Med Ad News - February 2016

ased on the early returns, 2016 is looking like the supersize version of 2015 for pharma marketers, with a whole lot more of everything. With the presidential election just eight months away, the candidates are certainly talking more, presenting a smorgasboard of health care policies with potential impact that remains to be seen.

Drug pricing, an issue that’s been lurking inside the health care debate for a long time, has become much more prominent thanks to a few high-profile products and price jumps. Big data just keeps getting bigger, and marketers are beginning to find ways to convert it into actionable intelligence. Due to rising expectations from clients, marketing agencies are being forced to do more and know more about more. Biosimilars are about to present one more headache to innovator brand managers already fed up with traditional small molecule generics. And the rising tide of technology means more new media – wearables in particular – are becoming a part of the lives of more patients. For more about all this, read on.

As with any year that in- cludes February 29th, the U.S. presidential elec-
tion and its associated health
care policy implications will be
taking center stage in pharma
in 2016. While the usual con-
troversies over ACA remain
on that list of implications, a
combination of growing finan-
cial responsibility falling to
consumers and some prom-
inent high-priced drugs and
“hikes” (we’re looking at you,
Martin Shkreli) have pushed the
issue of pharma pricing into the
political arena as well.

According to Michael Zilligen, president of Ogilvy CommonHealth Payer Marketing, the present menu of presidential candidates offers options for nearly every taste. On the far left, Democratic Sen. Bernie Sanders is advocating for a single payer, tax-supported, Medicare-like plan for all (a “universal health plan”). Moving toward the political middle, Hillary Clinton is the only potential nominee to defend the ACA and to propose keeping the basic structures of Medicare, Medicaid, and the Obama health law in place.

Both Sanders and Clinton have
discussed other government
actions to help influence, if not
control, drug prices, an area
the ACA did not address. They
both have called for empower-
ing Medicare to take advantage
of its massive buying power to
negotiate bulk discounts from
pharma to lower drug prices
for seniors, and to allow Ameri-
cans to import drugs from other
countries. Additionally, they are
both proposing eliminating so-
called pay-for-delay settlements
in patent litigation (in which
brand name manufacturers pay
generic competitors to hold off
on marketing less expensive ge-
nerics). And Clinton has advo-
cated policies that include short-
ening the exclusive marketing
period for new biologics from 12

to seven years.

On the right side of the spectrum are the Republicans, who are united on repealing President Obama’s health care law and decentralizing Medicaid by proposing block grants that can be managed by the states. The GOP, Zilligen notes, has generally been criticized for focusing on repeal without offering a full or partial replacement.

Nonetheless, the presidential
front-runners’ approaches steer
clear of Medicare (or other)

price negotiation or control and tend to allow a “free-er” market system to work. Simply put, the Republican candidates have not proposed actions that attempt to control drug prices.

Whatever the Republicans
might be saying, though, actual
repeal of ACA seems unlikely.

“As the field narrows, candidates will likely tone down their healthcare hyperbole and direct their attention to healthcare legislation that focuses on revising the ACA and the healthcare system rather than repealing it,” says Geoff Melick, chief innovation officer, Sandbox. “ Considering the majority of the ACA provisions are already in effect, with more than 11 million consumers receiving insurance subsidies through the exchanges and another 10 million enrolled in the Medicaid program, the repeal of the ACA doesn’t seem like a viable option. Whether some believe it should be struck down or not, it’s illogical that any new sitting president is going to take that coverage away and leave 21

million people without insur-
ance.”
But no matter what happens
with the ACA, the ongoing con-
troversy over pricing of drugs
will continue.

