The Value of New Medicines

1
The Value of New Medicines
WIPO Arab Regional Meeting IP as a Power Tool
for Economic Growth
Susan Kling Finston Associate Vice
President PhRMA
Amman, June 1, 2004
2
Value of New Medicines

• To Individual Patients and Families
• For the Benefit of the Larger Societies,
  including the Levant
• Specific Benefits to the Jordanian Economy (2000
  2004)

3
The value to Patients

1. Improving quality of life by reducing
   hospitalizations and helping patients avoid
   surgery.
2. Reducing side effects.
3. Decreasing mortality and morbidity.

4
I. New Drugs Improving Quality of Life

• Reducing hospitalizations and emergency room
  visits
• Avoiding surgery
• Helping patients remain more active and
  independent

5
New Drugs Reduce Visits to Hospital and ER
Asthma Management Program Improves Outcomes for
Children with Asthma
Source P.J. Munzenberger and R.Z. Vinuya,
Impact of an Asthma Program on the Quality of
Life of Children in an Urban Setting,
Pharmacotherapy, 22 (2002) 8, 1055-1062.
6
Medicines Help Prevent Invasive Surgeries

• For ulcers, a few pills have replaced major
  surgery.
• Former FDA Commissioner Dr. Mark McClellan,
  Speech before Drug Information Association,
  Ottawa, Canada November 18, 2003

7
Medicines Allow Patients to Remain Independent
Longer
New Alzheimers Medicine Delays Need for Costly
Nursing Home Care
73 Months
43 Months
Source G. Provenzano, et al., Delays in Nursing
Home Placement for Patients with Alzheimers
Disease Associated with Treatment with Donepezil
May Have Health Care Cost-saving Implications,
Value in Health, 4 (2001) 2,158.
8
II. New Medicines Reduce Side Effects

• New medicines have been found to reduce side
  effects, often leading to improved compliance and
  better health outcomes.
• Approximately 20 to 30 of patients who take
  conventional NSAIDs develop persistent side
  effects, and more than 10 are estimated to
  discontinue treatment as a result. (Source
  Anti-Inflammatory and Upper Gastrointestinal
  Effects of Celecoxib in Rheumatoid Arthritis,
  The Journal of the American Medical Association,
  Vol. 282, No. 20, November 24, 1999.)
• A new family of NSAIDs known as Cox-2 inhibitors
  have been proven to cause less stomach irritation
  and carry a lower risk of complications than
  conventional NSAIDs.

9
New Medicines Often Have Fewer Side Effects and
Less Complicated Dosing Regimens

• In the United States, the number of patients
  treated for depression has grown from 1.7 million
  to 6.3 million over the last decade.
• One of the primary reasons for the increase was
  the steady broadening of prescription drug
  options available to treat depression, including
  a new class of antidepressant medications, which
  have fewer side effects and require less
  complicated dosing regimens.
• Source Olfson, Mark et al., National Trends in
  the Outpatient Treatment of Depression, The
  Journal of the American Medical Association,
  2002 287 203-209.

10
III. Pharmaceuticals Reduce Mortality and
Morbidity

• Pharmaceuticals have eliminated or brought under
  control many diseases that once had high
  mortality rates (e.g., influenza, polio,
  pneumonia, diphtheria).
• Medicines have helped dramatically reduce
  mortality rates for other diseases and conditions
  (e.g., AIDS, asthma, heart attacks, strokes,
  ulcers).
• Medicines are alleviating symptoms for a wide
  range of diseases.

11
Drug Discoveries Have Helped Control Death Rates
for Chronic and Acute Conditions

• Examples
• Antibiotics have helped cut death rates from
  rheumatic fever and rheumatic heart disease by
  83 from 1965 to 1996.
• Medicines such as ACE Inhibitors, beta-blockers,
  and nitrates have helped cut death rates from
  atherosclerosis (hardening of the arteries) by
  74.
• H2 blockers and proton pump inhibitors helped cut
  death rates from ulcer of the stomach and
  duodenum by 72.

12
New Drugs Decrease Mortality for Deadly Diseases

• From Killer to Chronic Disease Drugs Redefine
  Cancer for Many
• Headline to Washington Post story, January 29,
  2003, which noted that thanks to advances in
  care, cancer has evolved into a chronic disease,
  much like asthma, diabetes, and, more recently,
  AIDS.
• AIDS death rate fell 80 in the last decade with
  introduction of HAART drug therapy.
• Source CASCADE Collaboration, Determinants of
  Survival Following HIV-1 Seroconversion After the
  Introduction of HAART, The Lancet, 362 (2003)
  1267-1274.

