INNOVATION MODELS IN THE BIOPHARMACEUTICAL SECTOR - Innovation in the Biopharmaceutical Industry - page 16

Diffusion and Adoption of Medicines
The final critical phase in the biopharmaceutical innovation process is the timely
introduction of new medicines into general usage. The substantial literature on this
topic can be broadly divided into three categories:
1. The impact of complex and changing patterns of demand- side decision makers
country by country.
2. Variation in diffusion rates across international markets.
3. The growing use of formal health technology assessment (HTA) processes to
manage the selective uptake of new products.
Demand side decision making
Bhide (2006) in a broadly-based comparative analysis of innovative activity in
Europe and the USA strongly argues that US superior competitiveness is more
likely to be attributable to the greater willingness of US consumers, relative to their
European counterparts, to try out and then adopt innovations, than to differences in
public policies promoting academic science, the output of science graduates, or the
environment for industrial R&D.
In the biopharmaceutical sector the dynamic relationship on the demand side
between the three primary customer groups (doctors, payers and patients), results in
complex patterns of decision making which determine the uptake of new medicines.
Historically, within OECD markets doctors have been the dominant decision
makers, and innovative suppliers have looked primarily to them to achieve rapid
diffusion. However, in the 1990s, payers, mainly state insurance budget holders,
adopted a far more assertive role in decision making through cost management
systems and through the direct involvement of clinicians in budget holding. Payer
led cost containment has become a major feature of healthcare systems in Europe
and has had a major impact on medicines' expenditure.
Typical features of initiatives which influence diffusion rates are:
1. National guidelines limiting usage to only selected patient categories.
2. Limiting usage to a narrow range of indications.
3. Non-reimbursement of the product from state system funds or high levels of
patient co-payment.
4. Budget capped formulary lists limiting access or expenditure.
5. Diverse forms of direct product price controls.
Currently, there are numerous initiatives aimed at giving patients more choices in
terms of treatment regimens. The nature and the pace of change vary greatly by