“No matter the outcome of
the presidential contest, what
is more certain is that consum-
ers, and not just politicians, will
continue to pressure the pharma
industry to drive consumer costs
down,” Zilligen says. “Consum-
ers are assuming (voluntarily
or involuntarily) more financial
responsibility for premiums, co-
payments, coinsurance, and de-
ductibles, and therefore are ex-
ercising more influence on drug
selection and use. So, the indus-
try needs to continue improving
its ability to communicate the
value proposition of therapeu-
tic advances (in consumer lan-
guage) — including outcomes
and real world evidence. In
the absence of compelling val-
ue messages, the national and
political spotlights will remain
on drug prices. Manufacturers
need to continue developing two
approaches: scrutinize the pro-
posed policies as closely as pos-
sible in order to be prepared for
multiple scenarios, and develop
and refine value propositions.”
Regarding pricing, many in-
side the industry are advocating
internal action before govern-
ment has a chance to drop the
hammer. “Certainly new pricing
models, more outcomes data
and clearer value propositions
should be driving pricing ef-
forts, but at the end of the day,
marketers should be working
towards reasonable pricing as
their target,” says Steve Stefa-
no, managing director, Ashfield
Market Access. “Patients should
be able to have access to medi-
cines that can help them. This is
really the take-home message.”
Stefano notes many incidents
in the recent past where pricing
models, outcomes data, and val-
ue propositions did not support
the kinds of price increases that
companies took. “In my opinion,
the current case of the former
hedge fund manager, Martin

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The Med Fame honored and Scot as 2016 in Begasse Lifetime Award recipient.

FEBRUARY 2016 MED AD NEWS• 13
ith the average cost of getting a novel medi-
cine to the marketplace at nearly $2.5billion,
it is more crucial than ever for drug compa-
nies to succeed in their R&D efforts. However,
according to a recent study generated by De-
loitte in collaboration with the research and consulting firm
GlobalData, leading pharma companies’ R&D returns con-
tinue to slide. The study showed that although the R&D di-
visions of 12 leading pharma companies advanced 306 assets
into late-stage pipelines since 2010 – with projected lifetime
returns of over $1.41 trillion – the returns are continuing to
decrease in percentage terms: from 10.1 percent in 2010 to
just 4. 2 percent in 2015, while the average cost of asset devel-
opment increased by one third.

This annual special feature has identified 10 company pipelines that are striving to buck the aforementioned trend of sliding R&D returns. The 10 companies were selected based on current projects in the pipeline, which therapeutic fields they are focused on, R&D deal-making activity, recent drug approvals, and other relevant criteria.

SalesforAbbViecontinuetobedrivenbytheworld’s top-sellingprescriptionmedicine,theTNFinhibiting anti-inflammatorymedicationHumira(adalimum-ab). AbbVie’s long-term strategic and financial objectives, as announced at the end of October 2015, include 2020 global Humira sales of $18+ billion. The North Chicago-based biopharma company reports that its pipeline has the potential togenerate nearly $30 billion in nominal peak-year sales by 2024 (excluding sales from already on-the-market products). AbbVie is on pace to introduce more than 20 new products or indications through 2020, including seven approvals that will contribute during 2016 and beyond, including: • Imbruvica indication expansion, including first-line chronic lymphocytic leukemia (CLL)

• Humira indication expansion, including hidradenitis suppurativa (HS) and uveitis • Viekira approval for genotype 1B patients in Japan • Venetoclax for relapsed/refractory CLL patients with the 17p genetic mutation • Zinbryta for relapsing remitting multiple sclerosis • Elotuzumab for relapsed/refractory multiple myeloma AbbVie is developing leading medicines in these therapeutic fields: immunology, oncology, neuroscience, kidney disease, liver disease and women’s health.

Through spending in new technologies and approaches, AbbVie is breaking ground in some of the most widespread and difficult-to-treat cancers, including glioblastoma multi-forme, multiple myeloma and chronic lymphocytic leukemia. AbbVie’s oncology pipeline contains multiple new molecules in development being investigated in more than 15 different cancers and tumor types.

AbbVie’s next big approval could come in the form of the B-cell lymphoma 2 (Bcl- 2) inhibitor venetoclax. The company has filed a New Drug Application (NDA) and a Marketing Authorization Application (MAA) for venetoclax in patients with relapsed/refractory (R/R) CLL in patients with chromosome 17p deletion. Priority review status was granted by U.S. regulators during January 2016 and validation has been provided by the EMA based on results from a Phase 2, open-label study.

In the clinical trial, venetoclax demonstrated a 79.4 percent overall response rate as monotherapy treatment, including patients that achieved complete remission.

