Ernst & Young highlights oncology market trends
July 2, 2009 – 10:40 am by Gina Monari
The convergence of a number of factors is set to continue to drive growth and investment in the oncology market going forward. According to Andrew Jones, senior industry analyst, Pharmaceutical Sector Team, Ernst & Young (ey.com), these factors include high unmet need, favorable demographics, defensible technology, and specialty economics. Despite progress made during the past decades, there remains a high degree of clinical unmet need for therapeutics and preventative interventions.
“This presents innovative companies with the opportunity to help meet important medical needs and justify price based on the effectiveness of their products,” Mr. Jones told Med Ad News.
Increased life expectancy, aging populations, and modern lifestyles will drive demand in mature western markets. Similarly, cancer presents a significant disease burden in emerging markets and this is likely to increase as life expectancy increases and as Western lifestyles become increasingly prevalent. From an investment perspective, new technologies, such as therapeutic antibodies and preventative vaccines, have proven significant utility in their ability to improve clinical outcomes.
“To date, in the absence of biosimilar products these technologies often provide companies with a highly defensible market positions,” Mr. Jones says.
As a specialty sector, the economics of sales and marketing are often more favorable than can be achieved when promoting products in primary-care settings. As such, the sector aligns with the efficiency initiatives occurring within many pharmaceutical companies.
In certain markets, however, pricing and reimbursement is becoming a significant challenge for patients, payers, and innovator companies. In the United Kingdom for example, these include drugs that have been recently rejected by the National Institute for Clinical Excellence on the grounds of cost effectiveness. Flexible pricing, cost, and risk-sharing agreements between payers and companies offers a potential fix by enabling products to gain market access and prove their value.
Celgene Corp.’s cost-sharing agreement with the UK National Health Service for Revlimid is a recent example. Revlimid is an oral cancer drug used for the treatment of multiple myeloma. The drug is part of a class of drugs called immunomodulatory drugs, which work against cancer cells by affecting the functioning of the immune system.
Few deals, however, have been struck to date and risk-sharing propositions are not always accepted by
payers. For example, GlaxoSmithKline Plc.’s risk-sharing offer for the oral breast cancer drug Tyverb was rejected by NICE. The company had offered to cover the cost of Tyverb for up to the first 12 weeks of treatment, after which the NHS would fund the drug only for those patients continued to experience clinical benefits. Tyverb is an oral treatment for breast cancer.
“The future promises to offer patients technological solutions enabling more comprehensive disease screening, earlier diagnosis, and ultimately increased life expectancy, yet the factors that limit the market are unlikely to be about the technology but about economics,” Mr. Jones told Med Ad News.
In many countries, technological progress is likely to be set against a backdrop of top-heavy populations characterized by a reduced tax-base and increased demand for services. This raises the prospect of affordability, regardless of a medicine’s cost-effectiveness, becoming the ultimate driver of reimbursement decision-making for expensive oncology medicines.
Editor’s note: Look for more in-depth information about the future of the oncology market in August’s issue of Med Ad News.
