Docstoc

AARP

Document Sample
AARP Powered By Docstoc
					The Value of Innovative Drugs –
Benefits to Patients and Society
           AARP Conference
        Washington, June 10, 2003

           Daniel Vasella, MD
           Chairman and CEO
Key Questions

 Are Americans spending too much on healthcare and drugs?

 What are we getting in return?

 What are the choices and tradeoffs?

 Why do we invest in research and develop of innovative drugs?

 How can we best help patients in need?




2 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Are Americans spending too much
    on healthcare and drugs?
Major Achievements of Innovative Drug Therapy

Drop in death rate for diseases treated with pharmaceuticals
1965 - 1999

   Early infancy diseases                           -80%

   Rheumatic fever and                                  -75%
   rheumatic heart disease
                                                              -68%
   Atherosclerosis

   Hypertensive heart disease                                  -67%

   Ulcer of stomach and                                              -61%
   duodenum
                                                                            -41%
   Ischemic heart disease

   Emphysema                                                                       -31%

Source: Efpia 1999 - 2002
4 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Prescription Drugs Only Account for 10% of US
Healthcare Expenditures

US national health care expenditure 2001: USD 1.4 bn

                                               Other1
                                                             24%

                Administration
                                                6%

                Prescription               10%
                Drugs                                                      39%    Hospital /
                                                                                  Long-Term Care

                                                       22%
                                  Physician
                                  Services
1   Dentist and other professional services, Home health care, durable medical products, OTC drug and sundries,
    public health, research and construction
Source: Centers for Meidcare & Medicaid Services 2003
5 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
US Spending on Drugs in Comparison with
Other OECD Countries

2000 Expenditure on Pharmaceuticals and other non-durable
healthcare products in % of GDP
2.0            1.9
                                  1.8
                                                     1.6
1.5                                                                        1.4     1.4

                                                                                             1.1
                                                                                                       1.0
1.0



0.5



0.0
            France               Italy            United             Canada      Germany   Switzer-   Nether-
                                                  States                                    land       lands
Source:    OECD Health Data 2002.
6 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Expenses For Prescription Drugs Are Increasing,
but no More Than for Other Daily Expenses

Consumption expenditures in the US, USD bn (1996)

 300

 250                                                                                       Video and audio

 200                                                                                       Auto Repair

                                                                                           Prescription Drugs
 150
                                                                                           Telephone

 100

   50

     0
            1995       1996        1997        1998       1999        2000   2001   2002

Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2003
7 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Increased Spending on Prescription Drugs is
Mainly Due to Higher Utilization

Factors Contributing to Increase in US Prescription Drug Expenditures
1997-2001


             Price increases                    26


                                                                                Increase in
                                                                           47   prescription
                                                                                volume



                                                   24
               Changes in
               prescription mix


Source: Kaiser Family Foundation
8 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
US Prescription Drug Expenditures Are Low
Compared with other Every-day Expenses

Consumption expenditures per day, 2002 in USD

Housing                                                                                           10.39

Food + Beverages1                                                                          8.73

Clothing                                                                            3.10

Auto repair                                                                  1.77
Gasoline and oil                                                           1.58
Prescription drugs                                                         1.48
Telephone                                                              1.28
Alcoholic beverages                                                    1.27
Tobacco                                                         0.78

      1    excluding alcoholic beverages
Source:    US Department of Commerce, Bureau of Economic Analysis, 2003
9 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
What are patients getting in return?
Positive economic Effect of Innovative Drug
Treatment
Total cost evaluation of innovative drug treatment
USD
2
                  +1.00                           –3.65                      +1.54       -1.11
 1

 0

-1

-2

-3
            Medication                         Hospital                     Outpatient    Total
                                               charges                        care       Saving
Source: American Economic Review, 1996                                                      s
11 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Higher Pharma Spending Offset
by Lower Hospital Utilization

US Pharma spending per capita                                                      Hospital days
in 1995 USD                                                                   per capita and year

1 000                                                                                            3




                                                                                                 2

   100

                                                                                                 1




     10                                                                                          0
        1960                          1970                          1980    1990          2000

Source:    OECD Health Survey, 2002
12 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Innovative Medicines Reduce
Total Costs to Society

Migraine medication significantly                                           Growth factor (G-CSF) reduces
reduces employers’ cost                                                     hospital costs of cancer patients
Total costs per employee & month                                            Cost per patient
USD                                                                         USD
           435                                                                     85


