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A Rare Strategic Acrobatic Feat in Covid Time

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‘Keep nose to the grindstone while lifting eyes to the hills.’ Quite a while ago, all-time global management guru – Peter Drucker used this essential acrobatic feat as an example, for the business strategists. This illustration signifies the criticality of harmonizing decisions affecting both the short and the long-term goals of an organization, for a sustainable business excellence.

In most recent times, the pharma major AstraZeneca that has virtually become one of the household names, for developing a Covid-19 vaccine candidate with the University of Oxford, has performed the above acrobatic feat – with precision. During the prevailing unprecedented health crisis, the Company has unequivocally proven that it remains on course – in achieving its dual objectives, as Drucker had prescribed in his management classic – ‘The Practice of Management.’

It happened in tandem – without getting overwhelmed by the disruptive forced of Covid pandemic, unlike most others. Immediately, the Company focused on an urgent objective of saving the humanity – by developing, manufacturing and delivering a Covid vaccine to the world, in a record time. This was possibly a relatively short-term goal. And closely followed the other – a critical strategic decision for the organization’s long-term sustainable business excellence.

I have discussed before, the Company’s first initiative – developing a Covid vaccine candidate with the University of Oxford. Hence, in this article, I shall focus on two other related areas:

  • Deadly impact of rare diseases in some Covid infected young patients.
  • Why not some large Indian companies also explore similar strategies as demonstrated by AstraZeneca – and the reasons behind the same?

Before going into those areas up front, let me start with a brief description of AstraZeneca’s intent to expand its footprint in the of area of rare diseases, besides immunology area to help treat rare types of cancer.

The acquisition:

On December 12, 2020 AstraZeneca announced that to accelerate its strategic and financial development, the company will acquire Alexion valuing $39 billion. Subject to all statutory approvals, the deal is expected to close in the third quarter of 2021. Interestingly, Alexion’s top brand – Soliris, is the world’s one of the most expensive drugs in the world. It is prescribed to treat a rare – life-threatening blood disease paroxysmal nocturnal hemoglobinuria (PNH). Incidentally, rare diseases have also some significant relevance for Covid infected patients. Let me now recapitulate, some key aspects of rare diseases.

Some key aspects of rare diseases: 

Rare Diseases (RD) – also referred to as Orphan Disease (OD), are diseases affecting a small percentage of the population, and include genetic diseases, rare cancers, infectious tropical diseases and degenerative diseases. There is no universally accepted definition of a rare disease, yet. Different countries define these differently. However, the common considerations in the definitions are, primarily, disease prevalence and to a varying extent – severity and existence of alternative therapeutic options.

Impact of some rare diseases in Covid infected patients: 

Since the beginning of the Covid pandemic, people with underlying diseases, such as, hypertension, diabetes, cardiovascular and kidney disorders, are considered to fall in the high-risk group. They are more likely to have severe disease and complications and need to be extra cautious of the infection. Importantly, it has been recently reported that some rare diseases also increase risk of dying during Covid-19 pandemic at a younger age.

For example, as reported on December 07, 2020, recent studies indicate, rare autoimmune rheumatic diseases increase risk of dying during Covid-19 pandemic for younger patients. The researchers also found that women with rare autoimmune rheumatological diseases (RAIRD) had a greater increase in all-cause mortality rates during the pandemic when compared to men with RAIRD. However, there seems to be an India specific issue also in this situation, as well.

India specific issue for Covid infected patients with some rare diseases:

Some India specific issues on RD, could have a significant adverse impact on Covid infected patients in the country. One such critical issues is the ‘Baseline Knowledge of Rare Diseases in India.’ This fact was well captured in an important survey that was published with the same name, as an original article, in the ‘International Journal of Rare Diseases & Disorders,’ on November 06, 2019.

The study noted, among others:

  • Although, rare diseases have recently received worldwide attention, the developing countries are seriously behind in regard to awareness, drug development, diagnosis, and social services, in this area. India, which has one-third of the world’s rare disease population, has no accurate assessment of the problem.
  • The drugs for ‘Rare Diseases (RD), also called Orphan Drugs (OD)’, often cost exorbitant with difficulties in diagnosis and treatments.
  • Indian policymakers want to find out the number of RD and the extent of the population suffering from them and help provide treatment for them, which is a challenging task with 1.45% GDP health care budget for 1.3 billion people.
  • The health care professionals appear to have some awareness as compared with non-healthcare professionals, but even among health care professionals, only one third had a rudimentary understanding of RD and OD, whereas three-fourths have virtually no knowledge of RD.
  • Forty-three percent of health professionals had not seen rare disease patients, and a large percent of practicing physicians had not seen even one rare disease patient in their entire professional practice.

Thus, it is clear from this survey that the most important issues are awareness and diagnosis, as many rare diseases are not diagnosed or possibly misdiagnosed. Besides, the survey also observed, since 1983, many global companies started developing orphan drugs after the Orphan Drug Act implementation. There is none at this time in India, although in 2017, the Drugs & Cosmetic Act. 1945 has been amended to include “rare diseases and orphan drugs”.

The National Policy on Rare Diseases flagged some of these facts:

The ‘National Policy on Rare Diseases 2020,’ for India, released by the Union Ministry of Health on February 07, 2020, acknowledged many of these important facts. It also said, ‘Considering the limited data available on rare diseases, and in the light of competing health priorities, the focus of the draft policy is on prevention of rare diseases as a priority as identified by experts.’

Interestingly, the first of such policy was prepared by India in 2017 and a committee was appointed to review it in 2028. However, recently published the National Policy on Rare diseases, has also noted one more important point. It noted: ‘Paradoxically, though rare diseases are of low prevalence and individually rare, collectively they affect a considerable proportion of the population in any country, which according to generally accepted international research is – between 6% and 8%.’ Currently, India, reportedly, doesn’t have any registry of rare disease, which has now been entrusted to the Indian Council of Medical Research (ICMR) in the National policy.

Common symptoms can hide underlying rare diseases, leading to misdiagnosis:

The above policy has also noted, rare diseases are characterized by a wide diversity of signs and symptoms that not only, reportedly, vary from disease to disease, but also from patient-to-patient suffering from the same disease. Importantly, relatively common symptoms can hide underlying rare diseases, leading to misdiagnosis.

During Covid treatment, similar circumstances could lead to a serious life-threatening situation. The 2020 RD Policy also reiterates: “Early diagnosis of rare diseases is a challenge owing to multiple factors that include lack of awareness among primary care physicians, lack of adequate screening and diagnostic facilities etc.” That said, yet another key question arises – will developing and marketing such drugs be profitable for the pharma industry?

Will developing such drugs be profitable for the pharma industry?

It is worth noting that the National Policy on Rare Diseases 2020, aims more at lowering the incidence and prevalence of rare diseases based on an integrated and comprehensive prevention strategy, rather than ensuring patient access to affordable treatments. Nonetheless, it also says, within the constraints on resources and competing health care priorities, India will try to enable access to affordable health care to patients of rare diseases which are amenable to one-time treatment. In general, the policy suggests, ‘voluntary crowdfunding for treatment’ of rare diseases.

With this being the prevailing situation in India, even during Covid pandemic, an interesting article – ‘How Orphan Drugs Became a Highly Profitable Industry,’ published in The Scientist, noted some important facts in this area. It highlighted: ‘Government incentives, advances in technology, and an army of patient advocates have spun a successful market—but abuses of the system and exorbitant prices could cause a backlash.’

It also articulated, despite higher costs and less-certain returns, investments in drug development on the rare diseases side appear to ‘be bucking the trend.’ The result of the global focus on RD nowadays is: ‘Firms with marketing authorization for orphan products, are now more profitable than those without.’

This also partly explains the financial rationale behind AstraZeneca’s recent acquisition of Alexion Pharmaceuticals, valuing $39 billion.

Conclusion: 

As of December 20, 2020 morning, India recorded a staggering figure of 10,031,659 of new Coronavirus cases with 145,513 deaths. The country has already crossed 10 million in Covid cases as the vaccine approval remains pending. The threat of subsequent waves for further spread of Covid infection continues to loom large in many states. Meanwhile, many studies indicate that comorbidity should now include rare diseases, as well, especially to prevent deaths in younger patients. From this perspective effective diagnosis and treatment of RD are also coming under spotlights. Curiously, the National Policy on Rare Diseases 2020 focuses more on awareness and prevention of RD rather than access to affordable treatment, particularly in Covid infected patients to save precious younger lives. As I wrote previously and still believe, the ‘National Policy on Rare Diseases’ becomes more meaningful with ‘Orphan Drugs Act.’

Vaccines to prevent Covid infections are also expected to get emergency approval in India, shortly. At lease, some of these being available at affordable prices, including AstraZeneca-Oxford vaccine, according to reports. As recent reports indicate the same company, is also entering into RD therapy areas, through a key acquisition, yet another hope looms large. A hope for availability of relevant RD drugs at an affordable price for Covid infected patients, despite other apprehension, as I wrote before.

That apart, purely from the business management perspective, as well, this rare strategic acrobatic feat of AstraZeneca - ‘Keep nose to the grindstone while lifting eyes to the hills,’ during the Covid crisis, I reckon, is exemplary for the practicing managers.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Any Threat To Current Commercial Model Of ‘Gene Therapy’?

