In August 2006, Dr Shehla Sheikh, Deputy Managing Editor of IMS Company Profiles, interviewed Dr Roch Doliveux, CEO of UCB. In this edited abstract (the full interview is available in the Profile from mid-January), Doliveux discusses some of UCB’s regional strategies and his plans for bringing UCB products to the major global markets.
IMS: "Could you tell me a little bit about your strategy for the Japanese market?"
Roch Doliveux: "We acquired a small company in 2000, and then we completely revamped that company. We now have a very strong development organisation. It is a very young organisation, not necessarily in terms of the age of individuals because we were lucky to benefit from mergers around us which enabled us to tap talent, and people may not have noticed its first two achievements: the approval of the registration of Zyrtec Dry Syrup, which was not marketed by us, but we did the development and we did the registration; and the first positive Phase III for the Keppra development. We are now very advanced with the second Phase III, which completes the development programme of Keppra, and obviously we are also actively working now on our pipeline products. The idea is the same, it’s to bring to the market these specialist products that require a relatively low number of reps but highly skilled reps. Keppra and Cimzia are the two products that are going to be launched in Japan."
IMS: "There was a report recently that said that with the way the industry is going, Japan will have a huge backlog of drugs awaiting approval, that have already been registered in other parts of the world. I was just wondering whether you've heard anything to indicate that the speed of registration in Japan will be increased in the next few years to cope with the backlog?"
RD: "Having had some experience with Japan, I think Japan is different and is very, very concerned about safety first and benefits. There are certainly a number of examples, including ones that I have engineered in previous lives, of relatively fast approval, as long as you meet both [criteria]. The Japanese people and regulatory authorities are very pragmatic in a way and so they’re going to favour products that can give you an advantage in terms of safety over what exists already, then afterwards providing benefits in terms of efficacy. The point is that both Keppra and Cimzia fit that bill, differently but they do fit that bill. Keppra has no drug-drug interaction and it’s the only anti-epileptic that doesn’t need titration. Japan, as you know, has an elderly population that is on the rise. A big source of the rise in the incidence of epilepsy in Japan is linked to the elderly, so there are a lot of inherent advantages in Keppra that makes it particularly interesting for the Japanese population and the Japanese medical system.
"I think also that there’s a dimension maybe some analysts underestimate today. It’s true that Keppra is in Europe and in the US, it’s true that in 2009 the patent will expire in the US, but Keppra is growing and still has a lot of potential to grow outside of those two regions in the world. Whether we’ve got patent in the US it’s really too early to tell but Japan could definitely be a big driver in the continued growth process of Keppra worldwide."
IMS: "You mentioned the USA, and growth in the USA has started to slow generally across the industry but it remains a hugely important market. How do you see UCB developing its presence in the US market and what is expected to drive sales in this region in the future?"
RD: "I think it is new products, and then we’ll see whether external growth can add to that. But the biggest driver is certainly new products. In our business it’s not all about size, it’s all about innovative drugs and you need to be able to fund your portfolio, your pipeline, and your launches etc."
IMS: "Do you intend to use partners in the US?"
RD: "I’m not sure we are thinking about using partners in the US per se. We may use partners, whether it’s in Europe or the US, and it’s valid in Japan, and if it fits our strategy or if within our strategy it can quantum leap us, it can really advance us significantly. It’s not like we’re completely thinking we have to do everything by ourselves; if there is something that can advance us, bring much higher return to our shareholders and bring our new medicines to much higher levels, we may consider partners. So there’s not a religion of saying no partner or partner. The one thing that we are always going to partner, at least in the coming years, are products with primary care applications, like Xyzal or like we’ve done in the past. But for the rest, you know, with our strategies of targeting products for specialists we’re able to do it ourselves. Now, if we can quantum leap that and advance much more rapidly together with somebody, why not? We’ll look at it in a very pragmatic way, as long as it significantly enhances our shareholder value."
