16 Nov Cross Border Pharmaceutical Alliances Present Challenges and Opportunities
MedicalResearch.com Interview with:
Diane Frenier Esq
Reed Smith Corporate Partner
Member of Corporate & Securities Group and Life Sciences Health Industry Group
Background: Diane Frenier Esq discusses the M&A boom in the pharmaceutical and retail drug industry including a the “global study of 100 senior executives at life sciences companies by global law firm Reed Smith, in partnership with Mergermarket, reveals that 94% are planning to make an acquisition in the next year”.
Medical Research: What are the main drivers behind the pursuit of cross-border life sciences deals?
Ms Frenier: I think companies are trying to strengthen their capabilities in areas that are a core focus for them (e.g., in certain therapeutic areas, or for orphan drugs), and that includes adding products in those core focus areas and, in some cases, broadening geographically so they can market products in those core focus areas on a more global basis. This will allow them to use their resources more efficiently and take advantage of saving from reducing redundancies.
Medical Research: What are the challenges faced in executing those deals?
Ms Frenier: I think the biggest challenge in executing cross-border deals is bridging the cultural divide that often exists, especially where the parties are smaller to mid-sized companies that are more geographically limited. This affects the style of negotiation, as well as the challenges in conducting legal diligence and agreeing on the legal documentation necessary for the transaction. It also requires legal and other consultants who understand the legal, regulatory and competitive landscape in the regions involved, so it often requires a bigger team to advise on those transactions.
Medical Research: How may advances in personalized medicine change the face of the industry?
Ms Frenier: Personalized medicine will ultimately create drugs with small market sizes, but with the potential to have higher pricing and longer use by the patients in that market. The smaller market size is created by targeting a drug for the narrower patient population who is shown to have a more positive response to a certain drug. But that also means that payors may be willing to pay more for that drug for that patient because it will be more effective and be less prescribed that a broad use drug. It also means that patients are likely to be more compliant users of a drug, because they will see benefits from the treatment and so tend to stay on the treatment longer, if necessary, to address a chronic condition. These changes will likely to result in better patient outcomes, because of the combination of the increased efficacy and the greater patient compliance.
Diane Frenier Esq (2015). Cross Border Pharmaceutical Alliances Present Challenges and Opportunities MedicalResearch.com;