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Wish All My Readers A Very Happy, Healthy, Peaceful and Prosperous 2020

 

One of the most complex areas in disease management, is the ailments related to genetic disorders. As these were incurable, over the last four decades, medical researchers are engaged in understanding the complex and intricate process to modify human DNA, using viruses for treatment. This painstaking initiative led to the evolution of ‘gene therapy’ which, according to Mayo Clinic, ‘involves altering the genes inside human body’s cells in an effort to treat or stop the disease.’ In that process, ‘gene therapy’ replaces a faulty gene or adds a new gene, to cure a disease or improve the human body’s ability to safely and effectively treat dreaded ailments, such as cancer, cystic fibrosis, heart disease, diabetes, hemophilia and AIDS, it further added.

Several studies, e.g., one titled ‘Gene therapy on the move,’ published in the EMBO Molecular Medicine highlighted, the first gene therapy clinical trials were initiated more than two decades ago. However, initially many of these were impeded by the occurrence of severe side effects in a few treated patients. Nevertheless, over a period of time, ‘highly efficient gene targeting strategies and site-directed gene editing technologies have been developed and applied clinically.’ With over hundreds of clinical trials to date, gene therapy has moved from a vision to clinical reality – offering a powerful treatment option for the correction of monogenic disorders.

It is believed that in the new millennium, ‘gene therapy’ has emerged as one of biotech’s momentous success stories for curing many genetic disorders, which were once considered incurable. But, the cost of ‘gene therapy’ treatment is indeed jaw-dropping – ranging ‘from about US$ 500,000 to US$ 1.5m. And for treatment over a lifetime, some drugs can cost as much as US$ 750,000 in the first year, followed by US$ 375,000 a year after that – for life.

Since, I have already deliberated on ‘gene therapy’ price and associated moral dilemma that it causes, in this article, I shall focus on different concerns that could pose a threat to its ongoing commercial model. Nevertheless, let’s start with the current scenario on ‘gene therapy,’ for better understanding of the issue.

The current scenario:

According to McKinsey & Company’s October 2019 article - ‘Gene therapy coming of age’ - till 2019, the primary focus in development of ‘gene therapy’ has been on monogenic rare diseases with all currently approved therapeutics falling into this category. It is worth noting, rare diseases tend to have clear genomic targets, as well as, high unmet need in a very small patient population, who have generally been under-served by other, more traditional, therapeutic modalities (including monoclonal antibodies)—making them ideal targets for gene therapies.

More than 150 investigational new drug applications were filed for gene therapy in 2018 alone. With this in mind, McKinsey & Company expects this market to grow significantly, with ten to 20 cell and gene therapy approvals per year over the next five years.

Major ‘gene therapy’ launched:

If one takes a broad look at the ‘gene therapy’ treatments launched so far, which I have compiled from different sources, it may appear as follows.

Gene Therapy Company Country Launch Year Indication Price ($M) Current status
Glybera UniQure Europe(EMA) 2012 Pancreatitis caused by absence of a gene - lipoprotein lipase, affecting about 14 people per year in Europe 1.0 Withdrawn (unaffordable)
Strimvels GSK Europe (EMA) 2016 To treat ADA-SCID patients (rare disease) 0.665 Sold to Orchard Therapeutics. Only 5 patients were treated.
Kymriah(CAR-T therapy) Novartis USA 2017 Acute lymphoblastic leukemia 0.475
Yescarta(CAR-T therapy) Kite Pharma USA 2017 Diffuse large B-cell lymphoma 0.373 Gilead acquired Kite Pharma in August 2017 for 11.9 billion dollars
Luxturna  Spark   2017 Rare disease called RPE65 mutation-associated retinal dystrophy. 0.850 for both eyes Novartis is paying $105M up front for the ex-US rights.

The latest being Zolgensma of Novartis. It was approved by USFDA on May 24, 2019 for ‘patients less than 2 years of age with spinal muscular atrophy (SMA) with bi-allelic mutations in the survival motor neuron 1 (SMN1) gene.’ It costs US$ 2.125 million in the US for a one-time treatment.

However, to get a better idea on the industry focus in this area, let us look at the current ‘gene therapy’ pipeline.

Current ‘gene therapy’ pipeline:

To fathom the extent of industry interest in ‘gene therapy’ let’s have a glance at the depth of its pipeline – both in terms of phase-wise clinical study, as well as therapy areas covered. This will help understand the concerns that could pose a threat to its ongoing commercial model.

Clinical Trial Phase Total by phase    Therapy Areas:HematologyOncologySensory OrgansInternal MedicinesOthers
I 574
II 520
III 205
Filed/Approved/Marketed 237
Total 1536

Adapted from: McKinsey article – ‘Gene therapy coming of age’, October 2019

Both large and small companies are entering into the fray:

Besides Novartis and GSK, as mentioned above, other Big Pharma constituents, such as Pfizer, Roche, Gilead and Bristol-Myers Squibb - are also putting their money in developing ‘gene therapy.’ This includes Mergers and Acquisitions too. For example:

Alongside, newer ‘gene therapy’ platforms continue to come up, many funded by venture capitals – further enriching the ‘gene therapy’ pipeline. In tandem, fresh concerns that could pose a serious threat to the ongoing commercial model of ‘gene therapy’ are also being realized. Mainly, the impact of the one-time or curative version of such avant-garde therapy on current pharma business models.

Also facilitates a giant leap towards personalized medicine:

‘Gene therapy’ is also believed to be a giant leap of medical science towards personalized medicine. This is because, in addition to repairing and replacing defective or missing genes of a human body, this therapy can use body’s own cellular immune system to treat the disease. This is because, CAR-T cell therapy can fall in the category of personalized medicine, where a patient’s T cells are changed in the laboratory, empowering them to attack cancer cells.

Concerns that could threaten its ongoing commercial model:

Despite its significant patient-value offerings with long-term benefits, ‘gene therapies’ that have been approved and are already in the market had to confront with tough unforeseen challenges, both from fresh regulatory questions - to therapy withdrawal for commercial reasons. These developments, coupled with a very low and difficult to identify patient population, and affordability related low market access, prompt the need of a transformed marketing model for novel ‘gene therapy.’ This is important for financial sustainability of current ‘gene therapies’ in most pharma markets, globally, including the United States.

Some critical areas:

An article on ‘gene therapy’ by the Managing Directors of L.E.K Consulting, published by Cell & Gene on May 16, 2019, also pointed to some of these critical areas. Even this paper articulated, the fundamental value proposition of ‘gene therapy’, its long-term efficacy with a single-dose treatment, gives rise to a number of unique challenges for its manufacturing companies. Let me paraphrase below just three of those, as I understand, to drive home this point.

Declining number of eligible patients for most doctors: 

The promise of a functional cure is expected to limit ‘gene therapies’ to a single dose per patient, in most cases. Thus, inability to re-treat would lead such therapies to deplete their addressable prevalent populations, for most doctors. This is primarily because, as the number of treated patient accumulates – the number of potential patients who could be treated in a given year is reduced. This leads to demand that would peak early before steadily declining. Once the prevalent population is depleted, the demand for a gene therapy would be driven by incident patients.

However, research has now been initiated targeting larger populations – e.g., those suffering from leukemia and lymphomas. But, the greatest revenue potential for ‘gene therapy’, is expected to be its success in delivering life-changing treatment outcomes in multiple myeloma. When such patients will get to experience better outcomes from cell and gene therapies, the incremental approach the industry has been taking in this area, will be more than justified.

Till then, it could pose a challenge to business sustainability:

As discussed, the ‘gene therapy’ sales curve with an early peak and then steady decline, caused by a depleted addressable patient population within a few years after launch, could pose a serious challenge to business sustainability. This would require launching, possibly another ‘gene therapy’ product before the revenue of the first ‘gene therapy’ starts waning. Consequently, the timing of its life cycle management efforts and subsequent launches would be a critical success factor.

Intricacy of market access dynamics:

Optimal market access of ‘gene therapy’ will call for working in unison with virtually all stakeholders, including regulators, governments, and at the same time, effectively disseminating the real-life treatment-success stories. However, both in the developed countries and also in the emerging markets, such as India, its treatment cost will continue to remain a key barrier, sans some disruptive pricing strategy.

How this tough task remains unresolved, can be sensed from the Wall Street Journal (WSJ) report of December 19, 2019 titled, ‘Novartis to Offer World’s Most Expensive Drug for Free Via Lottery.’ For this purpose, Novartis launched a lottery-style program to provide doses of its pricey gene therapy for Zolgensma, a one-shot ‘gene therapy’ cure, for free of charge. But, this approach drew criticism from patient groups that called it – an inappropriate way to distribute a lifesaving treatment aimed at babies for a deadly inherited disease whose victims cannot control their muscles. At a price of US$ 2.1 million, Zolgensma, is the world’s most expensive drug.

Conclusion:

As I discussed above, ‘gene therapy’, also known as ‘human gene transfer,’ has been one of biotech’s momentous success stories in the new millennium, paving the way for a cure of many genetic disorders – once considered incurable. However, the number of patients on ‘gene therapy’ remains small compared to other therapeutic regimens, mainly because of two factors. One – this therapy, mostly targets rare diseases, and the second – even among those small patient populations, only very few can afford such pricey therapy.

