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Articles

Although human trials in the U.S. are still a novelty, developers are identifying both sources and protocols for conducting therapy

Stem Cell Therapy: Business Models Begin to Take Shape

Although beset by less-than-friendly federal reimbursement policies, independent pharmacies are maintaining their viability for pharmaceutical delivery

Independent Pharmacies Promote the Value of Their Patient Contact to the Pharma Industry

Higher complexity—and expense—are the reality for most drug research, says Tufts

Long-Term Drug Approval Trends Highlight the Industry's Productivity Dilemma

Higher co-pays, ‘NDC block policies’ and multiple tiers add to drug benefit complexity

Novartis Managed Care Report Finds Higher Barriers to Drug Access

New Deloitte study finds “profound” positive and negative ROIs for combined therapies and diagnostics based on genetics

Examining the ROI of personalized medicine

 interview, Vibhu Tewary, project director, IQVIA Institute for Human Data Science, discusses:

Highlights of the company’s report surrounding the “Long-term Market Sustainability for Infused Biosimilars in the US: Foundational Analytics on Emerging Risks to Sustainability”

The process that constructing and piecing together a report of this magnitude entails, along with where the idea itself came from

The ongoing challenges surrounding ASP-based reimbursement

A closed-door, multi-stakeholder virtual roundtable (based on his original report) that was previously held

Vibhu Tewary offers insight on this market segment, including a behind-the-scenes of what goes into designing a report. 

The Path Forward for Infused Biosimilars in the US

 interview, Mark Bouck, chairman and CEO of PharmAlliance, a pharmaceutical and life sciences services platform, dives into:

How PharmAlliance’s acquisition of Complete Health Economics Outcomes Research Solutions (CHEORS) helps expand global reach

The platform’s biggest goal to when it comes to CHEORS and market access services

How CHEORS helps navigate cost-effectiveness and market access hurdles

Acquisitions in the space that are currently in the works

Mark Bouck discusses PharmAlliance’s latest acquisitions, while reiterating its goals surrounding health economics and outcomes research.

Navigating Market Access Hurdles

 interview, Brandon Newman, Xevant’s CEO and founder, explores:

The implications of the Inflation Reduction Act’s price negotiation provisions, and how these could result in ripple effects across the healthcare system

The role that pharmacy benefit managers (PBMs) and other intermediaries' play when it comes to determining drug costs, and how spread pricing is involved

How Xevant helps improve drug cost transparency efforts

Strategies for affordability Newman would offer the pharma industry that can be implemented immediately

Brandon Newman joins The Pharmaceutical Commerce Podcast to discuss the evolving role of PBMs, including the importance of drug price transparency. 

A Further Examination of Pharmacy Benefit Managers

The presidential action follows up on a 2019 final rule aimed at empowering patients and boosting competition among hospitals, group health plans, and health insurance issuers in both individual and group markets.

Trump Signs Healthcare Price Transparency Executive Order

The injection for the treatment of psoriatic arthritis—among other indications—is a biosimilar to Stelara. 

Selardsi Launches in the US Market

James D. Chambers, PhD, MPharm, MSc, professor of medicine at the Tufts Medical Center Institute for Clinical Research and Health Policy Studies, dives into why biosimilars contribute to a reduction in cost and increase in patient access, while highlighting challenges to adoption. 

The Biosimilars Landscape Through the Eyes of an Economist

The timing for the potential tax is yet to be determined, as the industry awaits to see the impact it could bring. 

Trump Reveals Plan to Enact 25% Tariff on Pharmaceuticals

A qualitative study examines how Medicaid telehealth reimbursement policies affect staffing and patient-centered care.

