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Doing Business in the United States
Doing Business in the United States 2
Agenda
• Introduction
• US Life Science Industry Overview
• Life Science Clusters
• US Biotechnology Overview
• US Medical Technology Overview
• Regulation and Market Access in the US Healthcare System
• US Food & Drug Administration
• Update on US Healthcare Reform
• Discussion on US Market Entry Strategy
• Q&A
3 Doing Business in the United States
Welcome from UK Trade & Investment
UK Trade & Investment, also known as UKTI, is the economic development
arm of the UK Government. As a standing resource that maintains a broad
base of connections in both industry and government, UKTI facilitates foreign
direct investment and the creation of new UK business and provides support
to UK exporters in foreign markets.
4 Doing Business in the United States
Trade Services
UK Trade & Investment’s trade services provide UK-based companies with
advice, information and practical assistance on all aspects of international
trade.
• An export „health check‟ to assess trade development needs
• Bespoke market and sector research through the Overseas Market Introduction Service (OMIS) or the Export Marketing Research Scheme (EMRS)
• A database of regularly updated business opportunities
• Personalised email alerts informing businesses about relevant opportunities and developments
• A High Value Opportunities Programme that identifies global supply chain opportunities
• Export skills training
• Detailed advice and support through our international trade advisers and through our Passport to Export and Gateway to Global Growth programmes
• Market entry support, including sector-based overseas trade missions, visits and trade shows
5 Doing Business in the United States
UK Trade & Investment | US Network Map
6 Doing Business in the United States
US Life Sciences Network
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Sector Leads in Boston Anne Avidon, Sector Lead Healthcare & Medtech ([email protected]) John Maclennon, Sector Lead Biopharma ([email protected])
Life Sciences Officers in 7 other Posts New York – John Hoggard ([email protected]) Washington DC – Officer vacancy Miami – Officer vacancy. Danielle Castellon ([email protected]) Chicago – Nadeem Ali-Khan ([email protected]) Houston – Dimitris Horiatis ([email protected]) San Francisco – Marisa Montalvo ([email protected]) Los Angeles – Harrison Shapira ([email protected])
Working with you and your ITA, we are here to support your US market entry and growth strategy
Doing Business in the United States
Examples of UKTI Relationships in the US
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San Francisco – Genentech, Gilead, Biomarin, Exelixis, Onyx Pharma, Pacific Biosciences, Bio-Rad, Affymetrix, Agilent
Los Angeles – Amgen, Allergan, Life Technologies, Illumina, Beckman Coulter (now Danaher), Edwards Life Sciences
Chicago – Baxter, Abbott Labs, Eli Lilly, Medtronic, 3M Healthcare, and greater Midwest companies like Procter & Gamble, Monsanto, Sigma-Aldrich
Houston – Lexicon Pharma, Texas Medical Center (largest medical center in the world)
Boston – Biogen Idec, Genzyme (now Sanofi), Vertex Pharma, Cubist Pharma, Ariad, Immunogen, Thermo Fisher Scientific, Waters, PerkinElmer, New England Biolabs/Cell Signaling Technology, Hologic, Boston Scientific, Alere, Covidien
New York – Pfizer, Merck, J&J, BMS, Forest Labs, Watson Pharma, GE, Bausch & Lomb, Cephalon (now Teva), Mylan, Celgene, PTC Therapeutics, Becton Dickinson, Quest Diagnostics
Washington DC – Human Genome Sciences, United Therapeutics, LabCorp, Smith & Nephew, Danaher, Quintiles
Miami – Outposts of many global companies and growing local cluster. Also a great gateway to Puerto Rico manufacturing hub and Latin America. Work with Atlanta and CDC.
Doing Business in the United States
Survey – Key Issues and Questions
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What is your primary interest in the US market?
Business Development
Strategic Partnering – Commercial
Strategic Partnering – R&D
Direct Market Entry/Sales
Distribution/Sales
Funding
Regulatory/Market Access
Technology Development
Who currently does business in the US?
How?
Is it working?
What do you want to learn today?
Do you plan to visit the US market in the next 12 months?
Doing Business in the United States
US Life Sciences Industry Overview
10 Doing Business in the United States
US Bioscience Industry
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• In the Battelle/BIO report on the US Bioscience industry 5 major subsectors
are assumed:
– Agriculture Feedstock & Chemicals;
– Drugs & Pharmaceuticals;
– Medical Devices & Equipment;
– Research, Testing & Laboratories
– Bioscience-related Distribution
Employment Composition of the US Bioscience Industry, 2010
• Over the past decade, the U.S. bioscience industry has a
strong track record in terms of growth in the number of
establishments, wages and employment.
• National employment in the bioscience industry totalled
1.61 million in 2010, with these jobs spanning 70,006
individual business establishments.
• Going back nearly a decade, bioscience companies have
added nearly 97,000 new jobs or 6.4 percent to their
employment base since 2001.
• During the economic expansion from 2001 through 2007,
the industry added new jobs at a rate nearly twice that for
the private sector. Since 2007, U.S. private sector
employment has contracted by 6.9 percent compared with
just 1.4 percent for the biosciences.