Nevertheless, current research in this complex area, is now targeting larger populations – suffering from leukemia, lymphomas and multiple myeloma. Success in these areas will open the door of significantly greater revenue potential for ‘gene therapy’ by delivering life-changing treatment outcomes. Till then, its current business model, I reckon, would continue to pose a high commercial risk to this venture.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

On The Flip Side of Pharma Industry: A Saga of Perennial Contradictions

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Awesome contribution in the battle against multiple diseases, is obviously the primary facet of the pharma industry. However, on its flip side, one would witness a saga of numerous contradictions. Some of these exist perennially in well-protected opaque cocoons, regardless of what recent research data reveal. The consequences of which leaves a detrimental impact on the patient’s health interests, eventually turning into highly contentious issues, in the socio-political milieu of recent times.

While there are many such contradictions involving the pharma industry, this article will endeavor to understand just one inherent dispute. This is related to the impact of high R&D expenditure on drug prices. It assumes importance, especially at a time, when the world’s most influential pharma trade organization continues arguing in favor of the dictum – high new drug prices are driven by mind-boggling cost of drug innovation, as R&D spending keep shooting north. Incidentally, many others challenge this assertion backed by robust data, claiming it’s not so, actually.

Thus, the question that comes up, if high R&D cost prompts high drug prices, what happens when this major cost of new drug innovation comes down, as is, apparently, happening now. A proper resolution of this contradiction by ushering in transparency in this area, is important to safeguard a critical health interest of many patients. A recent research report, followed by several other important developments in this area, exposes this contradiction, probably more than ever before.  

Some recent reports revealing the contradictions:

To drive home the point of contradictions, I shall cite a few references below, from a pool of many others. For example, one such report of September 26, 2019 unfolded: ‘The cost to bring a new drug to market has decreased to under US$ 2Billion’. This was announced by Clarivate Analytics plc  while releasing the “2019 Centre for Medicines Research (CMR) International Pharmaceutical R&D Factbook.”

Interestingly, another article had sharply contradicted the above, presenting a different story altogether. Quoting the Tufts University Center for the Study of Drug Development, it highlighted that it costs US$ 2.6 billion growing at 8.5 percent annually. However, adding an estimate of post-approval R&D costs increases, the cost estimate to US$ 2870 million. Many estimated, it would take pharma companies more than 15 years of average sales to reach breakeven.

Curiously, a different research paper, titled ‘Comparison of Sales-Income and Research and Development Costs for FDA-Approved Cancer Drugs Sold by Originator Drug Companies,’ published by the JAMA Network Open on January 04, 2019 concluded quite in line with the ‘2019 CMR International Pharmaceutical R&D Factbook.’ It found, ‘Cancer drugs, through high prices, have generated incomes for the companies far in excess of research and development costs; lowering prices of cancer drugs and facilitating greater competition are essential for improving patient access, health system’s financial sustainability, and future innovation.’

Again, contradicting the above, one more article – ‘The Link Between Drug Prices and Research on the Next Generation of Cures,’ published ITIF (Information Technology & Innovation Foundation) on September 09, 2019, touted to: ‘Put simply, drug companies must make significant profits on their best-selling drugs in one generation in order to reinvest in the next generation.’

The saga of contradiction continues.

A glimpse at the current scenario:

While trying to understand the inherent contradiction in the space of cost of drug innovation by analyzing the available data, let us examine the current scenario, of course with reasons. Going by the oft-repeated justification that high R&D expenses drive the drug prices up, the converse scenario would be – a dip in the R&D expenditure should lead to a reduction in medicine prices, commensurately.

But this is unlikely to happen – drug prices won’t possibly come down due to voluntary measures of the drug manufacturers. As various recent developments indicate, it will be clear in the course of this discussion that the same justification won’t be jettisoned anytime soon.

Pharma CEOs do acknowledge that they have some role to play in helping lower drug prices. However, they continue defending prevailing high new drug prices by highlighting, their multibillion-dollar investments in R&D are responsible for advances in treatments of many serious ailments, such as cancer, hepatitis C, schizophrenia and autoimmune diseases.

This was again contradicted by another BMJ Research Study of October 23, 2019, which concludes: ‘A review of the patents associated with new drugs approved over the past decade indicates that publicly supported research had a major role in the late stage developments of at least one in four new drugs, either through direct funding of late stage research or through spin-off companies created from public sector research institutions. These findings could have implications for policy makers in determining fair prices and revenue flows for these products.’ Nevertheless, in the midst of it, signs of a shift in focus of many pharma companies in this area, is clearly discernible. 

Signs of a shift in R&D focus are clearly discernible:

This gets well- reflected in the “2019 Centre for Medicines Research (CMR) International Pharmaceutical R&D Factbook.” As the report unfolds, one of the basic shifts is a change in focus on R&D targets. Until recently, the research focus of most companies was on Noncommunicable Diseases (NCD) such as, Parkinson’s disease, autoimmune diseases, strokes, most heart diseases, most cancers, diabetes, chronic kidney disease, osteoarthritis, osteoporosis, Alzheimer’s disease, and others. Whereas, today there has been an increased focus on rare diseases.  

What does it signify?

It obviously signifies, most companies are now trying to launch steeply priced niche products for rare diseases. This includes complex biologic products, gene therapy, personalized medicine and the likes. Which is why, a majority of current new drug approvals, targets smaller patient populations. For example, between 2010 and 2018, the number of addressable patients per drug approval decreased by 15 percent, as the above report revealed.

The bottom-line, therefore, is with the low hanging fruits already been plucked, many pharma players don’t seem to consider targeting innovation of reasonably priced mass market products. It has already happened with antibiotics and would now probably happen with several NCDs.

Two main drivers for this shift:

The two main drivers for this shift, resulting an increase in drug approvals, and significant reduction in cost per new molecular entity (NME), may be summarized as follows:

  • Increased focus on rare diseases. Of the 57 NMEs launched in 2018, 22 had an orphan drug designation, indicating that they targeted rare disease area.
  • Increased activity of smaller pharmaceutical companies. In 2018, as high as 74 percent of drug launches were developed by companies with an R&D spend of US$ 700 million to US$2 billion. Major pharma companies (R&D spend of greater than US$2 billion) accounted for just 26 percent of drug launches.

A good news!

The increase in new drug approvals driven by smaller pharma companies is a good news and also encouraging. This suggests, becoming a big company with deep pocket is no longer a prerequisite to bring an innovative drug to the market. On the contrary, making R&D programs more efficient is the name of the game, today.

Changing pharma investment strategies:

As is evident from the CMR International Factbook, drug manufacturers’’ investment strategies are also undergoing a makeover. In the R&D domain, external innovation, in general, is now playing a more critical role. Perhaps, more than ever before. In the first half of 2019 alone, global spend for pharma M&A and licensing activities was, reportedly, around US$140 billion. Interestingly, it outpaced projected 2019 R&D spend by more than 60 percent.

Do high R&D cost impact drug prices and vice versa?

This brings us to the key question: Does the high cost of R&D impact drug prices and vice versa? Or, it is being over-hyped as a tool to justify high drug prices. There are umpteen instances to believe so – for example, the world’s best-selling drug – Humira of AbbVie. According to the Wall Street Journal (WSJ) of September 28, 2017, the initial U.S. patent for Humira expired in December 2016, but the additional patents expire in the 2020s.

Interestingly, according to other reports, AbbVie has collected more than US$115 billion in global Humira sales since 2010. In 2018 alone its sales amounted to US$ 19.9 billion. The report reiterates, ‘AbbVie has made and will continue to make a lot of money from Humira.’ From these facts, one can presume that AbbVie’s R&D expenditure or the product acquisition cost, has long been recovered, but still doesn’t seem to have any significant impact on the drug price.

Pharma CEOs continue to repeat the same argument:

While testifying at a hearing of the Senate Finance Committee, pharma CEOs had to confront with a Senators’ question - “Prescription drugs did not become outrageously expensive by accident, Drug prices are astronomically high because that’s where pharmaceutical companies and their investors want them.” However, acknowledging that their prices are high for many patients for high R&D expenditure, the company chiefs tried to deflect blame onto the insurance industry, government and middlemen known as pharmacy benefit managers.

The CEOs also highlighted the rebates given on list prices to benefit patients. However, the reality is, under the current system, savings from rebates are not consistently passed through to patients in any form. Interestingly, despite such scenario, pharma CEOs don’t want the government negotiating drug prices directly. It’s apparent that none of their reasonings were found to be the genuine reasons for high drug prices, even by the US Senators.

Thus, pharma’s points of justification for high drug prices have not changed, over a long period of time. On the contrary, shifting greater focus on the R&D of rare diseases, where the number of patients is much less, the CEOs seem to be bolstering their same argument on a different ground, despite reducing R&D costs.

Surfaces a glaring contradiction:

Presenting the current situation from the drug industry perspective, the article titled, ‘Drug Prices and Innovation’, published in the Forbes Magazine on June 20, 2019, emphasized on some interesting points.

It said: ‘In 2018 return on investment in drug discovery/development were 1.9 percent, far below the 10.5 percent cost-of-capital - the rate-of-return the industry must provide to compete for capital with similar investments.’  The article also emphasized: ‘Under the current pricing regime, the expected returns from drug discovery do not justify the investment. They have not done so since 2010 and are expected to turn negative by 2020.’ It further added, big pharma, despite one of the highest rates of R&D spending of any industry, chronically fails to fund research sufficient to support adequate growth and returns to the average drug don’t cover the cost of development.