Impact of Telehealth Reimbursement Policies on Federally Qualified Health Centers

Impact of Tariffs on the Generic Drug Market

, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California (USC, describes how the 10% tax on Chinese goods and a potential 25% tariff on pharmaceuticals could have notable effects on the price, quality, and safety of generic drugs. He explains that while branded and generic drug markets operate differently, the cost of generics is typically much lower, with intense competition driving prices down. A 10% tariff on generics might not significantly impact costs because most of the price is tied to distribution, not manufacturing. However, the COVID-19 pandemic highlighted the risks of relying on countries like China and India for essential generics, which has led to a push to bring production back to the U.S.

A 25% tariff would likely make domestic production more attractive, but generics are low-margin products, so this may result in higher consumer prices. Joyce suggests that tariffs could disrupt supply chains but not lead to significant changes in US production in the short term. Additionally, the low-profit nature of the business could encourage foreign manufacturers to cut corners, potentially reducing drug quality. California's failed attempt to create its own generic drug industry illustrates the challenges in stimulating domestic production for these low-margin drugs.

While tariffs might encourage some domestic production, it could come at the cost of higher prices and possibly lower drug quality. The overall impact on the drug supply chain remains uncertain, with concerns about reliability and safety, especially if foreign manufacturers face increased production costs.

Joyce also describes what makes the generic drug market susceptible to supply chain disruptions; how the tariffs can affect price or competition within the branded drug space; health policy developments that coming down the pike that the pharma supply chain should prepare for; and much more.

How will the 10% tax on goods from China—along with the potential 25% tariff on pharmaceuticals—impact the price, quality, and safety of generic drugs? Would the aforementioned tariff encourage domestic production?

We're speculating, but people don't realize there's two very different markets for branded drugs versus generics, different players, as you're aware. We have some of the highest branded drug prices in the world and some of the lowest generics. Generic competition in most cases—there are exceptions—is fierce. If you’ve been on the Mark Cuban website, Cost Plus Drugs, you look at the ingredient costs, it's a penny to five cents a pill for a lot of very common generics. Someone mentioned a 10% tariff on that where most of the cost of the drug is getting it from the manufacturer to the patients for generic drugs. I didn't think 10% would move the needle, even though, during COVID, we did see shortages of essential drugs. There was more of a realization in the US that we have to repatriate drug production for essential medications, because we could be vulnerable if we rely on India and China, etc., for supplying generic but essential medications.

The question is, would a 25% tariff encourage domestic production? It clearly tips the balance more so in the favor of domestic production, but these are really low margin products, so I think really the losers would be consumers in this case. Supply of drugs I think could be disrupted. I don't think we would see in the short term. We wouldn't see significant changes in production in the US. You do worry about if it's really a low margin business, and you've added tariffs that these foreign manufacturers are going to cut corners, and, like you mentioned, quality declines, and we've seen that. We have evidence of foreign manufacturers cutting corners and having less than high quality standards.

I think that's been the argument for repatriating, and California has tried to do that unsuccessfully. They said they're going to have their own generic industry. They basically get approval for two drugs, and really have not had great production of those to start with. So again, it's a low-margin business, making that attractive to the US. To US manufacturers: prices are going to be higher for sure. You worry that even if that's not enough to stimulate domestic production, it's going to have repercussions for the supply, the reliability of supply, and potentially the quality of drugs made overseas.

In the first part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at USC, outlines how the tax on goods coming from China and potential 25% tariff on pharmaceuticals could influence generic drug prices. 

A Side Effect Cascade

, Tom Dorsett, CEO, RazorMetrics, describes how polypharmacy refers to the use of five or more medications by an individual, and it is becoming an increasingly prominent issue in the United States. Polypharmacy has been recognized for years but is growing more significant, especially within Medicaid, Medicare, and large commercial sectors, including self-funded employers.

One of the key drivers of this rise is the growing number of chronic conditions, which affect a large portion of the adult population. Around 40% of adults in the US have four or more chronic diseases, contributing to the increase in polypharmacy. Furthermore, among the working adult population between 40 and 79 years old, 24% are impacted by polypharmacy, a trend that continues to grow. This issue highlights the complexity and challenges of managing multiple health conditions and medications in an aging population, leading to potential risks related to drug interactions and overall healthcare management.

