A New Pharma Renaissance? Three themes from JPM.

Every January I make my annual pilgrimage to the J.P. Morgan Healthcare Conference in San Francisco. “JPM,” as it’s affectionately known to the thousands of CEOs, investors and analysts who descend on the Bay Area each year, provides a comprehensive overview of the state of the pharmaceutical industry. It’s a great way to level-set for the new year.
 
Although the thirty-minute CEO presentations are typically well-scripted and upbeat in nature, this year there was a palatable sense of renewed confidence. The latent fears of a fallow drug pipeline, patent cliffs, and an unstable insurance market seemed to be in the past.
 
Of course, there will always be product rotation as drugs lose their exclusivity, but across the board there was evidence of a more sophisticated approach to portfolio management. This was apparent in three themes that I heard repeatedly across 30 CEO presentations that I attended.

 

Theme I: Execute the Current Portfolio

With the relative stability of the healthcare market (and I use the term “relative stability” loosely), pharma has been able to focus its attention on managing the growth of its current in-market products, divesting of those that are underperforming, and funding launch products with the greatest potential.
 
Companies have gotten what I call “franchise fever.” They recognize the power of focusing on building a family of products around a particular disease state for a certain set of patient types.
 
Companies are claiming specific diseases or disease categories as their focus. Sales and marketing teams are being reorganized to support a portfolio approach. Products within these disease “verticals” are being intentionally managed for growth while those that are either underperforming or not part of a future strategic portfolio are being sold or simply managed for cash.
 

Theme II: Accelerate the Move from Chronic to Cure

It was also obvious that the bar has been raised on outcomes expectations. To achieve market access and desired pricing, products need to demonstrate the capability to reach meaningful therapeutic endpoints.
 
There was a focus at JPM on clinical trial results that showed real, differentiated patient impact.
 
For example, the excitement around gene therapy is largely based on this theme of moving the goal post from chronic (“living well” with a disease) to a cure. Gilead announced that it was disbanding its HepC development team because the efficacy of its portfolio of products has effectively cured Hepatitis C. This was a remarkable announcement and represents the level of product performance to which many companies need to strive to remain competitive.

 

Theme III: Expand the Pipeline

Through research and development, business development, licensing, partnerships and out-right acquisitions, pharma is on the hunt to build competitive product portfolios. As pharma companies identify possible product franchises, they begin the pursuit for complimentary products to round out their portfolio. With the current renaissance in the R&D field, particularly around gene therapy, there is a lot of movement and excitement around licensing and partnerships.
 
Gaining access to this new generation of effective drugs has begun to feed the increase in M&A and market consolidation. For some transactions, the financing of these deals will be helped by the windfall tax cuts that many of these pharma companies were announcing at JPM, but the business development focus also fits into the larger theme of innovation, value creation, and effectiveness.
 

Final Note

All in all, it was a very upbeat, very exciting, very optimistic conference.
 
For pharma marketing services companies like closerlook, new classes of drugs, new complex pathways, and a focus on finding cures means there is the need for more innovative and engaging communication and medical education for both HCPs and patients.
 
As the pharmaceutical industry experiences this renaissance in new, life-giving products, the companies that partner to bring these products to market must also help lead a renaissance in marketing, professional communication and patient engagement. Together we can make a difference.
 

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David Ormesher, CEO

Founder and CEO of closerlook, a recognized leader in creating innovative relationship marketing solutions that help pharmaceutical companies get closer to their most important customers. Learn more about closerlook here.

 

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