Personalised Medicine (PM), also called precision medicine, targets the therapeutic component of the treatment regime based on the diagnostic test characteristics, typically including genetic profiling, of the individual patient rather than population-based norms. The personalised medicine approach is changing the way medicine is practiced, especially for cancer (late-breaking sales figures indicate half of oncology drug sales last year were targeted medicines), and other therapeutic areas, such as infectious disease, will follow suit but more slowly. Nonetheless, use of personalised medicines is indeed growing, and globalizing. How fast this will happen in the emerging markets (EMS) of the Asia-Pacific region depends on a number of factors presented in the article.
Personalised Medicine (PM) is the wave of the future, but will the waves be bathing the shores of Asia-Pacific with the same market force as they do on either side of the Atlantic? Personalised medicine, also called precision medicine, encompasses treatment approaches that target the medicines used based on the characteristics of the individual patient rather than population-based norms. Those individual characteristics, in turn, are based on diagnostic tests, which would typically assess the genetic profile of the patient to determine the appropriateness of available treatments. In the most targeted approach, companion diagnostics are actually co-developed with the drug and the labelling reflects that the drug-diagnostic combination comprises the recommended or required regime. In another approach, complementary diagnostic tests can be used more broadly to assist the Healthcare Practitioner (HCP) in identifying the right medicine, monitor treatment status, determine likelihood of side effects etc. The advent of the age of personalised medicines heralds some very positive changes in the way medicine is practiced, but it is in its infancy, as the first personalised medicine, Herceptin, hit the market at the end of the 1990s and the availability of such medicines has only recently become more of a reality than a novelty. Use of Personalised medicines is indeed growing, as IMS reports that 46% of global oncology sales were targeted therapies in 2014. PMs, both old and new, are not only transforming the landscape of the major markets of Western Europe, Japan and the US, but are making inroads into global markets as well. How fast will PMs grow and how fast will they spread to the Asia-Pacific markets depends, on a number of factors.
Although some consider the APAC market to be overestimated in terms of likely sales by as much as US$50 billion—especially in view of the recent downgrade of GDP predictions for the region by the World Bank and the IMF—others feel that the current slowdown in the blooming of the EMs in the region are the lingering effects in the global aftermath of the US recession. Indeed if the biopharmaceutical market sales for 2009 to 2014 come in as expected for Southeast Asia (including China and India) at about US$150 billion, it will represent a 16 per cent CAGR and the share of the global biopharma market will have jumped from 9 per cent to 16 per cent in just a five-year period. Certainly, the demographics and GDP performance of India and China are positive indicators of the size and strength of those markets. Over 50 per cent of the world’s population which is above 65 in age lives in Asia-Pacific but their contribution to the age pyramid varies with China, South Korea and Thailand at just over 7 per cent, but Japan at 23 per cent (nevertheless, even at its current rate of ageing, by 2020 China will account for 46 per cent of the elderly worldwide). GDP growth is even more dramatic, 10 per cent of Chinese households possess 40 per cent of the wealth and for India 50 per cent of the wealth (see Figure 2). Together then, India and China, would have a wealthy adult population equal to that of the United States or Europe. With an ageing population, cancer absorbs a much greater proportion of the health dollar, and with increased spending power, wealthy Asians will be looking for the best treatment that money can buy.
Meanwhile, consultant surveys point to a number of market access problems in the emerging markets. For example, lack of reimbursement and public funding, lack of healthcare infrastructure, lack of affordability, price pressure, all scored 3.8 or higher (scale: most relevant = 5 vs. least relevant = 1), while regulatory and market access restrictions and reference pricing were considered major or moderate threats by half to 2/3 respondents in another expert survey. In India, for example, 78 per cent of total expenditure on healthcare is out-of-pocket (OOP). Also in India, patented drugs are available at 27 per cent of the prices in China, Mexico and South Africa and account for only 0.9 per cent of the Indian drug market by dollar totals. In China, McKinsey reports that hospital costs outweigh revenue, which they have buffered by over-prescribing drugs, but the government is seeking to reform the payment system and cost structures to decrease this reliance.
Distribution is another challenge to access: the number and complexity of ‘middlemen’ (e.g., China –currently 9,000 distributors being deconstructed under five year plan), or challenging geography (e.g., islands of Indonesia). One option for tackling with this challenge is to deal with regional buying consortia (e.g., such as ones that exist among the small island counties of the Caribbean). Another option is…city not country market. The UN climate change panel predicts that the growth rate of the world's urban areas will equal two Manhattans a day until 2030. China has 50 cities with over a million people. Or go even smaller—focus marketing efforts on a few specialty centres within cities or countries. This may be a viable strategy for dealing with China’s immensity and complexity, where hospitals are the dominant distribution channel(s), but according to Decision Resources, only 6 per cent are considered to be tier 3 at which hi-priced biologics are most likely to be administered as of 2010.