Dorsett also explains why he believes this concept is such an overlooked driver of unnecessary spending and adverse health outcomes, strategies that should be taken to overcome health information exchange blockages, and much more.

Why do you believe polypharmacy is such an overlooked driver of unnecessary spending and adverse health outcomes?

 It's a significant problem because it creates several different scenarios. One of the biggest is a cascade of side effects. When you think about it, you're getting prescribed medications for each one of these chronic diseases, and if the physicians aren't necessarily following what's known as the Beers List [Criteria], which is a list of drugs that have well known, acknowledged drug-to-drug interactions, then you're going to end up with this cascade.

Basically, you start getting side effects from the adverse reactions between the drugs, and you prescribe a drug for the side effect, which creates more side effects and so on, thus creating that cascade. The more drugs, the more cost. These adverse events also drive up emergency room visits. They're a very significant driver of increased emergency room visits, which are typically the most expensive medical encounters that you can have that aren't in-patient. It’s highly problematic in those regards, plus, it just has patients feeling worse because of the events that take place—because of the interactions—so the healthier you can get the population, the less this happens, and the less chronic disease there is.

We're starting to also see this with the advent of GLP-1s. Dropping weight creates a domino effect with hypertension, diabetes, and any number of different chronic diseases. There's a whole lot of promise with newer indications of GLP-1s coming out in the future. As you've probably seen, they're popping up all the time, regarding new and different ways that GLP-1s can help, so that's exciting. That's some something we're seeing, but nevertheless, we're still seeing growth in polypharmacy generally.

In the second part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Tom Dorsett, CEO, RazorMetrics, comments on why he believes polypharmacy is an overlooked driver of unnecessary spending and adverse health outcomes.

Enhancing Pharma Supply Chain Transparency and Trust

, Laura Johnson, senior director of sales, life sciences, Loftware, discusses how supply chain collaboration is becoming increasingly important, particularly in the life sciences and pharmaceutical sectors. According to Johnson, the adoption of cloud-enabled collaborative supply chains is crucial for improving real-time data sharing. This enhances visibility and coordination among internal stakeholders, external suppliers, co-manufacturers, and co-packers, who all play a role in the complex supply chain process.

This collaboration leads to faster decision-making and reduces operational costs, resulting in greater agility. Pharmaceutical organizations are better able to respond to market changes, regulatory updates, label changes, and potential disruptions. In addition, cloud-based systems facilitate regulatory compliance and advanced analytics, enabling more accurate demand forecasting. These systems also optimize inventory management, which directly contributes to improving patient outcomes and accelerating the time to market for new therapies.

Ultimately, cloud-based collaborative supply chains help streamline operations, reduce costs, and improve the overall efficiency of the pharmaceutical industry, benefiting both companies and patients.

companies are exploring new ways to ensure that their products and shipments are protected, why the demand for supply chain transparency is continuing to gain momentum, and much more.

Why is the demand for supply chain transparency continuing to gain momentum, and what role are track-and-trace initiatives playing in that effort?

I've been in the industry for a while, so I was around doing and providing solutions to support, track and trace way back in the beginning. You mentioned RFID was certainly a hot topic, and it continues to be. I think that companies are continuing to embrace track and trace. There's a better understanding that the technology has certainly improved immensely over the past 10 to 15 years, so I think it's easier for them to adopt and get the support, and the funding and things that might be needed to deploy these types of systems.

In general, the adoption of track and trace in life sciences certainly enhances the supply chain transparency. It provides that real-time monitoring of products across the network, from production all the way to patient delivery. I think that's really what the intent of it was back when we started focusing on it, deploying sterilized product, as well as the tagging in different ways, whether it's RFID or two-dimensional barcodes, which are a little bit harder to counterfeit than a standard linear barcode. Getting back to track and trace, it certainly improves regulatory compliance as well, and if needed, it can lead to the ability for brand owners or manufacturers to be able to act very swiftly or quickly, should a recall or something else be needed.

