I. The Basic Switch Process
Transcription
I. The Basic Switch Process
Rx to OTC Switch Summit: Assessing the Future of Switches in the US and Beyond Workshop: Evaluating “Switchability” and Ensuring Successful Regulatory and Commercial Outcomes We work with consumer healthcare companies to develop and implement strategies for growth – on a portfolio or brand basis We help our clients implement tactics for both organic and inorganic growth strategies Acquisitions/Divestitures Tech Search/In-Licensing Rx to OTC Switch Geographic Expansion Partnerships Marketing Initiatives Experience and Assignments • Our team members have contributed to dozens of Rx to OTC switch programs at SmithKline Beecham, WarnerLambert, Pfizer, Pharmacia, Schering-Plough, Merck, Chattem, etc. • In the past four years, our firm has: – Led the strategy, planning and program implementation of five first-in-class Rx to OTC switch candidates, from both a commercial and regulatory standpoint – Assessed Rx to OTC switch potential for multiple Rx products – Helped consumer healthcare companies develop evaluation criteria – Assisted Rx companies with Rx to OTC outlicensing strategies – Accelerated timelines for existing Rx to OTC programs – Participated in Rx to OTC switch Advisory Committee Meetings Agenda • Introductions • The Basic Rx to OTC Switch Process – Including NSURE Initiative 8:30am 8:45am • Break 10:00am • Key Switch Success Factors • Evaluating Switch Opportunities 11:10am 10:20am Level Setting • How many of you are switch novices? • How many are switch experts? Doing a Switch is like Making an Apple Pie Doing a Switch is like Making an Apple Pie Doing a Switch is like Making an Apple Pie Switches are like Apple Pie • There is no one, right recipe for switch • There are some basic guidelines that should be followed • There will be differences of opinion about how to achieve the switch • There can be similar ways to achieve the same outcome • Be careful not to over-complicate your switch • Some switches fail • Each switch has historically had a different “spice” that has made it unique • … and it can get heated in the kitchen! … BEFORE WE DISCUSS SWITCHES … Monograph vs. Switch • OTC Monograph Process started in 1972 – FDA reviewed all currently (1972) marketed OTC products – Determined which drugs, at what levels and in what dosage forms, were safe and effective – Set standard labeling – Monographs enable all GMP manufacturers to launch products according to guidelines without pre-clearance – … although some monographs still not finalized • Drugs not considered via the monograph process can only be introduced to OTC market via NDA – Most are “switched” from Rx marketing status – A few (topical) drugs have been approved directly as OTCs Monograph vs. Switch Monograph Analgesics Allergy Heartburn Switch THE BASIC RX TO OTC SWITCH PROCESS OTC Principles • According to FDA, OTC drugs generally have these characteristics: – Their benefits outweigh their risks – The potential for misuse and abuse is low – Consumers can use them for self-diagnosed conditions – They can be adequately labeled – Health practitioners are not needed for the safe and effective use of the product OTC Principles • CDER Director Janet Woodcock reaffirmed in 2001 that “the default assumption of the Act is for drugs to be marketed OTC without a prescription unless a decision is made tha t consumers are not able to appropriately diagnose their condition nor able to correctly choose the remedy and use it safely based on OTC labeling” • How FDA makes this decision continues to evolve, however… – FDA scheduled to present “updates on key Agency initiatives such as FDA monograph modernization and the Safe Use initiative” at CHPA RSQ on May 15th Peck Principles (1990) • • • • • • • • • • • • • Does the switch candidate have special toxicity in its class? Does the candidate have a large margin of safety? Does the candidate’s frequency of dosing affect it’s safe use? Has the candidate’s safety profile been defined at high dose? Has the candidate been used for a sufficiently long time on the prescription market to enable a full characterization of its safety profile? What is the worldwide marketing experience of the switch candidate? What foreign countries market the candidate OTC? What is its experience in those countries? What do the “use data” show? Has a vigorous risk analysis been performed? Has the efficacy literature been reviewed in a way to support the expected usage and labeling of the switch candidate? Is there a full understanding of the pharmacy-dynamics of the switch candidate? Is the minimally effective dose for the proposed OTC indication known? Have possible drug-drug interactions for the switch candidate been identified? • • • DeLap Principles (1998) Fundamentals – Can the condition be adequately self-diagnosed? – Can the condition be adequately self-treated? – Is the self-treatment product safe and effective for consumer use, under conditions of actual use? Points to Consider – Is there a need for physician evaluation of the condition? – What is the nature and severity of adverse effects of consumer misdiagnosis and delay in correct diagnosis? – Regarding effective product use, what is the nature of consumer understanding of product use? – What is the consumer understanding of expected benefit? – Does the consumer have the ability to assess treatment effect? Safe Product Use – What is the consumer understanding of product directions for safe use? – What is the consumer understanding of what to do if the product isn’t working? – What is the consumer ability to identify adverse effects, and the consumer ability to determine when adverse events may require professional care? – What is the consumer expectation of safety? OTC Principles • It’s all about Risk vs. Benefit! – Although “economic and comparative safety or efficacy assessments are not party of the agency’s switch decisions” • Assuming that safety and efficacy have already been demonstrated in an Rx setting, can a consumer safely use the drug without the presence of a learned intermediary? – Focus is therefore more on consumer behavior than safety and efficacy • Can the consumer safely self-diagnose? • Can the consumer safely self-treat? – Adequate and appropriate labeling is key Can the Consumer Self-Diagnose the Condition? • (For new OTC indications) will misdiagnosis result in delayed treatment for a more serious condition? – Are there more serious conditions with similar symptoms? • How common or rare are these conditions? – What are the consequences of misdiagnosis? – How are physicians diagnosing and prescribing? • Using visual clues versus tests? • Allowing consumers to self-diagnose or prescribing over the phone? Can the Consumer Safely Self-Treat with the Drug? • Will inappropriate patients know not to use the product? – Diabetics, certain age groups, etc. • Are there implications of inappropriate use? – Addiction? • Although nicotine is addicting … – What if the consumer takes more than the recommended dose? • What side effects have been seen in use? • What is the position of the professional/medical community on broader access? • Is any monitoring required to ensure safe/effective use? Basic Switches Do not Exist • In the past ten years … – Only 14 new drugs brought to OTC market – Only 6 First in Class switches • In the past five years … – Only 6 new drugs brought to OTC market – Only 2 First in Class switches • Almost no two switches have followed the same pathway View switch list at: http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ucm106378.htm Basic Switches Do not Exist OTC Product Approval First in Class? Lesson(s) Learned Lamisil Derm Gel (Novartis) 7/24/06 N Plan B (Duramed) 8/24/06 Y BTC for age verification MiraLAX (Schering-Plough) 10/6/06 Y Unmet consumer need drove big $ sales Zaditor (Novartis) 10/19/06 Y No patent protection and no spending = poor sales Alaway (B&L) 12/1/06 N Generic Zaditor alli (GSK) 2/7/07 Y “Read Me First” brochure to enhance compliance Zyrtec/Zyrtec-D (McNeil) 11/07 N Prevacid 24 HR (Novartis) 5/18/09 N Plan B One Step (Duramed) 7/10/09 N Basic Switches Do not Exist OTC Product Approval First in Class? Lesson(s) Learned Zegerid OTC (Schering-Plough) 12/1/09 N Allegra/Allegra D (Chattem) 1/24/11 N Oxytrol for Women (Merck) 1/25/13 Y Left “men” Rx Silhouette = Label Neg Ad Comm vote Nasacort Allergy 24 HR (Chattem) 10/11/13 Y All ages switched Human Factors Study Blocked publication of review/SBA Nexium 24HR (Pfizer) 3/28/14 N Efficacy required Flonase Allergy Relief (GSK) 7/23/14 N Booklet = Label Additional claim Rhinocort (McNeil) 3/23/15 N Trade dress hidden No Rx Product Equity 3rd PPI to market Common Threads of Recent Switches • All demonstrated safety in an OTC setting via adequate labeling – Labels constructed using Drug Facts Label format, despite limitations of this format – Label readability tested via Label Comprehension Studies • Only “new information” required to be tested – Consumer decision-making tested per Self Selection Studies – Actual Use Studies required to demonstrate safe use (i.e., de-selection, compliance to label, etc.) The Basic Rx to OTC Switch Meet with FDA (Pre-IND Meeting) Label Comprehension Study (LCS) Self-Selection Study (SSS) Actual Use Study (AUS) File NDA Advisory Committee Meeting Meeting with FDA • Rx to OTC switches involve both the Division of Nonprescription Clinical Evaluation (DNCE) and the therapeutic review Division – Create a meeting request that will get the right people to the meeting • Start with the label = Pay close attention to indication • Propose a development plan to FDA – Make a compelling case (with data) for rationale for switch and development plan – If FDA requires a clinical study to approve the switch, it will result in three years of Hatch-Waxman exclusivity • Summarize all learnings at meeting end and confirm understanding in formal minutes – Although FDA can change their mind Nasacort Pre-IND Meeting • Nasacort Review and Summary Basis of Approval (SBA)blocked from public review … but … check out Ad Comm material! • “FDA advised that label comprehension studies should focus on the priming of the Nasacort AQ pump, which was a more unique aspect of consumer directions. FDA also requested a human factors study to assess consumers’ performance in these tasks. Selfselection and actual consumer use studies were not deemed necessary given the experience with other OTC products and labels, including those for OTC AR http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/NonprescriptionDrugsAdvisoryCommittee/UC products.” M362907.pdf Nasacort Pre-IND Meeting (II) • “A key consideration in the switch approval of Nasacort AQ is the age recommendation for OTC use. Sanofi initially proposed to the FDA that the OTC indication be restricted to 18 years of age and older. FDA did not agree, indicating that they were unaware of any data that would preclude OTC approval for the full age range of 2 years and older, and requested a justification for an age restriction. Sanofi conducted a comprehensive review of Nasacort AQ safety information including for the pediatric population. ... In light of the benefits of OTC access, the safety evaluation and consistent with the FDA’s recommendation, Sanofi filed for a full switch (2 years of age and older) where the indication, population and duration of use reflect the current approved prescription labeling.” http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/NonprescriptionDrugsAdvisoryCommittee/UC M362907.pdf Label Comprehension Study • A Label Comprehension Study (LCS) is a consumer behavior study that assesses the extent to which consumers understand the information on nonprescription drug product labeling and then apply this information when making drug product use decisions in a hypothetical situation. – Performed as an “open-book” test – Supplemented with low medical literacy participants – Focuses on what’s different versus existing OTC labels • Data derived from a label comprehension study can identify areas on the label that would benefit from clearer or simpler presentation of important consumer information. Nasacort - Can Consumers use the Bottle without Being Taught? (From the Nasacort Ad Comm Briefing Document): • “The primary objectives in testing the DFL and CIL focused on consumer understanding of the following label directions: – DFL: Get a new bottle ready (primed) before first use. – CIL: A new bottle of Nasacort must be primed before first use.” http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/NonprescriptionDrugsAdvisoryCommittee/UC M362907.pdf Claritin – Focus on CIU (From the Claritin NDAC briefing documents): • “This label comprehension study was designed to evaluate Claritin ® 24 for over-the- counter (OTC) treatment of chronic idiopathic urticaria (CIU). Claritin ® 24 (loratadine) is currently a prescription medication prescribed for the treatment of seasonal allergic rhinitis and chronic idiopathic urticaria. Currently CIU is not an OTC indication for any product marketed in the U.S. The label study was designed to evaluate whether consumers can understand label directions, and in particular the new indication and direction for previously diagnosed, recurring or chronic hives. This review did not examine the entire Label Comprehension Study, but focused on issues that will likely be discussed at the Advisory Committee meeting. • The objectives of this study were to evaluate if consumers: – understand the uses, directions and warnings as based on reading the product label – can accurately self-recognize CIU upon recurrence and appropriately self-select Claritin for use” Source: http://www.fda.gov/ohrms/dockets/ac/02/briefing/3850b1_07_LabelComp-Review.pdf Oxytrol Required Multiple Label Comprehension Studies • From the Summary Basis of Approval: – Pilot LCS – LCS of enhanced pregnancy warning – LCS of diabetes warning – LCS among 65 and older women – LCS among women with diabetes risk – Pivotal LCS among female OAB sufferers Source: http://www.accessdata.fda.gov/drugsatfda_docs/nda/2013/202211Orig1s000SumR.pdf Self Selection Study • A Self-Selection Study (SSS) is a consumer behavior study that assesses the ability of consumers to apply drug labeling information to their personal health situation to make correct decisions about whether or not it is appropriate for them to use a drug product. – Particular focus on populations that should NOT use the product • FDA guidance published April 2013 • As with Label Comprehension Studies, there is specific expertise required to conduct these studies – Two key research organizations (Pegus and Concentrics) A Notable Self Selection Failure • Singulair (May 2014 Advisory Committee Meeting) – Concerns about increased risk of neuropsychiatric events in teens • Only 57.7% of adolescents correctly identified that the product was not for them in a targeted selfselection study when initially asked – Concerns about inappropriate use for asthma • The outer carton included a banner on the front AND back of the carton: THIS PRODUCT IS ONLY FOR ALLERGIES. DO NOT USE TO TREAT ASTHMA. • Nearly 16% of asthma sufferers without allergy symptoms felt that the product would be appropriate for them to use Proposed Mevacor Daily™ Label 2007 Notable Self Selection Failures • Mevacor – Merck tried to switch Mevacor in 2000, 2005 and 2007 – Concern about fetal toxicity associated with the drug – Merck failed to demonstrate that women under the age of 55, or women who could get pregnant, would not self-select OTC Mevacor A Self Selection Success • Gyne-Lotrimin (1990) – Initial concerns about self-diagnosis – Schering-Plough labeled the product both to describe the symptoms, and to state that the product should only be used by women who had previously experienced a yeast infection – Schering-Plough also demonstrated that women were as accurate as their doctors in recognizing recurrence – Key learning: the “standard of care” is not always standard How Many Oxytrol Studies? • Oxytrol required three self-selection studies with an evolving label – First Self Selection Study: • Decisions compared to a physician’s diagnosis • 89.4% of normal literates and 91.2% of low literates made a correct self-selection decision – Self Selection Study with only men: • >90% self-selected correctly not to use the product • PDP tested was pink and contained an image of a woman – Self Selection Study among pregnant women with OAB symptoms: • Study participants had to recognize that urinary frequency could be an early sign of pregnancy and that they should ask a health care provider before using Oxytrol if they were pregnant or nursing The Definition of Labeling is Expanding … • Includes images on Primary Display Panel – Earlier in the Oxytrol development program, the icon on the package featured a woman wearing a “stylized tent-like dress” – While men were able to understand that the product in the pink package was not for them … – This package tested poorly with pregnant women – In the final label review, FDA noted that the label is approved with “the silhouette of a woman … with a thin waist and slightly leaning back” OPDP and Labeling • OPDP (formerly DDMAC) will also consider OTC brand name – Particularly if an indication or dosage remains Rx – What does the suffix convey? Prevacid 24 HR • Clear lack of consistency! Plan B One Step Zegerid OTC Allegra/Allegra D Oxytrol for Women Nasacort Allergy 24 HR Nexium 24HR Flonase Allergy Relief Actual Use Study • An Actual Use Study (AUS) is a clinical study used to simulate