On the other hand, according to a presentation by CVS Health that cited Macrotrends.net as its source,pharmaceutical manufacturers’ profit margins have reportedly exceeded 26 percent for the last three years and 22 percent for the past 10 years.

This brings out again, the glaring contradiction between what is being highlighted and what is actually happening in the pharma business. Lack of transparency in this area of the drug industry, is believed to be the root cause of this confusion among many.

Conclusion:

As it has been recognized the world over, the high new drugs prices are an issue over the contentious argument of ‘high R&D expenditure’ being the ‘root cause’.  It is, therefore, imperative for the stakeholders to demand transparency in this area. If finding a solution to this health-related issue is considered critical, without further delay, this needs to be expeditiously addressed.

As the saying goes, once the disease is diagnosed accurately, zeroing in on an effective treatment becomes easier. Let me hasten to add, for new, innovative and patented drugs, the situation in India is generally no different. Thus, there is no scope for any contradiction in this area, whatsoever. As the saying goes, once the disease is diagnosed accurately, zeroing in on an effective treatment becomes easier.

Voluntary implementation of ‘responsible’ drug pricing policies, by pharma manufacturers themselves, has been given a long rope. Time is running out now. If this does not happen soon, government control of drug prices will be essential, just as is being contemplated in the United States – the ‘capital’ of the free-pricing world. Moreover, it has been well documented in several studies that price control won’t jeopardize drug innovation, as pharma manufacturers will have to come out with innovative new products and treatments – event for survival of the business.

Saving lives – more lives, alongside making reasonable profits in the business, remain the primary facet of the pharma industry. However, the flip side of it, revealing a perennial saga of contradictions, such as one we discussed above, raises concerns of their being perceived as profiteering with drug prices, by many. Such practices go not only against patients’ health interest, but also negates the core purpose of existence of the industry – surely, endangering long term survival of this business model – as the modern technology unleashes its mesmerizing power for all.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Focus On Patient Compliance To Boost Pharma Sales…And More…

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One high-impact area in the healthcare space that often finds its place in the backseat is – patient noncompliance. A term that is commonly used in regard to ‘a patient who does not take a prescribed medication or follow a prescribed course of treatment.’ It comes with a steep price, for causing serious adverse impact not just on human health and health system, but also in the pharma business. Intriguingly, such incidents are still not scientifically monitored enough and vigorously acted upon, both globally and locally.

The World Health Organization (W.H.O) has also flagged it as a huge problem, as it reports, 10 percent to 25 percent of hospital and nursing home admissions result from patient noncompliance. Furthermore, about 50 percent of prescriptions filled for chronic diseases are not taken correctly, with 40 percent of patients not adhering to the treatment regimen.

In this article, just after giving a flavor to its financial cost to patients, I shall dwell mostly on its impact on the pharma players, as overcoming this important problem doesn’t generally fall in the area of strategic focus for most of them. Finally, I shall explore how drug manufacturers can translate this problem into an opportunity – as the third growth driver for business, creating a win-win situation for all.

Economic and health impact on patients:

Noncompliant patients suffering from both acute and chronic ailments, pay a heavy price, not just in terms of longer suffering arising out of complications, but also incurring significantly more health expenditure for treatment of the same diseases. According to IMS Institute for Healthcare Informatics, on average, less than 40 percent of patients around the world are fully complying with their treatment instructions.

Even in the Indian context, the problem is no different. Let me illustrate the point with the example of a chronic disease, such as Asthma. The article published on June 26, 2018 in ‘Lung India’ – the official publication of Indian Chest Society reported: “The mean annual direct costs among compliant and non-compliant patients were ₹14, 401 and ₹24, 407, respectively. Percentage of hospitalization was less among the compliant group (6 percent) when compared with noncompliant group (17 percent).”

The study concluded, asthma is not only associated with patient-specific impairment, but also creates a significant economic burden for the family and society. The major contributors to the burden are the medication cost and hospital admissions. Patient compliance with prescribed drugs can help keep asthma under control, thereby decreasing the economic burden and emergency hospital admissions – avoiding the economic risk from ill health with high out of pocket payments.  Productivity loss is another under-appreciated source of economic loss contributing to indirect cost. The rising costs of investigations, interventions, and treatment of chronic diseases further complicate the problem.

Economic impact on pharma business:

According to November 16, 2016 report, published by Capgemini and HealthPrize Technologies, globally, annual pharmaceutical revenue losses had increased from USD 564 billion in 2012 to USD 637 billion due to non-adherence to medications for chronic conditions. This works out to 59 percent of the USD 1.1 trillion in total global pharmaceutical revenue in 2015.

The report highlights, besides medication nonadherence being a serious global health issue that needs to be addressed immediately, it also happens to be a critical business issue for pharmaceutical companies. Thus, it is the only area of their business where a sharp strategic focus “can generate significant top – and bottom-line growth, improve outcomes, and create substantial savings for the healthcare system – all at the same time.”

Major reasons for patient noncompliance:

Several reasons are commonly attributed to patient-noncompliance to medicines, such as:

  • Lack of knowledge of its health and economic impact
  • Importance of completing the full-course of the drug and dosage regimen for long-term remission, following immediate relief
  • Untoward side-effects and other inconvenience
  • Forgetting therapy because of preoccupation
  • Financial inability to complete the prescribed treatment regimen due to the high cost of drugs.

Nevertheless, the 9th Edition of Global Research Report by Capgemini Consulting underscores that reality is more complex. Patient adherence initiatives, if any, when undertaken, even by pharma companies, often lack a thorough understanding of the root causes of discontinuing treatment and failure to effectively engage patients with a holistic approach to the issue. It also emphasizes: “Individual tactics are tried by different brands and then discontinued as budgets and priorities shift, before their impact is known. Successes are seldom pulled through and expanded across the organization.”

Using it as the third major growth drivers for pharma:

The two primary factors that drug manufacturers are leveraging to boost growth of the organization are:

A.  New product introduction – gradually extending to line extensions and new indications. One such illustration is the cholesterol-fighting drugLipitor of Pfizer. The lifetime sales of this brand as of the end third quarter 2017 generated a stunning USD 150.1 billion of business for the company. Incidentally, Lipitor patent expired in 2011. There are many similar examples, including Humira of AbbVie.

B.  Regular and hefty price increases for already marketed products, for various reasons, but almost regularly. According to this 2019 report, percentage price increases, on a huge base, of some of the world’s top pharma brands were as follows:

  • AbbVie: Humira, a blockbuster drug with USD 15 billion in sales in the first 9 months of 2018: +6.2%
  • Allergan: Many of its brand-name drugs, including dry-eye medication Restasis: +9.5%
  • Biogen: Multiple sclerosis drug Tecfidera: + 6%
  • Bristol-Myers Squibb: Eliquis, a drug that prevents blood clots and is on pace for USD 6 billion in sales in 2018: + 6%
  • Eli Lilly: Type 2 diabetes medication Jardiance: + 6%

Many studies have captured the importance of regular price increase, as a key pharma strategy, not only to drive the internal growth, but also to keep their investors, as well as, the stock market on the right side. There are examples that for some of the top global pharma players, this strategy was directly responsible for 100 percent of earnings-per-share growth in 2016, and more than 20 percent of the revenue made in the first three quarters of 2018.

On the other hand, some top analysts’ findings highlight that drug companies serious strategic focus just on the issue of patient noncompliance with novel tactical measures, could fetch as much as a 30 percent increase in annual earnings per share for many players, even in India.

This brings up to the point – can strategic focus to minimize patient’s non-compliance, supported by adequate resources, be the third growth driver for drug companies?

Can focus on patient noncompliance be the third growth driver for pharma?

For a moment, leaving aside the above two primary growth drivers, if we look at the estimates, as quoted above, well over 50 percent to 60 percent of a brand’s potential sales is wasted due to patient noncompliance. Isn’t it huge? Can this be ignored? Obviously not. Instead, why not pharma converts this problem into an opportunity, with a sharp strategic focus, leveraging technology.

Translating this potential opportunity into reality is neither very easy nor is every company’s cup of tea. But the reward for the winners is indeed phenomenal. To chart on this frontier, one of the toughest barriers, besides a winner’s mindset, is getting access to credible and meaningful patient-data, for various reasons. On the other hand, it isn’t an insurmountable problem, either – especially, with today’s rapidly progressing technology.

Some companies have started the long march:

According to the review article, published in the New England Journal of Medicine: ‘The ability of physicians, to recognize non-adherence is poor, and interventions to improve adherence have had mixed results. Furthermore, successful interventions generally are substantially complex and costly.’

Realizing that it as a potential opportunity – disguised as a problem, several pharma players have started thinking about exploring this not much charted territory, confirm reports coming from different countries of the world. To give an illustration, November 22, 2016 edition of Fierce Pharma reported: ‘Pharma companies have more recently joined the conversation with partnerships and programs that include adherence aims.’

It is generally believed today that rapid ascendency of modern technology, and its strong influence on people, will help create a new awareness of its current adverse impact both on patients and the drug companies.

What else could be done in a much wider scale?

Digital interventions, such as smartphone apps, are becoming an increasingly common way to support medication adherence and self-management of chronic conditions. In this regard, the May 14, 2018 study titled, ‘Smartphone apps for improving medication adherence in hypertension: patients’ perspectives’, published in the journal of Patient Preference and Adherence, concluded as follows:

‘These data showed that patients can identify the benefits of a medication reminder and recognize that self-monitoring their blood pressure could be empowering, in terms of their understanding of the condition and interactions with their general practitioners.’ But some loose knots are still to be tightened.