In my opinion, by leveraging technology, organizations can improve data accuracy. They reduce inefficiencies often seen when a brand owner is working with a co-packer or another trading partner, and having track and trace across the entire network certainly helps to build trust with these different stakeholders and eventually the consumer.

In the third part of her video interview with Pharma Commerce Editor Nicholas Saraceno, Laura Johnson, senior director of sales, life sciences, Loftware, discusses why the demand for supply chain transparency is continuing to gain momentum, while also explaining the role that track-and-trace initiatives are playing in that effort.

Keeping a Finger on the Regulatory Pulse

chair of the FDA Regulatory practice at Lowenstein Sandler, discusses the potential impact of upcoming tariffs on pharmaceutical supply chains, focusing on Canada, Mexico, and China. He believes that tariffs on Mexico and Canada would have minimal effects on supply chains, as the pharmaceutical industry sources relatively little from these countries. The real concern lies with China, which is a major supplier of active pharmaceutical ingredients (APIs) and finished drug products. A significant portion of recent pharmaceutical deals has involved licensing Chinese drugs, which could be affected by tariffs if they disrupt supply chains.

If the relationship between the United States and China worsens, tariffs could have a more substantial impact. Specifically, they might increase the cost of generic drugs, since China is a crucial supplier for these products. Despite this, Shehan notes that many generic drugs are already extremely cheap, with some prescriptions costing just a few cents. Even if prices doubled, it may not drastically affect consumers. Specialty generic drugs, however, could see more noticeable price increases.

He also points out that if trade tensions extend to regions like the EU, India, or Japan, the situation could change. A broader trade conflict could influence drug prices, especially for certain medications. Overall, while tariffs on China may increase drug prices in the short term, the full impact will depend on the nature of global trade relations and the extent of supply disruptions.

Shehan also comments on how he believes the new administration will influence FDA approval processes for commercial products, other specific regulatory updates that drug developers should be closely monitoring in the current landscape, and much more.

What other specific regulatory updates should drug developers be closely monitoring in the current landscape?

The biggest thing to me right now is that our understanding is that decisions aren’t being made at NIH. That is very disturbing because there's a lot of cooperation between the pharmaceutical industry and NIH: funding, scientific collaboration. If it's a temporary pause, 30 days, while people change processes, not a big deal. But if that indicates some kind of big change in how the process works, that is concerning—and maybe less so for the more established part of the industry—but for all the startups etc. that have cooperative research projects with NIH, that could be huge. You really could see a little bit of a drying up at the earlier levels of the pipeline. Not that NIH does much drug development on their own, but some of that earlier-stage scientific work that lays the groundwork is done there.

In the second part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Jim Shehan, chair of the FDA regulatory practice at Lowenstein Sandler, discusses some of the other specific regulatory updates that drug developers be closely monitoring in the current landscape.

How Tariffs Could Affect Generic Drug Prices and the Global Pharmaceutical Market

Moving forward, what should the approach of pharma companies be amid the latest/pending tariffs imposed on Canada, Mexico, and China? What is their potential impact on the pharma supply chain?

If they were to come to pass the tariffs on Mexico and Canada, I don't think it would have a huge impact on supply, etc., basically because we don't source a lot of drug and drug products from those two countries. A little bit more from Canada, is my understanding. That I would kind of put aside, but China's more interesting. We do know that a very large percentage of the recent deal making has been in licensing of Chinese drugs by the global pharmaceutical industry. If there's a supply aspect to that deal, I guess tariffs have an effect. If there isn't, I don't think it substantially reduces that.

