Novartis' strategy is clear - will manifest itself all across Big Pharma

They are position themselves for the future.

Obamacare is accelerating changes in the US Healthcare market. The sweet spots in the new market realities are to either sell what people don't mind paying a premium for, Oncology treatments in the case of Novartis, or what everyone has to buy, in the case of all of Pharma's that is generics.

All Big Pharma's are either in this model or will be soon: Specialize in a profitable part of the Pharma market while supporting total revenue with generics.

JV's never work and the Consumer deal is just a prelude to a spin-off.

The concentration of Oncology in Novartis, and other parts of the market in other big Pharma's, will reduce competition while supporting higher prices and reduce total investments in research.

⅔ of US Marketing and Sales is gone. You may think that you can hide in mid to small pharmas but this is only temporary.

This will all been seen as hindsight the inflection point in the structure of global pharma.

 

Cialis was JV. It looks like it worked out well.

 

Cialis is a product that was a result of a JV. That JV is now over - fuukin moron.

 

spot on post....JV a prelude to a spinoff for consumer? how so?/

 

And their next move will be to sell the MS franchise on their ultimate quest to be an Oncology only focused company.

 

Novartis basically gives consumer to GSK to run but calls it a JV. GSK either buys it from Novartis down the road, sells it to someone like JJ or they IP it. How can you say this this current arrange is a prelude to getting out of the consumer space?

 

What real oncology assets did NVS get and if they were so good why did GSK get rid of them despite years of investment. Same old NVS, day late dollar short to strategy that everybody else jumped in years ago. Someone at GSK business development is getting a big bonus for selling $1.5 billion of products for $14 billion. Maybe we should ask Vasella if he still agrees with full service health company strategy.

 

Combining GSK and NVS oncology teams is going to cut a lot of unnecessary costs in the system and improve focus on the right products to care and cure patients. Yes, NVS is going to cure cancer.
Watch or get with the program.

 

Exrapolating from the past performance of Novartis wouldn't give an unbiased observer the ability to make the same uninformed comments. The majority of drugs developed by pharma in the last 30 years were simply me too drugs based on already developed drugs. Then you use highly paid lawyers and a patent system bought and paid for by capaign contributions and lobiests to milk profits from the US healthcare system selling drugs that offer little or no increase in clincial results.

So now, with less competion you think Novartis will make more new Oncology drugs.

You are a fuukin moron.

 

While I do not disagree with much of what you have to say, I must object to the last sentence.

Here's the deal. The good 'ol days of Big Pharma are coming to an end. The next phase is Little "Bigger" Pharma. In other words, Big Pharma will consolidate into fewer but greater specialized R&D, Production, Distribution, and Shared Service segments. Government will make this happen, because the government exists to serve the people's interests - which includes universal (efficient & effective) healthcare. What else do you think those future tax hikes will pay for?

The good news is that the future is not all about profit. In the short-term, yes. Over the long-term, no. Why you ask? In the current economic system, you need cash & access to "unlimited" credit in order to pay people to research/develop, oh say, the cure for cancer, and then be able to produce/distribute that product to the right patients at the right time every time.

 

There won't be any "future tax hikes" the US already pays twice as much per healthcare deliverable as the next comparable market, Europe, and we get less for it. They have live longer / less mortality and are healthier / less morbidity. The future for anything in US Healthcare is all about getting "more healthcare" and spending the same, or less, per healthcare deliverable. And the cost savings will all come out of margin and standard of living fior those paid by the industry. Currently, by law, Insurers have to apy 80% of thier gross to patient care - cap on profits. Pharma signed our selves up for "margin control" - Pharma pays a surcharge for every branded drug sold when a generic is available. How long until the guys with consultants with spreadsheets figure out that is less and less profitable to sell branded drugs with generic competition? Not long as they have already figured it out - they helped right the fuukin' law! How long until they figure out that it isn't a good investment to pay for research into drugs that will enter the market with an established branded competitor that will "graduate" into a generic status years before thier new competitor does? They already have - they wrote the fukkin' law!

I think that this is your future of Pharma - fewer / bigger companies rolling the dice on the next Oncolgy / Geriatric / Lifestyle Profelactic miracle cure, depending upon wheich one of these catagories they have retreated into?

