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Statin Market History 19872006

• Jim Kirk, Eidetics
• Richard Zucker, Emron

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Disclaimer

• Our personal observations, impressions, and
  hypotheses only
• Does not represent the views of Emron or
  Eidetics, former employers, or clients

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US Statin Sales
Zocor,Pravacol LOE
Vytorin approved
Crestor approved
Baycol withdrawn,Mevacor LOE
Baycol approved
FDA DTC rule change
Lipitor approved
4S Study Results
Lescol approved
Pravachol, Zocor approved
NCEP ATP I
NCEP ATP II
NCEP ATP III
ATP III Update
Mevacor approved
NCEP Formed
Multiple sources, approximate values for
discussion only
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US Statin Sales
Phase I
Phase IIa
Phase IIb
Phase III
Zocor,Pravacol LOE
Vytorin
Crestor
Baycol pulled, Mevacor LOE
Baycol
Lipitor
Lescol
Pravachol, Zocor
Mevacor
Multiple sources, approximate values for
discussion only
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Building the largest drug class

• 20-25 billion market based on a single
  molecular target HMG-CoA
• First-in-class, Mevacor, launched by Merck in
  1987 despite setbacks
• Potential toxicity concerns raised by Sankyo
  predecessor statin, compactin
• Clinical trials were highly successful, Mevacor
  approved 1987
• Initial label monitor for lens opacities and
  liver function tests
• The statin market has evolved over three broad
  phases
• Phase I The Lipid Hypothesis (1987-1993)
• Phase II Validation, Broad Adoption, Category
  Competition (1994-2004)
• Phase III Commodity Status versus Novel Entrants
  (2005-onward)
• With acknowledgement to J.A.Tobert in Nature July
  2003

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Phase I The Lipid Hypothesis Emerges

• The NIH Consensus Conference (1984) lowering LDL
  cholesterol reduces CHD
• The National Cholesterol Education Program (NCEP)
  created in 1985 to raise public and professional
  awareness, and to establish goals and treatment
  guidelines
• Yet, until the mid-1990s, the lipid hypothesis
  remained controversial. Many clinicians still
  questioned if lowering cholesterol
• Would actually decrease cardiac mortality
• Might paradoxically increase non-cardiovascular
  mortality
• Would benefit women, the elderly, and those with
  existing CHD versus middle aged males studied to
  date

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Phase IIa Validation, Adoption, and Growth

• NCEP ATP II and the presence of four approved
  statins signaled the arrival of statins as a
  major category
• The 1994 Scandinavian Simvastatin Survival Study
  (4S) marked a definitive turning point. 4S (5
  years, n4,444 CHD subjects) showed
• 42 reduction in coronary mortality
• 30 reduction in all-cause mortality
• 34 reduction in major coronary events
• Multiple subsequent primary and secondary
  prevention trials further validated the efficacy
  and essential safety of statins across a broad
  range of patients
• Liberalized DTC rules (1997) fostered greater
  consumer awareness
• Yet prescribers still harbored lingering concerns
  about safety, especially at higher doses

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Phase IIb Broad Adoption and Rapid Growth

• Lipitors success was shaped by three key
  dimensions
• Efficacy / Safety head-to-head comparative Phase
  III trial data
• Superior at equal doses
• Equal or better at lower doses
• Superior at the highest dose
• Offered novel advantages re triglycerides and
  HDL
• Because it had not yet launched, only Lipitor
  could perform such trials
• 10mg starting dose ( 1/8th of max dose) appealed
  to nagging MD safety concerns
• Price Lipitor was priced at a discount to
  category leader, Zocor (1997)
• Awareness Favorable 1997 DTC rule changes
  permitted Lipitor to motivate consumers via a
  simple message
• The dangers of high cholesterol arent visible,
  so know your number
• Despite reawakened safety concerns raised by
  withdrawal of Baycol, and introduction of generic
  lovastatin, category continued to grow
• Between 1994-2000, US statin revenues grew
  roughly 10-fold
• Crestor launched in 2003 against four remaining
  brand competitors

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Phase III Commodity Status and Novel Entrants

• The statin-monotherapy market is now likely
  mature
• simvastatin or pravastatin (about 40 of the
  market) will both be multi-source before yearend
  2006
• Many predict category revenues have now peaked
• Zocor, Lipitor, and Crestor are pursuing
  lifecycle management approaches via novel
  combinations with non-statins
• Vytorin (Zocor ezetimibe) ezetimibe inhibits
  dietary cholesterol uptake
• (Lipitor torcetrapib) torcetrapib elevates HDL
  levels
• (Crestor TriCor or ABT-335) fenofibrates
  elevate HDL levels and lower triglycerides