Now, if relationships with China deteriorate and one country or the other decides that that's an area they want to meddle in, I think that would have a big impact, but we haven't seen that yet. Tariffs on China will make generic drug prices go up I assume because China is such an important supplier of active pharmaceutical ingredients, as well as finished products. On the other hand, a lot of generic drugs are so dirt-cheap right now. I’ve literally had prescriptions filled for two cents, which they list the prices at $1.08 or something, and I'm responsible for two cents. I don't know how anyone makes money on that, but if you double the price of that, you're probably not going to have a huge impact. Some of the specialty, generic products are more expensive, but in terms of your pills and tablets, I don't think there's much of a difference there. If a trade war continues and spreads to say the EU, India, and other places—but mainly the EU and Japan—I think you're talking a different story there that may have an impact on prices.

In the first part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Jim Shehan, chair of the FDA regulatory practice at Lowenstein Sandler, describes what the approach of pharma companies should be amid the latest/pending tariffs imposed on Canada, Mexico, and China, along with their potential impact on the pharma supply chain.

The Rundown on Rebates

, Ed Schoonveld, value & access advisor for Schoonveld Advisory and author of 

, points out that the latest 15 drugs chosen for price negotiations under Medicare Part Dare not "negotiations" but rather government-mandated price reductions, based on a percentage discount determined by how far a drug is beyond its patent expiration. While the government has shown restraint in previous rounds, it’s expected that as more drugs are added to the list, Medicare pricing will experience a significant impact.

In this round, weight loss drugs like Ozempic, which have proven effective in managing diabetes, controlling HbA1c, and providing cardiovascular benefits, are included. However, these drugs are not yet approved for weight loss in Medicare patients, so their future role remains uncertain. While this could significantly affect Medicare pricing, Schoonveld notes that the private market is unlikely to be directly impacted by these changes in the short term. The government, however, influences physician fees for Medicare patients, which tend to be lower than those charged for privately-insured patients. This dynamic has led to the private sector subsidizing Medicare patients through premiums.

This trend may extend to drug pricing, where companies might raise prices in the private market to compensate for the government-mandated discounts in Medicare. Such changes could further strain the private sector, especially as employers and insurers are already expressing concerns about rising premiums and drug costs. Additionally, there is ongoing debate around potential restrictions on drug rebates, further complicating the financial landscape for both private insurers and consumers.

Schoonveld also offers a teaser on what to expect in his upcoming February “Value and Access” column.

What can readers expect from you February column?

 So my next column is going to talk about rebates. It's going to talk a little bit about, why are rebates bad? Why else would drug price controlling by the government be better? What are some of the drawbacks? What have we learned from some of the systems around the world? What are some of the drawbacks of that, and what are the points that we need to keep an eye on? What should be the focus of those programs, to make sure that we are keeping the patient in mind?

In the final part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Ed Schoonveld value & access advisor for Schoonveld Advisory and author of The Price of Global Health, previews his upcoming February column.

How Trade Strategy Impacts Business Success

, Amanda Salindong, associate director of channel & distribution at Alnylam Pharmaceuticals

explains how she participated in two key sessions: “Trade 101” and “Women in Trade.” The former, which she presented at both this year and last, is designed for those new to the trade function in biotech and pharma. It offers a high-level overview of the trade function, explaining its role in connecting various business areas such as revenue, contracting, pricing, supply chain, and finance. The session is beneficial for individuals from different backgrounds, including those transitioning into trade from other roles. Salindong enjoys the opportunity to meet attendees, engage in discussions, and help newcomers better understand the trade function. Audience feedback indicated that attendees found the session helpful in building foundational knowledge and sparking further questions.

The “Women in Trade” session, which Salindong co-hosted with colleagues from both the manufacturing and vendor sides, focused on career development, networking, and leadership. The session was intimate and inclusive, featuring both women and men from diverse experience levels. It allowed for open discussions on topics like allyship, career growth, and leadership development. Participants appreciated the chance to engage in meaningful conversations in a more personal setting, unlike larger networking events where deeper discussions can be difficult. Feedback from attendees was positive, as they valued the opportunity to share experiences, exchange best practices, and foster connections with others in the trade industry.