                                                                                                   55



                                        44


     Without                      With                                         Without           With
    Medication                  Medication                                    Medication       Medication
Source: Legg et al “Cost Benefits of Sumatripton to an Employer” JOEM,
        Peters “Comparative effects of G-CSF and PBSC therapy” Blood
13 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Inhaled Steroids for Asthma Improved Outcomes
and Reduced Costs for Medicaid

                                                                                  Total health-care
                    Hospitalizations                         Outpatient visits          costs
    0%



-20%

                                                                       -26%                -24%

-40%


                             -50%
-60%


 Balkrishnan R, Norwood GJ, Anderson A. Outcomes and cost benefits associated with the introduction of inhaled
 corticosteroid therapy in a Medicaid population of asthmatic patients. Clin Ther. 1998 May-Jun;20(3):567-80.
14 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Innovative Anti-hypertensive Therapies Achieve
Superior Compliance

Persistence on drug after one year in % of patients


 Thiazide diuretics                                            20.8


       Beta-Blockers                                                        45.6


  Calcium Channel                                                                  54.1
      Blockers

      ACE-Inhibitors                                                                      60.7


   Angiotensin                                                                                   67.4
Receptor Blockers


Source: Conlin et al. Clin Ther. 2001 Dec;23(12):1999
15 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
The Average Health of the Elderly Population is
Improving

 Prevalence of disability in US seniors

                  26.2%



                                                        19.7%
                                                                                25% decrease
                                                                            between 1982 and 1999:
                                                                             We are not only living
                                                                               longer but also
                                                                                  healthier!




                   1982                                   1999
 Manton KG, Gu X. Changes in the prevalence of chronic disability in the United States black and nonblack
 population above age 65 from 1982 to 1999. Proc Natl Acad Sci U S A. 2001 May 22;98(11):6354-9.
16 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
In addition to better outcomes, what
does the US get in return for its high
   utilization of innovative drugs?
European Firms Are Moving Research and
Operations to the US

 GlaxoSmithKline moved its operational headquarters
  to the US in 2000

 Novartis moved its research headquarters to
  Cambridge, Massachusetts

 Schering AG moved its therapeutics division to the US

 Organon relocated from the Netherlands to New Jersey




18 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
European Brain Drain to the US

Share of EU born PhD candidates who plan to stay in the US
in %

 80




 70




 60




 50
               1990        1991        1992       1993        1994          1995   1996   1997   1998   1999

Source: Third European Report on S&T Indicators, 2003
19 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Pharmaceutical Industry is of National Interest



Strategic value of the pharmaceutical industry
     High investment in research and development
     Export surplus
     Valuable jobs and attraction of talent (brain gain)
     Technology spill-over to other industries




20 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
What are the choices and
tradeoffs from a patient’s
      perspective?
Earlier Access to Innovative Drugs for US Patients

New Drugs First Marketed in the United States
% of all new drugs approved in the US

                                                                                        Simultaneously
                                                                                           launched



                                                                                          +29

                                                                              47

                                      33                        33

            20                                                                             51




      1987 - 89                   1990 - 92                  1993 - 95      1996 - 98     2001

Source: Novartis research
22 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Delayed and Limited Access to Important Medical
Innovation in Europe

Market share development of Zyprexa after first launch
% of its category

  60

  50                                                                                     USA

  40                                                                                     UK

  30                                                                                     Italy

                                                                                         France
  20
                                                                                         Germany
  10

                                                                                    Time since first
    0                                                                               launch in years
                         1               2               3                  4   5

Source:    IMS Health
23 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Delayed Access to Glivec/Gleevec
for Patients in Europe

Approval time in days




                                                                                     Effect:
       US                            73
                                                                               Patients in Europe
                                                                            received Glivec 6 months
                                                                                      later


Europe                                                                      247




Source: Data from FDA and EMEA: European approval time includes 119 days CPMP assessment and
        109 days decision making by the Commission
24 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Evidence from Research Reveals that….

 In Germany one million people unnecessarily suffer
  from migraine

 In France, 9 in 10 patients with acute asthma do not
  receive adequate care

 Only 5% of UK patients with a prostate cancer are
  treated by an oncologist




         Universität Erlangen-Nürnberg, Lehrstuhl für Gesundheitsmanagement
         Diffusion of Medicines in Europe   Prof. Dr. Oliver Schöffski, MPH


25 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
More Patients In Europe Are Not Receiving
Adequate Treatment

Percentage of eligible patients receiving Statins



United States                                                                                   56


Netherlands                                                                                36


Switzerland                                                                           29


Germany                                                                          26


United Kingdom                                                              23


Italy                                                                  17


  Universität Erlangen-Nürnberg, Lehrstuhl für Gesundheitsmanagement
  Diffusion of Medicines in Europe   Prof. Dr. Oliver Schöffski, MPH