Study of economic analyses of genetic tests in personalised medicines indicates that the most common therapeutic areas among the cost utility analyses were cancer at 39 per cent and infectious diseases at 15 per cent. In terms of market entry points for personalised medicines, these are the most likely therapeutic areas. Cancer drugs can be viewed as part of the problem, or part of the solution, by third party payers. Worldwide sales of branded prescription cancer drugs by the top 40 pharmaceutical companies globally amounted to US$61.6 billion in 2012, but that is only 5.6 per cent of the total cost of cancer to society, as estimated by IARC in the WHO World Cancer Report 2014. Although globally, tumour profiling was worth US$13.3 billion in 2012, with a CAGR of 18.5 per cent that will grow the market to US$35 billion by 2018, providing market entry for Molecular Diagnostics (MDx) in general, its use in infectious diseases is what really drives the market for linking molecular testing to precision treatment. Personalised medicines for infectious diseases may play the role of a loss leader in precision medicine. Health Care Systems (HCS) in the APAC increasingly realise that they can no longer treat infections indiscriminately with antibiotics at hand. In other words, they will have to ‘identify to prioritise.’
Gastro-intestinal infections, for example, have high heterogeneity of results, and variation in pathogens tested; respiratory bugs, death rates for pneumococcus in children <5>
How do patients in the emerging markets feel about MNC brands in general? In the Credit Suisse 4th annual survey of emerging market(s) (EM) consumers, 60 per cent said they were not willing to pay any premium for international brands; about 30 per cent would consider a 0-10 per cent premium; and, about 10 per cent would consider a >10 per cent premium. On a more specific country level, another survey found that where trust in local brands was high, as in Indonesia, there was less willingness-to-pay (WTP) for foreign MNC brands, compared to countries where trust (in local brands) was lower, as in China, WTP was higher. The biggest mistakes by big pharma in the EMs are insufficient tailoring of approaches to local needs; lack of patience, and a long-term strategy. However, some MNCs such as Sanofi have been judged, even by their peers, to be models of success in the EMs. How did Sanofi do it? By having a big presence. In China, for example, Sanofi has 11 regional offices, 7,000 employees (4,000 in sales), six manufacturing sites, and a regional R&D platform. In fact, using local partners, licensing, acquisitions, expansion of known brand to build loyalty, and local presence are often prerequisites for any MNC to be successful in the EMs, especially China, India, South Korea, and Taiwan. Working with local MDs is advisable for learning about regional clinical practices, especially in case of cancer types less prevalent in the US (e.g., GI stromal tumours), and dosing levels (e.g., genetic differences with 30 per cent of Asians having P4502C19 gene variation that limits the ability to metabolite up to 15 per cent of all clinically useful drugs, compared to 6 per cent of Caucasians with this variation). Other tactics used in China as market entry points are local acquisitions, or working with local partners as Roche which is working on basic biomarker research in China-specific cancers like nasopharyngeal cancer. Another tactic is to provide equitable access to critical drugs through tier pricing, especially in next wave EMs, e.g., Indonesia and the Philippines; where there are instances of big pharma lowering prices dramatically, e.g. Sanofi for Taxotere by as much as half.
In terms of what’s currently trending in the PM market, cancer drugs dominate. Six out of the top 10 best-selling cancer drugs worldwide in 2013 were PMs: Rituxan (US$8 billion, NHL, CLL); Herceptin (US$6.56 billion, breast, esophagus and stomach cancers); Gleevec (US$4.7 billion, leukemia, GI cancer); Alimta (US$2.7 billion, lung cancer); Erbitux (US$1.9 billion, colon, head & neck cancers); and, Revlimid (US$1 billion, multiple myeloma, mantle cell lymphoma). Owing to the obvious success, examining the experience of these market leading drugs is instructive for the prospects of the field as a whole.
Biosimilars are changing the life cycle prospects for personalised medicines. For example, Rituxan has been a target for biosimilar competition but would-be competitors have found it a tough go technically, and South Korea’s Celltrion, for example, abandoned its attempts late-stage. Herceptin, the pioneer of PMs, has had a good 15-year run, and remains Roche’s third best-selling drug, attesting to the potential for remaining profitable in a highly competitive field due to first-mover momentum, brand loyalty, scientific complexity, as well as high thresholds for regulatory approval and reimbursement. Nonetheless, in the APAC market, competition is knocking on the door. Mylan and Indian partner Biocon have launched their own versions in India, and South Korea’s Celltrion has a biosimilar that competes in Korea, while Hospira has an aggressive biosimilar programme under way, no doubt looking to compete globally.
