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Pharma and Biotech Management, Pharma and Biotech Policy - Coggle Diagram
Pharma and Biotech Management
Development and Approval of Drugs
What are the early stages of Drug development defined as?
understanding disease
identify potential compounds to combat disease
test compounds in vitro (cells in lab) or in vivo (animals with disease)
Example: Herceptin development took 13 years
Irritating: expensive, long, and uncertain process- only 1 in 10,000 FDA approved
12% of drugs that start phase 1 are approved usually 8 years later
What is the role of the government?
Approve patents
Safety and efficacy of drugs being tested
Stage 1/pre stage 1: compounds safe to be tested
Stage 2-3: work with pharmecutical companies to determine appropriate health outcomes
Stage 4: Evaluate drugs performance, improvement in health outcomes compared to control
Surveillance and manufacturing approval
How does the FDA Make approval decisions?
FDA Decision Rule:
are there health benefits better or same as control group?
do health benefits outweigh side effects
Phase 4 Studies
Mandates phase 4 studies as condition for approval- explore side effects in broader population
Does not consider prices
What happens when FDA approves drug for an indication?
Physicianns can use drug off label once approved
Pharmaceutical firms cannot market off-label, insurers likely to refuse to pay when drug is off label
20% for prescriptions are for off label uses
Off label prescription efficacy: 30% of off label prescriptions supported by evidence of clinical efficacy
Physician determination of On vs Off label: 55% of physicians could correctly determine whether use of drug was on label or off label
Why spend so much to develop a drug?
Patents allow firm to recover costs from making drugs
Generic Protection: prevent other firms from producing equivalent for 20 years
Bioequivalent competitors: people reverse engineering drug without investing in it
Competitive Pricing: pricing would make it hard to recoup costs
Patent Pricing: allows firm to charge price above cost of producing
Product Life Cycle: Profit reaches highest at 10 years and drops around 14 years once patent expires
97% of patients go to generic once available
How are patents not like monopolies?
Alternative treatment choices:
People may decide not to be treated/treated with pharmaceuticals
Same Disease Competition:
Company competes against other drugs that treat same disease
International Enforcement:
US patents not always enforced abroad
What does marketing for pharmaceuticals look like?
Declining in spending but focused on physicians
Detailing- $5.6B
Samples- $13.5B
MD Meetings- $1B
Experience goods: physicians and patients need to try product to determine value
Pharma and Biotech Policy
What changes have occurred in the past 40 years?
RX drugs increasing percentage of personal health care spending
drugs have improved health- ex. epivir/PI use
US Drug Prices
US pays much higher for drugs than other countries
Other high income countries spend much less than the US on drug prescriptions
How does the US drug market compare to others around the world?
Higher US drug spending driven by higher prices and greater use of NEW drugs but not greater quantity
Prices Set in Market
drug prices are set by firms and negotiation with private health insurance
Internationally; firms negotiate with one entity
drugs 60% lower in developed countries because they negotiate with one entity (government)- take it leave it threat
Japan and EU Policies
policies favor use of older, less expensive drugs, additional negotiating power for single entity
What would happen if it were legal to import drugs from Canada?
Pharmaceutical firms generate much more revenue from US- they will try to protect US prices and profit
LIMIT SHIPMENTS:
ship only enough drugs to Canada- prevent imports
STOP SELLING:
Stop selling some drugs to Canada
RAISE PRICES
Insist on higher drug prices
fewer drugs
eliminate the incentive to import
Government negotiation 2022
US can negotiate the prices for drugs for 60 drugs per year
save taxpayers $30 B per year
pharmaceutical companies
elderly cannot pay more than $2,000 per year out of pocket (D premiums will increase)
Regulating prices of prescription drugs in US involves tradeoff
Set Prices below Market Value
save monney by setting Medicare andd MMeddicaid prices below today's free market prices
Pharmaceutical Firms Response
drug firms will invest less in research and development
Fewer drugs would be launched