Three FDA Breakthrough Therapy Designations have been granted by FDA for venetoclax. The first designation was received in early 2015for treating patients with R/R CLL with chromosome 17p deletion. The second designation for venetoclax was received during the earlier part of January 2016 for combination therapy with rituximab for patients with R/R CLL, including those with chromosome 17p deletion. A third designation was received in late January 2016 for venetoclax in combination with hypomethylating agents (HMAs) in patients with untreated (treatment-naïve) acute myeloid leukemia (AML) who are ineligible to receive standard induction therapy (high-dose chemotherapy).

Venetoclax is being developed via a partnership with Genentech and Roche. Venetoclax in on tracktogain initial FDA approval during 2016 and generate blockbuster sales on a global basis by 2020.

AbbViehasbeenjointlydevelopingwithBristol-Myers Squibb another medicine expected to generate blockbuster sales. FDA during the fourth quarter of 2015 approved Empliciti (elotuzumab) for treating multiple myeloma (MM) as a combination therapy in patients who have received one to three prior therapies. Marketing clearance was based on data from a Phase 3 trial that showed patients treated with Empliciti plus standard of care therapy achieved a 30 percent reduction in the risk of disease progression or death compared to standard of care alone. This represents the first FDA clearance for an immune-stimulatory antibody for MM in this indication. FDA granted breakthrough designation for Empliciti, which will be marketed by Bristol-Myers Squibb.

Imbruvica (ibrutinib) attained blockbuster sales during 2015, recording sales of $754 million for AbbVie and $689 million for partner Janssen. The drug is approved for treating patients with CLL who have received at least one prior therapy, CLL patients who have del 17p and patients with Walden-strom’s macroglobulinemia. The medicine is additionally marketed for treating patients with mantle cell lymphoma (MCL) who have received at least one prior therapy.

A first-in-class, oral, once-daily therapy, Imbruvica inhibits
a protein called Bruton’s tyrosine kinase (BTK). This was one
of the first products to receive FDA marketing clearance after
being granted a Breakthrough Therapy Designation, and is
one of the few therapies to gain three separate designations.
BTK is a key signaling molecule in the B-cell receptor sig-
naling complex that has a significant role in the survival and
spread of malignant B cells. Imbruvica blocks signals that in-
form malignant B cells to multiply and spread uncontrollably.
Imbruvica is being investigated alone and in combination
with other treatments in several blood cancers. More than
6,100 patients have been treated in clinical studies performed
in 35 countries by 800-plus investigators. As of December
2015, 16 Phase 3 studies have been initiated with Imbruvica
and 67 trials were registered on www.clinicaltrials.gov.
AbbVie submitted a sNDA for ibrutinib for use in treat-
ment-naïve CLL patients, based on results from the Phase 3
RESONATE- 2 study. These data, published in The New En-
gland Journal of Medicine (NEJM), found that the product
significantly decreased the riskof progression or death (pro-
gression-free survival, PFS) and significantly decreased the
risk of death (overall survival, OS) versus chlorambucil in
treatment-naïve patients 65 years and older with CLL.
During the fourth quarter of 2015, it was reported that the
U.S. regulatory agency accepted AbbVie’s sNDA and granted
priority review for Viekira Pak without ribavirin in patients
with genotype 1b (GT1b) chronic hepatitis C virus infection
(HCV) and compensated cirrhosis (Child-Pugh A). The appli-
cation was supported by data
from the TURQUOISE-III
trial, which demonstrated

