2014 begins as a period of transition and evolution in medicine and health care. Patients, providers, academic researchers, biopharmaceutical researchers and all health care stakeholders across America are confronting evolving environments and learning new rules of the road.


John Castellani, Pharmaceutical Research and Manufacturers of America, PhRMA, biopharmaceutical research companies, biomedical science, pharmaceutical, research and development pipeline, PhRMA members, drug discovery and development




































































































































































































































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Inside This Issue - Opinion

For medicine and health care, a time of transition

January 6th, 2014
by John Castellani

2014 begins as a period of transition and evolution in medicine and health care. Patients, providers, academic researchers, biopharmaceutical researchers and all health care stakeholders across America are confronting evolving environments and learning new rules of the road.

John Castellani

From the workings of new state-based health insurance exchanges to funding challenges for basic research to the practical application of emerging technologies and knowledge in the development of innovative medicines, there are big questions affecting every American’s health.

One key question the biopharmaceutical research sector faces is: How can we best ensure that the tremendous promise of innovative medicines is fully recognized and valued?

Science is at the core

The answer rests in our science. America’s biopharmaceutical research companies — powered by growing collaboration and partnerships across the biomedical ecosystem — are delivering enormous benefits to patients, public health and our economy. To keep advancing, PhRMA is focused and advocating for constructive policies that help foster new invention and provide comprehensive access to lifesaving medicines.

At the core of everything our sector does and what we stand for is our science. It is the guiding force that inspires biopharmaceutical researchers and it is the driving force behind the value that medicines are delivering to patients, public health, our health care system and U.S. competitiveness.

Biomedical science is leading us in hopeful, exciting directions. Over the last five years, the Food and Drug Administration approved more than 100 new medicines for patients. In 2012 alone it approved 44 novel medicines, including new orphan drugs targeting rare diseases and exciting new treatments for cancers, infectious diseases, cardiovascular disease, and genetic and neurological disorders.

These approvals helped to make 2013 a good year for patients and for progress against disease. The challenge is to ensure that we build on this momentum in 2014 and beyond.
Every new medicine represents an important step forward in patient care, many opening the door to even better, more precise treatments in the research and development pipeline. The good news is that the FDA is on pace to again approve more than 30 innovative medicines in 2013.

And the prospects are bright for continued progress. There are more than 5,400 new potential medicines now in the biopharmaceutical R&D pipeline globally and as many as 70% are potentially first-in-class. These include over 1,000 new medicines to help fight cancers, nearly 225 new medicines to treat diabetes, more than 200 potential new approaches to prevent and treat heart disease and stroke, and over 450 potential new medicines targeting a wide array of rare diseases.

The value of these medicines to patients struggling with disease and hoping for new and better solutions is incalculable.

The R&D investment

The road ahead, however, is difficult. Each approved medicine begins as an idea in a laboratory or an insight gleaned in clinical practice and often more than a decade ago. Transforming and translating a possibility into an approvable medicine requires an R&D investment, on average, of $1.3 billion. It also requires an unprecedented level of cooperation and collaboration among patient advocates, practitioners, academic and government scientists, and biopharmaceutical researchers, all working to find innovative ­solutions.

"Today, the United States leads the world in drug discovery and development, and the potential for scientific breakthroughs in multiple disease areas has never been greater."

Continual reinvestment and renewal is a key to keeping the pipeline flowing. Many of the more than 100 new medicines approved over the last five years were fueled by over half a trillion dollars in new R&D invested by PhRMA member companies since 2000. In 2012 alone, PhRMA members invested $48.5 billion in the future.

Today, the United States leads the world in drug discovery and development, and the potential for scientific breakthroughs in multiple disease areas has never been greater. But innovative research needs a policy and regulatory environment that incentivizes innovation.

For example, we must preserve and strengthen intellectual property protections that allow for the necessary risk and investment in R&D; we need to ensure that our highly respected regulatory system keeps pace with the evolution of our science and emerging uses of “big data”; and we need a reimbursement system that recognizes the stepwise nature of biopharmaceutical innovation.

At the heart of each of these interconnected facets of medical innovation and access is the science driving our sector. Everything we do must be informed by science-based reasoning and data.

Leadership in science

With this in mind, PhRMA in 2013 inaugurated a new Scientific Leadership Advisory Council, chaired by Dr. Elias Zerhouni, president of Global R&D at Sanofi and former director of the National Institutes of Health. Comprised of the chief medical, research and scientific leadership of our member companies, the council seeks to promote a sustainable scientific ecosystem that drives and rewards biopharmaceutical innovation. This expert group of scientific leaders will provide PhRMA with strategic direction to help address key scientific and public health issues and deepen engagement with partners in the medical innovation ecosystem, including the academic community, patient advocates, policy makers and the public.

