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Consolidation: How's it Working (or not) for Big Pharma?

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After the business challenges of 2009 and what remains a describe the imageprecarious economy this year, we at JFK Communications feel fortunate to be growing again in 2010. And it's starting to look like while the national unemployment numbers remain unacceptably high, the US economy is at last beginning to show signs of improvement.

To me, the US healthcare industry in general and the pharmaceutical, biotechnology and medical technology industries in particular have always been bright spots on the economic landscape, whether times were good or bad for the country overall. The past few years, however, have been a very different story as we all know.

On the jobs front, I was both surprised and disappointed to learn recently that for the first half of 2010, the US pharmaceutical industry has eliminated approximately 35,000 positions. This is on top of the nearly 60,000 pharma jobs that were eliminated during 2009.

Industry pundits will offer up many reasons for why these job cuts had to be made, not the least of which is the dire economic conditions. But the pharma bloodletting started well before the US economy tanked, and job eliminations in the pharmaceutical industry look set to continue in spite of improving economic conditions.

I think many of the industry's current woes are the direct result of the seemingly endless drive toward consolidation, attempts to create "economies of scale" and getting bigger because it seems that well, that's all big pharma can think to do right now to try to fix its problems.

Consider the following questions:

  1. Has the US pharmaceutical industry become a more dynamic, enjoyable and opportunity-rich place for people to work, or has it become less so as the result of increased consolidation?
  2. Is the world really better off without such great companies (and places to work) as Pharmacia, Lederle, Parke Davis, Warner Lambert, and Searle, to name just a few?
  3. Are more innovative drugs being brought to market in the US as the result of pharma industry consolidation and the existence of fewer, but larger pharmaceutical companies?
  4. Has industry consolidation improved the overall financial health of big pharma companies over the past 20 years?
  5. What about healthcare costs? Are patients paying any less for their drugs these days?

The culture of consolidation permeating the pharmaceutical industry has impacted every operational area, including how these companies purchase creative services such as advertising, public relations, market research, digital communications and graphic design. In many cases, smaller to mid-sized independent healthcare communications agencies have lost out to mega-sized communications conglomerates such as WPP Group, Omnicom, Publicis and Interpublic Group. These groups have all benefited by entering into "preferred provider" agreements with big pharma companies. I like to think of this trend as the "Walmart-ization" of healthcare communications.

Do marketing directors and brand managers at pharmaceutical companies with preferred agency networks enjoy being told which agencies they have to work with?

And last but not least, it makes me wonder: when has removing competition from the equation ever been good for business?

--David Avitabile

BioNJ Webinar on Personalized Medicine

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As personalized medicine continues to become more of a reality, describe the imagepharmaceutical, biotechnology and medical technology companies are finding ways to create new partnerships focused on building the future of medicine.

BioNJ's Diagnostics Committee, of which JFK Communications is a member, is hosting a free webinar keynoted by G. Steven Burrill, Chief Executive Officer, Burrill & Company.

This event is the first in a series of initiatives from BioNJ for global life sciences companies. Learn more about it, and register, by clicking here: New Jersey Gets Personalized – A series of initiatives from BioNJ to advance the Diagnostics industry and foster partnerships with biopharma companies in the State of New Jersey. How New Technologies are Changing Opportunities in the Diagnostics Industry, Creating Value and Encouraging Partnerships.

--David Avitabile

Personalized Medicine: Hot and About to Get Much Hotter

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Personalized medicine has been a hot topic in life sciences for a while now. With 

the clearly changing landscape in healthcare, and increased pressure on drug developers to maximize their returns and minimize costs, personalized medicine is more important now than ever before, and it is becoming a reality.

It is estimated that the majority of cancer drugs fail to deliver the outcomes for which they are prescribed.  The promise that personalized medicine offers to patients is the potential to identify which individuals will respond to a particular drug. Think about the cost savings implications if the practice of personalized medicine can become standard operating procedure across all therapeutic areas.

There are also enormous potential benefits to full implementation of personalized medicine in clinical research and drug development. Consider the impact on clinical trial design, cost and success vs. failure rates for clinical research programs of drugs in development if the trial sponsors can screen and identify those patients most likely to respond to a potential new therapeutic at enrollment, and which patients should be excluded from the trial.

What is also very intriguing is to consider how many drugs that have "failed" using traditional clinical research models that could find new life in the era of personalized medicine. Drugs that showed promise but ultimately failed due to the inherent shortcomings of current clinical development protocols could be resurrected and ultimatley brought to market if found to be effective in specific patient populations identified using personalized medicine. Unmet needs in under served patient populations could be addressed, and investments in new therapeutic options could be justified as money well spent, rather than written off.