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Case Study The MCO Market

• Specific brand efforts in MCO market
• The evolution of MCO decision criteria
• Past and future roles for market research

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Payers Focus on CholesterolImpact of NCQA and
HEDIS

• National Committee for Quality Assurance (NCQA)
  established in 1990
• Driven by employers/healthcare purchasers
• Original focus Standardized RFP process for
  Health Plans
• NCQA takes responsibility for HEDIS 1.0
• Establishes Performance Assessment Task Force in
  1992 to work on HEDIS 2.0
• Objective to measure and improve quality of
  healthcare delivered by Health Plans
• First performance measures the following year
  included cholesterol screening
• As well as other measures such as pediatric
  immunization, mammography and eye examinations
  for diabetics
• NCQA releases first HMO report cards in 1994

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Lescol Value-Based Pricing

• Sandoz introduces Lescol (fluvastatin) in 1994 as
  most cost-effective monotherapy
• Lowest cost per 1 reduction in LDL levels
• But also lower efficacy
• Lescol promoted as appropriate for most patients
  with hypercholesterolemia
• Priced to be preferred workhorse agent on most
  MCO formularies

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Evidence-Based Indications MCOs Take Note, Push
Back

• Scandinavian Simvastatin Survival Study (4S) and
  other large clinical trials paved the way for
  widespread statin use and larger MCO budget
  impact
• 4S (1994) demonstrated significant outcomes
  benefits for Zocor (both mortality and morbidity)
  
• Milestone in cardiology and evidence-based
  medicine that Health Plans could not fully ignore
• Some MCOs concerned mortality/morbidity claims
  created legal exposure if they were to restrict
  access
• Claims fly Industry battle begins over unique
  indications
• Despite evidence, some MCOs push back on industry
  
• Show me this is not a class effect
• Why shouldnt I consider this a commodity market?

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Evidence-Based Indications Continued

• Example BMS and Pravachol (pravastatin)
• Primary Prevention of Coronary Events and
  Secondary Prevention of Cardiovascular Events,
  eg
• Reduce MI risk
• Reduce the risk of revascularization procedures
• Reduce the risk of CV mortality
• Reduce the risk of total mortality
• By reducing coronary death
• Reduce the risk of stroke and TIA
• Slow the progression of coronary atherosclerosis
• Hyperlipidemia, eg
• Reduce elevated Total-C, LDL-C, Apo B and TG
  levels
• Increase HDL-C in patients with primary
  hypercholesterolemia and mixed dyslipidemia
• Partial list of current indications.

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Lipitor Bypasses MCOsChallenges Principle of MC
Control

• Parke-Davis, Pfizer say efficacy does
  matterincluding HDL, TG
• And, by the way, atorvastatin is now the best
  value
• Cost to get patients to goal
• And well make your HEDIS scores look great
• And, in case you havent noticed, we plan to
  aggressively promote this product to providers
• But more than anything else, it was provider
  acceptance that drove rapid uptake
• As share grew, even high control MCOs fell in
  line
• The rebate factor

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New Competitors Enter Market All Compete on
Efficacy

• Lipitor still dominates market
• But Crestor (rosuvastatin) and Vytorin
  (simvastatin-ezetimibe) successfully play
  Lipitors efficacy card
• Baycol (cervistatin) withdrawal and safety
  concerns slow Managed Care uptake of more
  powerful agents initially
• MCOs take note of new data, indications, outcomes
• But they continue to
• Claim class effect and play one brand against the
  others
• Be concerned about impact of any proposed changes
  to benefit design on net cost and rebates
• Promote generics, esp. new simvastatin generic

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Expanded Generic StrategiesPursued by Largest
MCOs

• PBM Express Scripts (ESI) prepares for Zocor
  patent expiration one year early
• Removes Lipitor from its formulary and promotes
  brand Zocor
• Merck undercuts single-source generic
  manufacturer of Zocor to maintain Managed Care
  business
• United HealthCare signs on with Merck
• Other MCOs maintain mandatory generic
  substitution policies

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Promoting Statins vs. DMIndustry Focuses on Core
Competencies

• Industry promotes Cholesterol Disease Management
  programs to MCOs
• Some MCOs consider manufacturer-sponsored
  programs a conflict of interest
• Some manufacturers assess value of promoting
  lifestyle programs directly to physicians and/or
  consumers
• Concurrently with promoting their statins
• Industry moves back to primary focus product
  promotion

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ImplicationsFor Future Managed Care Research

