Next Level Pharma’s Speaker Series: Christoph Glaetzer

As part of NextLevel Pharma’s upcoming conference on “Pharmaceutical and Medical Device Access in Key Asian Markets”, I had the opportunity to speak recently with , Vice President of Market Access for Asia Pacific (APAC) of Janssen Pharmaceuticals.  The opportunities and challenges for the research-based pharmaceutical industry, including Janssen with the region are as broad as they are diverse.  Consider for a moment the region’s demographics:  approximately 60% of the world’s total population lives in the region.  And, as we have written about previously, the region is facing some unique amid substantial challenges related to its aging populace (by 2050 62% of the world’s 60+ population will live in the APAC region).

Additionally and most importantly, the population is spread across, or even within countries, with widely divergent levels of development and needs.  APAC countries can be characterized as “developed” economies (Australia, Japan, Singapore, South Korea, Taiwan), “emerging economies” (China, Thailand, India) and parts of what Goldman Sachs’ (Cambodia, Vietnam).  Because the countries in this region are so diverse in terms of need and development due to their economies and heath care systems, the challenges for someone in Glaetzer’s position are quite daunting:  while he has regional responsibilities and must have a strategic vision for the region as a whole, he has to be able to navigate the various needs of the different countries.  This is perhaps nowhere more challenging than designing access models that fit individual country’s needs.

As Glaetzer shared with me, “The main point about the APAC region is the significant differences within the region and even within some countries.  Within the established market segments you have countries like Korea, Australia and Taiwan where the health care model and situation is similar to that in Europe:  how can governments balance quality and costs in established and quite sophisticated health care systems with aging populations and economic uncertainty. The solution often proposed is one of cost containment.  Whereas in markets still developing their healthcare systems and pursuing universal coverage, the question is how does the government fund and/or pay for healthcare and manage expansion of the services provided.”

Glaetzer commented that the over-arching trends in the region he sees are positive.  As he put it, “the fact that almost all countries plan to expand healthcare coverage to people not covered, like China and Indonesia, is extremely positive.”  The question becomes how countries manage appropriate funding for the expanded coverage and enable access for patients in a sustainable way.  In this region, there is no “one size fits all” solution.  Especially the sometimes-huge income and wealth disparity within countries requires, according to Glaetzer,  “a country specific solution that makes possible the broadest access, while at the same time fosters an environment that will facilitate the development of innovative treatments and therapies.    “Countries that allow for different channels versus trying to have one channel, one coverage, and only one price level for the entire country are better positioned to manage the expansion of services in a sustainable way.”  They are also sustainable for the country, its people and the introduction of new health care solutions and treatments.

This is perhaps nowhere more evident than in China where the unique Anhui two-envelope bid model has become increasingly popular.  As I wrote last week in the Asia Times, the Anhui pricing model has created questions over profitability of both domestic and multinational pharmaceutical companies in China as well as quality concerns for those domestic-owned and operated pharmaceutical manufacturers who may win the bid based on low price, but sacrifice quality in order to do so.

Glaetzer addressed the challenges if China were to adopt the Anhui model, as it currently looks like since it does not support a sustainable model for innovation in health care. From an industry viewpoint, there is still significant variation in product quality even amongst generics; it is not good for patients if the industry ignores this quality aspect in bidding.  He wanted to make the point that the pharmaceutical industry is supportive of the Chinese government’s willingness to engage in dialogue and to develop options that would address the positive intention to expand coverage, and manage this expansion and related costs in a way that would enable patient access to quality medicines and a sustainable business model for the industry as well.

As he shared, “We have an open dialogue and engagement with decision makers in China in order to develop a broader understanding  – those of the Chinese government and the industry – and that we try to find ways to achieve the best and a sustainable solution.   The concept of looking at costs, quality, outcome and benefits is something we always support.  We definitely see the openness on the part of the Chinese government and appreciate the ability to discuss solutions.   We believe through an exchange of information, it will help to develop an a workable and beneficial system that will enable the broadest access to healthcare treatments and foster an environment where quality and innovation is paramount and available to all.”  During the May NextLevel Pharma event, Glaetzer will be sharing his thoughts on how to build strategies that take into account the diverse needs of the APAC region.  I am eager to hear him expand on what he shared with me last week and know that regional industry leaders in pharma and medical devices will equally benefit.  Registration for the event is still open here.