13
Study Finds Direct Correlation Between Reductions
in Mortality and Number of New Drugs for Disease

• Over 45 of the variation in mortality across
  diseases 1970-1991 is explained by the amount new
  drugs are used to treat the disease New drugs
  the most important factor in mortality
  reductions.
• Each of the 436 new drugs introduced 1970-1991,
  annually adds 11,200 aggregate years of life to
  the U.S. population.
• Source Lichtenberg, Frank, Pharmaceutical
  Innovation, Morality Reduction, and Economic
  Growth, Presented at the Conference on the
  Economic Value of Medical Research, December 1999.

14
Medicines Ease Symptoms
New Drug to Treat Overactive Bladder Improves
Symptoms Reduces Patient Care Needs
Improved Symptoms
Reduced Office Visits
Source T.B. Boone, et al., Treatment Patterns
and Associated Symptom Improvement During Six
Months of Care for Overactive Bladder A
Prospective, Observational Study, Clinical
Therapeutics, 24 (March 2002) 3, 397-408.
15
Value to Society

• Curbing overall health care spending.
• Increasing worker productivity.
• Preventing disease and/or mitigating the
  complications of disease.

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I. New Drugs Reduce Total Medical Spending

• The use of newer drugs tends to lower all types
  of non-drug medical spending, reducing the total
  cost of treating a condition.
• Hospitalization rates fall
• Length-of-stay in the hospital goes down
• Visits to family doctors and specialists are
  reduced
• Prevent costs associated with complications and
  symptoms
• Help avert costly surgeries

17
Research Shows Using New Medicines Reduces Health
Care Spending

• Use of newer medicines increased drug costs by
  18, but reduced hospital and other non-drug
  costs by 129.
• ? So for each additional 1 spent on newer
  pharmaceuticals, 6.17 is saved in total health
  care spending
• ? Of that amount, 4.44 comes from savings in
  hospital spending.
• Frank R. Lichtenberg, Benefits and Costs of
  Newer Drugs An Update, (Cambridge, MA National
  Bureau of Economic Research, June 2002).

18
Drugs Help Control Hospital and Ambulance Costs
Mood Stabilizers Result in Savings for Patients
with Bipolar Disorder
Source J. Li, et al, Cost of Treating Bipolar
Disorder in the California Medicaid (Medi-Cal)
Program, Journal of Affective Disorders, 71
(2002) 1-3, 131-139
19
New Medicines Reduce Costs by Averting
Complications and Reducing Symptoms
Diabetes Costs Reduced Through Improved Glycemic
Control
Source E.H. Wagner, et al., Effect of Improved
Glycemic Control on Health Care Costs and
Utilization, Journal of the American Medical
Association, 285 (2001) 2, 182-189.
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II. New Drugs Increasing Worker Productivity

• Pharmaceuticals make it possible for patients to
  perform better on the job worker productivity
  improves
• With effective medicines absenteeism falls
• Employers save money that would have been lost to
  physical and mental illness

21
Medicines Can Greatly Improve Productivity and
Save Employers Money
New Migraine Medicine Produces Productivity
Savings that Far Outweigh Drug Costs
Monthly Costs
Monthly Employer Savings per Employee Treated
Monthly Drug Costs per Employee Treated
Monthly Savings
10 1 Benefits Costs
Source R.F. Legg, et al., Cost Benefit of
Sumatriptan to an Employer, Journal of
Occupational and Environmental Medicine, 39
(1997) 7, 652-657.
22
Medicines Can Reduce Days Missed From Work
Antidepressants Reduce Absenteeism
Month
SSRI Drug Treatment Begins
Source A.J. Claxton, et al., Absenteeism Among
Employees Treated for Depression, Journal of
Occupational and Environmental Medicine, 41
(1999)7, 605-611.
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III. New Drugs Can Prevent or Mitigate the
Complications of Disease

• Drug treatments reduce disability resulting from
  a disease
• They minimize the chance of serious disease
  complications
• Medicines lower risk of serious disease events,
  such as heart attack
• New medicines can slow disease progression

24
Medicines Help Prevent Disability
Rheumatoid Arthritis Drug Treatment Reduces
Chance of Disability
Source J.B. Wong, et al., Estimating the
Cost-effectiveness of 54 Weeks of Infliximab for
Rheumatoid Arthritis, American Journal of
Medicine, 113 (2002) 400-408.
25
Medicines Prevent Serious Disease
EventsCholesterol Fighting Drugs Reduce Risk of
Heart Attack or Stroke

• Cholesterol-lowering drugs, known as statins,
  safely reduced the risk of a heart attack or
  stroke by one-third in the worlds largest study
  of people at high risk for these conditions.
• About 25 million people worldwide take statins
  today. The new findings suggest that about 200
  million people worldwide would benefit from the
  drugs.
• According to the studys lead investigator, if 10
  million high-risk patients started taking
  statins, 50,000 deaths would be prevented each
  year.