Fighting off competition as the patent cliff looms is another Herceptin experience in the APAC. In China, Herceptin sold at a 75 per cent discounted rate due to a cost-sharing deal between Jiangsu provincial government and Roche (who donated 8 vials of Herceptin if they bought 6) to avoid competition from copycats, a deal believed partly responsible for a four-fold increase of Herceptin patients who say they would rather pay a year’s income than suffer nausea/vomiting from chemotherapy. Roche was also pursuing an insurance approach with re-insurer Swiss Re, by offering private insurance for cancer, which garnered 20 million customers by the end of 2013, a 66 per cent increase over what was expected. In India, a vial of Herceptin costs more than 15 times the average per capita monthly income, but Roche sold it off-brand in partnership with a domestic firm in 2012 at one-quarter the price, and discounted it down to a biosimilar price of about US$600, but patient groups want the government to make available at US$100 per vial.
Wrangling in court over IP rights is another feature of the PM market in the APAC. Gleevec was the subject of a years-long court battle by Novartis to gain Indian patent protection for the drug, which they finally lost at the India Supreme Court level. Subsequently, Indian drugmaker Sun Pharma continued the struggle in US courts, seeking to launch a copycat version (a suit Novartis has since settled, keeping Sun's generic off the market until February 2016). Despite these efforts and close to US$3 billion in sales in 2013, Gleevec is now facing generic versions in Japan, China, and India. Alimta’s sponsor is also fending off patent challenges, but on its method patents (adding B vitamins to the regime) in the UK and Germany, a problem that is likely to follow suit in the APAC markets. In the meantime, Erbitux has sought an alternative to the usual strategy of extending patent life by expanding indications, by instead narrowing theirs. In 2009, the FDA allowed the sponsor to narrow Erbitux’s indication for advanced colon cancer, changing the label to recommend the drug for treatment of EGFR-expressing tumours only in patients without a mutation in the KRAS gene.
On another front, Revlimid ran afoul of cost-effectiveness scrutiny by NICE in the UK, which last year turned down the drug for patients with myelodys plastic syndromes on the grounds that results didn't justify the cost for patients with the bone marrow disorder, and got more of the same treatment from NICE regarding use of the drug for patients whose multiple myeloma relapsed after treatment with Velcade. This bodes ill for its prospects in the APAC market, since some follow NICE’s lead. Meanwhile, Velcade’s encounter with NICE is going in the opposite direction. Just a few months ago, NICE approved it as a first-line treatment for multiple myeloma in a reversal of its earlier decision forcing the sponsor to negotiate a money-back guarantee in a patient access scheme for patients who did not respond to the drug when the sponsor was negotiating its initial approval as a treatment in progressive cases. In another stroke of good fortune, it was discovered that the drug could be used not only effectively, but more safely by the subcutaneous route, a method for which it received further approval by the FDA. Nonetheless, like many of the frontier wave of PMs, Velcade’s patent expires within the next two years almost everywhere, including the APAC.
The APAC region sub-markets have certain commonalities suitable for a discussion of their overall prospects as PM boom or bust areas. The mighty mites of Singapore, Brunei, and Hong Kong are comparatively small in volume but rich in medical tourism, well-heeled patients, as well as cognisance and WTP for the best in personalised healthcare. The up-and-comers consisting of Thailand, Malaysia, and Myanmar are certainly a mixed bag of prospects with rising populations on the one hand but political tensions on the other. Malaysia and Thailand are forward-looking in terms of healthcare and medical tourism, but Myanmar is the laggard in the group in that regard. The next wave countries of Philippines, Indonesia, and Vietnam encompass 400 million people, and are considered rising economic powers, but currently have low per capita incomes. Philippines patients of a certain SES status are aware of and will avail themselves of the latest advances in medical technology, while Indonesia typically points to its regional neighbours for those seeking the next level of cancer care, and Vietnam is currently struggling with its transitional economy to be able to provide more than the basic health care. The mature markets of Japan, Taiwan, and South Korea are exactly similar to the mature markets in Europe and North America, following the trends in the PMs. The Big Kahunas, China and India, of the emerging markets with 2.5 billion people and upper class patient numbers equal to those in either Europe or the US while pharma market growth numbers are usually 2-3 times that of the mature markets making them attractive prospects for the future, but each will require considerable commitment and creativity to achieve sustainable PM markets and retain enough market control to justify the resources invested.
PM markets are evolving markets, so sticking to basics is important (i.e. customer education), but so is adaptability and experimentation. The way into the PM market space in a particular country or region may be different than the way up to market sustainability. Setting up shop in resource-intensive emerging regions or countries should be viewed as part of diversification strategy, not moving away from mature markets, or passing over smaller but less heralded next wave markets. Value determination is local, but certain principles are universal.
Social media and other communication technologies will be as much a force for generating worldwide markets for new technologies as was shipping by air in the early era of globalisation; one creates demand, the other supply!
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 Bloomberg News (Kresge and Gokhale, 20 Jan 2014)
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