the OTC use of a product to predict if a drug will be used properly, safely, and effectively in the OTC setting. • Examples of things an Actual Use Study can assess are: – Adherence (taking the drug and performing any monitoring for efficacy and safety in accordance with the drug label) – Safety (adverse events that occur during the study) – Efficacy (whether the clinical benefit in the prescription setting is reproduced in the OTC setting or with a different OTC indication) Recent Actual Use Studies • Oxytrol – Primary endpoint in CONTROL Actual Use Study: • Proportion of verified users who did not stop use when they developed new or worsening symptoms over all verified users • Lipitor – As reported on clinicaltrials.gov. Last updated March 2015 with completion December 2014. – Primary endpoints: • Percentage of subjects who comply with the direction to check their low-density lipoprotein cholesterol (LDL C) level after 26 weeks • Percentage of subjects who, after checking their LDL C level, take the appropriate action based on their test results Other Studies May Be Conducted or Required • Nasacort required to do Human Factors Study to demonstrate that consumers could prime and use the pump – Human Factors Studies are designed to show how consumer interact with the product – Also required to demonstrate that consumers did not perforate their septum • Nexium required to demonstrate efficacy for frequent heartburn, a different indication than the Rx indications • Flonase conducted a Phase IV study to demonstrate efficacy against the allergy symptom: “itchy, watery eyes” Advisory Committee Meetings • After filing a switch NDA, FDA may convene a Nonprescription Drugs Advisory Committee (NDAC) to obtain broader input on whether the sponsor has demonstrated that the drug product can be used safely and efficaciously by consumers without a learned intermediary – Particularly for first-in-class drugs • Recent NDAC meetings: Singulair (2014), Nasacort (2013), Oxytrol (2012) • There were no switches reviewed in 2011 or 2010 • Required for Nasacort (2013), but not Flonase (2014) or Rhinocort (2015) • Required for Prilosec (2000) but not Nexium (2014) Advisory Committee Meetings • NDAC meetings to discuss switches are public events, often attended by competitors, and include: – Presentations from sponsor and FDA – Comments from interest groups – Discussion, and voting • Although FDA asks the Advisory Committee to vote, FDA does not always follow their recommendations – NDAC voted 10 to 6 for Nasacort, but 5 to 6 against Oxytrol • Months of preparation are required by the sponsor in advance of an Advisory Committee meeting What Nasacort Did Well • Prepared for opposing views of public advocacy and health professional groups – Engaged them – Listened to their concerns – Transparent with intentions and respectful of their POV • Interfaced well with FDA to prepare for Ad Comm – Anticipated concerns of Advisory Committee and shared expectations with FDA – Practiced, revised and practiced core presentation repeatedly and shared it with FDA – Respectful and genuinely open, appreciative and cooperative with FDA Slide courtesy Bernie Simone, VP Rx to OTC Switches, Chattem What Nasacort Did Well • Conducted well-designed comprehension and human factors studies and presented them in a clear, complete and concise manner • Prepared for thousands of possible questions that helped hone the Core Presentation • Incorporated excellent consultants and integrated them effectively – Team of Rivals Slide courtesy Bernie Simone, VP Rx to OTC Switches, Chattem Switch Program Costs and Timing • Assuming a First in Class switch: Label Comprehension Self-Selection Actual Use Prepare/Approve NDA TOTAL Duration 6 months Cost $250K 5 months 1.5 years > 1 year 5 years $500K $2.5MM $2.2MM+ >$6MM Does not include: repeating studies, Ad Comm preparation, personnel costs, outside consultants, at-risk launch preparation Some Topical Products have been approved for OTC sale in the US without prior Rx history • Abreva, a product for cold sores, and Mexoryl, a sunscreen, were approved by FDA for OTC use without prior Rx use in the US (2000 and 2006 respectively) • Both products had extensive clinical programs. Mexoryl also had an extensive history of use in Europe. – There were 33 in vivo and 5 in vitro studies conducted on Abreva in addition to 3 clinical efficacy studies – In addition to its non-US marketing history, 18 studies were conducted on Mexoryl Abreva Pre-Approval Studies Pre-Clinical/Non-Clinical 38 Total Studies (33 in vivo + 5 in vitro) • 1 in vitro Pharmacokinetic study • 4 in vitro Genotoxicity studies • 5 Safety Pharmacology Studies • 2 Hours Body temperature in Mice(n = 24) • 2 Hours Sleeping Time in Mice (n = 24) • 4 Hours Cardiovascular and Respiratory in Mice (n = 24) • 4 Hours Gastrointestinal Tract in Mice (n = 24) • 3 Hours Urinary Output in Mice (n = 24) • 4 Repeat 168-Hour ADME studies in Mice (n = 76) • 24-hour Absorption and Pharmacokinetics study in Rabbits (n = 12) • 6 Reproductive and Development • 4 Day Oral Dose Range in Rats (n = 36) • 20 Day Oral Dose Range in Rats (n = 24) • 12 Day Oral Dose Range in Rabbits (n = 4) • 29 Day Dose Range in Rabbits (n = 16) • 71 – 90 Day General Reproduction in Rats (n = 176) • 1 Hour General Reproduction in Rabbits (n = 16) • 17 Toxicology studies • 15 day Oral Toxicity in Rats (n = 10) • 26-week Oral Toxicity in Rats (n = 160) • 26-week Oral Toxicity in Dogs (n = 32) • 15 day Dermal Toxicity in Rats(n= 10) • 13 Week Dermal Toxicity in Mice (n = 60) • 28 Day Repeated-Dose Dermal Toxicity in Rabbits (n = 60) • 28 Day Dermal Tolerance in Rabbits (n = 8) • 4 Hour Skin Irritation/Corrosion in Rabbits (n = 3; 10% formula) • 4 Hour Skin Irritation/Corrosion in Rabbits (n = 3; 20% formula) • 1 Hour Eye Irritation in Rabbits (n = 3; 10% formula) • 1 Hour Eye Irritation in Rabbits (n = 3; 20% formula) • 8 Day Hypersensitivity in Guinea Pigs (n = 30; 20% formula) • 8 Day Hypersensitivity in Guinea Pigs (n = 30; 25% formula) • 7 Day Phototoxicity in Guinea Pigs (n = 6) • 10 Day Penile Irritation in Rabbits (n = 40) • 10 Day Vaginal Irritation in Rabbits (n = 50) • 28 Day Vaginal Toxicity in Rabbits (n = 5) Clinical 3 Clinical Efficacy Studies • 2 Week Randomized, double blind study in Patients with Recurrent Herpes Labialis (n = 63) • 18 Hour Disease duration study (n = 312) • 16 Hour Disease duration study (n = 312) Mexoryl Pre-Approval Studies Pre-clinical/ Non-Clinical 8 Total Studies (2 in vitro + 6 in vivo) 2 in vitro • Critical Wavelength Study of Test Formulations • E. Coli genotoxicity in presence of UVA and UVB light 6 in vivo • Clastogenicity in Rodents (n = UNK) • 104 Week Dermal Carcinogenicity in Mice (n = UNK) • 2 Week Topical Toxicology on Rodents (n = UNK) • 2 Week Oral Toxicology in Rodents (n = UNK) • 26 Week Oral Toxicology in Rats (n = UNK) • 6 to 21 Day Reproductive Toxicology in Rats (n = UNK) Clinical 10 Clinical Studies • 1 week Phase 1 Dermal Safety Study (n = 223) • 20 Day Phase 2 Efficacy study on 7 Test Formulations (n = 100) • 22 Day Phase 2 Efficacy Study on 6 Test Formulations (n = 49) • 10 Day Phase 3 Efficacy Study on 1 Test Formulation (n = 14) • 12 Month Phase 3 Safety Study (n = 1,048) • 6 Hour Photosensitization (n = 137) • 48 Hour Phototoxicity (n = 26) • 6 Week Acnegenicity/ Comedogenicity (n = 44) • 8 Day Pharmacokinetic Study in Healthy Males (n = 6) NSURE INITIATIVE FDA’s NSURE Initiative • In March, 2012, FDA held a public hearing to consider expanding “the conditions of safe use” under which more OTC drugs could be made available to address undertreatment of common diseases that could benefit public health. • FDA cited the following public health concerns: – Significant undertreatment of common diseases and conditions – Lack of regular access to medical and pharmacologic care – Decreased access to health services See http://www.gpo.gov/fdsys/pkg/FR-2012-02-28/pdf/2012-4597.pdf FDA’s NSURE Initiative • In the meeting notice, FDA specifically cited hyperlipidemia, hypertension, migraine headaches, diabetes, asthma and chronic obstructive pulmonary disease (COPD) as underserved conditions • FDA convened the meeting to question whether innovative technologies could be used to expand which drugs products could be safely used OTC – Approximately 30 speakers provided broad representation of different views (consumer, professional organizations, academia) – FDA received over 180 comments from a variety of stakeholders FDA’s NSURE Initiative • Comments addressed a variety of areas: – Access and data concerns – Effect of paradigm on health care – Effect of paradigm on health care costs – Specific drugs, diagnostics and technologies – Conditions of safe use – Barrier to successful implementation • Subsequent to