100 percent sustained virologic response at 12 weeks post-treatment (SVR12) in this patient population. In early December 2015, AbbVie announced that FDA accepted the company’s NDA for a once-daily, fixed-dosed version of Viekira Pak to treat GT1 HCV. The proposed dosing for the fixed-dose form is three oral tablets, taken once per day with a meal, with or without ribavirin. AbbVie expects FDA action on the new formulation during 2016. If approved for marketing, this regimen will be the first all-oral, co-formulated three direct-acting antiviral treatment for adult patients with GT1 chronic HCV infection. Viekira Pak(ombitasvir, paritaprevir, and ritonavir tablets; dasabuvir tablets) is a prescription medicine used with or without ribavirin for the treatment of adults with genotype 1 chronic hepatitis C virus infection, including people who have a certain formof cirrhosis (compensated). FDA marketing approval was initially granted in December 2014. Among other fourth-quarter 2015 R&D highlights, AbbVie presented data from its next-generation HCV regimen (ABT-493 and ABT-530) being assessed as a pan-genotypic, once-daily treatment option for patients with HCV. Results showed 12 weeks of treatment resulted in 97-100 percent SVR12 in GT1 non-cirrhotic HCV, 96-100 percent in genotype (GT2) and 83-94 percent in genotype 3 (GT3) patients. Also, data from the SURVEYOR-I trial demonstrated that non-cirrhotic GT1 HCV patients who received shorter duration of treatment for eight weeks with ABT-493 and ABT-530 achieved SVR12 rates of 97 percent. AbbVie launched Phase 3 trials during the fourth quarter.

At the American College of Rheumatology Annual Meeting in November 2015, AbbVie presented the full 12-week, Phase 2b safety data for ABT-494 fromthe BALANCE-I trial ( efficacy data was previously top-lined). This study assessed a broad dose range to understand the boundaries of JAK-1 selectivity and the efficacy ofthe investigational oralJAK-1 inhibitorABT- 494 compared to placebo in previously treated patients with rheumatoid arthritis with persistent and active disease. The clinical trial met its primary endpoint, achieving an ACR20 response after 12 weeks of treatment using an LOCF approach, and ACR20 for all dose levels. The BALANCE I and II results support AbbVie’s decision to advance the new drug candidate into Phase 3 trials with a once-daily dosing. The Phase 3 program began during late 2015and a Phase 2 study of ABT-494 is under way for treating Crohn’s disease.

AbbVie is exploring the orally administered gonadotro-pin-releasing hormone (GnRH) antagonist elagolix in diseases that are mediated by sex hormones, including uterine fibroids and endometriosis. The new drug compound has been investigated in more than 40 studies totaling 3,000-plus subjects.

top10pipelines specialfeature

By Andrew Humphreys • andrew.humphreys@medadnews.com

Top 10 Pipelines The pharma industry’s R&D concentration has been shifting towards specialty therapy areas as research and development returns decline for some leaders.

m© Significant Pipeline Activity Product Launches and Key Data Flow

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ABBVIE

AbbVie Amgen AstraZeneca Biogen Gilead Merck Novartis Roche Sanofi Vertex TOP 10 PIPELINES

22 •MED AD NEWS FEBRUARY 2016
n honor of our 16 trends, let’s go back
16 years, when the world was very
different. In 2000. The X-Files were on
television, no one knew about al-Qaeda,
And changes will continue to affect how pharmaceu-
tical sales forces operate, Though some of the trends
cited are more about what is happening with the cus-
tomers – physicians and patients – pharma sales force
strategies will be affected by thesetrends as companies
react to realign and rethink how reps are deployed.

The 16 trends picked out by experts are:

AccordingtoPratapKhedkar,managing principalatZSAssociates,thenumberof salesrepsmayevenseeamodestuptickfor the first time in years. The number of reps in the United States has bottomed out to around 65,000, 36 percent less than its peak in 2005. The modest increase in reps is expected because most of the major patent expirations are over and the number of FDA new drug approvals is growing. “However, most new launches are large molecules in spaces such as oncology with few prescribers, so only small numbers of additional reps will be needed,” Khedkar says. “We will not return to the large, prima-ry-care driven sales forces of yesteryear.”