I've got another spin on this scenario. They can't be "bigger" as in the number of people that they employ as the market price of what they are selling will decrease over time so the only way to please investors will be to maintain or increase margins is by decreasing cost - paying fewer people ever less. Then you talk about a "cure for cancer"? Gowd, the odds of Pharma developing that aren't very good as ~ 80% of all the drugs brought to market over the last 30 years were based on previous drugs. Last I heard there are no "cures for cancer" to base a new drug on.

Research - Pharma will have NO incentives to develope "me too" drugs so they will focus on "cum shots" in there chosen lanes. That means MUCH less overall research spending but more focused on many fewer areas. Then, what if Pharma does "kill our great white whale(s)" of Cancer / AH / Diabetes? Do they need sales marketing / sales / reg / etc to sell it? No, if your researchers find the cure for cancer, it will be a few trials, a rush to license then it will sell itself.

Here is he future - many fewer, mostly low paid people working at low margin pharmas with fewer highly paid researchers working to find miracle cures to make sales that benefit shareholders. Welcome to the "Asian Nike Factory" that Pharma is evolving into. The dynamics are undeniable.

 

We already pay twice as much as Europe for the same our less healthcare outcomes. Tax hikes, the US tax payers should get some of the $'s that we have stolen from them in the past, back!

 

At last, someone on a CP forum with an above average intelligence level. I like you and hope you stick around. ;-)

I agree with your argumentation re: inefficiencies in US healthcare delivery vs. that of European peers. This is not news btw. There are some social/ethical issues that need to be resolved in the US to build a system that could rival or beat the various European models. (And, what we're talking about here is the basic right of all individuals (US citizen or not) to healthcare. I would not be surprised if a Constitutional Amendment gets added in the next 2 years).

How to finance that? Well, you need to raise the tax base (on the wealthy, who can bear the burden) for more affordable/accessible medical education to not only US, but global top talent. You want the best of the best researchers/developers, producers/distributors, clinicians, etc. who can tackle current and future challenges, whether or not said top talent is a US citizen or can finance the education and necessary training independently. What are some consequences across the industry? For one, the margins will naturally decline over time in order to finance the next generation of the healthcare industry. And, yes the industry helped write the legislation, because that was part of the deal in accepting this fate. The leadership are not fools, hence the reason to take the recently announced measures. In other words, get with the new program or look elsewhere.

TL;DR

Net income for the overall healthcare industry (pharma/device makers and their staffs, insurance co's and their staffs, and medical practices and their staffs) will decline as a result of future progressive taxation in order to allocate/manage resources more efficiently/effectively not only for US, but also for global challenges in healthcare. We're talking about the commons, and with that, a little bit more of a centrally planned/managed future. But, it is a positive future that will lead to advances in human evolution/development.


PS.
Although I've elaborated on my argument a bit more, and I want to emphasize that you've seen only "a bit" (there's much more to it), my use of "future tax hike" was a wink to the anti-gov crowd here on CP. What I think will happen (although I could be very wrong if sense does not prevail) is that the US will adopt a single-payer healthcare system (with multi-payer "add ons" for those who can afford) as a means to control for efficiency and effectiveness of healthcare delivery.

Top tip. Keep an eye on the clusters: a JV, if you will, of private wealth (philanthropic) interests, universities, and hospitals. There is a convergence in shaping the future of healthcare. For example:
http://wyss.harvard.edu/viewpage/271/grid-what-is-the-wyss

And government, with those additional tax revenue resources, will fund the future delivery of those solutions to both US and global markets. Corporations will compete for contracts, but the margins will be below historical averages. But, the opportunity to care and cure 2, 3, 4, 5, ... billion patients will be achievable.

 

So I am the individual above that you seem to agree with more than others here but I don't agree with most of what you said here.

There will not be significant tax increases because of the GOP. They didn't try to raise taxes to pay for 2 wars that cost ~ $1T. They haven't proposed raising taxes to help the Vets of those 2 wars in fact, they cut those programs. And the Dems haven't made a big fuss about it. You know why? It isn't an issue that moves / changes any votes. Screwing over Vets has been a GOP Hallmark since Reagan and the military and their GOP supporters will support the GOP because the GOP likes war as long as you pay for the beans / bullets and bandages by putting it on the credit card. Let the Romney's of the world keep their plunder.

There will be no significant taxes raised because of changes in the US Health care system and what we have now with Obamacare is about what we will have in 20 years. It took over 90 years for in to be first proposed by a "Progressive Republican", Teddy Roosevelt and then adopted by the GOP in response to a true reform / single payer called "Hillary Care" then again finally adopted by the GOP then repudiated when the current idiot Tea Bugger-eds gained influence then adopted by the Dems.