Tightening the loose knots:

Having leveraged the state of the part digital technologies to tighten the loose knots in this area,a host of AI-enabled smartphone health and diagnostic apps, capturing patient compliance details, especially in chronic disease areas, are fast coming up. Most of these are being developed by large, small and medium sized non-pharma pure tech companies, including startups. For example, according to reports: ‘With the release of the Apple Health Record and Apple Watch with a single-lead ECG, it’s evident that Apple has officially entered the healthcare space.’

A good number of these apps have received even the US-FDA approval, such as: MyDose Coach - a reliable dose calculating app for type 2 diabetic patients who take insulin once-daily in concert with physician guided insulin recommendations. Or, GoSpiro – a home spirometer, to measure air output from the lungs for COPD patients and connects wirelessly to provide hospital-quality data regarding breathing.

That many non-pharma entities are trying to create a space for themselves in a high-tech, but non-drug treatment segment within the pharma space, has prompted, several drug manufacturers to rewrite their marketing playbook, incorporating this ‘new notation’.

It’s real now…for some:

As the above Fierce Pharma article reported: ‘Pharma companies have more recently joined the conversation with partnerships and programs that include adherence aims; efforts from Verily and Sanofi and IBM and Novo Nordisk have recently made the news.’Further, on November 07, 2018, in another report it brings to the fore that Geisinger Health System has developed mobile apps to manage asthma with AstraZeneca, and a wearable app to manage pain with Purdue. It also joined forces with Merck to develop tools for patients and caregivers to improve care coordination and medication adherence.

Moreover, on February 09, 2019, Japanese drug major Astellas and WiserCare - a company that develops healthcare decision support solutions, announced a collaboration that includes improving patient adherence to care plans, and improve the overall care experience.

In tandem, concern on patients’ data privacy, may also now be addressed, possibly by making use of blockchain or similar technology for such initiatives, as I discussed earlier in this blog.

Conclusion:

‘Acquiring new customers is important, but retaining them accelerates profitable growth,’ is the theme of an article, published in Forbes on June 08, 2016. Therefore, just as any other business, this dictum applies to the pharma industry, as well, especially in context of patient noncompliance to medicines, with a clear strategic focus to minimize its impact on performance.

The major reasons for patient noncompliance ranges from ignorance of its adverse impact on health to side effects, forgetfulness and right up to inability to afford full-course of the prescribed drug treatment. Despite its continuity over decades, adversely impacting patients, health system and the pharma players, it won’t be prudent to infer that no attempt was being made in the past, to address this critical issue. Nevertheless, those measures have not worked, for many reasons, as we see today from various research studies in this area, even in the Indian context.

Once again, intervention of technology to make patients compliant to medicine, is showing promise for following it up more vigorously. That some global drug majors are entering into collaborative arrangements with non-pharma, technology companies of various sizes, sends a signal of the emergence of a third major growth driver for pharma, as discussed above.

This issue is so important, especially considering that the low hanging fruits of R&D have mostly been plucked, just as regular hefty increases of drug prices are meeting with tough resistance, squarely. In this scenario, a robust strategic focus on patient compliance would not only boost pharma sales but would also reduce the disease burden of a large section of people significantly. This will benefit all and harm – none.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Would ‘Connected Healthcare’ Catch Pharma Players Off-Guard?

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Rapid advancement of medical science is making several life-threatening diseases easily preventable, curable and manageable. For some conditions, such as, peptic ulcer even surgical interventions are no longer necessary. This results in the expansion of preventive and primary-care segments, with equal speed. Simultaneously, increasing complexity of many diseases, late stage disease detection, and better identification of rare diseases, are broadening the specialty hospital segment, as well.

On the other hand, the general mindset of people is also changing as fast. They dare to chart in the cyberspace, seek for more health-information, prefer participative care, expect a speedy treatment process – delivering better outcomes.

The cumulative impact of these are creating some brilliant sparks, confirming evolution of some disruptive health care business models. These are quite different from what we generally experience today.One such model is termed ‘connected healthcare.’ This is a unique business model, having potential to break the decades old status-quo – for the benefit of patients – closely involving doctors, pharma – medical device/diagnostic companies and of course the hospitals. In this article, I shall deliberate on ‘connected healthcare’ looking at its various aspects and examining whether pharma industry is ready for this change. Let me start this discussion with the role of Internet of Things (IoT), as an enabler for this process.

Internet of Things (IoT) – A great enabler for ‘connected health’:

‘Internet of Things (IoT)’ has opened new vistas of opportunities for providing healthcare with significantly better outcomes. According to Ecoconsultancy, by leveraging the IoT network, medical devices of everyday use can be made to collect, store and share invaluable medical data, providing a ‘connected healthcare’ system. Consequently, doctors, along with patients, can get speedy and deeper insights into symptoms and trends of diseases for prompt interventions, even from remote locations. The question that follows: what really is ‘connected health?’

‘Connected Health (cHealth)’ and a teething problem:

‘Connected health or (cHealth)’ refers to the process of empowering healthcare delivery through a system of connected and interrelated computing devices, mechanical and digital machines on an IoT network platform. It provides the ability for seamless data transfer and access between patients and providers, without requiring human-to-human interactions to improve both quality and outcomes of healthcare.

Two more articles, one titled ‘Connected health: How digital technology is transforming health and social care,’ and the other ‘Accelerating the adoption of connected health’, both published by Deloitte Center for Health Solutions also described ‘Connected health (cHealth)’quite eloquently.

One of the papers highlighted, being a technology driven network system, cHealth has its own teething problems. Some of its key reasons include: Many physicians ‘are often reluctant to engage with technology, partly due to the scale and pace of changes, and partly through lack of education and training, and concerns over liability and funding.’

Precise value offerings of a ‘Connected Health’ system:

The Accenture study titled, ‘Making the Case for Connected Health,’ established that ‘connected health’ approach creates value at three different levels, as follows:

  • Clinical efficacy and safety - Eliminating duplicate lab and radiology tests; improving patient safety through 24/7 access to comprehensive, legible medical records; and speeding up access to patient medical histories and vital information – the cost of treatment can be reduced, significantly.
  • Shared knowledge - Improves care quality, benefits with prompt safety alerts, such as drug interaction, enhances clinical decision-making through sophisticated tools along with evidence-based care protocols, and helps acquiring new capabilities in health care.
  • Care transformation - Advanced analytics help sharing clinical decision-making process, population health management, and facilitate building new care delivery models.

‘Connected health’ in managing chronic diseases:

‘Connected health’ is being practiced at different levels in many countries. These are particularly useful in treating or managing chronic ailments, such as cardiovascular (hypertension), metabolic (diabetes) disorders and COPD (Asthma).  Some examples are as follows:

Many hypertensive patients monitor their blood pressure and other related parameters, through self-operating digital instruments and devices. If the auto-flagged readings get transferred to the treating physicians through IoT system, physicians can promptly adjust the drug doses and offer other required advices over the same system online, and as and when required or periodically. This could avoid periodic personal visits to doctors for the similar purpose, saving time and money. At the same time, it ensures better quality of life through the desired level of disease management, always.

Similar results have been reported in the management of diabetes and Asthma with ‘connected health’ system.

 ‘Connected health’ in treating life-threatening diseases, like cancer:

The paper titled, ‘Smart technology helps improve outcomes for patients with head and neck cancer,’ published by the News Medical on May 17, 2018, which was also read at the June 2018 Annual Meeting of the American Society of Clinical Oncology (ASCO), highlights some interesting developments in this area. This federally funded, randomized clinical trial on 357 people receiving radiation for head and neck cancer, using mobile and sensor technology to remotely monitor patient symptoms, resulted in less severe symptoms related to both the cancer and its treatment.

It also noted: ‘Patients who used the technology – which included a Bluetooth-enabled weighing scale, Bluetooth-enabled blood pressure cuff, and mobile tablet with a symptom-tracking app that sent information directly to their physician each weekday – had lower symptom severity than participants who had standard weekly visits with their doctors. In addition, daily remote tracking of patient wellbeing, according to the researchers, enabled physicians to detect concerning symptoms early and respond more rapidly, compared to usual care.’

While treating serious ailments, medical images, such as computed axial tomography (CT), magnetic resonance imaging (MRI), digital mammography and positron emission tomography (PET), can be connected, stored and shared with cloud-based connectivity and online sharing platforms, as confirmed by several studies. This would enable physicians to build better and deeper referral networks, for better diagnosis and speedier treatment inventions to patients.

‘Connected healthcare’ is fast growing:

As the above Accenture study indicates, many countries have started implementing  ‘connected healthcare’ systems to deliver cost-effective, high-quality and speedy healthcare services to the population with better outcomes. Some of these nations are, Australia, Canada, England, France, Germany, Singapore, Spain and the United States.

According to the New Market Research report titled, “Connected Healthcare Market – Global Industry Analysis, Size, Share, Trends, Growth and Forecast 2018 – 2022,” published by Wise Guy Research: ‘Globally, Asia-Pacific region is one of the fastest growing markets for ‘connected healthcare’. It was valued at USD 2.65 billion in 2015, and is expected to reach USD 23.8 billion by 2022, at the rate of 30.6% during the forecast period.’ During this span, ‘The global connected healthcare market is expected to reach $105,337.5 Million by 2022 at a CAGR of 30.27%,’ with North America commanding largest market share of 36.7%, the report highlights.

