Pharma & Life Sciences Industry in "Constant Flux of Change"

Pharma & Life Sciences Industry in "Constant Flux of Change"

This week’s edition of the Analyst Q&A series features Yanis Saradjian of Arx Research. Yanis has over twenty years of experience conducting industry analysis and customized consulting engagements for Fortune 500 life sciences and consumer goods companies.

Yanis covers everything from the biggest challenges facing life science organizations in 2017 to the most interesting developments in pharma.


Q. What are the biggest challenges facing pharmaceutical executives and life science organizations in 2017?

In our opinion, the industry is in a constant flux of change and the challenges facing life science executives will vary from region to region, country to country and from organization to organization. We find the greatest challenge facing these executives is mostly related to the substantial amount and complexity of regulations. Let’s take a look at the spectrum of our analysis for the medical affairs functions as examples, as this is our area of expertise.

A country such as the US is at the tail end of a major transformation that took years to overcome, following realignment due to the implementation of the Sunshine Act (transfer of values reporting). Medical Advisor Field teams experienced significant contraction a few years ago, while the thought leaders they were exchanging with pushed back temporarily as the transparency processes were being worked out. Now, almost half of studied organizations report they expect team expansions. Life science entities in Europe are enduring major reorganizations as new regulations (EFPIA Transparency Code) on thought leaders and HCPs exchanges and payment reporting are being implemented. These entities are experiencing a similar scenario as the US did during the early onset of the Sunshine Act. Close to 70% of executives reported they expect stability or reduction of medical field teams as they sort through the challenges the new rules bring to the various countries.  

In the Asia-Pacific region, more than 70% of surveyed executives indicated medical field teams are expected to grow. This is mostly attributed to the novelty of the function. Where life sciences had very little needs for Medical Affairs functions in the past, the medical field role has now its place and growing. We expect this trend to hold until countries in this region begin developing and implementing more stringent payment reporting rules. Latin America is highly segmented by country in regards to regulations affecting life sciences. Many corporations took steps to insure good corporate transparency internally and prepare for potential public reporting. In the meantime, the medical field teams are expanding very rapidly and regional thought leaders and HCPs are becoming increasingly familiar with the concepts of medical advisors’ relationships.


Q. How can Arx Research’s KOL-FMV Compensation Data reports and services help legal, compliance and medical affair executives? What are the key benefits offered by these reports?

The KOL-FMV Compensation Data reports help life science executives involved in developing, exchanging and contracting with KOLs and HCPs establish market-driven and market-supported fee schedules. Fees paid to KOLs and HCPs will vary constantly as the industry develops new drugs and therapy areas become in more demand than others. Therefore, having up-to-date rates, gathered through our survey and reporting capabilities will ensure healthy thought leader relationships.

Q. Why have payments made to physicians and thought leaders been under scrutiny and why is it important for companies to adjust their rates to level with industry standards?

The payments made to KOLs and HCPs originally came under pressure as a handful of life science organizations got into trouble for overpaying or because of implicit attempts to influence prescribers. These issues then raised public concerns about the honesty of HCPs regarding prescribed medicines and the influence the industry had over prescribing habits. In turn, regulatory bodies developed new rules to address the issues forcing companies to report payments made to physicians. And with these payment amounts made public, it caused many academic research centers, KOLs and HCPs to push back and some simply cutting ties with pharmaceutical companies – being afraid to be labelled as corrupt by their patients and general public opinion.

Now, the payments information made to KOLs and HCPs are available on various websites, although what is available publicly is often aggregated and do not show many details. Regardless, organizations are somewhat obligated to align with market rates to avoid being under additional scrutiny.  These industry standards also bring all life sciences working with thought leaders at the same level, with some flexibility to stay competitive, but without over- or under-paying for activities they involve thought leaders. Thought leaders were also setting their “price” before fee schedules were implemented by life science organizations. Although there are still negotiations between parties, fees are now becoming more normalized.

Q. Why are adjustments to market rates best done through 3d party research?

Third parties are able to gather compensation rates from multiple sources by removing the competitive aspect or perception of intelligence gathering of such research – no one executive from company A would want to share their rates directly with a company B executive for instance, for obvious reasons. Therefore, Arx Research provides a safe environment for executives to share rates used in the contracting with healthcare professionals.

In return, the analysis of rates from multiple organizations, worldwide, benefit the industry as a whole as each can then compare their own rates with “industry-wide” rates, and adjust as necessary to become more competitive, realign their fee schedules or quickly establish payment schedules for a newly approved product’s therapeutic area.  


Q. What are the most interesting developments in the pharma and life sciences industries in 2017? In your opinion, how will these developments impact the industry over the coming years?

Although the industry experienced consolidations during a period of “lean” years, there are much discussions about mergers and acquisitions ramping up in the next year due to major policy changes, cash reserves repatriation and tighter pipeline developments. I believe we will see a few “big-10” mergers and many smaller life science organizations being acquired. These movements usually have impacts on large cohorts of employees as merging organizations look for cost efficiencies. But this also usually creates an upsurge of new organizations as these employees look to pursue drug developments.  It is a cyclical evolution.

Deregulations in the United States might ease and speed up drug development, bringing potential new products faster on the market – these developments still have to be enacted before being discussed with more certainty.

The personalized medicine trend that began a few years ago will continue with even more focus, bringing additional precision in patient targeting and resolve of diseases. This means narrower patient populations for each product and “hybrid” development of each product to target specific variations of diseases.

We’d like to take this opportunity to thank Yanis for sharing his expertise with us.

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About the Interviewee:

Yanis Saradjian has serves as the Chief Executive Officer of Arx Research, LLC. He directs the company’s planning, strategy and business development initiatives. He has over twenty years of direct leadership experience in business operations and strategy consulting with significant project management, strategy formulation and deployment.

Published by Research and Markets