In brief

• Pharmaceutical companies are facing major headwinds due to loss of exclusivity (LOE) as product patents are set to expire, with billions in sales at stake.
• While sunsetting products is not new, maximising value in today’s environment requires a strategic approach.
• Savvy industry leaders are aligning sales, marketing, legal and other functions to reduce costs and drive value at the end of a product’s lifecycle.

Introduction

When a new prescription drug is launched, the pharmaceutical innovator holds exclusive rights to develop, sell, and market the drug during the patent period, typically lasting 10 to 15 years. After this period, the brand faces loss of exclusivity (LOE), relinquishing its monopoly and preparing for the entry of lower-cost generic (Gx) alternatives. This significant milestone requires a comprehensive adjustment in brand strategy.

Defensive strategies, such as intellectual property (IP) litigations and patent extensions, are often the first recourse prior to LOE. However, once these legal options are exhausted, the impact of Gx entry on sales volume can be immediate and substantial. To mitigate this, companies can maximise the revenue potential of the brand through line extensions and leveraging brand loyalty.

This necessitates strategic planning around commercial priorities and close coordination with other functions, akin to the launch phase of the drug. When extracting further value from the brand is no longer viable, companies typically switch patients to next-generation or over-the-counter (OTC) products, gradually sunsetting the original brand.

As a pharmaceutical company approaches the LOE, it must also navigate a highly competitive landscape where market dynamics rapidly shift in favour of cost-effective alternatives. This transition phase demands a proactive approach, integrating market access strategies with advanced analytics to anticipate and respond to competitive pressures.

Understanding prescriber behaviour, payer influence, and patient adherence becomes critical in retaining market share. Moreover, effective communication with healthcare providers and stakeholders is essential to maintain the brand’s value proposition during this pivotal period.

Diabetes has become a major cause of mortality and morbidity due to its rapid prevalence. According to the International Diabetes Federation (IDF), around 643 million people across the globe are likely to suffer from diabetes by 2030.

Further, this number is projected to rise to 783 million by 2045, requiring the World Health Organisation (WHO) to declare this condition a global epidemic. 1

The chronic and debilitating nature of this disease has significantly impacted the patient’s quality of life even in highly developed economies, such as Europe. A study by the WHO revealed that around 60 million adults are diabetic in Europe. 2

Moreover, since one in eleven adults is estimated to have diabetes, it has become a significant public health concern across the region. 3

Rising Clinical Trials and Partnership Activity

Diabetes mellitus, commonly referred to as diabetes, has a long history of management options; these include insulin injections, advanced wearable continuous glucose monitoring (CGM) insulin pumps and other smart devices, diet, medication, and exercise. In fact countries, including Germany, the UK, and France are estimated to be the largest markets for anti-diabetic drugs in Europe.

Key drivers propelling the market growth include an increasingly ageing population, rising disease prevalence, and a shift towards value-based care.  

While the European healthcare system is aimed at increasing awareness, improving reimbursement policies, and promoting diabetes prevention, no conclusive cure has been discovered to treat this metabolic disorder characterized by high blood sugar levels.

Nevertheless, researchers are actively exploring treatment options that can naturally achieve glycaemic control without the need for drugs or exogenous insulin injection. As per the data reported by the WHO International Clinical Trials Registry Platform (ICTRP), approximately 25,000 clinical trials have been conducted for diabetes in the past twenty years worldwide.  4

As a result, stem cell therapies, beta cell transplantation, and regenerative medicine have emerged as ground-breaking technologies capable of transforming the diabetes treatment landscape.

Considering the ongoing pace of innovation, several European pharmaceutical players have also reported significant clinical trial activity. For instance, Imcyse, a Belgium-based firm is assessing its lead candidate IMCY-0098 in phase II IMPACT trial. IMCY-0098 is a proinsulin-derived imotope engineered to halt disease progression and prevent early-onset Type 1 diabetes (T1D). The firm is expecting trial results in 2024. Similarly, another Belgian firm, ActoBio Therapeutics is evaluating its candidate in phase I/II trials.

The European market for diabetes has also witnessed a surge in partnerships among pharmaceutical companies. For instance, in 2022, Evotech, a Germany-based firm collaborated with Canada-based Sernova for the development and commercialisation of an implantable diabetes therapy based on beta cell replacement.

The partnership combined Sernova’s proprietary Cell Pouch, an implantable and scalable medical device with Evotec’s QRbeta technology, which is used to produce iPSC-based beta cells in islet-like clusters. Both firms are anticipated to validate this combination in phase I/II clinical trials in 2024.

A Wave of Technological Ingenuity

Japan’s prowess in technology has been a cornerstone of its economic and social fabric, reflected vividly in its digital health sector. As of 2024, the digital health market in Japan is projected to reach $6.15 billion, starkly overshadowing China’s $54 million. This growth is fuelled by a deep-rooted technological culture that has pioneered advancements in areas from electronics to robotics, now ingeniously pivoted towards healthcare.