Overall, both sessions were well-received, offering valuable insights, networking opportunities, and practical takeaways for individuals at various stages of their careers in trade. She emphasized the importance of fostering relationships and creating spaces for open dialogue within the trade community.

Salindong also speaks on her day-to-day workflow of that involves supporting her organization’s channel strategy, the factors she believes that manufacturers should consider when selecting a third-party logistics provider, and much more. 

A portion of your day-to-day workflow involves supporting your organization’s channel strategy. What does that entail?

 It is a bit of a smaller company, but I do focus on the channel strategy and operations of the company. As I mentioned before, trade is a nexus of various business functions—you get involved with anywhere from pricing to contracting and revenue, so it's key that the person in trade has a seat at the table to be able to contribute toward broader discussions of an organization's initiatives.

There's a lot of heavy collaboration with the internal stakeholders, and other members—whether it be a market access team or another team—to be able to make sound business decisions to accomplish the company's goals. One of my roles is introducing trade terms and the trade business, and to be able to consider certain factors within the trade and channel to help support a business decision. Thinking bigger picture, whether it be being involved with strategic account initiatives or a revenue business school, it's really important for the trade person to come and bring in how the channel will impact that decision, considering all different factors. How is that going to positively and or negatively impact the business?

That area is where I heavily support within channel. Also, a lot of times in trade, the ultimate goal is to ensure that there's seamless distribution of products to the channel to provide optimal product access. You want to make sure patients get treated, so in order to do that, that involves a lot of contracting, fostering relationships, as well as making sure that the business with other collaborators is running smoothly, whether it be within supply chain or finance.

In the second part of her video interview with Pharma Commerce Editor Nicholas Saraceno, Amanda Salindong, associate director of channel & distribution at Alnylam Pharmaceuticals, describes how she supports her organization’s channel strategy.

Addressing Legal Battles in the Pharma Space

, Donald Prentiss, founder and CEO of Qualthera, describes how compounding pharmacies play a critical role in addressing unique and unmet medication needs that cannot be met by commercially available drugs. Their role in the pharmaceutical supply chain varies depending on the type of compounding facility: 503A or 503B.

A 503B facility, also known as an outsourcing facility, primarily supplies office-use medications to healthcare providers, who then administer them to patients. These facilities must adhere to current Good Manufacturing Practice (cGMP) standards, as they are FDA-registered and subject to inspections. In contrast, a 503A facility focuses on compounding medications based on individual prescriptions, typically in smaller, patient-specific batches. This allows for customization, such as removing allergens or adjusting dosage forms to better suit a patient's needs.

Both types of compounding pharmacies are particularly useful in cases of drug shortages or when commercially available drugs are insufficient. For example, if a patient requires a medication that is in short supply, a compounding pharmacy can step in to provide a tailored solution. This flexibility makes compounding pharmacies essential for meeting the unique needs of patients, whether by modifying an existing medication or creating entirely new formulations to address specific medical conditions.

Ultimately, the primary function of compounding pharmacies is to bridge gaps in the pharmaceutical market by providing personalized, alternative treatments that meet the diverse needs of patients.

Prentiss also comments on the tirzepatide shortage, the notion that commercialized and compounded drugs are competing with one another, what needs to be done amid the various legal battles pertaining to GLP-1s that are currently taking place, and much more.

What do you believe needs to be done amid the various legal battles pertaining to GLP-1s that are currently taking place?

