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Novartis’ European chief says ‘Geotailoring’ will speed decision making and bring it closer to customers

Published on 28/01/08 at 12:26pm

Q: Europe’s biggest market Germany is preparing for some major reforms at the moment. How is Novartis responding to that changing that environment?

“The German system has seen decision-making become regionalised, moving from a few centralised people making decisions about access to the market and pricing to many more regional bodies looking at these questions.

 “And there is now a mix of private and public payors, which creates a certain asymmetry of purpose.

 “I think we have two factors in our favour when responding to those changes: we have been successful in Germany in the last few years, and we have learnt to live with the changes, because of the way we can adapt as a company.

“We believe in the concept of geotailoring – that means we don’t believe in ‘one size fits all’ in terms of our approach to working with healthcare systems. We organise our businesses in response to the environment in each territory.  “If you look at the track record of our innovation, for instance Exforge is now doing very well in Germany after a successful launch into the GP market,  so we have cracked that, so to speak. 

 “We clearly see a similar pattern as we launch Rasilez, there too we seem to have mastered how to get into the new market. We have been particularly successful with our speciality brands, but Germany remains a challenging and demanding market.”

Q. While both are hypertension products, Exforge (combining Novartis’s Diovan with amlodipine) is very different to Rasilez which is a novel drug with a new mode of action. Isn’t it harder to convince doctors about this new drug?

“Of course, if you market a combination of the two best known, most prescribed antihypertension drugs you will get a good level of acceptance - we are running into open doors. But nevertheless, we are very pleased with the results for Exforge, and particularly because the degree of cannibalisation from Diovan is very low.  So Exforge is a solution to those patients who haven’t reached their [blood pressure lowering] goal on individual products. And that’s helping us consolidate our standing in hypertension.

 “Rasilez, let’s be clear, has some unique features – 24 hour blood pressure control, for instance, and we have some very convincing efficacy data. But clearly it doesn’t have that wealth of data yet compared to established drugs. We are running a very extensive clinical programme in order to document all the benefits, but that will take time to bear fruit.
“Today, with all the hurdles and screening that takes place, it is going to take some time until you move into formularly position and displace drugs that have been studies in all aspects of cardiovascular medicine – heart failure or myocardial infarction and so on.

“It will take time, but we are very confident about Rasilez. Because if you look at the mechanism of action and the data, it has a great deal of promise.”

Q. Joe Jimenez talks of Novartis’ using innovative marketing techniques - guaranteed outcomes for certain products, for instance. Will that be arriving in Europe in the near future?

In the speciality field, when you arrive with genuine innovation, you base your negotiation with the payor on what the existing data are on prevalence and epidemiology. We have seen in the past when you arrive with a product that fulfills genuine unmet need, then all of a sudden, patients are diagnosed and the numbers of actual patients increases. So payors will want to share risk in this situation. If during the lifetime of the drug we see the patient population expand, they will want room to negotiate on price.

So there is in-built into this negotiation an evolution which can take various forms – staggered pricing or whatever.
Take Aclasta [Novartis’ once a year osteoporosis injection] where there is such convincing data from the patient study that [payors say] they are willing to pay the price that you ask, but need reassurance the trial data can be replicated in the wider population. There are different ways of doing that, you could have a risk management programme that has a study programme in it, or you could have some sort of money back guarantee which says we can definitely prove the same response will be seen in the clinical reality.

 But Cornut says that in the ‘mass market’ of primary care products, such schemes are far more difficult, because payors are increasingly focused on making saving with generic prescribing rather than gaining incremental clinical benefit with newer primary care drugs.

 "You have to strike a balance between what you can offer and what is the price recognition,” he says: “There is recognition for innovation in these fields, but you have to be more creative to clinch it.

Novartis has declared it is going to reorganise itself and simplify its internal decision-making structure. Why is that necessary now?

"Markets are becoming more complex and therefore familiarity with the market is key. And sometimes ‘vertical’ decision making [global decision making] becomes too difficult. Because if you have to go back to Global for every local decision, you realise it is going to take so much time just to explain the local market conditions. You really need to re-think which level is accountable for what decision.

"There is great variation even within markets – say between England’s different PCTs, or between the regions in Spain, or hospitals in Germany. So moving from a ‘one size fits all’ to a ‘geotailoring’ approach also raises the legitimate question – what are our decision making processes, how can we accelerate them and be closer to the customer and get closer to the market?

“These are all very important questions, and we are going to work hard to make sure we are efficient and responsive to customers."
Cornut concludes by indicating that Novartis will see some significant changes in 2008, but says making the most important and difficult changes will take time.

“We will look at opportunities to streamline decision making, but at this time it is premature to make a definite statement about that. This year, we will see changes to our business in a few simple ways. Either we stop doing something because we no longer need it, or we outsource or offshore it and do it somewhere else more cheaply. That we will do pretty quickly because they are obvious choices.”

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