AccordingtoZS’AccessMonitorReport,for thefirsttime,lessthanhalfofdoctorsare willingtoseerepsfreely,Khedkarsays.
“This decrease in access is particularly extreme for
oncologists – down to a quarter who are ‘easy to see’
– even as many new compounds are expected to
launch in this space,” he says. “We expect the trend
in access to continue to decline. This trend is driven
by an irreversible shift in physician preferences to
digital channels as well as practice acquisition by
hospitals with restrictive rep policies.”
In 2015, the number of physicians pushing back
against reps either to a moderate degree or a severe de-
gree exceeded 50 percent, Khedkar says. “This means
less than 50 percent are freely accessible,” he says.
But David Stievater, director, strategic solutions,
at athenahealth believes that there will be “modest
growth” in the ability of pharma sales reps to gain time
with physicians. This will be driven by thelaunches
of new drug classes such as immunosuppressants and
PCSK9 cholesterol-lowering agents.
However, though there maybe intense demand for
information about these new products, thenumbers
of physicians interested in hearing more about them
will not be enough to turn the tideagainst the trend of
reduced physician access, experts generally agree.
“In someof the specialties, the [rep access] number
is actually much worse,” Khedkar says. “Among on-
cologists, 27 percent are available, but 73 percent are
pushing back on reps to some degree. The oncologist
number has fallen faster than thegeneral average.”
This big increase in thenumber of oncologists who
refuse to see reps is especially problematic considering
the number of new oncology products in thepipeline,
Khedkar says. “There will be an increase in oncologists
seeking information about these new compounds
going forward, but the other trend that complements
this is oncologists are turning awayfrom reps to other
channels.”

Althoughsalesforcesmaymodestlygrow, ascompaniesworryaboutcompliance andreigninginextremerepbehavior and rewards, payout curves will flatten further, according to Khedkar. This means payout differences between low-performing reps and high-performing reps will shrink.

Thistrendwillbenoticeableespeciallyat pharmamanufacturersthathavebeenlate tofocusdedicatedaccountteamscallingon IDNs, ACOs, and large independent physician groups, Stievater says.

Asdigitalandnon-personalchannels proliferate,topphysiciansarehitonce veryhourbysomeindustrychannel,which leads to poor experience and engagement. “As awareness of the problem spreads, companies will be forced to address this issue through data-enabled orchestration – where upskilled sales reps use predictive customer analytics on their iPads to coordinate all touches a customer sees from a company,” Khedkar notes. “Non-traditional channels such as inside sales will continue to see increased use.

AccordingtoStievater,thisstrategywillinclude partnershipswithIDNs,pharmacies,andeven payers.Increasingly,salesforceswillneed to look at the full patient disease experience and provide services beyond the drug itself. “This will not play out fully in 2016, but you’ve had glimpses of this with some of the programs that have begun with big health systems like Geisinger,” he says.

In May 2015, Boehringer Ingelheim established a five-year partnership with Sutter Health to exploreand test the value of digital health solutions, mobile technologies, and insights from advanced data analytics in the delivery of health care.

In March 2014, Daiichi Sankyo Inc. and Partners HealthCare’s Center for Connected Health entered a joint-development agreement to createa mobile app to serve as a coaching platform for patients with atrial fibrillation who have been prescribed oral anticoagulation therapy. The goal of this mobileapp will be to support patients living with atrial fibrillation by helping improvepatient adherenceand compliance to medication, as well as fostering feedback loops that connect the provider to the patient.

Merck & Co. established a program with Geisinger Health System as far back as 2012. Themulti-year collaboration is designed to improve patient health outcomes by focusing on innovative solutions that facilitate shared decision making between patients and physicians and improve adherence to treatment plans and clinical careprocesses.

Rep accesswill continue todecline as physicians change behavior (except maybe incertain limited cases). salesforcesweet16 specialfeature

By Christiane Truelove • chris.truelove@medadnews.com

The sweet 16

Industry experts tell Med Ad News about 16 trends that they believe will affect sales-force strategies in the immediate future.

The number of sales reps has stopped declining.

Variable incentive compensation willbecomelessvariable. 3

There will be continued growthof KeyAccountManagers(KAMs). 4

Customer experience willsuffer even more and force companies to address the sales and marketing orchestrationproblem. 5

In conjunction with the growth of KAMs will be the launches of new

“above the brand” programs to improvediagnosisandtreatment. 6

24• MED AD NEWS FEBRUARY 2016
he Medical Advertising
Hall of Fame elected
its 2016 inductees at a
black-tie ceremony on
Feb. 11, 2016, at The
Pierre Hotel in New York City. C.
Marshall Paul, market researcher,
and Scott Cotherman, former CEO
of CAHG, represented the newest
induction class. Additionally, Ken
Begasse Sr. wasrecognized with the
annual MAHF Lifetime Achieve-
ment Award.