I totally sympathize with drug manufacturing. You spend all this money to get the patent, get your drug to market, and it's successful. Then, you run out and try to gear back up; you look around, and there's thousands of these facilities now making your drug and getting that revenue. They go through the process. They respect the FDA process to get these things approved, and so they want to protect their interests. They have stakeholders too, so I totally get that side. On the compounding side, as I alluded to before, there is a statutory framework that allows compounders to make these drugs in shortage, and if there's a medical need to alter that drug in some form or fashion. Both sides have the right to engage in these battles based on what's allowed from a regulatory perspective.

To answer your question, what brings it together goes back to collaboration. When the shortage happened with all these weight loss drugs, compounding arguably helped further the success of the drugs. They made it more widely available. More people started to use it, and saw the benefits of it, and so they kept that demand alive, arguably in the best interest of the Lillies of the world. How do you work together to say, thank you for helping us out, but now we want to transition back to our supply chain. We want to keep you in mind, so maybe we can come up with a preferred list of compounding pharmacies or outsourcing facilities that we can refer out to (contract outsourcing), but more collaboration there, so that we're not having to settle this in the courts and with the FDA.

I believe I saw it from the Ros, and the Hims, and the Hers of the world—they're largely used compounding pharmacies to supply their medications. What was really neat was that I think it was Ro who had some kind of agreement with Lily to channel their drugs to that platform now too, so that was a nice little kind of collaboration that I saw there. If these telehealth platforms can collaborate with drug manufacturers, and compounders having already collaborated with telehealth platforms, let's bring in the FDA. Let's bring in other stakeholders. Let's give the patients a voice. What do they want? A lot of these patients are paying cash for this stuff. That's how important it is for them to reach their healthcare goals, and and I think that's another kind of underlying thing here.

Even through COVID, we still saw demand for compounds. They're willing to pay cash even through economic downturns, because it was so powerful. Health is a great equalizer, as you know, and so without it, money is worthless, so I think collaboration is the key. The FDA does a good job of creating listening sessions and other conferences on the compounding side. They have a whole website dedicated to compounding excellence. A lot of useful materials on how to educate compounders on how to do things appropriately—getting that information from the industry. I think really pushing that, bringing in the trade groups like the OFA [Outsourcing Facilities Association], just to put our heads together to solve this together, instead of fighting each other across it.

In the third part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Donald Prentiss, founder and CEO, Qualthera, explains how collaboration between compounding pharmacies, drug manufacturers, and telehealth platforms can drive success, despite the various litigations pertaining to GLP-1s that are currently taking place.

ROIC

PC: In what ways does return on invested capital (ROIC) differ in its significance for biopharmaceutical companies compared to other industries, considering the unique R&D cycles and patent lifespans?

So, let’s look at two companies, and you can guess who those two companies are. Why? Well, it’s because of the GLP-1 inhibitors. Those two companies are Novo Nordisk and Eli Lilly. Their ROICs are astronomical I think Novo Nordisk is around 50%. Most companies would kill just to have a gross margin of 50%. Their ROIC is 45% at the bottom before taxes, so that's astronomical, and that's why the ROIC is so important. 

: The upcoming industry audit presentation will analyze key metrics and trends among top biopharma companies, focusing on financial and strategic performance. The audit, now in its 23rd year, has evolved from analyzing 25 to the current "nifty 15" publicly traded pharmaceutical companies, reflecting industry consolidation. Core metrics assessed include enterprise value, enterprise value-to-sales ratio, and return on invested capital (ROIC), providing insights into shareholder value, growth potential, and operational efficiency. High ROIC figures, such as Novo Nordisk’s 45%, underscore the sector's exceptional profitability compared to others, driven by innovative products like GLP-1 drugs for diabetes and weight loss.

Two broader themes contextualize the audit. First, Johnson & Johnson ranked sixth overall and fifth in innovation among 250 U.S. companies in the Drucker Institute's Best Managed Companies list, reflecting the growing recognition of pharma's management excellence. Second, diversity remains a focal point. Women now outnumber men in U.S. medical and law schools and achieve parity in MBA programs, signaling progress in advancing women into executive roles, though female representation among CEOs remains limited, especially globally.