‘Connected health’ shows a high potential in India:

The above report also indicates, ‘mobile-health services’ accounts for the largest market segment in the UK, Italy, Japan, China and India. E-prescribing is the fastest growing segment in Asia Pacific and is expected to grow at the rate of 31.27% CAGR during the forecast-period.

E-Health initiative of the Government of India, which is aimed at using of Information and Communication Technology (ICT) in health signals a good potential for ‘connected health’ in India. Fast penetration of mobile technologies even at the hinterland of India will facilitate this process.

Another article titled, ‘Why Connected health is the key to reducing waste and increasing efficiency,’ published in Healthcare India on July 25, 2017, brings to the fore some key benefits of ‘connected healthcare’ in the country. It says, ‘connected healthcare’, can bring path-breaking changes in the country. Following are a few examples:

  • Today when almost 70 percent of the medical expenses are borne by the patient, a ‘connected health’ ecosystem, would reduce admissions by early intervention and potentially deter surgeries.
  • Having access to a patient’s entire medical record, physicians’ will be able to minimize ‘over diagnosis’, amounting to multiple tests, over-medication and avoidable prescriptions, thereby reducing out of pocket health expenditure of patients.
  • When patients are referred from one doctor to the other, or from the rural medical centers to district hospitals, they often need to repeat all the tests, as there is no connected health ecosystem. In doing so, they lose time and sometimes don’t show up for follow up treatments and consultations with their treatment remains incomplete.

Leading private players in ‘connected health’ area:

Some of the leading market players in the global ‘connected healthcare’ market, reportedly, include Agamatrix Inc. (USA), Airstrips Technology (San Antonio), AliveCore Inc. (Australia), Apple Inc. (USA), Athenahealth Inc. (USA), Boston Scientific Co. (USA), GE Healthcare (UK), Honeywell Life care Solutions (UK), Medtronics (Ireland) and Philips Innovation Campus (Bengaluru, India).

Would ‘Connected healthcare’ disrupt pharma’s legacy commercial model:

McKinsey Digital’s March 2012 paper titled, “Biopharma in the coming era of connected health” explains, how ‘connected healthcare’ has started disrupting the legacy commercial models of pharma and Biopharma industry. One of the related examples cited in the article is, pharma’s less emphasis on large sales forces “selling” to physicians.

As this new system gathers wind on its sail, information transparency will allow customers, regulators, and competitors to understand and independently assess the performance of various drugs, often better than what the manufacturers present. These powerful new data sources would reveal true efficacy of medicines, in the real-world settings. No doubt, it will be a significant patient empowerment.

Would pharma be caught off-guard?

Despite such clear signs of changes, the way the pharma industry continues to operate, which as perceived by a majority of the population, is generally self-serving in nature. It has remained virtually unchanged over several decades. Another strong public perception is, patients often get trapped by a two-way financial interest, existing between doctors, hospitals, pharma, biotech – medical devices/diagnostic companies, in various forms. Notwithstanding, industry lobbyists pooh-poohing it, it remains a robust general perception, nonetheless.

That said, this situation can no longer be allowed to remain frozen in time. Today, time is making many things obsolete, including human behavior and business practices, much faster than ever before. This gets fueled primarily by two catalytic factors – one, rapid progress of technology, and the other, which is even more fundamental – the changing demographic profile and social fabric. Together, these are creating a new, informed, more assertive and expressive mindset of people – signaling their needs, preferred choices and processes, even for a health care solution. It’s for the industry now to shape up, soon.

Conclusion:

Joining all these dots, one gets a clear sign of ‘connected healthcare’ gradually evolving in India. Even if, it still takes some more time for an integrated ICT system to be in place, especially in India, it’s for sure that ‘connected healthcare’ will be a reality, surely.

As and when it happens, it will be a disruptive process. The process of sharing all requisite disease prevention, treatment and management related data, between patients, doctors and other care providers, including pharma companies – over regulatory approved, interconnected IoT enabled devices, machines and applications, will benefit all.

There will, of course, be several barriers to overcome, before this new era ushers in. One such hurdle being, many doctors still don’t express a favorable attitude towards adoption of ICT technology in their everyday practice. Alongside, the government with the help of regulators, should enact the requisite laws, and frame stringent rules to ensure enough privacy and security of confidential medical information of individual patients. In tandem, appropriate authorities must ensure that ‘connected healthcare’ system is effectively implemented by all concerned.

As strong environmental needs will hasten this process, public access to high quality healthcare with better outcomes – and all at an affordable cost, will improve by manifold. Thus, I reckon, days aren’t too far to witness ‘connected health care’ in India. But, the hundred-dollar questions still remain unanswered – Are most pharma players ready for the ‘connected healthcare’ regime, or will it catch them off-guard?

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Made-to-Measure’ Marketing for ‘Made-to-Measure’ Medicines

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We have entered into a new era of innovation in medical science where ‘one size fits all’ type of treatment is making a sizeable space for a new ‘made-to-measure’ variety of the same. Such medicines are being developed particularly for life-threatening and rare diseases, where individual genetic differences in patients play a key role in the choice of therapy.

The marketers of such drugs, at the same time, will need to make sure that the right sets of messages are delivered to the right person, in the right way and at the right time, for brand success. This isn’t a piece of cake, as it will be akin to finding out a needle from a haystack. It would call for craftily ferreting out from an enormous database, both the patients’ and the prescribers detail profile virtually in each stage of the treatment process.

Such information would form the bedrock for effective brand value creation and its delivery, to achieve best possible business results and also patient outcomes. Thus, ‘made-to-measure’ marketing would be a whole new ball game for many pharma marketers – a  completely different situation that, very often, they know little about.

In this article, I shall dwell on this subject. Let me begin with a brief description of the emerging ‘made-to-measure’ variety of treatments.

‘Made-to-measure’ treatment:

There are many serious and life-threatening disease conditions where ‘One Size Fits All’ sort of treatment approach doesn’t work too well. One such dreaded disease is cancer. Conventionally, following standard treatment guidelines, doctors generally opt for similar treatment for patients suffering from the same type and stage of cancer. Interestingly, it has been conclusively established over a period of time that this approach often yields different outcomes to different patients.

With the progress of genetic science, the researchers have unraveled this mystery from the genetic difference of patients. This understanding heralded the dawn of a new era of targeted or ‘made-to-measure’ drug therapies. These are called “personalized medicine” or “precision medicine”. According to the National Research Council, “personalized medicine” is an older term with a meaning similar to “precision medicine.”

Personalized medicines:

According to the American Society of Clinical Oncology (ASCO), understanding a patient’s genetic makeup and ascertaining how certain gene changes during cancerous tumor growth, doctors can now choose more effective treatment options for each patient. In other words, based on genetic test results, oncologists can now opt for a customize treatment, based on each patient’s specific needs. Such drugs can block or turn off the signals that tell malignant cells to grow and divide, keep cells from living longer than normal, or kill the cancer cells altogether.

Moreover, by performing genetic tests both on the cancer and normal cells, doctors can also:

  • Find out the chances of a person developing cancer and selecting the screening strategies to lower the risk
  • Match patients with treatments that are likely to be more effective and cause fewer side effects
  • Predict the risk of recurrence, which means the return of cancer

The new era began in 1998:

The era of ‘personalized medicine’ for cancer, in all practical purposes, commenced in 1998, when the US-FDA approved the targeted therapy, Herceptin (trastuzumab). Breast cancer patients having high levels of a biomarker, known as “HER-2,” are more likely to be susceptible to this drug.

Since then, the development of targeted therapies has grown rapidly. As reported by the American Journal of Managed Care (AJMC), published on January 31, 2018, one in every 4 drugs approved by the US-FDA over the past 4 years was a personalized medicine, and the agency approved a record-breaking 16 personalized therapy in 2017. The same year, US-FDA also approved the first biosimilar of a personalized medicine - trastuzumab-dkst (Ogivri) for HER-2-positive breast cancer patients. This biosimilar was developed with Herceptin as its reference.

The February 2018 report of Research and Markets titled, ‘Personalized Medicine – Scientific and Commercial Aspects’ says, the aim of ‘personalized medicine’ is to match the right drug to the right patient and, in some cases, even to design the appropriate treatment for a patient according to his/her genotype. I deliberated on genotype-based treatment in my article titled, ‘A Disruptive Innovation to Fight and Cure Intractable Diseases’, published in this blog on October 30, 2017.

At this point, let me hasten to add that the development of personalized medicine raises some ethical issues, as well. Currently, this debate is mostly limited to the area of genetic testing.

Personalized dosage:

An article published on March 23, 2015 in the ‘FDA Voice’ of the US-FDA states, since the 1990s, the agency is also working on personalized drug dosing. This is because individuals differ in how they eliminate a drug. Some eliminate it much more slowly than most other people, and thus are susceptible to overdosing, while others eliminate it much faster, and may not get the desired therapeutic effect. There are biomarkers to identify people who may have these unusual results. Personalized drug dosing makes sure that drug efficacy for such patients are not compromised, or they are not at high risk of any severe side effects.