During his 50-year career in phar-
maceutical marketing and related
research, Mr. Paul spent time on
both the manufacturer and service
sides of the industry. He began as a
market research analyst for Merck
from 1963 to 1965, then moved to
IMS where he spent 17 years before
becoming a co-owner of Healthcare
Communications (HCI) in 1982.
When HCI was soldto ACNielsen
in 1997, he became president of
ACNielsen/HCI through 2010.
As president of HCI, Mr. Paul
pursued a goal of providing primary
promotion research showing the
effectiveness of, and relationship
between, the different promotion
components. His efforts yielded
information that allowed marketers
to communicate and promote more
efficiently and more effectively. A
generation of marketers have ben-
efited from the information and
guidance that he provided.

“Medical advertising is a leveraging tool that magnifiesthe effect of detailing at a fraction of detailing’s expense, thereby increasing marketing’s ROI,” Mr. Paul concluded during his induction speech. “In this way, advertising can offer part of the solutionnecessary to create needed marketing efficiency increasingly demanded by the spot light on healthcare expenditures. At the end of the day: Good advertising works and the process can be effectively managed to ensure success.” Mr. Cotherman was just the third CEO in the 54-year history of the organization that began as Frank J.

Corbett Advertising, which eventually became CAHG and now operates as Corbett. During his 15-year tenure as CEO, Mr. Cotherman’sfor-ward-looking style positioned Corbett to anticipate and capitalize on changesin the industry andsociety – such as the impact of personalized healthcare. Under his leadership, the agency continued to adapt and grow. He led the expansion of the agen-cy’sglobal footprint by singularly aligning with TBWA/WorldHealth, becoming chairman of a network spanning 48 offices in 36 countries.

Mr. Cotherman served three years as chairperson of the MAHF, expanding the organization’s mission to include providing educational and support resources for the next generation of industry executives.

‘Throughout hiscareer, Scott focused on securing the present by investing in the future,” says Robin Shapiro, president of Corbett. “His accomplishmentsand contributions have had a profound impact on our agency and our industry – spanning the past, the present, and leading us into the future. He led by example. Yes, he was an industry visionary; but he also touchedus on a personal level because of his integrity, loyalty, sense of fairness, and passion for everything he did.” Ken Begasse Sr.’s career spanned

37 yearsbefore his untimely death in 2010. He began hiscareer in healthcare when he established and led the Respiratory Therapy Department and Pulmonary Lab at Greenwich Hospital. A chance meeting switched his career into advertising whenhe joined the small Kimmich & Company adagency in Norwalk, Conn., as an account executive. After a decade at Kimmich, Mr. Begasse Sr. joined Sudler & Hennessey, then went on to senior positions at Lowe McAdams, Nelson Communications, CommonHealth, MBS/VOX, and finally CEO of Concentric Pharma Advertising, an agency co-foundedby his son. While his career wasmarkedby continuing business success, possibly his most notable achievement – and the one he wasproudest of – was the mentoring and development of young talent.

“He helped us all to ‘dream’ in our strategy, to push the boundaries of what could be done, not to settle on the obvious or the easy-to-sell strategy,” saysKen Begasse Jr., CEO of Concentric Health Experience.

“He’d rather lose a pitch with the
right strategy than win a pitch with a
strategy that couldn’t work.” medadnews
medicaladvertisinghalloffame specialfeature

By Med Ad News staff Medical Advertising Hall Of Fame 2016

The Medical Advertising Hall of Fame honored C. Marshall Paul and Scott Cotherman as 2016 inductees; Ken Begasse Sr. was the Lifetime Achievement Award recipient

About the MAHF The Medical Advertising Hall of Fame was founded during 1996 to:

• Document the history of the industry.

• Honor the retired men and women who have made significant contributions to the medical advertising profession – MAHF Inductees.

• Attract and honor next-generation talent to the medical advertising profession – Future Famers.

• Honor industry creatives by recognizing great, retired campaigns – Heritage Awards. The Heritage Award allows the industry to pay appropriate homage to writers, art directors, and account people who made a great campaign come to life.

MAHF membership is open to healthcare advertising agencies and publications, and consists of the leaders of nearly 40 agencies and publishing companies.