(BATTELLE/BIO STATE BIOSCIENCE INDUSTRY DEVELOPMENT 2012)
Doing Business in the United States
Bioscience Employment and Establishments
12 Doing Business in the United States
Agricultural Feedstock and Chemicals
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The agricultural feedstock and chemicals subsector applies life sciences
knowledge, biochemistry, and biotechnologies to the processing of
agricultural goods and the production of organic and agricultural chemicals.
The subsector also includes activities around the production of biofuels.
Examples of Companies
• Abengoa
• Archer Daniels Midland
• BASF Plant Science
• Bayer CropScience
• Cargill
• Dow AgroSciences
• DuPont
• Intrepid Potash
• Monsanto
• Novozymes
• Poet
• Scotts Miracle-Gro
• Syngenta
States that are Both Large and Specialized*
• Illinois
• Iowa
• Florida
• Indiana * States are listed in descending order by subsector employment levels.
Doing Business in the United States
Drugs and Pharmaceuticals
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The drugs and pharmaceuticals subsector produces commercially available medicinal and diagnostic substances. The subsector is generally characterized by large multinational firms heavily engaged in R&D and manufacturing activities to bring drugs to market.
Examples of Companies
• Abbott Laboratories
• Amgen
• Biogen Idec
• Cornerstone Therapeutics
• Eli Lilly & Co.
• Merck & Co.
• Novartis
• Pfizer
• Roche Group – Genentech
• Sanofi-Aventis/
Sanofi Pasteur
States that are Both Large and Specialized*
• California
• New Jersey
• Pennsylvania
• North Carolina
• Illinois
• Puerto Rico
• Indiana
*States are listed in descending order by subsector employment levels.
Doing Business in the United States
Medical Devices and Equipment
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Firms in the medical device and equipment subsector produce a variety of biomedical instruments and other health care products and supplies for diagnostics, surgery, patient care, and laboratories. The subsector is continually advancing the application of electronics and information technologies to improve and automate testing and patient care capabilities.
Examples of Companies
• Alcon
• Becton, Dickinson and Co.
• Boston Scientific Corp.
• GE Healthcare
• Medtronic
• Roche Group – Ventana
• Siemens Medical Solutions
• Smith & Nephew
• STERIS
• Stryker
• Zimmer
• 3M Health Care
States that are Both Large and Specialized*
• California
• Minnesota
• Massachusetts
• Indiana *States are listed in descending order by subsector employment levels.
Doing Business in the United States
Research, Testing, and Medical Laboratories
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The research, testing, and medical laboratories subsector includes a range of activities from highly research-oriented companies working to develop and commercialize new drug discovery/delivery systems, and gene and cell therapies, to more service-oriented firms engaged in medical and other life sciences testing services.
Examples of Companies
• Albany Molecular Research
• Celera
• Charles River Laboratories
• Covance
• Laboratory Corp. of America
• NeoGenomics
• Orchid Cellmark
• Pacific Biomarkers
• Pharmaceutical Product
• Development
• Quest Diagnostics
States that are Both Large and Specialized*
• California
• Massachusetts
• Pennsylvania
• New Jersey
*States are listed in descending order by subsector employment levels
Doing Business in the United States
Bioscience-Related Distribution
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The bioscience-related distribution subsector coordinates the delivery of bioscience-related products spanning pharmaceuticals, medical devices, and ag biosciences. The subsector increasingly deploys specialized technologies such as cold storage, highly regulated product monitoring, and automated drug distribution systems.
Examples of Companies
• Mckesson
• Cardinal Health
• AmerisourceBergen
• Monsanto
• Express Scripts/Medco
Health
• Omnicare
• Wilbur-Ellis
• Owens & Minor
• Henry Schein
• Patterson Companies
States that are Both Large and Specialized*
• Florida
• Illinois
*States are listed in descending order by subsector employment levels.
Doing Business in the United States
US Life Sciences Clusters
18 Doing Business in the United States
US Life Sciences Clusters
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Survey says: Boston is the lead life sciences cluster in the USA (Jones Lang LaSalle Life Sciences Cluster Report November 2011)
Why? Boston is #1 in: 1. High-tech research and hospital/medical employment – 7x the workers in biotech R&D than the national average, with
more than 85,000 high-tech research employees and more than 340,000 hospital and medical employees 2. Science & engineering grad students 3. NIH funding – Recipient of 13% of national NIH funding, with 5/top 8 NIH-funded hospitals and top 5 NIH-funded
universities 4. R&D spending as a percent of GDP 5. Academic and research institute facilities
And Boston is #2 in VC funding (San Francisco Bay Area is #1 in that category)
Other top hubs include: New York/New Jersey (#2 overall) and the San Francisco Bay Area (#3 overall).