Companies such as Takeda are at the forefront, transforming how diseases like Parkinson’s are monitored through innovations like the “Care for One” integrated solution. This app-based technology, leveraging the Apple Watch, allows for continuous monitoring of symptoms, enhancing the accuracy and personalisation of treatment plans.

Moreover, Japan’s commitment to digital therapeutics (DTx) is evident through strategic partnerships and significant investments. Giants like Shionogi and Sumitomo Pharma are collaborating with global entities to advance digital solutions for complex health challenges, including mental health disorders.

An Aging Population: A Catalyst for Change

With over 29% of its population aged 65 or older, Japan faces unprecedented demographic challenges. This aging landscape is driving the need for scalable, efficient healthcare solutions.

Digital health technologies, including AI-powered diagnostic tools and mobile health applications, offer vital solutions.

For instance, the AI device nodoca by Iris, designed for rapid influenza diagnosis, exemplifies how Japan is leveraging technology to cater to its elderly, providing quick and non-invasive health assessments.

Proactive Policies Propel Progress

Japan’s government has been instrumental in cultivating a fertile environment for digital health. Since amending the Pharmaceutical Act in 2014, there has been a robust push towards embracing digital therapeutics. Startups like CureApp have thrived under this regime, receiving the first Japanese regulatory approval for a nicotine addiction treatment app, and subsequently for a hypertension management application.

These initiatives are part of a broader strategy to integrate digital health solutions into the national healthcare framework, supported by policies that streamline approvals and offer financial incentives for adoption. Such proactive governance not only fosters local innovation but also sets a precedent for regulatory frameworks globally.

Cultural Embrace of Technology

The integration of technology into daily life is a defining feature of Japanese culture. From early adopters of personal electronics to current applications in digital health, the societal embrace of innovation plays a critical role in the seamless adoption of new technologies. This cultural trait continues to facilitate the integration of advanced digital health tools, from sophisticated wearables to telemedicine platforms, into everyday healthcare practices.

Conclusion: Japan as a Global Beacon in Digital Health

Japan’s strategic approach to digital health, characterised by an integration of technological innovation, proactive policies, and a supportive culture, not only addresses its unique demographic challenges but also sets a benchmark for global healthcare practices. As digital health continues to evolve, Japan’s model provides invaluable insights for nations aiming to leverage technology to enhance healthcare delivery and outcomes. As we observe Japan’s advancements, it is clear that its journey in digital health is not just about national transformation, but a beacon for global health innovation.

The pharmaceutical industry is experiencing a period of rapid innovation and development, fuelled by technological advances, regulatory changes, and a heightened focus on patient-centric care.

This article explores the most recent and significant developments that are shaping the future of healthcare and pharmaceuticals in 2024.

As we move through 2024, several key developments are shaping the future of pharmaceuticals, promising to enhance patient outcomes, streamline drug development, and expand the reach of personalised medicine.

1. Revolutionising Drug Development with AI and Machine Learning

Artificial Intelligence (AI) and Machine Learning (ML) are pivotal in transforming drug discovery and development processes. These technologies are not just accelerating research but are also making it more cost-efficient and reducing the time to market for new drugs.

Key Highlights:

• AI in Predictive Models: Technologies like AI neural networks are being utilised to predict the outcomes of drug interactions before physical trials commence, significantly shortening the development timelines and enhancing safety profiles.
• Machine Learning in Genomics: ML algorithms are crucial in parsing through vast genomic datasets, helping in the identification of biomarkers and understanding disease mechanisms at a molecular level, thus paving the way for personalised medicine strategies.

2. Advancements in mRNA Vaccine Technology

The success of mRNA vaccines against COVID-19 has propelled the use of this technology against other formidable diseases, including cancer, Zika, and autoimmune diseases. Its mechanism, which uses messenger RNA to trigger an immune response, is proving to be a versatile platform for rapid vaccine development and deployment.

Key Highlights:

• mRNA in Oncology: Clinical trials are exploring mRNA vaccines that prime the immune system to recognise and destroy cancer cells, marking a significant step forward in cancer immunotherapy.
• Expansion to Other Diseases: The technology is also being tailored to combat a range of infectious diseases, with trials for mRNA-based influenza and Zika vaccines underway.

3. Enhanced Focus on Rare Diseases

There’s a growing emphasis on addressing rare diseases, historically overlooked in the pharmaceutical field. Innovations in genetic research and drug design are facilitating the development of effective treatments for these conditions.