Novo Nordisk stands out not only for its market value exceeding Denmark's GDP but also for its philanthropic initiatives, such as the world-leading Novo Nordisk Charitable Foundation. Such efforts illustrate how biopharma companies are increasingly integrating societal objectives into their strategies. In a shifting market, financial performance alone is no longer sufficient; long-term value creation must align profitability with stakeholder benefits and community impact. This balance, exemplified by companies like Novo Nordisk and J&J, will likely shape how the industry communicates its value to investors amidst uncertainties.

Bill Trombetta, PhD, professor, healthcare strategy, marketing, St. Joseph's University, discusses the difference between return on invested capital in pharma compared to other organizations. 

Latest Conference Coverage

Trade & Channel Strategies 2024: The Significance of Return on Invested Capital for Pharma Companies

Key Challenges Facing the Pharma Industry in 2025

, Gaurav Gupta, managing director and head of R&D 

, discusses the regulatory pressures and rising R&D costs impacting the pharmaceutical industry as it looks toward 2025. Gupta highlighted that many regulatory challenges, such as drug pricing pressures from the Inflation Reduction Act, will persist in the coming years. Additionally, he pointed out the growing integration of real-world evidence into clinical trials and the need for regulators to keep pace with emerging technologies like AI. Gupta believes that these trends will continue to shape the industry without major new disruptions expected in the short term.

He also comments on the steps pharmaceutical leaders should take to better prepare their teams and organizations for supply chain disruptions; specific technical and "soft" skills that will be critical for pharmaceutical leaders and frontline employees to thrive in the evolving industry landscape, and how this can help when it comes to proactivity in handling talent shortages.

A transcript of Gupta’s conversation with

Looking ahead to 2025, what types of regulatory pressures and areas pertaining to rising R&D costs will impact the pharma industry, and how can companies proactively address these obstacles?

On the regulatory pressures, in many ways, it's a continuation of what we've seen over the last couple of years. Of course, there could always be something new that happens, particularly with the new administration, but I think we've already seen some of the pressures on pricing, for example, with the Inflation Reduction Act, and that's going to play out over the next couple of years in various different ways. I think that's going to continue. I think we're already seeing some new sort of thinking from regulators around things like real-world evidence and how that's being integrated into trials. We're going to continue to see that evolve.

We're going to see the evolution of regulation around emerging technologies, whether that's AI obviously being a big component of that, but also other new technologies. I think that's always a constant—as the technology develops, the regulations have to step in and keep up. I think we're going to continue to see that over the next couple of years. I don't know that there's—at least at the moment—anything significant that we can forecast that's all that different from what's already been happening. I think it's going to be a continuation of that.

On the R&D costs, it’s a similar story because the underlying dynamics haven't changed. The underlying dynamics still drive some of the same challenges probably more so around where to invest, and what’s the right sort of allocation of R&D resources, whether that's thinking about white space versus existing areas; thinking about target population, smaller target populations, which has sort of been a trend that's been going on for a little while now; thinking about even things like digital therapeutics, or AI and technology, and how much are we investing in that, versus investing in that versus investing in traditional drug development. I think that the big question will be, where do you allocate your resources? There's no question that there's going to be an increase in R&D spending. I think that's been consistent for the last 20 years at this stage.

I think that's probably where you're going to see some of the decision making, and I do think, to your question surrounding if those are connected: I think what's connected is that both of those create a level of sort of uncertainty in decision-making because we don't have all of the information that we're going to need to decide what we should be doing on the regulatory front, or what we should be doing on the R&D front. I think that the skillset around how you make decisions in an uncertain world, and how you make decisions with incomplete information is probably the key to success for most leaders and most businesses.

In the first part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Gaurav Gupta, managing director and head of R&D at Kotter, details the types of regulatory pressures and factors surrounding rising R&D costs that will affect the pharmaceutical industry.

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