• Net cost and budget impact drive most MCO
  decisions
• Novel, meaningful outcomes/indicationssimilar to
  a reduction in mortality or prevention of first
  MImay help future products gain unrestricted
  preferred access
• Assuming price is not an issue
• Reversal of atherosclerosis, esp. with fewer
  surgeries or stents, is one potential example of
  such an outcome
• But always need to guard against messaging in
  Managed Care studies
• Use experienced MC moderators, MC tradeoff
  analyses, etc., or you may hear what you want to
  hear, instead of what you need to hear
• Consider the impact of other stakeholders on MCO
  decision-making
• Especially MCOs customers, the payers (employers
  and CMS)

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ImplicationsFor Future Managed Care Research

• Factors that impact MCO decision-making, in
  addition to direct savings/cost offsets, can
  include
• Marketability of Managed Care services to payers
• Eg, outcomes that result in improved HEDIS scores
• Avoidance of potential legal risk or damage to
  their reputations
• Eg., due to limitations on access to life-saving
  drugs
• Payers and plans do respond to providers
• Especially in specialty markets

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ImplicationsFor Future Managed Care Research

• If members dont see value in your product, dont
  expect payers to see it either
• As risk is shifted to consumerseg, through high
  co-pays or consumer-directed, high-deductible
  benefit designsmember price sensitivity rules
• Pure statin efficacy claims may have reached a
  point of diminishing returns with MCOs (TBD)
• However, if payers, providers and/or members do
  value a product attribute or benefit, consider
  sharing their perceptions with MCOs as part of
  your research

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Perspective on Market Research

• Summary of contributions by Phase
• What we should be proud of / what we could have
  done better

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Phase I Market Research Challenge Find ways to
make people care

• Early MR sought to understand perception of
  hypercholesterolemia as a condition requiring
  medical treatment
• Relationship of lipids to overall health and
  risks
• Total vs. LDL vs. HDL targets
• Treatment inertia (2551 rule)
• Adherence dynamics (persistency on treatment
  averaged 3-4 months)
• As new products entered, brands wrestled with
  differentiation before having dealt with overall
  category saliency
• Zocor and Lescol offered performance and price
  differentials, but all four brands still had to
  provide reasons to care about lipids in the first
  place

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Phase IIa Market Research ChallengeFind reasons
to choose among brands

• The era of outcomes studies fractionated the
  market both by brand and by patient subtype
• Different endpoints
• Different target patients (primary vs. secondary
  prevention, etc.)
• my data is bigger than your data
• Both Pravacol (outcomes) and Lescol (value story)
  captured meaningful market share based on
  targeting patient types
• Zocor capitalized on both lower is better story
  and Mercks marketing muscle

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Phase II b Market Research Challenge Find ways
to grow / fight the 700-pound gorilla

• Key market research insight for Lipitor was the
  importance of prescriber comfort in starting low
  dose of statin
• Initial learning must have occurred years before
  launch to shape clinical trials, but subsequent
  research refined positioning and messaging
• Other brands seemingly continued to focus on
  market partitioning, now including both patient /
  endpoint segment and lipid subfractions
• LDL, HDL, triglycerides, VLDL, VVLDL, Apo-B,
  exogenous vs. endogenous cholesterol
• Several players began lifecycle management work
  in earnest

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Phase III Market Research Challenge Find ways
to extend and expand utility

• Effort on combination products is strong,
  bridging both commercial and therapeutic
  interests
• Dyslipidemia (rather than hypercholesterolemia)
  is emerging as an important component of
  cardiovascular risk management
• Combination regimens to address lipids, HTN,
  diabetes, etc.
• Emerging importance of metabolic syndrome,
  especially in aging, slothful US market
• As disease processes continue to be clarified and
  understood, new diagnostics and new treatments
  will continue to emerge
• Continued interest in statins for unrelated
  conditions

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Recap The role of MR in the statin market

• Contributions
• Understanding how the market thinks about the
  condition
• Identifying drivers of increased comfort with
  prescribing
• Targeting segments of differentiation
• Integration of clinical management with lifecycle
  management
• Missed opportunities
• Failing to focus on category expansion before
  switching to brand warfare
• Sustaining focus on segment-based positionings in
  the face of more broadly based shift in the value
  proposition (though segment targeting has
  recently become a more appropriate focus)
• Continued focus on Rx starts rather than
  long-term adherence

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Contact Information

• Richard Zucker
• Vice President
• Emron
• 502 Valley Road
• Wayne, NJ 07470
• 973-321-4428
• rzucker_at_emron.com

Jim Kirk Partner Eidetics 1200 Soldiers Field
Rd Boston, MA 02134 617-254-4100 jkirk_at_eidetics.co
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