Jorge Alderete, president of ALK Americas, recently spoke to PharmaBoardroom about his 20+ years with the Danish mid-cap, the challenges in communicating the USA’s challenging market access environment to a European HQ, and why new models of patient-doctor interaction and medical distribution are crucial to ALK’s future success.
A New Paradigm in the US
On what tempted him to leave the biotech sector behind for ALK, Alderete notes that “Immediately prior to joining ALK in 1999, I was with IDEXX Laboratories, a biotech company developing a rapid detection test for Escherichia coli for the pharmaceutical, food and water industries. A former colleague of mine at IDEXX had gone over to join ALK and he told me that the Danish company had amazing innovation and technology but had taken the wrong approach for the US market. When I looked into the company, I became very interested because as a research-driven global pharmaceutical company focusing on the prevention, diagnosis and treatment of allergy, ALK had developed products that actually addressed the underlying cause of allergy rather than simply treating the symptoms.”
I saw the opportunity for me to change that paradigm for the organization in the US
Jorge Alderete, ALK
He adds that “The products interacted with the immune system to either strengthen it or reduce the impact of allergens. They were not simply putting a Band-Aid on the solution. However, despite the technical strengths of the portfolio, the company was selling its products more as a commodity, competing on price. Their US organization was focused mainly on salespeople instead of business development people with the technical backgrounds to explain the medical benefits of the portfolio to healthcare professionals.”
“I saw the opportunity for me to change that paradigm for the organization in the US. What was important was helping physicians realize the innovation behind our portfolio and the genuine value it could bring to patients. I have stayed with ALK ever since and the organization has had a good run over the past two decades, with phenomenal double-digit growth in recent years.”
Noting the cultural differences between the two business cultures he bridges, Alderete points out that “The Danish take a longer-term view to managing a company than the Americans, which I prefer. I do not think businesses should be run on a quarterly basis. This is why I like working for ALK: their business culture and their long-term perspective in business.”
Bridging the Cultural Gap
Alderete highlights the importance of communication between the US affiliate and ALK’s Danish headquarters, especially to unpack the unique market access challenges that the US market poses.
“Market access is the most complex part of the puzzle,” he states. “When I speak to my colleagues in Europe, I love to show a slide summarizing all the actors in the US healthcare system, including pharma benefit managers (PBMs), private insurance players, wholesalers and so on. Invariably the Europeans are shocked at the complexity. The system is very convoluted and difficult to explain, and all these actors take a cut, which is why drug prices in the US are so high compared to other developed countries. However, while most drugs are more expensive in the US, it is these profits that fund the innovation for new medications through research and development. Without the higher prices in the US, innovation would be reduced significantly. Many, if not most Americans, do not understand their own healthcare system.”
Market access is the most complex part of the puzzle
Jorge Alderete, ALK Americas
He continues, “At the same time, Americans are very reluctant to pay out-of-pocket for drugs. Even a monthly co-pay of around USD 50 is seen as far too high, which is why pharma companies also offer coupons for most of their drugs to reduce the co-pay to USD 25 or sometimes even nothing at all.”
“In this context, it is also sometimes challenging to explain the commercial environment to our European colleagues. The US is the biggest market in the world with many opportunities, but the environment is also a little more difficult than before. Gone are the days that you can launch a new product and it becomes a blockbuster with USD one billion sales almost immediately. These days, even for the Big Pharma players, it is starting to take around five to seven years to gain the sort of traction you want for key brands. You have to invest heavily in consumer education, disease awareness, sales calls to doctors and so on. The prices in the US are a lot higher than in Europe so it is a lucrative market, but some patience is needed as well for our investments to generate the kind of returns expected.”
Reaching out to Consumers
Despite the aforementioned challenges, ALK’s Americas business is performing well and the region has become increasingly strategic for the global group. Looking towards future areas of focus, Alderete is keen to underline the significance of effective communication with consumers, especially about the company’s range of tablet-form medicines.
“Our big push – and we are continuing to do this – is to reach out to consumers. Physicians do not have the direct economic incentives to prescribe tablets, even though it would be beneficial to them in the long run because right now around 60 to 70 percent of patients do not want to get allergy shots. Doctors are therefore effectively losing the majority of patients with allergy. These patients could be prescribed tablets.”
Patients are … getting used to the convenience of not having to visit their doctors, which will make our tablets even more appealing
Jorge Alderete, ALK Americas
“However, as TV ads are very expensive in the US, we are focusing on targeted digital and mobile advertising. For instance, we can target consumers that go online to Google symptoms like ‘itchy eyes’ or that share negative experiences with allergy shots on online forums. This ensures that our ads are viewed by the right target audience. We want to raise consumer awareness as well as direct consumers to doctors that are familiar with our portfolio. Last year, we were able to drive 66,000 patients to talk about these tablets with their allergists, which is great.”
Alderete adds, “As telemedicine becomes more prevalent these days, especially with the current COVID-19 situation, patients are also getting used to the convenience of not having to visit their doctors, which will make our tablets even more appealing.”
“This is in line with the global direction of the company. In 2017, ALK decided to create a consumer care division to develop closer relationships with our consumers. It was first launched in Germany and then the UK, and it will arrive in the US in Q3 2020.”