Transcript AARP

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
rheumatic heart disease
-75%
Atherosclerosis
-68%
Hypertensive heart disease
-67%
Ulcer of stomach and
duodenum
-61%
Ischemic heart disease
Emphysema
Source: Efpia 1999 - 2002
4 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
-41%
-31%
Prescription Drugs Only Account for 10% of US
Healthcare Expenditures
US national health care expenditure 2001: USD 1.4 bn
Other1
24%
Administration
Prescription
Drugs
6%
10%
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
1.4
1.5
1.4
1.1
1.0
1.0
0.5
0.0
France
Source:
Italy
OECD Health Data 2002.
United
States
Canada
6 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Germany
Switzerland
Netherlands
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
Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2003
7 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
2002
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
47
Changes in
prescription mix
24
Source: Kaiser Family Foundation
8 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Increase in
prescription
volume
US Prescription Drug Expenditures Are Low
Compared with other Every-day Expenses
Consumption expenditures per day, 2002 in USD
10.39
Housing
8.73
Food + Beverages1
3.10
Clothing
1.77
Auto repair
Gasoline and oil
1.58
Prescription drugs
1.48
Telephone
1.28
Alcoholic beverages
1.27
Tobacco
1
Source:
0.78
excluding alcoholic beverages
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
Medication
Hospital
charges
+1.54
-1.11
1
0
-1
-2
-3
Source: American Economic Review, 1996
11 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Outpatient
care
Total
Saving
s
Higher Pharma Spending Offset
by Lower Hospital Utilization
US Pharma spending per capita
in 1995 USD
Hospital days
per capita and year
1 000
3
2
100
1
10
0
1960
Source:
1970
1980
OECD Health Survey, 2002
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1990
2000
Innovative Medicines Reduce
Total Costs to Society
Migraine medication significantly
reduces employers’ cost
Growth factor (G-CSF) reduces
hospital costs of cancer patients
Total costs per employee & month
USD
Cost per patient
USD
435
85
55
44
Without
Medication
With
Medication
Without
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
With
Medication
Inhaled Steroids for Asthma Improved Outcomes
and Reduced Costs for Medicaid
Hospitalizations
Outpatient visits
Total health-care
costs
-26%
-24%
0%
-20%
-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.
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Innovative Anti-hypertensive Therapies Achieve
Superior Compliance
Persistence on drug after one year in % of patients
Thiazide diuretics
20.8
Beta-Blockers
Calcium Channel
Blockers
ACE-Inhibitors
Angiotensin
Receptor Blockers
Source: Conlin et al. Clin Ther. 2001 Dec;23(12):1999
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45.6
54.1
60.7
67.4
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
Source: Third European Report on S&T Indicators, 2003
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1995
1996
1997
1998
1999
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
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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
1987 - 89
51
1990 - 92
1993 - 95
Source: Novartis research
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1996 - 98
2001
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
launch in years
0
1
Source:
2
3
IMS Health
23 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
4
5
Delayed Access to Glivec/Gleevec
for Patients in Europe
Approval time in days
US
73
Europe
Effect:
Patients in Europe
received Glivec 6 months
later
247
Source: Data from FDA and EMEA: European approval time includes 119 days CPMP assessment and
109 days decision making by the Commission
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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
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More Patients In Europe Are Not Receiving
Adequate Treatment
Percentage of eligible patients receiving Statins
56
United States
36
Netherlands
29
Switzerland
26
Germany
23
United Kingdom
17
Italy
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
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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
Number of NMEs
2000
2001
2002
10
4
3
2
2
2
2
1
GSK
Pfizer
Zelnorm,
Elidel,
Foradil,
Gleevec,
Zometa,
Trileptal,
Visudyne,
Exelon,
Rescula,
Starlix
Merck
Astra
Zeneca
Aventis
BMS
J&J
Source: FDA website, company websites, other public domain information
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1
1
Pharmacia Novartis
Lilly
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%
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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
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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
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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