Other clusters, ranked 4th–10th : Los Angeles, Greater Washington DC, Philadelphia, San Diego, Minneapolis,
Raleigh-Durham (Research Triangle), Seattle
Emerging clusters: Chicago, Denver, Houston, Florida, Atlanta, Indianapolis
Doing Business in the United States
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The Greater Boston Area
“The Greater Boston area is a
leading global industry cluster that
supports all aspects of the life
sciences industry including
biotechnology, pharmaceuticals,
medical devices, diagnostics and
bioinformatics. Because of the
industry‟s mature critical mass in
the area, new companies and
venture capital investments are
common.” (Jones Lang LaSalle
report)
Doing Business in the United States
Greater Boston Industry Cluster
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Greater Boston is home to R&D operations of most global life sciences companies, including: Pfizer (all R&D heads), Merck (oncology), Novartis Inst. for Biomedical Research, Sanofi (global oncology CoE/Genzyme), AstraZeneca (infectious diseases), Shire, Biogen Idec, Millennium (Takeda Oncology), Sunovion (formerly Sepracor), H3 Biomedicine (Eisai oncology), Abbott Labs Bioresearch
Rising stars like Vertex Pharmaceuticals, Cubist Pharmaceuticals, Ariad, Immunogen
Vibrant start-up community
Home to HQs of many research tools and technologies companies like: EMD Millipore, Waters, Thermo Fisher Scientific, PerkinElmer, New England Biolabs, Harvard Bioscience
Home to CROs and service providers like: Charles River Labs, Parexel, Averion, Lonza Biologics
Medtech/Diagnostic/Healthcare companies like: Alere, Covidien, Boston Scientific, Phillips Healthcare, Hologic
Clinical: Harvard Medical School, Brigham & Women‟s, Dana-Farber Cancer Institute
Academia: Harvard, MIT, U. Massachusetts, Boston University, Tufts, Draper Labs
Doing Business in the United States
West Coast Industry Clusters
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Seattle
• Novo Nordisk, Seattle Genetics, companies like Zymogenetics bought by BMS
• Academia: University of Washington
• Clinical: Fred Hutchinson Cancer Research Center
San Francisco Bay Area
• Global companies like Bayer, Takeda, Genentech, Elan, Amgen, Novartis, Pfizer CTI
• Rising local stars like Gilead, Onyx Pharmaceuticals, Nektar, Exelixis, Biomarin
• Research tools/tech like Pacific Biosciences, Bio-Rad, Affymetrix, Agilent
• Top universities like UCSF, Stanford, UC Berkeley
Los Angeles
• Local stars: Amgen, Allergan, Beckman Coulter (now Danaher), Edward Life Sciences, Abraxis Bioscience (Celgene subsidiary)
• Big players like Medtronic and Baxter have presences
• Academia: UCLA, USC, Caltech, UC Irvine
San Diego
• Local stars like Life Technologies, Illumina, Gen-Probe, Amylin, also Pfizer R&D
• Academia: UCSD, Scripps Research Institute, Salk Institute, Sanford-Burnham
Doing Business in the United States
East Coast Industry Clusters
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New York Tri-State Area (NY/NJ/CT)
• Pfizer, Merck, J&J, BMS, GE, Becton Dickinson, Bausch & Lomb
• Global: Novo Nordisk, Sanofi (clin dev), Novartis, Abbott Labs, Bayer have local ops
• Local stars like ImClone (now Eli Lilly), Celgene, Regeneron, Forest Labs, PTC Therapeutics (just did a huge deal with Roche), Watson Pharmaceuticals, Quest Diagnostics
Greater Philadelphia
• Global players like AstraZeneca, GSK, Shire, Merck
• Local stars like Cephalon (now Teva), Mylan, Tengion, NuPathe
Greater Washington DC
• Local stars like Medimmune (now AZ), United Therapeutics and Human Genome Sciences
• Global footprint of companies like Qiagen
• Government cluster: NIH, NSF, DOD/DARPA, HHS, FDA, CMS, VA
• Academia: Johns Hopkins, U. Maryland, Georgetown, GWU, J. Craig Venter Institute
Raleigh-Durham (Research Triangle)
• Home to one of the largest research parks and the highest concentration of CROs
• Merck, Labcorp, AgBio, Syngenta, Bayer CropScience, BASF, Monsanto
Doing Business in the United States
Don‟t Forget about the Middle
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Atlanta
• Home to the Center for Disease Control and Prevention, American Cancer Society
• Local operations of Quest Diagnostics, UCB, Covidien
• Academia: Georgia Institute of Technology, Emory University
Chicago
• Home to major global company HQs like Baxter, Abbott Labs, Hospira, Walgreens
• Home to R&D operations of Japanese Pharma companies like Takeda R&D, Astellas R&D
• Academia: Northwestern, U. Chicago, Illinois Institute of Technology
• But: fewer start-ups
Minneapolis and Indianapolis
• Home to major global company HQs like Eli Lilly, 3M Healthcare, Medtronic, Zimmer, DuPuy, Biomet, St. Jude Medical
Texas
• Home to the largest medical center in the world: Texas Medical Center
• Local stars like Lexicon Pharmaceuticals
• Growing local biotech and life sciences community, but strength still in academia and translational research
Doing Business in the United States
Agenda
• Introduction
• US Life Science Industry Overview
• Life Science Clusters
• US Biotechnology Overview
• US Medical Technology Overview
• Regulation and Market Access in the US Healthcare System
• US Food & Drug Administration
• Update on US Healthcare Reform
• Discussion on US Market Entry Strategy
• Q&A
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Ernst & Young and company financial statement data. Percent changes refer to change over December 2010. Some numbers may appear inconsistent because of rounding. New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont Mid-Atlantic: Maryland, Virginia, District of Columbia Southeast: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Tennessee, South Carolina Midwest: Illinois, Michigan, Ohio, Wisconsin Pacific Northwest: Oregon, Washington
Agenda
• Introduction
• US Life Science Industry Overview
• Life Science Clusters
• US Biotechnology Overview
• US Medical Technology Overview
• Regulation and Market Access in the US Healthcare System
• US Food & Drug Administration
• Update on US Healthcare Reform
• Discussion on US Market Entry Strategy
• Q&A
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US Biotechnology Overview
27 Doing Business in the United States
US Biotechnology at a Glance, 2010-11
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$US billion
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European Biotechnology, 2010-11
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$US million
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Distribution of Total Capital Raised
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North America and Europe by Year
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Enough to Sustain Innovation?