IMS: "One school of thought for some European companies is that if they're taking their drug to somewhere like the USA, it's easier to let a US company, which has a market presence there go ahead and deal with it."
RD: "The head of our neurology franchises is an American, and the head of my inflammation franchise is a Norwegian that worked in the US for many, many years. We have know-how of the US market, so the strategy of some of our peers in Europe that are scared of Europe, or that have been scared off from the US, we don’t have that. I worked for eight years in the US - it’s a big market. I couldn’t say it’s a complicated market - I mean I’m not saying managed care is simple, I’m not saying Medicare Plan D is simple, and the donor pool is simple for everybody to understand, including seniors - but it’s big, that’s what it is, it’s big and it requires resources. So our strategy for the US is yeah, we want to go to the US because no matter what, it’s still the biggest market even if the growth will slow down because there is now a regulation system. Before it was not a market and there was no regulation; people could increase prices as they wanted, which is not really a market regulation. Primary care though requires huge investment and for that we’re going to be pragmatic and make use of infrastructures that exist, and we’re not going to build a primary care sales force of 4,000 people."
IMS: "That’s a refreshing attitude to hear…"
RD: "I think it may have to do with what we talked about earlier on, which is the genuine diversity of our executives, which kills the myth. If you only have Danes, Germans or Brits around the table then you’re dealing with each other’s own myths, which are the same. Here we have Americans around the table, our chief legal counsel is an American, as I mentioned the head of one of the divisions is American, so yes the US market is a big market and a very important market, but it’s also a very nice market to compete in.
"I think also if you look back at the eight years’ of history of UCB, it has always been its strategy, whether it was chemicals or films, that we believed in the fact that size was not an issue; that if you could come with an innovative product, whether in films, chemicals or pharma, you could become number one in the world. That has always been present, 'in the genes of DNA of UCB' and continues to be an important part of the company. That’s probably why I’m here also. I mean I worked in Belgium 15 years ago but I don’t think that’s why I was hired - I was hired because I have US experience. So it all depends on the people you attract."
IMS: "The use of home healthcare providers is expected to increase in Europe over the next few years, which would cut out the wholesalers and retailers between manufacturer and patient. What kind of implication do you think that would have on your business across Europe, or would it not?"
RD: "It may open another channel but this is something that also for many, many years we’ve been talking about. There is huge resistance and it’s bureaucratic resistance to home healthcare, and there are all sorts of things about reimbursement, the political dimension, and that it’s removing patients from hospital, which absolutely makes sense, but the hospital is usually the first employer of the community. So it is complex. Personally I don’t expect that a big wave of home healthcare is going to replace everybody in the next five years.
IMS: "The reason I asked is that it was noted that in the UK and the Netherlands, Enbrel and Humira were distributed exclusively by a home healthcare channel last year. I just wondered how much impact that would have on European strategy. The reports suggest that it’s actually better for manufacturers to have a home healthcare channel."
RD: "Certainly for specialist products it does make sense. I’m just saying I’m not sure I see that as a huge [factor]. It is potentially very important though and we may need to address that later."
IMS: "The importance of emerging markets is growing in the pharma industry as a whole. Can you tell me about your plans for markets like China and India, which are growing at very fast rates. For example, according to IMS, China was number ten in 2001 and this year is number eight and in 2009 it’s expected to be around six or seven."
RD: "There is still a lot of Chinese medicine but, that being said, they are a big rising market and we have our own presence in both markets. It’s very small in China and we are probably in the last lap of getting Keppra approved there. We’re going to get exclusivity, which in China is a major achievement - people don’t always understand that - so yes, we will certainly market Keppra there, although, given the size of the market, we may not market it on our own in China. India is different because we have a fairly large infrastructure, with over 300 reps, and we are also in the last laps of getting Keppra approved before we launch it ourselves."
The full transcript of this interview is available in the latest IMS Company Profile on UCB, where Roch Doliveux also discusses potential blockbuster Cimzia, and the successors to Keppra.
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