Source Lawrence K. Altman, Cholesterol Fighters
Lower Heart Attack Risk, Study Finds, The New
York Times, November 14, 2001.
26
Medicines Reduce the Risk of Complications Stride
s in Ulcer Treatment Exemplify Ability of
Pharmaceutical Innovation to Prevent or Mitigate
Complications of Disease

• Before 1977, the year in which stomach-acid
  blocking H2 antagonist drugs were introduced
  97,000 ulcer surgeries were performed each year.
  By 1987, that number dropped to fewer than
  19,000.
• In the 1990s cost of drug therapy for ulcers
  900/person/year
• Cost of surgery 28,000
• The new treatment saves at least 224 million a
  year in health care costs.

Source The Contribution of Pharmaceutical
Companies Whats at Stake for America, The
Boston Consulting Group, September 1993.
27
Hepatitis C Virus (HCV) and its Epidemiology in
Levant Area

• Discovered in 1989 as a small RNA blood-borne
  virus with a large reservoir of chronic carriers
  worldwide
• Major cause of posttransfusion hepatitis prior to
  1992
• Actual prevalence of HCV infection in Lebanon and
  Syria is not known.
• Prevalence in Iraq 0.5, Libya 7.9 and Jordan
  2.
• Genotype 4 is the most prevalent type in the
  Middle East.

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Prevalence of HCV in Our Countries
29
Combination Therapy is Excellent Value Compared
with Other Well Accepted Interventions
Cost per life years gained (Euro)
50,000
40,000
30,000
20,000
10,000
0
Stool Guaiac
Pneum Vacc
Mammogram
CABG
Anti- hypertensives
PegIntron(1.5) Rebetol
30
Value to Jordan

1. Growth in Pharmaceutical Industry Economic
   Activities
2. Development of New Related Sectors
3. Overall Benefits to the Jordanian Economy

31
Growth in Pharmaceutical Industry Economic
Activities (2000 - 2004)

• More New Product Launches
• More than 32 new product launches
• Jordan joining Global Launch A-List
• Growth in PhRMA Activities in Jordan
• Ten Regional Offices
• 300 Growth in Direct Employment

32
Growth of Partnerships

• Eli Lilly Agreed with Al Hikmeh to promote
  Cialis for erectile dysfunction in the Jordanian
  market, as the first multi-national company to
  provide exclusive promotion responsibility for an
  innovative drug.
• Bristol-Myers Squibb Signed a 3-yr cooperative
  landmark agreement with King Hussein Cancer
  Center (KHCC). This agreement extended
  cooperation to Jordan already existing between
  B-MS and NCI (National Cancer Institute) in US.
• Novartis Levant Regional Office in Amman
  celebrates its fifth year in operation serving
  several countries in the region reached a
  collaborative agreement with Dar Aldawa.

33
Development of New Sectorsin Jordan - - Clinical
Reseach

• PhRMA members Aventis, BMS, Eli Lilly, Janssen
  Cilag, MSD, Novartis, Organon, Pfizer and
  Schering AG
• Key areas
• Cancer - Cardiovascular
• Renal Failure - Anti-infectives
• Schizophrenia - Diabetes
• Epilepsy - Osteoporosis
• Antibiotics - Painkillers

34
Growth of Clinical Trial Activity in Jordan
Clinical trials Pfizer Eli Lilly Novartis MSD Aventis Schering AG
Pre-2000 1 Almost none None None None None
2004 4 2 4 3 6 1
Subject Antifungal Cardiovascular Osteoporosis Sepsis Cancer Thalassaemia Cancer Osteoporosis Osteoarthritis Cardiovascular Oncology Osteoporosis Cardiovascular Diabetes Anti-infectives Computer tomography Cardio angiography investigations
Data Internal PhRMA Survey, Spring 2004
35
Development of New Sectorsin Jordan - - Medical
Tourism

• Jordan has four major sites
• Each with several medical/holistic health
  centers
• Dead Sea
• Maeen Falls
• Jordanian Hummah
• Afra Falls

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Overall Benefits to the Jordanian Economy

• Benefits of Perception of strong Jordanian IP
  Regime
• Growth in Jordanian Economy based on Knowledge
  Economy
• Springboard for attracting PhRMA member
  activities to Amman.
• Jordans pharmaceutical exports produced by
  local firms increased by 30 overall to all
  markets through 2003.

37
PhRMA International Points of Contact

• Washington DC
• sfinston_at_phrma.org Susan Finston
• Amman, Jordan
• smansour_at_phrma.org Samir Mansour