The goal of efforts like this is to further the creation of a sustainable scientific ecosystem and reflects our sector’s mission: to bring safe and effective new medicines to patients, building on incredible progress in recent years against cancers, HIV/AIDS, rare diseases, rheumatoid arthritis, hepatitis and scores of other diseases and conditions.

But a sustainable ecosystem has positive ramifications that go well beyond the benefits to patients and advancing public health. Take for instance, Alz­heim­er’s disease.

Alzheimer’s is the sixth-leading cause of death in the United States today, with more than 5 million people currently affected. By 2050 the number of Americans with the disease is projected to reach 13.5 million at a cost of over $1.1 trillion unless new treatments to prevent, delay or cure the disease are found. According to the Alz­heim­er’s Association, a new medicine that delays the onset of the disease could change that trajectory and save $447 billion a year by 2050.

The discovery and development of medicines for this extremely complex disease has been elusive. Recognizing the societal scope of Alzheimer’s, as well as the scientific hurdles facing the collaborative research community, this past fall PhRMA convened a forum to catalyze progress in Alzheimer’s research. We brought together experts from industry, academia, government and leading Alzheimer’s patient organizations to tackle ways to accelerate the impact of pre-competitive collaborative efforts and explore challenges in clinical trials recruitment unique to Alzheimer’s, particularly among pre-symptomatic individuals.

This can help bring us a step closer to delivering meaningful medicines for Alzheimer’s patients or those at risk of developing the disease. However, our scientific endeavors also hold great potential in helping to control the rising costs in our health care system.

Benefits of Rx adherence

While prescription medicines are typically singled out and treated as a line item in cost-containment efforts, the academic literature increasingly shows that use of medicines can help save money on other health care services, especially hospitalizations and emergency department care. For instance, every additional dollar spent on medicines for adherent patients with congestive heart failure, high blood pressure, diabetes or high cholesterol generates $3 to $10 in savings on emergency room visits and in-patient ­hospitalizations.

In late 2012 the Congressional Budget Office (CBO) changed its cost estimating methodology to reflect “a substantial body of evidence” showing that increases in prescription drug use within Medicare Part D lead to offsetting reductions in spending for other Medicare medical services. Among the research CBO cited was an article published in the Journal of the American Medical Association finding that the implementation of Part D was followed by a $1,200 average decrease in non-drug medical spending in both 2006 and 2007 among those who previously had limited drug coverage.

Other researchers have associated this reduction in non-drug spending with achieving approximately $13.4 billion in overall savings during the first full year of Part D.
The CBO’s revised methodology was admittedly conservative, but it represents a sea-change in how we think about the role of medicines in our health care system.

And it may be the tip of the iceberg. Preliminary findings suggest that the magnitude of offsetting savings for patients suffering from congestive heart failure, diabetes and several other conditions may be much greater than the population average reported by CBO.
For example, research published in the American Journal of Managed Care showed that improved medication adherence related to the expansion of drug coverage under Part D led to about a $2.6 billion reduction in medical expenditures annually among beneficiaries suffering from CHF who previously lacked comprehensive drug coverage. The study found that greater improvements in adherence could potentially yield more than $22 billion in federal savings over 10 years.

The economic impact

Finally, the U.S. biopharmaceutical research sector has a tremendous impact on the U.S. economy and global competitiveness. Our industry directly provides more than 810,000 jobs and supports a total of 3.4 million jobs across the economy. These jobs encompass the research-based occupations that will help sustain future U.S. economic growth, often requiring specialized science, technology, engineering and math skills.

The President’s Council of Advisors on Science and Technology recognized that the “nation’s leadership in biomedical innovation has been supported by a robust industry and, in turn, investments in biomedical research and corresponding medical advances have allowed industry and the economy to thrive. Biomedical innovation has supported U.S. economic growth, and high-value, highly skilled jobs for Americans.”

Our science-based sector is a true American success story. Biopharmaceutical research is delivering lifesaving and life-changing medicines to patients. It is helping to strengthen our health care system, and it serves as the foundation for our robust contribution to the U.S. economy. If we can seize this moment, if we can better realize the value of medicines, take advantage of the possibilities of the evolving science and embrace policies that foster continued R&D, we have an opportunity to reach unprecedented heights in our care for patients and to retain our global leadership in biomedical innovation.

JOHN CASTELLANI is president and chief executive officer of the Pharmaceutical Research and Manufacturers of America (PhRMA).

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