Marketing ‘personalized medicine’ a whole new ball game:

All this vindicates that ‘personalized medicine’ is not just a flash in the pan. With each passing year, it’s moving ahead at a brisk pace. In this emerging scenario, what happens to marketing of these drugs? Will the marketing of ‘personalized medicine’ remain just the same as the conventional one, or it warrants radically different cerebral inputs?

The opportunities for personalization in pharma marketing are immense. ‘Personalized medicines’ offer a greater scope in leveraging its potential that is yet to be fathomed, meaningfully. Broadly, this will mean targeting customers or potential consumers even at the individual level, to add greater differential value.

This, in turn, will involve making the marketing content, the message format and choosing the effective value delivery platforms, virtually ‘made-to-measure’ for the target audience. Marketing interaction of this ilk, has proven to offer a cutting-edge experience to the target groups with greater outcomes, in tandem, yielding superior financial results to the concerned pharma players.

Recent reports:

On December 18, 2017, Cambridge BioMarketing – one of the world’s leading rare disease agency highlighted, as personalized medicine continues to take hold, it will be more important than ever for healthcare companies to incorporate the ‘hyperpersonalized’ experience in marketing and communications. Patients’ voice has already started becoming more important than ever before, in various facets of pharma business. In 2018, one may expect to witness more pharma companies tapping the experts who can help explain the life-changing benefits of a treatment for the patient, effectively – the report predicted.

Moving forward, patients embarking on new treatments will be better empowered to take charge of their well-being. Physicians and nurses will also be better connected to their patients, along with other care providers, with the support of enhanced digital connections and mobile apps. Interestingly, one can find it happening in several developed countries, especially, in areas like rare diseases, where ‘personalized medicines’ will be used more – underscored this agency.

On January 22, 2018, quoting the same Cambridge BioMarketing, FiercePharma also reported, more ‘personalized medicines’ also mean more ‘personalized marketing’ – and the ‘hyperpersonalization’ trend goes to extremes. Crunching data gathered from multiple sources, such drug marketers need to identify small groups that could be receptive to specific messaging. Advanced data and analytics, would facilitate the marketers to whittle down their targets and tailor messages to consumer audiences, sometimes as small as one person – the report asserted.

Conclusion:

As the February 2018 report of ‘Research and Markets’ highlights, increase in efficacy and safety of treatment by individualizing it, has benefitted in financial terms too. Available information indicates that ‘personalized medicine’ will ultimately be cost-effective in healthcare systems. This would also eliminate the need for various assumptions in the process of diagnosing a disease.

Thus, conventional pharma marketing based on the mostly segmentation strategy used for blockbuster molecules may not work for a ‘personalized medicine’. Instead, ‘personalized marketing, focused on smaller and exclusive markets – identified based on robust research and analytical data, will be the name of the new game for business excellence in this specialized area.

Thus, I reckon, as we move ahead, ‘made-to-measure’ marketing will no doubt be one of the key success requirements to make ‘made-to-measure’ medicines’ – a money spinner.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

A Disruptive Innovation to Fight and Cure Intractable Diseases

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Several important facets of health care often arrest general attention. These are also widely discussed, analyzed and argued vehemently – with each person or group trying to justify one’s own point of view. Among these, following 6 critical areas, broadly dominate the deliberations:

  • Incredible advancement in the medical science driving health care,
  • Infrastructure, facilitators and providers of health care,
  • ‘Wolves of health care in sheep’s clothing’, as described by many
  • Large populations facing inadequate availability and access to health care,
  • The need for Universal Health Care (UHC)
  • Public investments, policies and regulations governing health care.

In this article, I shall focus only on the first area – incredible recent advancement in the medical science driving health care, especially the very recent developments on a disruptive innovation called ‘Gene Therapy’.

Gene Therapy:

As some would know, one of the latest developments in the pharma world, relates to marketing approval in the United States and Europe of ‘Gene Therapy’ – a disruptive innovation in the medical science.

This technique of treatment using genes to manage, cure or prevent many intractable diseases are fast gaining ground globally, including India – at a slower pace, though. As I said, in America, the first gene therapy has already obtained the approval of the US-FDA in August 2017, closely followed by the second in October 2017, with the third waiting in the wings. In the European Union (EU), the first gene therapy was approved in 2012, but faced some commercial issues that I shall discuss later in this article.

During approval of the first gene therapy in the United States (US), the FDA Commissioner Scott Gottlieb reportedly said, this new frontier in medical innovation has the ability to reprogram a patient’s own cells to attack a deadly disease, such as cancer, creating an inflection point to treat, and even cure many intractable illnesses.

According to an October 10, 2017 publication of the U.S. National Library of Medicine, gene therapy may allow doctors to treat a disorder by inserting a gene into a patient’s cells instead of using drugs or surgery. Extensive research is ongoing, adopting several approaches to this treatment, including:

  • Replacing a mutated gene that causes disease with a healthy copy of the gene.
  • Inactivating, or “knocking out,” a mutated gene that is functioning improperly.
  • Introducing a new gene into the body to help fight a disease.

Thus, gene therapy is fast emerging as a promising treatment for a number of life-threatening diseases, including inherited disorders, some types of cancer, and certain tough to treat viral infections. That said, the technique being risky, is still under study to make it safer the patients. Currently, it is being tested only for diseases that have no other cures.

The first approval of gene therapy in the United States:

On August 30, 2017, US-FDA took a historic decision with its approval for the first ever gene therapy in America – meeting an unmet need in its true sense, and thus creating a major milestone in medical science. US-FDA approved this treatment for certain pediatric and young adult patients with a form of Acute Lymphoblastic Leukemia (ALL) – resistant to standard treatment, or which often relapses. The overall remission rate within three months of this treatment was found 83 percent in clinical trials.

This path-breaking therapy (tisagenlecleucel) is named Kymriah, and is made by Novartis. Nevertheless, it is worth noting that the treatment was developed by a group headed by Carl H. June  at the University of Pennsylvania and licensed to Novartis.

A customized treatment:

The US-FDA approval letter to Novartis says, “Kymriah is a genetically modified autologous T-cell immunotherapy. Each dose of Kymriah is a customized treatment created using an individual patient’s own T-cells, a type of white blood cell known as a lymphocyte. The patient’s T-cells are collected and sent to a manufacturing center where they are genetically modified to include a new gene that contains a specific protein (a chimeric antigen receptor or CAR) that directs the T-cells to target and kill leukemia cells that have a specific antigen (CD19) on the surface. Once the cells are modified, they are infused back into the patient to kill the cancer cells.”

Nevertheless, Kymriah can cause life-threatening side effects, such as dangerous drops in blood pressure. This has prompted US-FDA to caution that hospitals and doctors should be specially trained and certified to administer this therapy, and require stocking of drugs to control severe reactions, if and when required.

The price tag is jaw dropping:

As  reported by New York Times (NYT), Kymriah will be given to patients just once and must be made individually for each, costing US$ 475,000. Novartis reportedly has said, if a patient does not respond within the first month after treatment, there will be no charge. The company also said it would provide financial help to families who were uninsured or underinsured. This is indeed a commendable gesture.

The second USFDA approval for gene therapy:

Just about a week ago, on October 18, 2017, US-FDA approved Yescarta (axicabtagene ciloleucel) of Kite Pharma Inc. – a Gilead company. This is gene therapy is to treat adult patients with certain types of large B-cell lymphoma who have not responded to or who have relapsed after at least two other kinds of treatment.

Initially, 54 percent of patients on Yescarta reportedly had complete remissions with their tumors disappearing. Another 28 percent had partial remissions, where tumors shrank or appeared less active on scans. After six months, 80 percent of the 101 were still alive.

Just as Kymriah, Yescarta will also reportedly be introduced gradually, and be available only at centers where doctors and nurses have been trained in using it. This is, again, due to its serious side effects, which include high fevers, crashing blood pressure, lung congestion and neurological problems.

As reported, Kite Pharma hopes that Yescarta will eventually be approved for earlier stages of lymphoma, rather than being limited to patients with advanced disease who have been debilitated by multiple types of chemotherapy that did not work.

Yescarta will cost less than Kymriah at US$ 373,000 per patient. This is a single dose treatment to be infused into a vein, and must be manufactured individually for each patient. About 3,500 people a year only in the United States is estimated to be candidates for this therapy.

Yet another gene therapy is likely to get US-FDA approval soon:

Close on the heels of these two developments, yet another gene therapy is likely to get US-FDA approval in the coming months. On October 12, 2017, Spark Therapeutics – a gene therapy company in the United States, reportedly won unanimous support from a US-FDA advisory panel for its gene therapy – Luxturna (voretigene neparvovec), after the experts concluded that the benefits of this gene therapy outweighed its risks.

Luxturna – a one-shot treatment, has shown to reverse blindness by restoring vision in children with an inherited form of blindness, and shows potential to restore blood-clotting function to hemophiliacs, or even cure rare diseases outright. However, as the analysts estimate, the cost of Luxturna will be hefty, which could even be more than Kymriah of Novartis – at US$ 1 million per patient.

The first gene therapy in Europe was not commercially viable:

As stated above, in 2012, the first gene therapy – Amsterdam-based Uniqure’s Glybera (alipogene tiparvovec), was approved by the European Medicines Agency (EMA) for the EU market. The product was indicated for treatment of rare inherited disorder – lipoprotein lipase deficiency (LPLD).