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Innovation Capital in North America and Europe by Year
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Quarterly Breakdown of US Biotechnology Financing
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2011
$US million
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US and European Strategic Alliances
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(Based on Biobucks, 2006-11)
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US Strategic Alliances
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(Based on Biobucks, 2006-11)
Doing Business in the United States
Agenda
• Introduction
• US Life Science Industry Overview
• Life Science Clusters
• US Biotechnology Overview
• US Medical Technology Overview
• Regulation and Market Access in the US Healthcare System
• US Food & Drug Administration
• Update on US Healthcare Reform
• Discussion on US Market Entry Strategy
• Q&A
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US Clinical Pipeline by Indication, 2011
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(E&Y, MedTRACK and company websites)
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US Medical Technology Overview
37 Doing Business in the United States
Agenda
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(Sources: CMS, “National Health Expenditure Data”; Boston Healthcare, Commercialisation of Medical Devices in the United States; US International Trade Administration Medical Devices Industry Assessment)
• The United States spent approximately $2.7 trillion on healthcare in 2011, which is expected to grow to over $3.6 trillion by 2016.
• In 2010 this spending accounted for 17.6% percent of the nation‘s GDP with projections reaching nearly 20 % by the end of the decade.
• The health care market in the U.S. in 2011 was made up of:
– hospital care (about $831.5 bn)
– physician and clinical services ($537.4 bn)
– prescription drugs ($276.6 bn)
– nursing homes ($221.9 bn)
– dental care ($105.5 bn)
– and other items ($787.1 bn)
• Medicare provided coverage to 47.4 million seniors in 2010 and national expenditures on Medicare for FY2011 are projected at $556.1bn.
• The US is the largest consumer of medical devices and leads the world in the production of medical devices (60% of total output).
• The US has a medical device market valued at more than $100 billion in 2008, roughly 42 percent of the world‟s total. This market is expected reach $140 billion by 2013.
• The fastest growing segments are products that serve an aging population, solutions that minimise hospital stays and minimally invasive applications.
• Key segments include: neurology, cosmetic therapies, orthopaedics, diabetes, cardiology, dental, GI & obesity, women‟s health, and health IT
• Registered hospitals totaled 5,795 in 2010, containing 944,000 beds serving 37.5 million admitted patients during the year.
Doing Business in the United States
Medical Device Market Segments
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(Source: US International Trade Administration Medical Devices Industry Assessment)
Doing Business in the United States
Medical Technology at a Glance, 2010-11
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(US$b, data for pure-play companies except where indicated)
Doing Business in the United States
US Medtech at a Glance, 2010-11
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(US$b, data for pure play companies except where indicated)
Doing Business in the United States
European Medtech at a Glance, 2010-11
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(US$b, data for pure play companies except where indicated)
Doing Business in the United States
Selected US Medtech Public Company Financial Highlights, 2011
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(US$m, % change over 2010, except market cap over 30 June 2011)
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M&A in the US and Europe
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$US million
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Regulation and Market Access in the US Healthcare System
45 Doing Business in the United States
US Healthcare Funding Dynamics
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• In the United States (US), health care is primarily paid for by government payers (public payers) and commercial payers (private payers)
• Health care is financed through payroll taxes (public) and employee/employer contributions (private insurers)
• The majority of health insurance is offered by private plans through employment-based coverage
‒ Private (commercial) payers typically offer a menu of plans to employers with different levels of health benefits and patient cost-sharing
‒ Payers negotiate with their customers (employers) as to which health benefits are included in the health plans provided to employees
‒ Payers may take on financial medical risk for employer group members or perform an administrative role where employers maintain risk (self-funded employers)
• Standard benefits include medical, pharmacy, and durable medical equipment (DME – for use in
home), although employers have the option to purchase additional benefits
(Boston Healthcare Associates, 2011)
Doing Business in the United States
US Healthcare Funding Dynamics
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(Boston Healthcare Associates, 2011)
• In the US, patients share a portion of health care costs which vary by payer
‒ For example, Medicare pays for 80% of the “allowable costs” for most Medicare-covered services, meaning that the patient is responsible for the remaining 20%