What will happen is a gradual cooling-off. The total cost of US Healthcare will grow as the averagely unhealthy and old baby boomers need more of it but the costs per patient will stay flat or increase much more slowly than it would have otherwise - "bending the cost curve". For 20 years the US economy as a whole, will grow, while the US Heathcare economy will shrink in relation. Scumbag companies like Novartis have engineered all this plus they will always have the managerial discretion to make changes, so they will get their unholy part. In the US, the "front end" of all Pharma's will take a bigger hit as the new system we are moving to takes much fewer commercial / coordination horsepower than it did in the past. Small and medium sized Pharma will die as there is much less money flowing thru the system to fund them and they will be consolidated in the larger pharmas. Those larger Pharmas will employ many fewer people and gradually pay much less. Total research will be much lower but focused in areas chosen by the companies funding them.

This will NOT lead to a revolution in treatment for any one but will be a gradual change so that the current system that should be focused on giving US citizens what it should, affordable healthcare, does so like it is in Europe. There will be no resources left over for visionary hopes.

 

The pharmaceutical companies that survive will be those that answer to The Bilderberg Group and either support Death Panels, or develop drugs that insidiously kill off half of the world population.

 

oh, boy. stop confusing some, unnamed chemical manufacturers' business practices with that of good pharma.

you're a "dead" giveaway victim of a "mass-market" viral media campaign. did you know that? or, are you paid / co-opted by the conservative, WASPy right?

on the origins of "death panels":
https://en.wikipedia.org/wiki/Death_panel#Origins

so, here's a lesson about the company on which whose anonymous message board you are posting mass-market, mis-information. the mission of nvs is to care and cure, not to kill its own business model. (that's why your claim about "drugs that kill off half of the world's population" is patently absurd). besides, what pharma company, in today's extremely competitive regulated markets (which will get more and more regulated + consolidated by people like you and me--->you forgot we live in a democratic society within a market economy?), can survive as a going concern if its products sole effect is to cause serious adverse events?
http://www.fda.gov/safety/medwatch/howtoreport/ucm053087.htm


Bilderberg Group, WEF/Davos crowd, Bohemian Grove, (insert name here of any culture club), they are all about ideas and business. think of english coffeehouses during 17th and 18th century london.
https://en.wikipedia.org/wiki/English_coffeehouses

this is old news.



PS.
if it weren't for english coffeehouses, the two of us wouldn't be having this conversation right now. "we" might still have an "anonymous", digital network of communication to spread ideas, but "you and i and our current exchanges of words" wouldn't be happening.

 

See the string re Pfizer and AZ

 

It makes big picture sense, no? Why should pharma companies (or any corporate behemoth), their shareholders, and their employees continue to maximize individual profits by "unequally" controlling the distribution of "universal human resources" to the "privileged" few at the expense of the "under-priveleged" many. I'm not talking USA alone here. I'm talking big, like global, Planet Earth big.

I understand the capitalism game that we're playing, and I'm certainly playing it too, despite the limited shelf life. However, a continuation of the status quo simply carries increased risk of leading to undesirable consequences of epic, societal/cultural/economic/existential proportions. The higher purpose folk understand the risks and are calling for a future that gives us that great, quantum leap forwards and backwards. The lower purpose folk want to continue the status quo of forgetting their inter-connectedness to all of nature, becoming out of balance.
http://vimeo.com/21922694

This new game that we're experiencing now is the apocalypse, which is literally the lifting of the veil or revelation.
https://www.youtube.com/watch?v=CY638NluxuM

And, I think it's going to be OK ;-)

How dare I question all prevalent belief systems and think the impossibly big? What kind of self-righteous, delusional dolt would write such hyperconsciousness bs?
https://www.youtube.com/watch?v=DVg2EJvvlF8&feature=youtu.be&t=42s

Well, isn't this just a ride that we can change at any time?
https://www.youtube.com/watch?v=iMUiwTubYu0

Are we not immortal?
https://www.youtube.com/watch?v=65I54uUO-Io

 

Novartis should enjoy the windfalls of oncology while they can. There is change in the winds and it's coming soon.