the March 2012 Public Hearing: – FDA named the initiative NSURE (Nonprescription Safe Use Regulatory Expansion) – Held three expert workshops to further explore the issues The NSURE Workshops • 11/8/12: “Nonprescription Medications with Conditions of Safe Use as a Novel Solution for Undertreated Diseases or Conditions” • 5/9/13: “Innovative Technologies and Nonprescription Medications: Addressing Undertreated Diseases and Conditions through Technology Enabled Self-Care” • 11/4/13: “Exploring Implications of the Nonprescription Drug Safe Use Regulatory Expansion (NSURE) Initiative on Reimbursement and Access” • It has been over a year, and next steps are unclear … looking forward to update on May 15th! NSURE’s Potential • Evolving 21st Century communication tools to assist with proper decision-making and safe use could include: – Pharmacist integration into product monitoring and simple diagnostic testing (i.e. blood pressure testing and monitoring?) – Computerized kiosks with self-selection algorithms that could intervene with the ability to purchase the drug if self-selection is inappropriate (i.e., cholesterol risk factors?) – Algorithms that limit the quantity of medication available to help ensure proper adherence with usage instructions – Smart phone capabilities integrated with drug use monitoring or to help thwart potential for drug-drug interactions • There’s an app for that! – Interactive computer programs used by consumers and monitored by sponsor companies Some Issues For Consideration • Will new regulations be required to approve a new, expanded definition of labeling? • If “tools” designed to aid self-selection are added to OTC drugs, will these be considered drug-device combinations? • What would be required when these new technologies are updated with enhancements, something that can be expected to happen frequently? Do We Need NSURE? • Long ago, FDA demonstrated their willingness to consider “collateral measures” in Rx to OTC switch approvals – 1996: Nicorette switch included “User’s Guide and Audiotape” – 2007: Alli switch included “Read me First” insert • 2014: The approved Flonase label includes a 36page booklet! H *!4I #:*(>#:*(*4-3. %#?' -*%-#FG' 1 2(* Merck Self Selection Patent Enhancing Self-Treatment US Patent Application 20080153122 Method and System for Enhancing Self-Treatment of Onychomycosis Can Technology Aid Consumer SelfSelection? GSK developed a prototype electronic aid to selfselection using: • a simulated electronic kiosk • a model drug named “Cardiocor” – an OTC statin for cholesterol reduction • 9 step self selection algorithm based on the Mevacor- Daily™ Drug Facts label Slide courtesy Erin Oliver, Head, US Regulatory Affairs, GlaxoSmithKline Consumer Exploratory Study of an Electronic Self-Selection Aid • Exploratory study evaluated the use of technology to supplement the product label – Ease of use (electronic self-selection aid) – Impact on correct decision making • Compared 2 groups – Label only (n = 155) – Label + electronic self-selection aid (n = 155) • Use of the electronic aid significantly improved overall correct selection (46.5% vs. 73.5%; p <0.001) • Subjects found the device easy to use and helpful in making a selection decision Slide courtesy Erin Oliver, Head, US Regulatory Affairs, GlaxoSmithKline Consumer In The News “CVS Health has confirmed a report that it is planning to open a CVS Health Digital Innovation Lab this winter in Boston that will focus on “building customer-centric experiences in health care.” As initially reported on BetaBoston.com, the new 15,000-sq.-ft. office space will be centrally located to the medical community in Longwood and the tech community in Cambridge, and will enable CVS Health to further explore the “digital enablement of health care.” In the article, Tilzer also pointed to another project in development — “lab stores” in Boston, New York and Menlo Park, Calif. Tilzer said the stores will provide a “live environment” and will open next year. "The lab stores will provide a 'live environment' to 'explore whether they can be meaningful,'" Tilzer told BetaBoston.com.” As reported in Drug Store News, November 18, 2014 Incorporating Monitoring Devices? • Garmin Vivofit Wireless Activity Tracker & Heart Rate Monitor Bundle learns your current activity level, creates a personalized daily goal, tracks progress, tracks heart rate and reminds you to move. $119.99 • Can the next generation of Rx to OTC switches include “monitors” to enhance compliance? Track results? • Would monitors be considered a drug-device combination? NSURE Final Thoughts • The successful switch of new and more challenging categories may require: – The ability to use and validate non-traditional communication methods to aid consumers in making more complex choices – Facilitating self-selection and use decisions can be accomplished with the PDP, DFL and … • Help lines, CDs, • User guides, support materials • Websites, on-line, personalized programs NSURE Final Thoughts (II) • The successful switch of new and more challenging categories may require: – More cooperative dialogue between the Agency and Sponsors on these novel ideas to assure “safe use” using new tools – A shared perspective of the: • Safety consequences of use and misuse • The possibilities and the limitations of new technologies and the retail environment • A fair and balanced assessment of the incremental OTC risk vs. the current Rx Standard of Care to achieve increased access to the under-served patients without compromising safety BREAK KEY SWITCH SUCCESS FACTORS Not All Switches Are Successful OTC Product Approval Sales >$100MM? alli (GSK) 2007 Initially Zyrtec/Zyrtec-D (McNeil) 2007 Yes Prevacid 24 HR (Novartis) 2009 Initially Plan B One Step (Duramed) 2009 No Zegerid OTC (Schering-Plough) 2009 No Allegra/Allegra D (Chattem) 2011 Yes Oxytrol for Women (Merck) 2013 No Nasacort Allergy 24 HR (Chattem) 2013 Yes Nexium 24HR (Pfizer) 2014 Yes Flonase Allergy Relief (GSK) 2014 Yes Rhinocort (McNeil) 2015 ??? The Size of the Prize US OTC Sales* Mucinex $781MM Advil $705MM Vicks $576MM Tylenol $506MM Claritin $497MM Aleve $414MM Zyrtec $407MM Allegra $332MM Bayer $331MM Prilosec OTC $304MM • Vicks and Bayer are the only top 10 US OTC brands that were not Rx to OTC switches • Rx to OTC switches drove 27% of OTC growth in last 5 years** * Nielsen latest 52 weeks xAOC w/e 2/21/15 ** IRI Presentation at CHPA Annual Meeting, March 2015 Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. b. c. Consumer Advertising and Promotion Retail Planning Lifecycle Management 6. A High Performing Team Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. b. c. Consumer Advertising and Promotion Retail Planning Lifecycle Management 6. A High Performing Team At Least Initially, Rx Brand Equity Matters • Rx brands bring existing users • Moreover, well known brands have established inherent trust – “millions of prescriptions …” • For this reason, key to switch at/by patent expiry – Brand names erode over time (i.e., Lipitor) • Astra Zeneca spent over $1B marketing “the purple pill” – Rumored that Pfizer paid for Rx marketing prior to switch • Sanofi spent $600M on DTC advertising prior to Allegra switch • Could be impediment to switching birth control pill? Who Will Win the PPI War? H2 OTC Approval OTC Sales ($MM)* Rx Sales prior to Patent Exp Observations Prilosec 6/20/03 $304.3 $3.7B (2001) Now with wildberry coating Prevacid 5/18/09 $84.0 $3.4B (2007) Cut back on Year 2 spending Zegerid 12/1/09 $31.4 $0.1B (2009) No brand equity Superiority that can’t be communicated Nexium 3/28/14 $199.0 $6.1B (2013) “The Purple Pill” was #1 Rx brand Price parity with Prilosec < 11 months of sales • Who Will Win the INS War? • Flonase vs Nasacort vs Rhinocort? * Nielsen latest 52 weeks xAOC w/e 2/21/15 Low Rx Equity Products with OTC Success • Some brands have experienced higher sales OTC than Rx – Immodium ($103.2MM) • Problem resolved for most patients before they received prescription from doctor – Pepcid ($88.6MM) • Relatively late entry to Rx category, but first OTC H2 antagonist – MiraLax ($191.4MM) • Provided meaningful benefits versus existing OTC laxatives * Nielsen latest 52 weeks xAOC w/e 2/21/15 Implications for Switch • Rx drugs with strong brand equities, and therefore high TRx, bring consumers with them when they switch – A notable exception is Rx drugs that address a key unmet consumer need in the OTC marketplace will source new volume • For a drug that will switch at or after patent expiration, it may be worthwhile to continue to spend Rx marketing dollars until the switch occurs • Competitive intelligence is key: If larger, more well known competitors are due to switch in the same timeframe, the value of your switch may be limited – Nasacort vs Flonase vs Rhinocort? Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. b. c. Consumer Advertising and Promotion Retail Planning Lifecycle Management 6. A High Performing Team Order of Entry Important, But not Insurmountable +5 K&0"#, "=%] . "%N&"%+, /. 05 &. , "#>L$% ( 0- $0%&'%A, "01% , 7KS7!, D!SF - 7L!#N[S#! #* . . S##!SRNH O[S#! % &3!%3!%!U!' (! , 41&4!' (! #%@ S0$4%0$!q"! S0$45! G% GFFT % E% QF%e%QOT % H% OO%e%POT % M% OF%e%OOT % O% MO%e%OOT % P% MF%e%OFT % • j #, "#6%n%H%!: ;"6<%% an%G%;, %VEl/%,&: b% % % • CLL$D0#%n%H%!: ;"6<% an%H%;, %CLL$0D1%,&: b% % % %n%E%!: ;"6<% • j 10"$6% ao%*L#0;";, %;, %I$#0%Gb%% \!H , F - B!#N[S#! a` %2 ;LL;&, /b% $110 $62 O&4=&0$!' (!! &3! ' 3&=!#%@ O49@ VXU! Prilosec 9/03 Prevacid 11/09 N$: %40&- . 6"%)0$, - /%EFF +, '&! 6#, %!#L$/%R#"#=% E%&'%Ei%%+7+% 4#0"% N. 5 >$0%H=% %2 #03$";, D%!6;$, 6$=%B&L. 5 $%GM=% ! &. 06$U%% Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Long-Term Impact of Order (Nearly 20 Years Later) H2 OTC Approval Sales ($MM) Observations Pepcid 4/28/95 $88.6 Pepcid Complete approved 2000 Tagamet 6/19/95 $9.7 Was #1 Rx, but two pill OTC dose Tagamet 200 approved 1999 $118.0 Zantac 150 approved 2004 Clear Positioning “No pill relieves heartburn faster” Zantac 12/19/95 Axid 5/9/96 $0 Not enough room for #4 • Consider also PPI Order of Entry * Nielsen latest 52 weeks xAOC w/e 2/21/15 Private Label Timing Material to LongTerm Potential, not Initial Success 40;J #"$%X#>$L% ) ;5 ;, D%2 But #"$0;#L% "&%X&, D9)$05 %4&"$, ";#L=%% ] . "%N&"%+, ;";#L%!. 66$//%% N[[S? 7N!f !N@ @ &4C5+!DKN!NPP4' 8&1!s%02%45!6W""p!O4' 12=$!#) 9PP&1! ! "#$%&' #$( ) $%"#$*"#+,$ O498%$&![%A&@ ![%20=) &1!90!NP49@ _!, 0&!H ' 0$) ![%$&4! • C'"$0% &, $%1$#0=%40;J #"$%X#>$L%: #/%EOT %"<$%/;d$%&'% CLL$D0#% /#L$/i%CLL$D0#%L&/"%% - .&( .$%( $/.&01%#$213#+$ +14) 5"&) 6$&*$' 1%#.&1+$ G@ QT % &'% /: ;"6<;, D%J&L. 5 $%"&%40;J #"$%X#>$L@ % cL7- S. !f !N@ @ &4C5+!DKN!NPP4' 8&1!6WWXp!#) 9PP&1!s%02%45!6WWZ! O498%$&![%A&@ ![%20=) &1!%$!$) &!#%J &!- 9J &! • C'"$0% &, $%1$#0=%40;J #"$%X#>$L%: #/%HFT %"<$%/;d$%&'% j 10"$6% /#L$/@ % O7SI N. /K!f !B&%4$A240+!DKN!NPP4' 8&1!H %5!6WW] p!#) 9PP&1!F ' 8&J A&4!6WW] ! O498%$&![%A&@ !#$%4$&1!#&@ @ 90C!90!H %5!6W"6! • C'"$0% &, $%1$#0=%40;J #"$%X#>$L%: #/%MGT %"<$%/;d$%&'% 40$J #6;- %/#L$/i%40$J #6;- % L&/"%M\ T %&'% /: ;"6<;, D%J&L. 5 $%"&%40;J #"$%X#>$L%@ % %( $%"#$+( ) 67%#.' $*&8#$ ( ,$%"#$*9 &%5"#: $3.1) : ;! "#$%!& ' ( ) %!*) +$, - %!, .! ) /012%$3$45!' 6%, 124) 15! 0+$4$0' 17!8 #) +) ! *, %%$61) 9!%: $40#! 0' ; - $- ' 4) %!%#, 21- !1, , ( ! ., +!) /012%$3$45!3) +%2%! <+$3' 4) !=' 6) 1!4#+, 2>#! *' 4) ; 4%9!- , %) !., +& %!, +! , 4#) +!2; $?2) ! 0#' +' 04) +$%4$0%7!!! ! &. 06$U%% +7+%N#";&, #L%*&, /. 5 $0%4#, $Li%CLL$D0#%";5 $% K$0;&- U%% OE% Z $$3/%$, - ;, D%E[EP[GEi% j 10"$6%";5 $% K$0;&- U%% OE% Z $$3/% $, - ;, D%GG[E[FYi% 40$J #6;- %OE% : $$3/%$, - ;, D%2 #1%EFGHi% 4( ! % T %/#L$/%&, $%1$#0%K&/"% Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Private Label OTCs Acne Treatments Adult Incontinence Antacid Liquids/Powders Antacid Tablets Antismoking Gum Cold/Allergy/Sinus Liquid/Powder Cold/Allergy/Sinus Tablet/Pckets Cough/Sore Throat Drops Cough Syrup External Analgesics Rubs Eye/Lens Solutions 0% 10% 20% 30% 40% 50% Percent category dollar sales in Drug COT In well-developed OTC categories, Private Label penetration often exceeds 40% dollar share in the Drug Class of Trade Source: Drug Store Management 2014-2015 State of Industry Report 60% What happens to Rx Generics upon switch? • Zaditor switch approved 2006 with no exclusivity – Three generics already approved Rx (Apotex, Akorn, Alcon) – Office of Generic Drugs issued notice that labeling needs to be updated for OTC sale – In theory, manufacturers must update their labels and stop selling Rx within 6 month window • Apotex began manufacturing product under Claritin Eye and Zyrtec Eye • No major compliance issues What happens to Rx Generics upon switch? • MiraLax approved OTC in 2006 with a number of Rx generic competitors already in the market – In theory, MiraLax had 3 years of Hatch-Waxman exclusivity • Rx sales should have stopped within 6 months • There should have been no OTC sales – In reality, doctors kept writing (colonoscopy prep) prescriptions and pharmacists kept filling (ORx) – Schering tried to get FDA to enforce that the Rx drugs were “misbranded” • This is not an important enforcement issue for FDA What happens to Rx Generics upon switch? • Nasacort approved 2013 with one generic competitor (Teva) and no exclusivity – Nasacort filed a legal challenge to block the publication of their SBA so that (private label) competitors would not know specifics of their approved label until Nasacort launched – There are still no OTC private label versions of Nasacort in the market; Teva appears to still be distributing Rx Private Label Strategies • Nasacort filed a legal challenge to block the publication of their SBA so that private label competitors would not know specifics of their approved label until Nasacort launched • Flonase gained three years of Hatch-Waxman exclusivity for two ocular symptoms: itchy eyes and watery eyes – Will Private Label still be able to claim “compare to the active ingredient in Flonase”? – The 36-page booklet, considered part of the approved label, may also be a barrier to private label to competition • Many OTC brands use development of new dosage forms as a means to stay one step ahead of private label • Nexium tried to create an “ownable” package • Rhinocort trade dress blocked. FDA website says “Information Being Posted Pending FDA’s Review of Confidentiality Claims”* * http://www.accessdata.fda.gov/drugsatfda_docs/label/2015/020746Orig1s032lbl.pdf Implications for Switch • Consider switching prior to patent expiration • Create exclusivity – Develop a reason why a clinical study is required by FDA and help FDA to request it • Fight ORx products as being mislabeled • Plan for continuous marketing investment once the product is launched OTC • Actively plan lifecycle management after OTC launch Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. Consumer Advertising and Promotion b. Retail Planning c. Lifecycle Management 6. A High Performing Team Satisfaction with Current Choices Is 00$, "%*<&;6$/%% *. Success %: ;"<% ! #";/'#6";&, Important for ;/%+5 K&0"#, "%'&0%!. 66$//% N[[S7? L!#* DDS7S7#! #N- /#DN. - /, F ! BSN7- M* 7F !#* DDS7S7#! B/? B! B/? B! 6TU! : ;"<%( ) *% N&"%!#";/';$- % CJ #;L#>L$% *<&;6$/%*. 00$, "L1% !! TU! Z &03%&0% ! #1%;"%kR&$/, l"% 7$L;$J $%!1/"$5 /m%9%40;L&/$6% ( ) *%*<&;6$/% X;3$%2 &0$% Z &. L- % ) 0$#"5 $, "/% '&0%CLL$0D1% VU! Z &03%&0% ! #1%;"%kR&$/, l"% 7$L;$J $%!1/"$5 /m%9%40$J #6;- % [, g ! [, g ! >VU! ! : ;"6<%C5 &, D%C, ";<;/"#5 ;, $% C6";J $%+, D0$- ;$, "% !! !H SK/* H ! !H SK/* H ! XTU! #N- /#DN. - /, F ! XWU! "&% ;/%kN&"<;, D% ! #1%"<$0$% R;/L;3$%[%;"%Z &03/m%e%4X%( 5 $K% H SNF /F ? D* [!MSF SD/- #!. 7/- /. N[!D, 7!B/? B!#N- /#DN. - /, F !. N- S? , 7/S#! ! &. 06$U%+7+%*. /"&5 %!" Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Delivering Satisfaction • Providing a meaningful, differentiated proposition – Conducting market research is key • The messages that worked for the Rx product may not work in the OTC environment • Are there specific messages that will work for the partners of the sufferers? – How is the product differentiated versus current OTC offerings? How is it competitively superior? • And how can this difference be communicated in a simple way? – Prilosec: “1 Pill. 0 Heartburn. 24 Hours.” – Orudus: No clear benefit versus ibuprofen Delivering Satisfaction • … at reasonable pricing – Can’t charge more without added benefit! • Nexium “forced” to price parity versus Prilosec • Flonase is priced slightly higher than Nasacort – presumably for ocular symptom relief claims – Is there a sweet spot between store brand entries and what consumers co-pay for Rx? The ACA has brought new patients into the market with very high deductibles/co-pays Statistics on exchange enrollments, by plan tier1 Plan type % of enrollees Premium1 Deductible2 Preferred/non-preferred brand drug Bronze 19% $3,552 $5,081 35%/36% coinsurance Silver 62% $3,828 $2,907 $47/$89 copay Gold 12% $4,536 $1,277 $39/$85 copay Platinum 7% $4,656 $347 $31/$61 copay 1. Average annual premium for 40-year-old across 34 different states 2. Deductible for an individual enrollee Source: HealthPocket.com accessed May 27, 2014 Source: Heather Sumner to Susan Levy, 12/23/14 Implications for Switch • Need product differentiation that translates to meaningful consumer benefits • Clear positioning via identification of key targets and breakthrough and engaging advertising • Consumers won’t pay more money for a brand that offers no advantages versus lower priced OTC brands … or versus generic Rx’s • Premium pricing versus private label needs to be justified Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. b. c. Consumer Advertising and Promotion Retail Planning Lifecycle Management 6. A High Performing Team Professional Marketing • Successful Rx to OTC switches have leveraged professional marketing and relationships with medical professionals – Key to develop these relationships prior to Advisory Committee for first-in-class switches • Professional marketing includes, but is not limited to: – Medical professionals (detailing) – Managed care Allegra Success: Growth in HCP CLL$D0#%!. 