‒ Approximately 90% of Medicare beneficiaries (patients) have some form of supplemental insurance (e.g. MediGap) to cover these costs
• Private payer cost-sharing is highly variable as each payer “plan‟ type can have a different cost-
sharing structure. Types of cost-sharing:
‒ Deductible: the amount of covered charges incurred by the insured member that must be paid by the member before benefits by the insurance company become payable
‒ Co-insurance: provision where the member shares in the cost of certain covered expenses on a percentage basis (e.g. 20% of medical expenses). Co-insurance often applies after first meeting a deductible requirement
‒ Co-payment: portion of a claim that a member must pay out-of-pocket; usually a fixed amount (e.g. $10 for a GP office visit)
Doing Business in the United States
US National Health Expenditure (NHE)
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(Kaiser Family Foundation, “Health Spending: Trends and Impacts,” http://facts.kff.org/chart.aspx?ch=858, data cited from CMS, Office of the
Actuary, National Health Statistics Group)
Doing Business in the United States
Agenda
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(Source: Boston Healthcare Associates, 2011)
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US Food & Drug Administration (FDA)
50 Doing Business in the United States
The FDA
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A Brief Overview
• Established in 1906, the Food and Drug Administration (FDA) is an agency of the United States
Department of Health and Human Services (HHS), one of the United States federal executive
departments.
• Separate centres exist within the FDA to regulate drugs, biologics, devices, and food.
• The FDA is responsible for protecting and promoting public health through the regulation and
supervision of food safety, tobacco products, dietary supplements, prescription and over-the-
counter pharmaceutical drugs (medications), vaccines, biopharmaceuticals, blood transfusions,
medical devices, electromagnetic radiation emitting devices (ERED), and veterinary products.
• The agency has 223 field offices and 13 laboratories located throughout the 50 states, the United
States Virgin Islands, and Puerto Rico.
• In 2008, the FDA also started opening offices in foreign countries, including China, India, Costa
Rica, Chile, Belgium, and the United Kingdom.
• Similar organisations in the UK would be the MHRA and Foods Standards Agency (FSA).
(US Food and Drug Administration: http://test.fda.gov/ForConsumers/ConsumerUpdates/ucm185769.htm)
Doing Business in the United States
Center for Drug Evaluation and Research (CDER)
52
• The Center for Drug Evaluation and Research (CDER) is a division of the FDA that monitors drugs
(note: Some biological products are also legally considered drugs, but they are covered by the
Center for Biologics Evaluation and Research).
• CDER reviews applications for new and generic pharmaceuticals, manages US current Good
Manufacturing Practice (cGMP) regulations for pharmaceutical manufacturing, determines which
medications require a medical prescription, monitors advertising of approved medications, and
collects and analyzes safety data about pharmaceuticals that are already on the market.
• Essentially, CDER approves drugs based on safety and effectiveness, and determines over-the-
counter vs. prescription status.
• CDER has around 1,300 employees in "Review teams" that evaluate and approve new drugs.
• CDER monitors possible medication side effects through voluntary adverse event reporting.
• The FDA requires a four phased series of clinical trials, with phase three being the largest and
usually requiring 1,000-3,000 patients.
(US Food and Drug Administration: http://www.fda.gov/Drugs/default.htm)
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FDA Approval Process
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A Different Kind of 12 Step Programme
1. Preclinical (animal) testing
2. An investigational new drug application (IND) outlines what the sponsor of a new drug proposes for human testing in clinical trials
3. Phase 1 studies (typically involve 20 to 80 people)
4. Phase 2 studies (typically involve a few dozen to about 300 people)
5. Phase 3 studies (typically involve several hundred to about 3,000 people)
6. The pre-NDA period, just before a new drug application (NDA) is submitted, is a common time for the FDA and drug sponsors to meet
7. Submission of an NDA is the formal step the FDA takes to consider a drug for marketing approval
8. After an NDA is received, the FDA has 60 days to decide whether to file it so it can be reviewed
9. If the FDA files the NDA, an FDA review team is assigned to evaluate the sponsor‟s research on the drug‟s safety and effectiveness
10. The FDA reviews information that goes on a drug‟s professional labeling (information on how to use the drug)
11. The FDA inspects the facilities where the drug will be manufactured as part of the approval process
12. FDA reviewers will approve the application or find it either “approvable” or “not approvable”
Doing Business in the United States
The Investigational New Drug Application (IND)
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• The FDA‟s Investigational New Drug (IND) Program is the means by which a pharmaceutical company obtains permission to ship an experimental drug across state lines (usually to clinical investigators) before a marketing application for the drug has been approved.
• If the application is cleared, the candidate drug usually enters a Phase 1 clinical trial in humans.
