diphtheria and dengue are spreading to more developed, previously endemic areas

Question 31

What has global warming allowed?

Answer 31

The reestablishment of malaria in previously endemic areas such as Europe and the US, having already done so in Azerbaijan, Corsica and Georgia

Question 32

What else are increases in temperature associated with?

Answer 32

Increased risk of infection by microorganisms

Question 33

How is the replication rate of E. coli affected by increasing temperatures?

Answer 33

It has been found that for every degree above -10oC, the replication rate of E. coli increases by 6%

Question 34

What has been subject o extensive scrutiny by society?

Answer 34

The high cost of medicines, with governments and payers becoming increasingly aware of cost

Question 35

What has the high cost of medicines created?

Answer 35

A negative image for the pharma industry

Question 36

What has a recent Harris poll indicated?

Answer 36

11% thought the pharma industry was honest and trustworthy, compared to 20% of people who had faith in banks

Question 37

What does the high cost of drugs represent?

Answer 37

A financial provision by pharma companies to avoid litigation

Question 38

What is the drug discovery and development process?

Answer 38

Time consuming, complex and highly risky

Question 39

When can concerns over a compounds safety, efficacy or commercial viability become visible?

Answer 39

At any point from early stages of R&D, to clinical development, regulatory approval and later pricing stages

Question 40

What has the increased risk of litigation led to?

Answer 40

Reduced probability of bringing a drug to market, increased safety tests, and ultimately augmented the cost of drug discovery and development

Question 41

How many molecules make it to market?

Answer 41

1/10,000

Question 42

What is the price per patient in phase III?

Answer 42

$25,000

Question 43

What is the total cost of bringing a drug to market?

Answer 43

Approx. $2 billion

Question 44

What has changed about incremental science?

Answer 44

It is no longer rewarded due to increased risk and ambiguous returns, so pharma is failing to look for constant improvement out of fear of not being reimbursed

Question 45

What is the role of patents?

Answer 45

Incentivise innovation and enable pharma companies to achieve a return on their investment and also to fund further R&D

Question 46

What happens after the expiration of a typical 14 year patent?

Answer 46

Generics manufacturers can market 'bioequivelant' drugs that are the same as the branded drug, at greatly reduced cost

Question 47

What proportion of prescription drugs did generics account for in 2019?

Answer 47

88%

Question 48

What will occur as more and more generics enter the market?

Answer 48

Price erosion will intensify, posing a major threat to pharma's bottom line

Question 49

What is more important than ever in the face of increasing pressure due to patent expiries?

Answer 49

Innovation is more important than ever for growth

Question 50

Where must effort be made within the pharma industry?

Answer 50

In the space of research and innovation, with a strong focus on unmet medical needs

Question 51

What happens as research increases the knowledge of various diseases and biological pathways?

Answer 51

This will increase the number of therapeutic targets and therefore increase the ability to treat and prevent disease

Question 52

What is an imperative for the pharma industry?

Answer 52

To increase productivity within R&D investment by delivering clearly differentiated medicines

Question 53

What will be key in increasing productivity within R&D investment?

Answer 53

Externalisation and creative deal-making

Question 54

What major shift are we observing?

Answer 54

From in-house research to speculative buying and development

Question 55

Why is speculative buying beneficial?

Answer 55

It eliminates some of the risk and fixed costs associated with drug discovery and development for pharma companies

Question 56

What has the nature of competition shifted from and to? What does pharma need to do?

Answer 56

From "scale and stability" to "innovation and change", meaning that pharma needs to segment into small, lean and fully segmented business units that can innovate and rapidly respond to change

Question 57

Why is innovative science crucial?

Answer 57

Because it is now first, and not best, in class

Question 58

What is innovation in healthcare being driven by?

Answer 58

More than ever by advances in technology, such as NGS enabling advances in personalised medicine and targeted therapies, which have the potential to drastically cut R&D costs while bringing great value to the end user

Question 59

What is happening with these breakthrough techniques?

Answer 59

Techniques developed in the lab are reaching the clinic at an accelerated rate, with the potential of having a major impact on healthcare

Question 60

What will the increasing application of IT and mobile tech foster?

Answer 60

Evidence-based medicine, while driving healthcare from an acute setting to the community, which is likely to reduce costs

Question 61

What is ultimately needed?

Answer 61

A balance between performance and organisational health

Question 62

What is meant by organisational health?

Answer 62

The ability of an organisation to align, execute and renew itself better than the competition

Question 63

What are the characteristics comprising organisational health?

Answer 63

Direction, accountability, coordination, motivation and EXTERNAL ORIENTATION, LEADERSHIP, INNOVATION & LEARNING