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Pharmacogenomics will lead to predictable patient outcomes, so drug companies will change the way they price, market, and distribute genomically produced drugs
Pharmacogenomics will lead to predictable patient outcomes, which will drive drug companies to change the way they position genomic drugs, according to Juliet J. Goodfriend, chairman of Strategic Marketing Corp., a market research firm in Bala Cynwyd, Pa.
"There is nothing more attractive to a physician, with his pen poised above his pad, than to know that the drug of choice is going to give his patient relief," said Goodfriend. She was speaking to pharmacists and managed care professionals at the 13th Annual National Managed Health Care Congress, held recently in Atlanta. "Doctors and patients don't want surprises," continued the consultant. "They would rather have no response at all than to have an adverse effect."
Predictability is the catalyst that is turning the big disease markets into small ones, she continued. Divide and conquer may well describe the emerging path of the pharmacogenomic industry. "The big diseases must be divided to be conquered," explained Goodfriend, indicating that this will have a major impact on the business model and marketing strategies of the pharmaceutical industry and on those that dispense or pay for drugs.
In light of this shift in the marketplace, Goodfriend predicted that the maturation of genomics, which is currently in the early stages of research, will be the biggest influential factor on the pharmaceutical industry. Pharmacogenomic companies today generally cannot launch more than 1.5 new chemical entities per year, because the larger pharmaceutical companies are focused entirely on marketing only blockbuster drugs, she said. However, if pharmacogenomics delivers on its promise, predictable mergers will propel the industry forward, allowing these companies to produce much more, she said.
Goodfriend observed that a number of transfor-mations must take place before drug firms are ready to tackle the task of marketing genomically produced narrow-spectrum drugs targeted to specific disease sites, instead of the more broad-spectrum approach. "At the point of commercialization and market launch, we will begin to see a significant change in the way pharmaceuticals are marketed, including scale changes, margin changes, distribution changes, and payment algorithm changes," she said.
Genomic products, coupled with a number of other marketed drugs, will be designed for use in patients with specific genetic targets. "The resultant microsegmentation of the disease market will be specified at the point of care by the physician, using new diagnostic tools, with tremendous ramifications on how [pharmaceutical companies] do business," Goodfriend said. "No longer will a drug company be justified in marketing a shotgun drug to a wide audience."
"Today, pricing is based largely on what the market will bear," Goodfriend pointed out. In tomorrow's market of small but invariably effective and well-tolerated genomic therapies, it is still unknown what the market will bear.
Historically, many managed care organizations have not evaluated the cost-effectiveness of drugs from a societal perspective but have instead identified thresholds that detect costly drugs based on volume. High prices can be readily sustained in MCOs if the volume of patients is low, said Goodfriend. And in this new market, the volume will be low, but whether third-party payers will embrace pharmacogenomic therapies remains to be seen.
"We have found that patients' short-term membership in MCOs has long discouraged most agenciesat least the nonvisionary onesfrom paying for preventive therapy," said Goodfriend. "Members themselves seem deterred by the insurance industry from having the predictive diagnoses done that would mark them as diseased or at higher risk. We need to rethink these price-premium PMPD (per member, per day) payment schemes in light of the new therapies that will become available from pharmacogenomics."
Drug therapy advertising and promotion may become a thing of the past if genomic information becomes widely used by physicians to identify, predict, diagnose, and treat patients. With the patient's "genome identified, disease markers highlighted, selecting the correct therapy could become formulaic to the point that the specialist could conceivably stock a small number of the magic bullets in that specialty or send for the specific drug from the manufacturer," Goodfriend envisioned.
"One thing seems likely," she continued. "The local pharmacist could not stock all of these new [genomically developed] drugs unless he or she were given the tools for admixing them, much as is now done with intravenous solutions.
"The new math behind tomorrow's drugs will need to reexamine distribution," Goodfriend contended. "And it will be helped in doing so because of the inevitable and already evident convergence of health-care industries as a result of genomics," she concluded.
Leah Perry. How pharmacogenomics will change drug marketing.