Criteria for Application
– New indication
– Change in the approved route of administration or dosage level
– Change in the approved patient population (e.g. paediatric) or a population at greater or increase of risk (elderly, HIV positive, immunocompromised)
– Significant change in the promotion of an approved drug
Application Content
• IND application must contain information in three broad areas:
– Animal Pharmacology and Toxicology Studies
– Chemistry and Manufacturing Information
– Clinical Protocols and Investigator Information
(US Food and Drug Administration: http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/InvestigationalNewDrugINDApplication/default.htm)
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The Investigational New Drug Application (IND)
55
Application Categories
• There are two main categories of IND: Investigator-initiated and Sponsor-initiated.
• Investigator-initiated INDs are used when a physician wishes to perform a clinical trial to study an
unapproved drug treatment, for example a new indication for an existing drug.
• Sponsor-initiated INDs are filed by pharmaceutical companies studying new drugs or new uses for
existing drugs.
• Both of these types of studies require approval by an Institutional Review Board (IRB), an
independent body constituted of medical, scientific, and non-scientific members, whose responsibility it
is to ensure the protection of the rights, safety, and well-being of human subjects involved in a trial.
• The IRB must review, approve, and provide continuing review of the trials, protocols and amendments,
and of the methods and material to be used in obtaining and documenting informed consent of the trial
subjects.
• A third category is the Emergency Use IND, which allows the FDA to authorize use of an
experimental drug in emergency situations that do not allow time for submission of IND (it is also used
for patients who do not meet the criteria of an existing study protocol).
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The New Drug Application (NDA)
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• The New Drug Application (NDA) is the vehicle in the United States through which drug sponsors
formally propose that the Food and Drug Administration (FDA) approve a new pharmaceutical for sale and
marketing.
• The NDA includes the results of preclinical and clinical studies, manufacturing information, and labelling,
and it can be hundreds of thousands of pages.
• The FDA has 60 days to decide whether to review the NDA, and after deciding that it will review an NDA,
the FDA has 10 months to make a determination (6 months for priority drugs).
• NDA goals are to provide enough information to permit FDA reviewers to establish:
– Whether the drug is safe and effective in its proposed use(s), and whether the benefits of the drug
outweigh the risks.
– Whether the drug's proposed labelling (package insert) is appropriate, and what it should contain.
– Whether the methods used in manufacturing the drug and the controls used to maintain the drug's
quality are adequate to preserve the drug's identity, strength, quality, and purity.
(US Food and Drug Administration: http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/NewDrugApplicationNDA/default.htm)
Doing Business in the United States
Post Market Surveillance
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• Post-marketing surveillance is the practice of monitoring the safety of a pharmaceutical drug or device
after it has been released on the market and is an important part of the science of pharmacovigilance.
• As part of the approval process, the FDA may obtain commitments from the sponsor to do additional
Phase 4 studies after the product is marketed.
• Post-marketing surveillance is overseen by the FDA, which operates a system called MedWatch, to
which doctors or the general public can voluntarily report adverse reactions to drugs.
– MedWatch Website - http://www.fda.gov/medwatch/
• The FDA cannot enforce compliance, but it also monitors adverse events through an adverse event
surveillance programme:
– Reporting is voluntary for health care providers; mandatory for drug manufacturers
– Epidemiologists review adverse event data
– Safety Information Retrieval
– Adverse event reporting for drugs, devices, biologics, and dietary supplements
(US Food and Drug Administration: http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm090385.htm)
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Manufacturing and Labeling Issues
58
• Evaluation of manufacturing is part of the NDA process.
• The sponsor must show that the product entering to market is the
same as the product tested in trials.
• Manufacturing requirements are identical for generic and branded
drugs.
• The product label is written and owned by the manufacturer but
approved by the FDA.
• Categories of information that are required in the label are set
forth in the Code of Federal Regulations.
• Exact label language is often negotiated between the sponsor and
the FDA.
• Once approved by the FDA, the label governs the information that
can be distributed by the sponsor, including materials distributed
by sales representatives.
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Regulatory Environment for Medtech
59
• The FDA Center for Devices and Radiological Health (CDRH) is responsible for
regulating companies that manufacture, repackage, re-label, or import medical devices sold in
the United States.
• Aside from medical devices, CDRH also regulates radiation-emitting electronic products (both
medical and non-medical) such as lasers, X-ray systems, ultrasound equipment, microwave
ovens and colour televisions.
• Medical devices are organized into three classes based on the amount of risk they present to
the patient or user and the intended use of the device. The device classification determines
the regulatory requirements for the device, with regulatory control increasing from Class I to
Class III.