ASCO has already announced their approach to assessing value of cancer therapeutics. Simply put doctors want a larger slice of the pie for themselves and less for pharma. Look at Gleeves as an example of a drug whose cost has tripled in the dozen or so years since it was introduced. Below are some uotes from an ASCO stataement

The Value Initiative

Now, under the leadership of the Value in Cancer Care Task Force, ASCO has launched a new strategic initiative to define value in cancer care. Not only is the Society developing a working definition for value that is specific to oncology, it is also identifying opportunities to integrate value considerations into clinical decisions along the continuum of cancer care. In terms of healthcare, value has been defined by Michael Porter, a leading authority on competitive business strategy, as outcomes relative to cost.[4] In order to define value in cancer care specifically, ASCO is developing a methodology for determining the relative value of cancer treatments and interventions to help physicians make the best decisions with and for their patients.

“In oncology, we face the fascinating challenge of determining the value of today’s cancer treatments,” said ASCO President Clifford A. Hudis, MD, FACP. “What is the worth, for example, of an average of three or four more weeks of time—be it freedom from progression, or life itself –relative to the cost and side effects of the treatment? What if a few benefit greatly and many not at all? The answers to these kinds of questions may vary widely among different patients, families, health-care providers, and communities, but we must confront these difficult issues with courage, compassion, and integrity.”

Based on the work of this task force, ASCO has identified three goals for its strategic value initiative:

Oncologists will have the skills and tools needed to assess relative value of interventions and use these in discussing treatment options with their patients.
Patients will have ready access to information that assists them in selecting high value treatment that meets their unique needs.
Those responsible for covering the costs of cancer care will have a useful algorithm with which to define and assess value of cancer treatment options.

Increasingly, the price of cancer therapeutics has been the subject of intense discussion and debate within the oncology community. Since the 2009 publication of ASCO’s Guidance Statement on The Cost of Cancer Care, the discussion of drug costs has broadened to the larger medical professional community as well as the general public through professional publications and mainstream media alike. From institutional decisions to not offer certain expensive new therapies, to commentaries from leading oncologists across the country, the soaring cost of cancer drugs is under scrutiny by the very doctors who prescribe them. In a special article, “Cancer Drugs in the United Sates: Justum Pretium-The Just Price” published in the Journal of Clinical Oncology, Hagop Kantarjian, MD, and his coauthors drive right to the core of the issue.[5] They raise questions about the ethics of the current pricing model and challenge the increasing practice by drug manufacturers of charging people faced with life-threatening disease enormous sums of money for the life-saving drugs that they require. They also note the disconnect between the benefit—value –of some new drugs and their pricing. This robust discussion makes it clear that oncologists have not only a role, but indeed a responsibility to help address and manage the issue of high drug costs on behalf of our patients.

Most troubling to ASCO are the reports that high drug prices are limiting patient access to treatment and challenging patients’ (and their families’) financial stability and security. The overall burden on the national economy translates into enormous strain at the individual level: patients and their families affected by disease often face crippling expenses during what is already one of the most difficult and stressful times in their lives. According to the National Cancer Institute, an estimated 1.7 million Americans will be diagnosed with cancer this year—bringing the high cost of cancer drugs close to home for that many more patients and their families.[6] With many newly approved oncology drugs costing as much as $100,000 or more for a single course of treatment, these therapies are out of reach for many.

The Value Framework

The ASCO Value in Cancer Care Task Force is working to develop an initial framework for evaluating value in oncology and to define the key components of this framework. Three key elements have emerged from the work of the Task Force:

Clinical benefit. Clinical benefit is commonly accepted to mean that the treatment demonstrates an improvement in survival compared with no therapy (when appropriate) or to a known effective therapy. In some cases, however, clinical benefit may also constitute a clear improvement in time to disease progression together with an improvement in symptoms or quality of life. In other cases, clinical benefit may not translate to an increased period of disease control, but rather a markedly reduced symptom burden resulting in improved quality of life.
Toxicity. Toxicity refers to side effects associated with treatment, particularly those that impact a patient’s quality of life or ability to complete their usual activities of daily living. It is important to consider the degree of toxicity as many side effects can be managed with supportive or additional treatments.
(NOTE: don't overlook economic toxicity)

Cost. Cost encompasses those expenses incurred by patients, society and insurers. In an era when co-pays are rising as a fraction of the cost for care delivered, there are increasing numbers of patients who are forced to file for bankruptcy protection, or make choices between other necessities such as food or shelter. Financial toxicity also can result in poorer outcomes as many patients do not adhere to their treatment regimens in an effort to conserve limited financial resources.

 

Oncology is was their best place to retreat to as many of the other specialties are already under even bigger pressure from regulatory changes -i.e. generics etc. There is and will be more innovation here and less pressure on costs.