66$//U %S 0&: "<%;, %V*4%7$6&5 5 $, - #";&, Recommendation N[[S? 7N!#B, g SK!O, #/- /I S!? 7, g - B!- 7SF K#!! /F !#O/- S!, D!MS/F ? !>41!SF - 7NF - !/F !, - . !N[[S7? L ! N8&4%C&!g &&a@ 5!7&=' J J &01%$9' 03! GP GM GE GF Y P M %%%%CLL$D0#%( ) *%7$6&5 5 $, - #";&, / E F ! &. 0 Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Allegra Professional Launch Source: Allegra Marketing Director, 12/31/14 Allegra Professional Reminders Source: Allegra Marketing Director, 12/31/14 Managed Care Plays an Important *#0$%4L#1/%#, %+5 K&0"#, "%7&L$% 78%^#6"&0/U%2 #, #D$- %Role % &C4%!#: 9$=) !90!- : ' !g %53!89%!$) &94!N1o219=%$9' 0!F &$: ' 4a3^! @ %03!N=$&1!' 0!$) &!N@ H %0%C&1!. %4&!O@ EFGG%"&%EFGH% >1%OFT %'0&5 % ^$8&'$, #- ;, $%78% &'% • ! "$#- ;L1%0#;/$- %6&9K#1/% ( ) *%CLL$D0#%e%% /60;K"/%a>L. $%>#0/%>$L&: b%"&%6&;, 6;- $%: ;"<%"<$%L#. , 6<%&'% • 7$_$6"$- %^$8&'$, #- ;, $%78% "<#"%: $0$% 78% &'% &+!7$_$6";&, %0#"$%;, - ;6#"$/%"<$%T % !19((&4&0=&!(4' J !$) &!O4&8%=91!&; %J P@ %!(201%J &0$%@ "&%L#. , 6<%&'% D$, $0;6/%aOT %K0;&0% , . 5 >$0%'&0% #%J$01%L&: % %N&05 #LL1% : 0;""$, %>1%- &6"&0/=%>. 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";&, / HE% Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Allegra Managed Care Activity • Allegra executed a comprehensive managed care plan: – Live meeting with “Champions” and kick off TC with account teams and senior leadership – Account manager backgrounder and leave-behind – Training deck – Letter templates – Coupons – Brochure – Newsletter copy – FAQ – Web banner – Email templates – Email and direct mail for Medco Health Store – SmartCare plan engagement – Xerox employer group (free sample/coupon program) Source: Allegra Marketing Director, 12/31/14 Allegra Managed Care Activity Source: Allegra Marketing Director, 12/31/14 Zyrtec Managed Care • Zyrtec approached Managed Care providers and employer health plans prior to switch and found them to be quite cooperative and helpful – Worked with plans to engage members and change formulary status • Total Managed Care launch investment of $15.8MM • The result was that 27% of Zyrtec OTC volume was sourced from Zyrtec Rx volume and 27% from other Rx allergy volume • With Year 1 sales of $610MM, this strategy provided a 21x return on investment Source: Conversation with former Zyrtec Managed Care Director, 1/5/15 Implications for Switch • Trial rates are 4x higher with Professional recommendations – May need to change size of professional sampling vehicle • For a drug that will switch at or after patent expiration, it may be worthwhile to continue to spend Rx marketing dollars until the switch occurs • The Professional Plan should consider: – Developing a publication plan to create credibility with the medical community – Engagement of Key Opinion Leaders about switch – Advocacy Groups – Managed Care Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. b. c. Consumer Advertising and Promotion Retail Planning Lifecycle Management 6. A High Performing Team Heavy Media Spend Beyond Year 1 is a Must for Success Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Allegra’s Pre-Launch Efforts Were CLL$D0#l/%40$9X#.Phenomenal , 6<%A''&0"/%Z $0$%4<$, &5 $, #L%% -I ! • CLL$D0#%/"#0"$- %#%/"0&, D% K. /<%>$'&0$%"<$%K0&- . 6"% <;"%"<$%/<$LJ $/% • A#0L1%#- U%: <;"$%6&#"% <$#L"<6#0$%K0&'$//;&, #L%%% /<&: ;, D%: <$0$%CLL$D0#% : &. L- %>$%;, %"<$%#;/L$% /F <#- , 7S! • CLL$D0#%<#- %/;D, ;';6#, "% K0&5 &";&, #L%/K$, - ;, D% ;, 9/"&0$%>$'&0$%L#. , 6<=% - 0;J ;, D%$86;"$5 $, "%#, - % #""$, ";&, %"&%"<$%- #"$% #J #;L#>L$% • k*&5 ;, D%!&&, m%#- /%;, % 0$"#;L$0%% 6;06. L#0/% #, . /N[!H SK/N! • ! &6;#L%5 $- ;#%: #/%#% '&6. /%'&0%"<$%L#. , 6<% >$6#. /$%;"%K0&J ;- $- % $8K&/. 0$%#, - % &KK&0". , ;"1%'&0%>0#, - % #- J &6#"$/% • R;/6&. , "%&''$0/%'&0%"0;#L% • ^#6$>&&3% • ) : ;""$0% [ N* F . B!g SM#/- S! • ! "0&, D%>0#, - ;, D%'0&5 %% 78%<$0;"#D$% • A- . 6#";&, %;, '&05 #";&, % '&0%6&, /. 5 $0/%#, - % V*4/=%6&5 KL$5 $, "$- % : ;"<%#%̀P%6&. K&, %&''$0% • 40&- . 6"%L&6#"&0%9%: <#"% /"&0$/%<#- %K0&- . 6"%#/% /&&, %#/%#J #;L#>L$% • ( , L;, $%>#, , $0%#- /%: ;"<% "<$%&K";&, %"&%K0$9&0- $0%% ! &. 06$U%( , L;, $%7$/$#06<%#, - %+, - . /"01%*&, J $0/ Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Allegra’s OTC Launch was 360° and Integrated % Rx scripts pre launch) er Switch Strategy ate Label launch by suing FDA to prevent of Nasacort labeling prior to launch e, integrated consumer marketing campaign wareness including starting TV advertising Chattem is Repeating their Launch Integrated, Well-Funded Formula with Nasacort Go-to-Market Plans Award Winning Winning Shelf Award Shelf Tray Tray ailer et of driving ce cate trial onal cent trial Meaningful, Differentiated Proposition Innovative interactive shelf tray helps overcome high barrier to usage by educating at shelf Source: IRI, 49wks Ending 1/11/15 Portfolio Efficiencies Efficiencies Portfolio 360° Heavy Heavy Media Media 360° Implications for Switch • Rx to OTC switches require an integrated consumer/professional/retailer plan – Synergistic across all mediums – Need to get the vehicles right • Rx to OTC switches require HEAVY, continued spending – Typically $50MM to $100MM+ Year 1 and 50-100% of Year 1 Sales – Typically 35% to 50% Year 2 Sales – Examples: • Monistat outspent Gyne-Lotrimin by 33% Implications for Switch • For blockbuster Rx to OTC switches, the media spending starts (continues) when the product is still Rx – Pfizer rumored to have spent $300MM last year on pre- and post-launch spend for Nexium • OTC spending should begin pre-launch to build excitement • Investment needs to continue beyond years 1 and 2 • Credibility is key: consider using a spokesperson Strong Retail Partnerships Critical to ! "0&, D%7$"#;L%4#0", $0/<;K/% *0;";6#L%"&%+, ;";#L%!. 66$//% Initial Success 7S- N/[!SF ? N? SH SF - ! % ! "0&, D%0$"#;L$0% $, D#D$5 $, "%: ;"<%/$L$6"% 0$"#;L$0/%. /;, D%J#0;$- % '&05 #"/% O7SI N. /K!6TB7! % 40$J #6;- %EMV7%<#- %/"0&, D% K<#05 #6;/"%;, '&05 #";&, #L% K0$K#0#";&, %aK#63$"/=% : $>/;"$=%^Cp /=% 6L;, ;6#L% - $"#;L/b% N[[S? 7N! % CLL$D0#%0$#6<$- %YFT % - ;/"0;>. ";&, %: ;"<;, %% E%: $$3/%&'%L#. , 6<% . I #!g SM#/- S! % *B! %k! #J ;, D/%*$, "0#Lm% : $>/;"$%'$#". 0$- %CLL$D0#9 >0#, - $- %6&, "$, "=% ;, 6L. - ;, D%#%K&LL$, %6&. , "% '&0$6#/"$0% ! &. 06$U%( , L;, $%7$/$#06<%#, - %+, - . /"01%*&, J $0/#" H Slide courtesy Bob Sanders, EVP, Healthcare Practice Leader, IRI Integrate with Retail Customers at All Levels Retailer Expectations Brand Positioning Contact Strategy At all Levels Incremental Category Growth Shopper Insights Merchants Profitability versus pharmacy Strategic Alignment – Health Global Market Best Practices Internal Team Marketing Retailer Leadership Team Customized Plans Speed to Market Professional Engagement Supply Chain Health Care Clinics Operations Marketing Support Multi Channel Knowledge Engagement of Pharmacist Slide courtesy Market Performance Group (MPG) Pharmacy Operations Manufacturer and Retailer Partnership Planning Requires 18-24 Months LeadTime PRE LAUNCH 6-12 months Brand positioning Marketing mix Connection plan Pricing strategy Shopper Platform • Budgets / Spend • Co-Marketing concepts • Merchandising Objectives • Logistics planning • • • • • Review plans with Executive MGT and operations • Promotional planning • Engage supply chain management • Put in place patient retention plans • Finalize planograms • Off Shelf merchandising • Speed to market plan • Loyalty programs • Marketing support • Private Brand Planning • Pricing strategy MANUFACTURER 12-18 months • Share concept • Strategic Targets • Volumetric projections • Source of volume estimates • Define success criteria • Review with Retail leadership team • • • • • RETAILER 18+ months POST LAUNCH • Review concept • Review current profitability (pharmacy) • Establish switch team • Review with Leadership team • Begin merchandising strategy • War room on competition • Engage Marketing • Management to allocate resources • Finalize budget and JBP 0-6 months Problem solving Refinement Finalization Begin path forward planning (Commercial and Product Innovation) Slide courtesy Market Performance Group (MPG) 0-6months 6+ months • Launch learning • Success criteria analysis • Plan correction / optimization • Path forward learning – inputs for planning • Assess & refine strategies • Optimize tactics • Share innovation concepts • Define future success criteria • Monitor share • Review sales and profits to plan • Visit competition – document learning from competition • Review planogram for productivity • Private brand strategy • Share review • Measure performance to plan with supplier • Review inventory levels • Look to build market basket Allegra Pharmacy Kit Enrollment Manufacturer Switch Strategy • Heavy reliance on retail activity • Incent and drive awareness in pre-launch • Flood marketplace early and consistently • Target existing OTC users Integrated, Well-Funded Go-to-Market Plans Nexium 24 HR Had Aggressive In-Store Retail Execution Aggressive In-Store Retail Execution Aggressive Pre-Launch Shelf Savers Pre-Launch Announcements and Offers (in-store & on-line) Shelf Merchandising Trays Multiple Display Configurations Customized In-Store Materials Heavy Flonase Pre-Launch Activity • Will Rhinocort be able to generate this level of excitement in the fall? e an - Oxytrol Failed With Its Shelf Shelf Placement Placement L not • Adjacent to categories no longer relevant to • Array of different products target shopper (e.g. pregnancy kits) • Adjacent to categories no "There your o messa Implications for Switch • Begin planning with retailers two years in advance – Starting with top to top meetings – Retailers are seeking customization • For a new OTC category, conduct market research to identify optimal store placement – Communicate store placement in media • Identify the ideal, protectable package – Engage packaging design firm – Get feedback from retailers – Hide packaging from private label Implications for Switch • Consider likelihood of theft for high priced items – Engage with experts to leverage cutting age technology – Include loss prevention in retailer meetings – Consider anti-theft displays • Launch can be optimized with rapid distribution of product – Need to make immediate shelf placement as easy as possible for retailers Proposition ild with immediate and aggressive eting and retail execution onse to 2nd Gen Switch (Regulatory) proval to change label to more closely yrtec in the range of allergies it treats ion Integrated, Well-Funded Go-to-Market Plans Lifecycle Management: Claritin Billboard Audience/Type Audience/Type Continuous Pipeline Forms Forms Sizes Sizes on xt -D with Pseudoephedrine Oral Dissolving Tablets on ew Children's Liqui-Gels X-Large Size - 70CT • Claritin has also grown via compelling claims (i.e., Claritin Clear) and innovative outlicensing efforts From the Claritin Graveyard • Claritin Hives – Although Claritin was approved for OTC use of allergies in November, 2002, it took Schering-Plough another year before it could obtain approval of a “Hives” indication – Product discontinued due to low sales From the Claritin Graveyard • Claritin Eye – When Zaditor (ketotifen) switched in 2006, it did not obtain exclusivity; private label versions were immediately available. Both Claritin and Zyrtec launched allergy eye products given the ability of the product to deliver non-drowsy, 12 hour ocular allergy relief. – Required Label Comprehension Study to demonstrate that consumers understood that product contained a different active – Discontinued due to manufacturing site issues Implications for Switch • Developing a pipeline of products to create a billboard at shelf should also be part of the long-term plan – – – – – – Advil 1984 Advil Cold & Sinus 1989 Advil Migraine Liquigels 2000 Children’s Advil Cold 2002 Advil PM 2005 Advil Congestion Relief 2010 • Because new dosage forms will not be “monograph”, they will require (expensive and time-consuming) NDAs as well Lessons Learned Drivers of Rx to OTC Switches 1. Rx Factors: Brand Equity (including DTC) 2. Order of Entry (vs other Switches and Private Label) 3. Satisfaction with Current Category Choices Prior to Switch a. Implications for pricing 4. Professional Marketing (including Managed Care) 5. Excellence in Execution a. b. c. Consumer Advertising and Promotion Retail Planning Lifecycle Management 6. A High Performing Team Successful Switches Require a High Performing Team • With multiple facets required for a successful Rx to OTC switch, the project team needs to be higher performing than that of a “typical” OTC new product launch – Senior Management support, particularly to secure resources (people and dollars) and remove roadblocks – Typically more multi-disciplinary than most project teams – Requires all team members to possess: • Out-of-the-box thinking • Problem solving skills • Collaborative mindset Almost Always “Us” vs. “Them” • Nearly all switches: – Involve “transfer of power” from Rx to OTC division, either internally, or … – Are Joint Venture between an Rx company and a different OTC company, and … – May have both global and local teams • As a consequence, decision-making processes are key – Need to determine who has responsibility for which decisions (RACI chart suggested) • i.e., OTC claim studies may impact current Rx product – Need escalation process Critical to Outline Commitments Up-Front • Particularly when there are multiple parties involved, it is key to use a structured approach to outline: – Roles and Responsibilities • Project Sponsor • Project Leader • Alliance Management? – Project Scope • With implications for required resources – Project Timing • Requires complex project management (and frequent updates to plan) … across a multi-year project Finding the Right Expertise • Of the 14 molecules switched in last ten years in the US, only 6 were first-in-class, so limited industry switch expertise • Only a couple of firms with expertise in consumer behavior switch studies – Pegus, Concentrics • Unlike launching an OTC line extension, switches also require: – Stakeholder Management/working with Advocacy Groups – Working with Managed Care, and Professional Plan – Issues Management (potentially), more PR, etc. Project Horseshoe 129 – … basically, a much larger, high powered team Implications for Traditional OTC Functions • Regulatory Affairs – Need to create a label that enables consumers to safely and effectively self-diagnose and self-treat – Need to help FDA see benefit versus risk – Need to figure out how to delay PL entries (Nasacort) – Need to do homework to figure out how to claim Rx/ORx product is “mislabeled” (MiraLax) – Need to use “voice of the consumer” to guide regulatory strategy • Regulatory can’t follow the rules … it needs to establish new ones! Implications for Traditional OTC Functions • Medical/Clinical Affairs – Need to analyze Rx and global data to understand real world experience and risks … to create a label that minimizes risk for general population – Need to use “voice of the consumer” to guide clinical strategy … and drive differentiation versus existing OTCs – Need to contribute to Professional Plan and Managed Care strategy – May need to publish studies to establish drug credibility – May need to contribute to thinking about how to enhance compliance Implications for Traditional OTC Functions • Marketing/Market Research – Need to ensure label communicates clearly … starting with the indication – Need to coordinate a more synergistic integrated consumer/retailer/professional … working with lots of agencies across many platforms – Need to delve deeply into consumer behavior – May need to conduct competitive intelligence and/or lead war gaming exercises – May need to determine shelf placement if creating a new OTC category (i.e., Viagra) Implications for Traditional OTC Functions • Operations/Logistics – Need to get demand forecast right internally and externally, working with Marketing and Sales • Especially special packs and displays • Need to get sizing right, including trial vehicles • Need to determine if current Rx facility can handle OTC volume – If OTC package different from Rx, need to determine implications – May need to get product manufactured before label approved to facilitate quick launch Implications for Traditional OTC Functions • Packaging – Need to create something protectable/ownable … especially versus private label – May need to consider how to incorporate new technologies, from behavioral support mechanisms to theft prevention • Sales – Need to engage retailers strategically, not just tactically, at all levels – etc. Final Thoughts on Team • The Rx to OTC switch – Requires all team members to possess: • Out-of-the-box thinking • Problem solving skills • Collaborative mindset – And a strong project leader … who identifies obstacles and removes roadblocks • For a $100MM opportunity … every week missed in the marketplace represents $2MM in lost revenue EVALUATING SWITCH OPPORTUNITIES Evaluating Switch Opportunities • A preliminary evaluation of Rx to OTC switch opportunities considers both the technical and commercial aspects – Technical • Can the consumer properly self-diagnose the condition – i.e., Could the consumer self-diagnose rosacea when they really have lupus? • Can the drug be used safely without a learned intermediary? – Commercial • Will the cost to switch the drug and launch the product provide a return on investment? The Technical Evaluation • Applying a structured Risk-Benefit framework • Sources of information include: – What actually happens in diagnosis and treatment of the condition? – Global Rx history and adverse event experience • Are there “black box” warnings? Are they valid? • Is the drug scheduled as an addictive substance? Is the scheduling appropriate? – ex-US OTC history and experience • see: http://www.aesgp.eu/facts-figures/otc-ingredients/ • Assume that certain diseases (cancer) and treatments (injectables) are non-starters The Technical Evaluation • Start by creating a draft Drug Facts Label!! – What is the Indication? – When should the consumer stop use and see a doctor – Are there special populations that should not take the drug? – (And how is it better than current OTC options?) • Proving that consumers will safely understand and follow the DFL will dictate the proposed Rx to OTC switch program Structured Risk-Benefit Framework • An assessment of absolute benefit & risk is conducted as part of the Rx approval process • For Rx to OTC switch – it’s important to assess the incremental risks and benefits associated with the drug’s use in a nonprescription setting • A structured framework can facilitate this process: – By considering risk-benefit domains common to OTC drugs and – Evaluating product specific considerations • Not meant to be an exhaustive list, simply a framework General OTC Risk/Benefit Domains Convenience/improved access Improved clinical outcomes BENEFIT CONSIDERATIONS Public health benefits Enhanced consumer involvement BENEFIT / RISK CONSIDERATIONS Economic benefits Unintended misuse/abuse Intentional misuse with therapeutic intent RISK CONSIDERATIONS Accidental ingestionIntentional overdose Brass et al. Clinical Pharmacology & Therapeutics, Volume 90, Number 6, December 2011 Worsened outcome due to selfmanagement Product Specific Considerations The Scar Treatment • A client approached us about evaluating the OTC potential of a scar treatment that they were developing – The drug was designed to work on keloid scars and was in early phase Rx development – The inventors envisioned that a direct to OTC switch could be a faster, more profitable pathway – The drug works to “paralyze” the types of cells in scar tissue … which is, apparently, similar to heart muscle – The inventors noted that the drug should be safe if used on “healed” scars and if it did not get into the blood stream … The Commercial Evaluation • Rx to OTC switch should be considered early within any Rx asset’s lifecycle management strategy – For many drugs, the ideal switch timing is the day of patent expiration – Simultaneous OTC may be possible via existing or alternate indications – Simultaneous OTC may be possible with lower dose – Simultaneous OTC may be possible for specific population – Direct to OTC may be possible, particularly with topical products The Size of the Prize • If the dynamics are right, there are cases where drugs have provided higher topline revenue as OTCs than as Rx drugs – Order of entry: Pepcid – Self-treatment convenience: Immodium – Awareness and better consumer experience: MiraLax • While “big” OTC brands are not blockbusters compared to Rx drugs, OTCs can live into perpetuity with strong messaging and innovation – Listerine is over 100 years old – Benadryl (switched in 1985) sales are $239MM* • The US OTC market is estimated between $20B to $30B – Switches drove 27% of OTC growth in last 5 years** The largest OTC brands were formerly available Rx *– Nielsen latest 52US weeks xAOC w/e 2/21/15 ** IRI Presentation at CHPA Annual Meeting, March 2015 The Commercial Evaluation • There is no “plug and play” model for the commercial evaluation of Rx to OTC switches – Is the switch competing in an existing OTC category or creating a new one? • If an existing OTC category … – What is the order of entry? » How do you protect from Private Label? – Will you steal share or grow the category? » What will the impact be on the remaining Rx business for this brand and other Rx’s? » What will Managed Care do? » How will you drive doctor recommendations? The Commercial Evaluation • If an existing OTC category (continued) … – Is there a meaningful advantage that can be communicated to consumers versus current OTC treatment options? » Zegerid is the only immediate release PPI, but can’t communicate speed of relief – What will you need to spend to gain share of voice? – How will the product be priced versus existing OTC options? The Commercial Evaluation • Additional considerations for a new OTC category … – Is the drug used for prevention or treatment? – How annoying is the condition/how motivated are users? – How large is the sufferer population? – Is the drug for acute or chronic use? • Sales for OTC emergency contraception, while stronger than Rx, don’t lend themselves to high repeat rates – How to optimize the price versus Rx co-pays? – How strong is the brand’s Rx equity and current sales? The Lice Treatment • A client approached us about evaluating the OTC potential of their Rx lice treatment – The liquid product is applied to the scalp on Day 0 and Day 7 – The amount of liquid varied based on the length of hair. For a girl with long hair, a physician would prescribe six 8oz bottles (using 24 ounces for each treatment) – The cost of goods dictated that the retail price would be in the $40 to $50 range – It is unlikely that a new OTC entrant could grow the category: sufferers treat! – It would be challenging for the Rx product to steal share: it offered no competitive claims vs existing OTC products, had little brand equity and poor sales Financial: The Size of the Prize • In some cases, there may be greater value in “milking” an Rx whose patent has expired (versus receiving OTC licensing fees) – Particularly if the Rx is not differentiated from existing OTCs – Rx drugs have much higher margins (but are lower volume) than OTCs – Launch costs for switches often exceed first year revenue – And private label will readily take 40% of branded sales The Onychomycosis Drug • A consumer healthcare company approached an Rx company with a topical drug to treat onychomycosis (nail fungus) about OTC switch rights – The Pharma company did not have an OTC division/capabilities – The Pharma company’s analysis showed that 90% of Rx sales would be lost within 6 weeks of patent expiration – The product had a 90% profit margin – Even though the OTC product was expected to have higher sales, the OTC licensing revenue would not be higher than the profit derived from “milking” the Rx Commercialization Options Recent Partnership Deals • Outlicense rights: – In May 2014, Lilly announced that it had given Sanofi the Rx to OTC switch rights for Cialis – 8/12/12 Pfizer pays $250MM upfront (plus milestone and royalty payments) for OTC rights on Nexium ($6B Rx) and right of first refusal on Rhinocort • Meanwhile, Pfizer declined and McNeil licensed Rhinocort – Merck’s recent OTC launch of Oxytrol licensed from Watson • Bayer now allowing rights to revert back to Actavis – In October 2006, Schering-Plough paid Santarus $15 million upfront for the Rx to OTC switch rights for Zegerid • The deal included an additional $65 million in regulatory and Commercialization Options Recent Partnership Deals • Acquire OTC capabilities: – 12/21/09 Sanofi pays $1.9B to acquire Chattem, providing switch capabilities for Allegra (and Nasacort) • Form JV: – 11/3/11 P&G/Teva form PGT Healthcare “a new model in the industry” to focus on best-in-class development and state-of-the-art commercialization of branded OTC medicines Finding Switch Gold • Is there switch gold in your Rx pipeline? – Convincing the Pharma colleagues to begin switch planning is an uphill battle – Pfizer has been working on the Lipitor switch since 2000 • Is there switch gold in the pipelines of other Rx companies? – Pharma companies often do not start thinking about OTC as an option until the patent is nearly expired – The financial argument needs to be compelling for the Pharma company – And sometimes, the Pharma company in-licensed the compound … and the license is “silent” on OTC rights • The time is now to evaluate potential switches in 2020 and beyond! QUESTIONS? Contact: Susan B. Levy Principal and Founder 908-654-1054 (Office) 973-713-3637 (Mobile) [email protected] www.susanblevyconsulting.com THANK YOU!