• Class I Devices – Present minimal potential for harm to the user and are simpler in design
– Most Class I devices are exempt from a Premarket Notification 510(k) application
– Examples: elastic bandages, examination gloves, hand-held surgical instruments
Doing Business in the United States
Regulatory Environment for Medtech
60
• Class II Devices – General regulatory controls used for Class I devices are insufficient to assure
safety and effectiveness of these devices; require use of special controls, which may include labelling
requirements, mandatory performance standards and/or post-market surveillance
– Most Class II devices require completion of a Premarket Notification 510(k) application before
entering the market
– Examples: powered wheelchairs, infusion pumps, surgical drapes
• Class III Devices - Support or sustain human life, are of substantial importance in preventing
impairment of human health, or present a potential, unreasonable risk of illness or injury
– Class III devices require the completion of the more complicated Premarket Approval (PMA)
application
– Examples: replacement heart valves, breast implants, implanted cerebella stimulators
• It is also necessary that a manufacturer apply for an Investigational Device Exemption (IDE)
during the approval process, which allows an unapproved device to be used in a clinical study while
collecting the safety and effectiveness data required to support a 510(k) or PMA submission.
Doing Business in the United States
Regulatory Environment for Medtech
61
• A 510(k) is a premarketing submission made to the FDA to demonstrate that the device to be marketed is
substantially equivalent (SE) to (i.e., as safe and effective as) a legally marketed device that did not require
a Premarket Approval.
• Applicants must compare their 510(k) device to one or more similar devices currently on the US market in
order to make and support their SE claims.
• Before a manufacturer can sell a new device it must have an SE letter from the FDA indicating that a
device has the same intended use as comparator devices, the same technical characteristics, or different
characteristics that do not raise new questions of safety and effectiveness.
• The FDA has a statutory deadline of 90 days to review a 510(k), but actual review times can be longer.
• If the FDA determines that a new device is not substantially equivalent, a Premarket Approval application
is required and that device is categorized into Class III (the applicant can request reclassification to a Class
I/Class II designation through the de novo process).
• Premarket Approval (PMA) is the most stringent type of device marketing application required by
FDA, and similarly to the 510(k) the applicant must receive FDA approval of its PMA application prior to
marketing the device.
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Agenda
62
• Over the past few years, the manner in which the FDA is executing its authority over the regulation of medical
devices in the US has been called into question.
• While some have claimed that current regulatory requirements are lax and harming patients, independent analysis
has demonstrated that the current system does an exceptional job of protecting patients.
• However, with regard to the agency‟s objective of promoting the public health through new innovations, there are
increasing concerns from patients, physicians, and innovators that the FDA is falling short.
The Medical Device Tax
• Excise tax – effective 2013 medical device manufacturers required to pay 2.3% of the sales price of certain devices
as an industry fee.
Resources and Tools
• CDRH Learn – Online Regulatory Training Tool: http://www.fda.gov/Training/CDRHLearn/
• Device Advice – Online Regulatory Information: http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/
• Division of Small Manufacturers, International, and Consumer Assistance (DSMICA): [email protected]
– Technical and Regulatory Assistance for the Medical Device Industry
Doing Business in the United States
Update on US Healthcare Reform
63 Doing Business in the United States
Patient Protection and Affordable Healthcare Act (ACA)
64
• The Patient Protection and Affordable Care Act (ACA), politically referred to as Obamacare, is a United States federal statute signed into law by President Barack Obama on March 23, 2010.
• The ACA's provisions are intended to be funded by a variety of taxes and offsets. Major sources of new revenue include a much-broadened Medicare tax on incomes over $200,000 and $250,000, for individual and joint filers respectively, an annual fee on insurance providers, and a 40% excise tax on "Cadillac" insurance policies.
• PPACA includes a Comparative Effectiveness Act, which funds a new independent body, the Patient Centered Outcomes Research Institute.
• PPACA includes a Physician Payment Sunshine Act, which requires disclosure of payments made by manufacturers to physician or hospitals for consulting, clinical trial participation, charitable donations, royalties, etc.
• Overall reductions in provider payment (i.e. total payment reductions to hospitals) will have indirect impact on manufacturers.
• Stricter fraud and abuse scrutiny – The False Claims Act was amended; notably the elimination of the public disclosure bar, which will increase potential financial reward for claimants and in turn increase the number of claims brought against manufacturers.
Doing Business in the United States
White House Position on ACA
65
According to a White House press release on 28 June 2012 on the ACA:
• Insurance companies no longer have unchecked power to cancel your policy, deny your child coverage due to a pre-existing condition, or charge women more than men.
• Over 86 million Americans have gained from coverage of preventive care free of charge, like mammograms for women and wellness visits for seniors.
• Nearly 13 million Americans will receive a rebate in the summer of 2012 because their insurance company spent too much of their premium dollars on administrative costs or CEO bonuses.
• The law has already helped 5.3 million seniors and people with disabilities save an average of over $600 on prescription drugs in the “donut hole” in Medicare coverage.
• The law‟s provisions to strengthen and protect Medicare by fighting fraud will continue.
• The law has helped 6.6 million young adults who have been able to stay on their parents‟ plans until the age of 26, including 3.1 million young people who are newly insured.
(http://www.whitehouse.gov/the-press-office/2012/06/28/fact-sheet-affordable-care-act-secure-health-coverage-middle-class)
Doing Business in the United States
Medical Device Tax – View from Industry
66
AdvaMed advocates for a legal, regulatory and economic environment that advances global health care by assuring worldwide patient access to the benefits of medical technology.