Key Highlights:

• Gene Therapy Innovations: Technologies like CRISPR and gene silencing are being harnessed to tackle rare genetic disorders at their genetic roots, offering not just treatments but potential cures.
• Orphan Drug Advances: The FDA’s Orphan Drug Act provides incentives for the development of drugs for patients with rare diseases, leading to a robust pipeline of new drugs aimed at these populations.

4. Regulatory Innovations Speeding Up Approvals

Regulatory agencies are evolving to expedite the approval processes, particularly for critical and life-saving medications. The FDA and its global counterparts are implementing faster, more flexible review processes to bring treatments to market more swiftly.

Key Highlights:

• Real-Time Oncology Review (RTOR): This FDA initiative allows for the real-time submission of data segments as they become available, speeding up the review process without compromising on safety.
• Project ML algorithms: Through this initiative, international regulatory agencies collaborate to concurrently review and approve oncology drugs, facilitating quicker patient access across different regions.

5. Sustainability Practices in Pharma Manufacturing

As environmental concerns grow, the pharmaceutical industry is turning towards more sustainable manufacturing processes. These practices not only help in minimising the environmental impact but also in adhering to stricter regulations and improving societal goodwill.

Key Highlights:

• Waste Reduction Initiatives: Companies are adopting synthetic biology and green chemistry, which reduce hazardous waste and improve yield by using environmentally friendly materials.
• Energy Efficiency: There is a significant push towards utilising renewable energy sources in manufacturing facilities, reducing the carbon footprint of production sites worldwide.

6. Digital Health Integration

The integration of digital health technologies is redefining how pharmaceutical services are delivered. These tools are becoming integral in clinical trials, patient monitoring, and in the management of chronic diseases.

Key Highlights:
Telemedicine: This technology is pivotal in remote patient management, allowing for continuous communication and monitoring, which is essential for chronic disease management and for populations residing in remote areas.
Wearable Technology: Wearables are extensively used in monitoring patient vitals and conditions in real time, providing a stream of data that aids in personalized drug formulation and treatment plans.

Conclusion

In 2024, the pharmaceutical industry is set to overcome many of its traditional challenges through the adoption of innovative technologies and methodologies.

From AI-powered drug discovery to sustainable manufacturing practices and the rapid development of mRNA vaccines, the sector is not only poised for transformative growth but also for a redefined approach to global healthcare provisioning.

As these technologies mature and integrate more deeply into the Pharma landscape, they hold the promise of delivering more precise, effective, and personalised healthcare solutions across the globe.

Profits are steadily eroding in the pharmaceutical industry – thanks to rising costs across labour and raw materials, alongside persistent price pressure. Getting drug pricing right is therefore more important than ever.

Traditional methods to set and negotiate drug pricing over the lifetime of a drug fail to leverage the wealth of available data and therefore limit profitability. It also poses the risk of costly mistakes: just consider the embarrassing climb-down by Aduhelm maker Biogen, for example.

Vamstar addresses these challenges by harnessing AI combined with a meticulously curated dataset to streamline and automate the pricing and negotiation process.

From assembling and refining relevant data to applying sophisticated pattern recognition and predictive analytics, read on to see how Vamstar’s Polaris platform helps suppliers set optimal prices in a tough market.

Manually setting prices is inherently risky

In life sciences, optimal pricing maximises value, minimises risk, and ultimately improves patient outcomes. Nonetheless, suppliers often rely on outdated, error-prone methods to set their prices – errors that can be very costly across multi-year contracts. The source of the problem looks roughly like this:

• The Excel trap: Excel was never suited to the complexities of pharmaceutical pricing. Modelling dynamic market factors, competitor strategies, and intricate cost structures using a spreadsheet is cumbersome and risk prone. Formulas get misaligned, data becomes outdated, and costly errors inevitably creep in.
• Oversimplified models: Simple cost-plus pricing functions as a baseline, but it fails to offer any modelling depth in a market that is nuanced and complex. Simplified models won’t reflect the true potential of a product in comparison to the competition, nor the willingness (and ability) of payers to improve their offers.
• Revenue management falls short: Past attempts using revenue-management platforms did improve pricing management, but revenue management platforms are not built with the specific goal of price optimisation in mind and cannot model drug prices.
• Untapped data goldmine: A treasure trove of valuable pricing data is going unutilised. Market share information, historical pricing trends, and competitor intelligence are all available in public data sets, but these data sets are scattered and disconnected. Current pricing methods offer no way to integrate and make sense of this vast pool of insights.

The net result is missed profit opportunities, vulnerability to competitor moves, and less-than-ideal value delivered to payers and to patients, risking suboptimal patient care.

Complex negotiations require extensive analytics

Setting prices for pharmaceuticals is far from a one-and-done task. It’s an intricate dance involving internal calculations, external market dynamics, and ultimately, a value proposition that convinces payers.