26 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
There Are Clear Tradeoffs for Patients


  Free pricing and fast approval secure rapid access
   to innovation without rationing
  Market-driven generic substitution lowers cost and
   frees up resources for innovation
  Innovative drugs lower overall healthcare
   expenditure as most are cost-effective



             More choice, independence and modern
                    therapies for US patients


27 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Why do we invest in research and
development of innovative drugs?
Novartis Launched Most New Molecular Entity
Approvals Across Industry in Past Three Years

US approvals (NMEs) for Top 10 pharma companies 2000 – 2002

                                                                                                             Zelnorm,
Number of NMEs                                                                                                 Elidel,
   2000         2001         2002                                                                             Foradil,
                                                                                                     10      Gleevec,
                                                                                                              Zometa,
                                                                                                             Trileptal,
                                                                                                             Visudyne,
                                                                                                              Exelon,
                                                                                                             Rescula,
                                                                                                               Starlix
                                                                                           4
                     3
       2                          2             2                                 2
                                                            1                1                                  1

     GSK          Pfizer        Merck         Astra       Aventis           BMS   J&J   Pharmacia Novartis    Lilly
                                             Zeneca

Source: FDA website, company websites, other public domain information
30 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
How can we help patients?
Novartis Leads in Providing Discounts to Seniors:
CareCard, CarePlan and Together Rx Card




32 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Impressive Savings for US Seniors Through
TogetherRx Card and Novartis CarePlan

 Up to 11 million Medicare enrollees are eligible

 Seniors with low income1 and no prescription drug coverage
  receive Novartis drugs at significant discount

 Currently there are 772 000 Together-Rx and 53 000 Novartis
  CareCard enrollees

 Total savings for patients amount to over USD 90 million

 Novartis has provided almost USD 24 million in savings



1    Medicare enrollees without prescription drug coverage and annual income under USD 18,000 (couples under USD
     24,000) receive Novartis prescriptions for USD 12.00. Individuals with annual incomes between USD 18,000 and
     USD 28,000 (couples between USD 24,000 and USD 38,000) receive a discount of 25% of Wholesale Acquisition
     Cost which translates into 25 - 40%
33 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis Patient Assistance Program Provides
Drugs to Patients not Covered by Third Parties

The number of uninsured Americans increased to over 40 m

Key facts about the Novartis Patient Assistance Program

 Easy access through toll-free phone, internet and physician offices

 More than 30 Novartis products provided

 Eligible are patients with low income, not covered by third parties

 Currently there are over 200 000 enrollees

 High customer satisfaction

 Since 2001, products worth more than USD 200 m supplied


34 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis’ Patient Assistance Program for Gleevec

Facts about Gleevec/Glivec
 Revolutionary therapy for Chronic
  Myeloid Leukemia and GIST
 High price but cost-effective therapy
  based on unprecedented response rates
 Relatively small patient population

Novartis Patient Assistance Program
 Liberal patient assistance program:
  more than 10% of all patients receive
  drug for free or at significant discount1
 Similar provisions for patients in
  other countries


1   Annual household income less than 500% of federal poverty level, assets not to exceed USD 250,000
35 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis Commitment to Patients

Patient Assistance
 ~ 1 m CHF per day contributed to those in need
 12% of all Gleevec/Glivec patients receive assistance worldwide
 Free medicine donation until leprosy is eliminated worldwide
 Malaria drug, Coartem, provided at cost for the developing world
 100 000 treatments for tuberculosis per year for 5 years in Africa

Innovative Medicines
 10 new drugs brought to patients in key markets in 2000–2002
 5 new molecular entities to launch in 2003-2004
 Research and development grow overproportional to sales
 122 m USD funding with Singapore government for Novartis Institute
  for Tropical Diseases for research in neglected diseases of the
  developing world
36 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Shared Healthcare Imperative

1. Get Medicare drug benefit bill passed in the US during
   the 108th Congress bringing coverage, access and
   choice for senior patients

2. Accelerate drug development and improve regulatory
   communications to get medicines to patients faster

3. Respect IP, so industry continues to invest into R&D
   and provides a continuous flow of innovative drugs

4. After patent expiries generics free up funds to be
   redeployed in innovative medicines

5. Form genuine partnerships at the state level to manage
   healthcare cost pressures

6. Fund access to medicine initiatives with focus on
   distribution and infrastructure
37 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
A Wise Man Should Consider That Health Is
The Greatest Of Human Blessings


               Hippocrates 460-370 BC

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:5
posted:2/22/2012
language:English
pages:38