• The Affordable Care Act imposed a excise new tax on medical device sales in the United States
beginning in 2013.
• The tax is estimated to total nearly $30 billion.
• The new medical device tax applies to most products except items to be sold primarily to individuals at retail locations for personal use.
• Taxing medical technology will hurt an innovative industry that directly employs more than 400,000 people, and is a net exporter.
• Small and emerging growth medical technology companies, which are key drivers of medical innovation and job creation, will be hit hard by the device tax.
• Many start-up companies are not yet profitable, but will be forced to pay the tax, in their early stages.
(AdvaMed.org)
Doing Business in the United States
ACA: Implementation Hurdles
67
• Despite having survived legal challenges in the US Supreme Court and the contentious 2012
presidential campaign, the Affordable Care Act remains controversial with mixed opinions from the
general public, economist, healthcare and judicial experts,. However, Obama’s successful re-election
to a second term in the White House will cement the basic tenets of ACA into US law.
• Some states have resisted implementation of specific provisions of the law, which continues to create
uncertainty in the overall effectiveness of the Act.
• Recently, Health and Human Services (HHS) pushed back the deadline for States to declare whether
they intend to manage insurance exchanges or allow the Federal Government this function.
• The insurance exchanges are designed to function as marketplaces where Americans can
comparison-shop for different insurance plans, all of them with a minimum standard of coverage
mandated by the law.
• Some States and groups, such as Oklahoma and Catholic institutions, have brought lawsuits against
provisions in the ACA that require coverage of birth control and abortion, but so far none have
managed to gain any credible legal traction.
Doing Business in the United States
ACA: Impact on the Public Purse
68 Doing Business in the United States
Discussion on US Market Entry Strategy
69 Doing Business in the United States
Risks Grid
70 Doing Business in the United States
There are a Variety of Ways to Distribute
71
• Licensing/Partnering with ―Big Co.‖
• IDN Relationships
• Securing GPO Contracts
• Direct Sales
• Working with General Line Distributors
• Working with Independent Sales Representatives
• Working with Independent Specialty Distributors
• Blended Options
Typical/Ideal Medical Innovation Adoption Timeline—Sales Perspective
Profile the
account,
understand
customer’s
concerns and
needs
Demonstrate to medical
committee, identify
departments and
supervisors
Conduct
evaluation,
monitor
departments
Summarise
outcomes
Negotiate terms
of sale
Post-sale
implementation
process
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Doing Business in the United States
Opportunity and Competition
72
The US has a wealth of opportunities for business development, strategic partnering, and funding, but it
is also full of indigenous competitors and a top market destination for other international exporters of
products, services, and technologies.
For example - Large CROs cluster in:
• Boston-area (Parexel, Averion, Charles River Labs)
• NY Tri-State area (Covance, Aptuit)
• Research Triangle North Carolina (Quintiles, PRA International, PPD)
Other global leaders like ICON also have strong presences. Many smaller boutique and specialty CROs
compete with the big players for everything from preclinical services to clinical trials management, CT
supply, and regulatory/market access consultancy.
There are also lots of service providers active in biomarker discovery, medicinal chemistry, and
ADMET/Tox.
Question: What is your USP?
Doing Business in the United States
Discussion: Market Entry Strategy
73
2011 – Top Biotech R&D Spenders (Source: FierceBiotech.com)
• 13 of the Top 15 biotech spenders are in the US • UKTI US Posts have relationships with all of the US companies:
‒ Amgen - $2.8B (€2.15B) ‒ Biogen Idec - $1.25B (€930M) ‒ Celgene - $1.13B (€833M) ‒ Gilead Sciences - $1.07B (€789M) ‒ Genzyme - $866.6M (€628M) ‒ Vertex Pharmaceuticals - *$637.4M (€463.6M) ‒ Actelion - $539M (CHF 484.3M) ‒ Regeneron Pharmaceuticals - $489M ‒ CSL - $334M (€242M) ‒ Exelixis - $210.7M (€153M) ‒ United Therapeutics - $171M (€124M) ‒ Cubist Pharmaceuticals - $161.4M (€117M) ‒ Amylin Pharmaceuticals - $157.3M (€114M) ‒ BioMarin Pharmaceutical - $147.3M (€109.3M) ‒ Seattle Genetics - $146.4M (€109.1M)
Doing Business in the United States
BIO and other Major US Events
74
April 2013 – BIO International Convention in Chicago
• UK Pavilion and exhibition pods (Contact for pods: Karen Chandler-Smith at the BIA) • Exclusive UK networking drinks and dinner • Partner events – UKTI Boston leveraging other strategic relationships to add value for UK
delegation • Expressions of interest welcome now!
September 2013 – AdvaMed in Washington DC
• Boston and Washington UKTI posts Continue to leverage partnership with AdvaMed and its Board Members companies to provide UK medtech industry access to unique opportunities and tailored information.
• Anne Avidon is leading a Healthcare Market Access Roadshow in the UK in March 2012 – details TBC
Doing Business in the United States
Thank You!
75 Doing Business in the United States