Comprehensive and up-to-date data, deep and broad analytics, and a good measure of automation lead to a more accurate and more defensible process of setting initial prices. It means that suppliers can include market trends, comparable products, and the unique benefits a drug offers in their pricing decisions.

Furthermore, these insights help manufacturers optimise pricing through the lifecycle of the drug – providing much-needed data during complex negotiations.

Payers will naturally seek to minimise costs, often armed with internal datasets. Here, concrete pricing data provides the firepower to counter objections and negotiate from a position of strength.

Detailed market analysis, insights into competitor pricing, and even historical trends on discounts – all provide leverage. Extensive analytics and data also offer supporting evidence in a world of evolving regulations and heightened scrutiny around drug costs.

Data, AI, and automation from Vamstar

To secure the value of innovation, drug manufacturers must find a way to collect and analyse the data that support pricing decisions – but that’s easier said than done. At Vamstar, we developed a pricing product that utilises a deep pool of data, carefully applied AI, and purpose-built automation to deliver unprecedented control over the pricing process. It works like this:

Step 1: Assembling and refining a Pharma dataset

The first obstacle to setting pricing is the fragmented nature of relevant data. Public datasets on pricing trends, competitor analysis, historical wins, and losses, and countless other factors exist, but these data sets are scattered, messy, and often designed for other industries.

Vamstar begins the journey here as our expert data scientists meticulously gather these scattered datasets. We collect data on market share, penetration rates, and product adoption rates; cleaning and reshaping applying life science-specific knowledge to ensure the data brings value.

We then connect this data to produce a highly curated proprietary data set that acts as an engine for pharmaceutical intelligence.

Step 2: Harness the pattern-seeking power of AI

With the foundations laid, Vamstar’s AI-driven tools take centre stage. Using proven AI models tweaked for life science use, Vamstar builds ultra-sophisticated pattern recognition and prediction engines, trained specifically on the complexities of life science pricing.

We combine your internal data with our custom dataset to reveal hidden connections between discount levels, competitor strategies, market dynamics, and a product’s unique value proposition.

AI also monitors market changes across the lifecycle of the drug, using rigorous analysis to spot pricing opportunities. These patterns wouldn’t be visible to the naked eye, but form the basis of intelligent, profitable pricing decisions including negotiating different discounts and higher reimbursement rates.

Step 3: Automation that transforms insight into action

Data and analysis are meaningless without action, and taking the steps to price correctly is often beyond the abilities of time-pressured life sciences companies. Vamstar delivers a streamlined platform that eliminates the tedious, error-prone aspects of pricing.

Vamstar Polaris delivers data-driven pricing recommendations, scenario modelling tools, and a centralised hub for tracking pricing performance. It’s the difference between fumbling with spreadsheets and having an expert co-pilot guiding every decision.

Automation goes beyond internal efficiency. When payer negotiations begin, a supplier is already armed with hard evidence. Suppliers can confidently justify pricing not with vague promises, but with clear data demonstrating a product’s superior value.

Empowered pricing across the drug lifecycle

The impact of Vamstar’s informed, automated, AI-powered pricing platform extends far beyond a single launch or negotiation. It’s about ensuring optimal pricing at every stage of a drug’s lifecycle:
Strong foundations: Pricing is never a shot in the dark, always backed with data-driven insights that ensure initial offers are aligned with the state of the market.

• Stop costly mistakes: Prevent excel errors and miscalculations that can cost millions thanks to the safety net of set processes and extensive automation.
• Maximise pricing over the lifecycle: Vamstar ensures that manufacturers continue to drive profits even after loss of exclusivity, providing pricing data to ensure optimal price setting and price calibration through the lifecycle of the drug.
• Right offer, right customer: Compensate for shifting market conditions through AI analytics that monitor trends and buyer behaviour – and tailor offers for specific segments to prevent leakage caused by overly generalised pricing.
• Negotiation advantage: At every step, never guess what the payer might accept – work with concrete data analytics including historical trends and market and competitor intelligence.
• Profit optimisation within constraints: Find the sweet spot even within heavily regulated frameworks, by modelling different scenarios and understanding the impact of discounts.

AI-driven pricing also supports industry efforts to maximise patient outcomes by indirectly (or directly) outcomes through an improved understanding of the true value drivers for each and every stakeholder.

Dynamic pricing for a changing landscape

As profit margins remain under pressure, more market changes are on the way. It is only the suppliers that invest in getting pricing right that will manage to avoid ongoing price erosion, and squeezed profits over the lifetime of the drug.

Suppliers that harness Vamstar’s Polaris can develop a pricing strategy that’s as dynamic as the market itself, minimising missed opportunities and maximising the value a life sciences company extracts from every innovation it brings into the world.

The required data and analytics tools are out there – the time to act is now. Get in touch with Vamstar now to see how Polaris can help your organisation improve the pricing process – and your organisation’s bottom line.