This is an area of great interest to me. I recently published an article in the Life Sciences Supplement to NJBIZ that explored some of these issues, and I look forward to what the future has in store.

Click here to download a copy of my article, entitled "Personalized medicine offers opportunity" published in the 2010 Life Sciences Supplement to NJBIZ.

--David Avitabile

Healthcare PR in a Cost-contained World

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With healthcare reform legislation signed by President Obama on March 23 2010, there's no doubt that along with changes to the US health insurance system, there will be a much greater focus on healthcare cost-containment in the years to come. Predictions on whether the impact of this legislation on the US pharmaceutical industry will be positive or negative are mixed.

What does this mean for healthcare public relations? Actually, on this issue, I'm bullish. I think there are a number of reasons why public relations has a major role to play in the changing healthcare environment, and I discuss them in a recent article I published in Communique Volume 16.

Most importantly, challenges such as communicating the very real differences between cost effectiveness as opposed to price when talking about a drug, biologic, device or procedure require the development of multifaceted, nuanced arguments. And public relations, more than any other marketing discipline, is best at framing complex issues, creating and mobilizing advocates and engaging in conversations with multiple stakeholders.

For these reasons, healthcare PR is alive and well in countries where healthcare cost containment has been in place for decades. As an American who lived and worked for eight years in the United Kingdom, you need only look at the vibrant, continuously evolving and highly creative UK healthcare communications agency business to see proof of that. 

There is no doubt that changes in the US healthcare system will place new pressures on the life sciences industry to communicate in different ways. I believe that as a result, healthcare public relations will become a tool that these companies will rely on more than ever before.

For a PDF of the article I published recently in Communique 16, click here.

--David Avitabile

FDA Practicing Stealth Comparative Effectiveness? What's So Stealth About it?

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The In Vivo Blog has a very interesting discussion about a recent Pink Sheet/CMS Summit Panel discussion that suggested that the FDA may be  practicing "stealth" comparative effectiveness through an increasingly greater focus on superiority data (rather than, I presume, non-inferiority data). Read it here at In Vivo.

 The blog raises a number of interesting points, not the least of which is the question that is on many people's minds, including physicians, patients and industry: "is the FDA becoming too conservative?"

I believe that this question needs to be considered as part of the overall discussion, debate and analysis of issues such as the decline in new molecular entities, fewer first action FDA approvals, and fewer treatment options available for patients who need them.

A decline in R&D productivity has contributed to these issues to be sure, but I don't believe that industry is to blame for all of it. Open and honest discussion and debate is in the best interests of everybody, especially patients. 

--David Avitabile

Good Direction or More Control?

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For better or worse, on November 12 & 13, 2009, the U.S. Food and Drug
Administration and its Division for Drug Marketing Advertising and Communications (DDMAC) will convene a hearing entitled “Promotion of FDA-Regulated Medical Products Using the Internet and Social Media Tools.”  

Sorry, if you didn’t register by October 9, you will not be able to attend in person; however, all are welcome to participate.  Healthcare communicators, especially healthcare PR folks, should submit questions and comments to: “Electronic Comments,” identified with docket number FDA-2009-N-0441, at http://www.regulations.gov.  Everyone can watch and listen to this hearing for free by registering here.

The hearing will be just that.  Be prepared to listen to more than 80 (that’s right, eighty) 15-minute presentations by healthcare communication leaders from industry, academia, government, media and non-profits.  And, for one who has endured my fair share of FDA hearings, don’t expect any action, other than the obligatory, “We thank all of you for coming, for your time and thoughtful insights.”  “We will take all of your comments under advisement and will continue to compile outside comments and reconvene in 2010.”

We can expect that FDA and DDMAC will float a straw man document for comment in 2010.  And, perhaps after another hearing, they might finalize new regulations in 2010.  For those of us involved in healthcare communications, healthcare PR and medical communications, these new regs will help us reduce our risk of DDMAC violations.  However, it remains to be seen if these new regs will help or hinder industry communication to physicians, patients and caregivers. 

--John Kouten

Good News for the Healthcare Industry

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With all the noise in the news lately about the healthcare reform battles being fought, there was some very positive news for the pharmaceutical, biotechnology and medical technology industries yesterday that I think may have gone unnoticed by many.

On Wednesday September 30th, President Obama announced a plan to spend $5 billion on medical and scientific research, medical supplies and upgrading laboratory capacity.

This is great news for the pharmaceutical, biotechnology and medical technology industries. Promising new treatments and technologies discovered as the result of NIH-funded research are usually developed and commercialized by private sector companies. More investment in NIH research means more opportunities for technology transfer to pharma, biotech and other companies through Cooperative Research and Development Agreements (CRADA). The list of successful pharmaceutical and biotechnology products developed as the result of CRADAs is extensive, and includes breakthrough cancer treatments such as Taxol and Velcade.

Government investment in medical research has contributed to enormous growth for the pharmaceutical, biotechnology and medical technology industries through technology transfer. Most importantly, these investments have improved the lives of millions of patients.

The Rise and Rise of the Oncology Market

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The New York Times had a great story today by Andrew Pollack about the continuous push by Big Pharma and smaller specialty companies to become major players in oncology.

The article focuses mainly on Pfizer and the significant investments that the company is making in oncology--a major shift in strategy for the company, which historically has mainly focused its R&D efforts in other therapeutic areas.

The Healthcare PR Blog wrote about the explosive growth of the oncology market, and the fact that this trend looks set to continue in the years ahead, back in June of this year. 

Check out the New York Times story and The Healthcare PR Blog entry from June. There are some very interesting forecasts and figures in both pieces.

 

 

 

 

Will Media Report how Ted Kennedy’s Life was Extended through Improved Technology to Fight Brain Cancer? Probably Not

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Ok, I am backlogged on my reading, so what else is new?  If you are a healthcare public relations professional you are, by definition, behind on your reading!  If I can scan my newspapers, multiple news aggregators, and Twitter messages each day I’m ahead of the game.

 

However, I did take the opportunity to review PharmaceuticalExecutive’s Fifth Annual Press Audit.  While this appeared earlier this year, its findings are very relevant today, and will be valid until they field and report the 2010 press audit results. For those involved in healthcare communications and pharmaceutical and biotechnology public relations, these data are profound.

 

The PharmExec audit reveals that while articles covering pharma’s marketing, sales and other promotional practices have fallen, they have been replaced with articles about drug safety issues.  During 2008, Approximately 83% of articles focusing on pharmaceuticals and biotech were about drug safety concerns.  Negative articles about drug safety issues are at a five year high.  And, while overall media coverage of pharma is down, the majority of this coverage is negative, with only a small percentage considered positive (12%).

 

Considering these data, along with the ever increasing regulatory and political headwinds facing the pharma industry, we believe strongly that we need to restore confidence in the industry.  As leaders in healthcare PR and pharma marketing, we are proud of the work we do each day to raise awareness of new ground-breaking medicines and medical technologies.  We are passionate that pharma technology and R&D will contribute to cost savings in this era of healthcare reform and increased rationing. 

 

Many of our clients serve cancer patients and their families.  And, as we have witnessed today with the loss of Senator Ted Kennedy to cancer, the victory over this global scourge is still somewhere in the future. Senator Kennedy’s death is a terrible loss. However, we know that his life was extended months longer than it would have been just ten years ago because of the great strides we have made in the fight against brain cancer.

 

As healthcare communications professionals, I believe it is our responsibility to support a balanced portrayal of the pharmaceutical industry, and communicate with patients, legislators, the business community and the general public about its valuable contributions to extending and enhancing human life.

Town Hall Chaos, or Democracy at Work?

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As a healthcare communications professional, it has been very interesting to witness the continuous clashes over healthcare reform between concerned citizens and our nation’s political leaders taking place at Town Hall meetings throughout the country.

First of all, I think a bit of perspective is in order. The United States has a long and colorful history of vigorous debate, ideological clashes and differences of opinion. Just read about the presidential election of 1800 between John Adams and Thomas Jefferson. Or read about the Whiskey Rebellion of 1794, where President George Washington decided to declare martial law and send troops to Pennsylvania to put down a rebellion of farmers opposed to federal taxes on whiskey. The new taxes were introduced as a way to pay down the national deficit, which was a real concern following years of war with Britain and massive borrowing from France, Spain and Holland to finance the American Revolution.

The current debate over healthcare reform, and the scenes taking place at Town Hall meetings throughout the US, is tame by comparison to these early struggles. Viewed in historical context, one could even argue that the current national scene is an example of democracy at work.

However, as the debate continues, neither side is communicating effectively. Supporters of reform seem unable to define clear, effective key messages. Political leaders are falling into classic traps by allowing themselves to be provoked and driven off message, and few if any seem to be prepared to handle the hostility that they are facing. On the other side, hyperbole, misinformation and shrillness don’t seem to be working either. The work goes on in Washington, and displays of hysteria at Town Halls could have the undesirable effect of marginalizing opponents of healthcare reform at a time when different views should be heard and considered.

Most rational people agree that the current US healthcare system is badly in need of reform. There are legitimate concerns over what shape healthcare reform should take, how much it will cost, and how it will impact the lives of ordinary citizens. Whether we succeed or fail hinges upon how well we as a nation can define the critical issues, engage all the stakeholders in this debate, listen to differences of opinion and create a shared understanding of the way forward.

In other words, we need to communicate.

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