However, with treatment cost of €1m+ per patient, Glybera was reportedly the most expensive therapy ever approved in Europe. Interestingly, in April 2017, Uniqure decided to terminate post-marketing studies required for prolongation of its existing EU conditional market approval, for its extremely limited usage, making the product commercially non-viable.

These four developments give me a sense of both – the fast pace of progress of gene therapy and also its possible commercial vulnerability, due to astronomically high prices coupled with a limited number of current usages linked to the specific disease types.

Gene therapy research in India:

According to the paper titled, “Gene therapy in India: a focus,” published by the Journal of Biosciences in June 2014 – ‘starting from 1998, the Indian government is playing a leading role in the advancement of gene therapy research in India by providing enormous financial support to scientists and clinicians through its various funding agencies like Department of Biotechnology (DBT), Department of Science and Technology (DST), Indian Council of Medical Research (ICMR), etc.’

India is not far behind other Asian countries in the field of gene therapy. In Asia, China is the leader with 16 research laboratories, followed by Japan (13), India (10), South Korea (4), Israel (3) and Taiwan (3), the paper says.

The laboratories established in India to conduct gene therapy research are: Advanced Centre for Treatment, Research and Education for Cancer, Mumbai (1998), University of Delhi (2002), Saha Institute of Nuclear Physics, Kolkata (2004), Indian Institute of Science, Bengaluru (2005), Actis Biologics Private Limited (2005), Mumbai, Center for Stem Cell Research, Vellore (2010), Vellore Institute of Technology, Vellore (2012), Institute of Life Sciences, Bhubaneswar (2012), Narayana Nethralaya, Bengaluru (2013).

Conclusion:

As deliberated above, gene therapy reflects an incredible advancement in the medical science driving health care. This is primarily because, the disruptive innovation is aimed at treating genetic diseases at the molecular level by correcting the defective genes.

The fact, as captured in the worldwide gene therapy data table, that between 1989 and February 2016, over 2,300 gene therapy clinical trials have been conducted – 93 of which being in phase III while 3 in phase IV, further vindicates the rapid pace of evolution of this science.

As stated before, the critical process of this treatment reportedly involves ‘introduction of new genes into cells, to restore or add gene expression, for the purpose of treating disease. Most commonly a mutated gene is replaced with DNA encoding a functional copy. Alternatively, DNA encoding a therapeutic protein drug may be introduced.’ However, the exorbitant current cost of this novel treatment, for various reasons, severely limits its access to a vast majority of the global population, at least for now.

Be that as it may, the disruptive medical innovation culminating into gene therapy of date, is expected to open new vistas of opportunity to fight and cure several life-threatening intractable diseases. This game changing advancement in the medical science, no doubt, would help provide a new lease of life only to some, mostly due to its price barrier. Nevertheless, for many, it does carry a new hope for access to this life changing therapy – probably at some point of time in future. God willing!

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Making ‘National Policy For Rare Diseases’ More Meaningful With ‘Orphan Drugs Act’

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In November 2016, while hearing a related case, the Delhi High Court reportedly directed the Union Government to finalize and implement a policy on rare diseases, with a provision for free treatment with the expensive medications, as will be required by patients.

Earlier in 2014, while passing the judgement in response to a petition filed by a seven-year-old son of a rickshaw puller seeking affordable treatment for the rare disease that he is suffering from, the Delhi High Court concluded that, “every person has a fundamental right to quality health care that is affordable, accessible and compassionate.”

Currently, the treatment for rare diseases costs the patients an arm and a leg, ranging between Rs. 40 lakhs (US$ 62,000 approx.) to Rs 1.70 crores (US$ 267,000 approx.), which is way beyond the reach of most Indians.

Subsequently, on May 26, 2017, the Ministry of Health and Family Welfare filed an affidavit before the honorable Court, submitting a copy of the National Policy for Rare Diseases 2017, stating that it will aim to facilitate effective diagnosis and affordable treatment. This development is indeed good news, especially considering around 6 to 8 percent of the world population suffer from ‘rare diseases’, and India is no exception.

The key highlights of the new policy:

As per available information, following are the 10 major highlights of the National Policy for Rare Diseases 2017:

  • The Union Government to create a corpus with an initial funding of Rs 100 crores (US$ 16 million). The State Governments would also provide for a similar fund with a 60 percent contribution from the Centre. This corpus is primarily for the treatment of genetic disorders, excluding rare blood diseases, such as, thalassemia and sickle-cell anemia.
  • For the sustainability of the corpus, Public Sector Units and Corporates will be encouraged for the contribution in these earmarked funds, as part of their corporate social responsibility.
  • Appropriate institutions will be accredited by the government for diagnosis and treatment of rare diseases.
  • To ensure adequate availability and reasonable affordability of the drugs for rare diseases, the Drug Controller General of India (DCGI) will consider amending the Drug and Cosmetics Act with requisite provisions to make clinical trials and import of ERTs possible.
  • The Department of Financial Services to ensure coverage of rare diseases under insurance schemes.
  • Employees State Insurance Corporation (ESIC) will explore whether the ceiling limit of funding the treatments for rare diseases can be increased through suitable amendments.
  • The policy recognizes that rare diseases are, in most cases, serious, chronic, debilitating and life-threatening, often requiring long – specialized treatments, and may also lead to some form of handicap, at times extremely severe in nature.
  • About 50 percent of new cases of rare diseases are in children and responsible for 35 percent of deaths before the age of one, 10 percent between the ages of one, and five years and 12 percent between five and 15 years.
  • As a preventive measure, the policy may consider the feasibility of providing pre-conception and ante-natal genetic counselling and screening programs for diagnosing genetic disorders, which would provide a choice to parents about giving birth to children with genetic disorders, especially for families that have a diagnosed genetic disorder, or a high risk profile for it.
  • The policy gives Indian Council for Medical Research (ICMR) the responsibility of creating a patient registry, as India has no epidemiological data on rare diseases.

Rare diseases – definition:

There is no universal definition of rare diseases. For example, while the US defines a rare disease as one that affects less than 200,000 people nationwide, in China, this number changes to 1 in 500,000 people (or neonatal morbidity of less than 1 in 10,000). India doesn’t yet have a clear definition for the same – not even in its new policy for rare diseases.

However, according to Rare Diseases India (RDI) – a foundation for research on rare diseases and disorders, any disease having fewer than 100 patients per 100,000 population fall into this category. Whereas, those ones affecting 2 patients per 100,000 population are described as ultra-rare diseases.

Rare Diseases in India:

The Organization for Rare Diseases in India (ORD), states that 1 in 20 Indians is affected by such diseases. About 6000 to 8000 rare diseases, mostly genetic in nature, have been identified in India. It was initially estimated that over 31 million Indians are suffering from such disorders in the country, many of which still do not have any cure. Moreover, epidemiological data for most of these ailments is hardly available.

To increase awareness for rare diseases, Rare Diseases Day was observed for the first time in India (New Delhi) on February 28, 2010.

Orphan diseases and orphan drugs:

According to RDI, rare diseases are often referred to as ‘orphan’ diseases. Consequently, the drugs that are specifically developed to treat ‘orphan’ or ‘rare disease conditions’ are called ‘orphan drugs’. The reason being, pharma companies do not generally take such drugs through further stages of development for market launch, or in other words, these are orphaned for economic considerations, though are important to save many precious lives.

Need to encourage orphan drug development in India:

According to SanOrphan SA, Geneva, Switzerland, around 65 percent of rare diseases is serious and disabling. Interestingly, about 250 new rare diseases are discovered each year, corresponding to five new rare diseases per week. As the scenario is no different in India, it prompts the need to encourage development of effective and affordable orphan drugs in the country.

However, without appropriate ecosystem being in place, developing an orphan drug in India, specifically to treat a very small number of such patient populations, through a cost intensive R&D initiative with a low potential of return on investments, is indeed a challenging proposition for many pharma players. Although, in the western world, this trend has started changing now, driven by various other commercial reasons.

Why should ‘Orphan Drugs Act’ follow the National Policy on rare diseases?

National Policy for Rare Diseases is undoubtedly a good beginning, though was brought under the directive of Delhi High Court. Nevertheless, to encourage ‘Orphan Drugs’ development within the country, a robust ‘Orphan Drugs Act’ should now logically follow.

One may well ask, why is this Act is so necessary in India? This is because, the new ‘National Policy for Rare Diseases’ charts just the pathway of a course of action that the Government is planning to take in this area. Policies, as we know, though, are a set of well-articulated intents, do not guarantee that these will be successfully followed to achieve the pre-set long-term goals. Whereas, all legislative Acts or duly enacted laws, are legally enforceable. It is worth noting, while the national policies can be formulated by the government, an Act must be passed by the lawmakers in the Parliament.

Consequently, it is now a well-accepted fact that ‘Orphan Drugs Act’ encourages development of drugs for rare diseases. In an article titled, “What the Orphan Drug Act has done lately for children with rare diseases: a 10-year analysis”, published by the National Center for Biotechnology Information (NCBI), U.S, National Library of Medicine, the authors highlighted that in the U.S. 1138 orphan drugs were designated and 148 received marketing approval, of which 38 (26 percent) were for pediatric diseases, from 2000 to 2009. The percentage of approvals for pediatric products increased from 17.5 (10 of 57) in the first half of the decade, as compared to 30.8 (28 of 91) in the second half. Based on these data, the paper concluded that the incentives provided in the ‘Orphan Drugs Act (ODA)’ of the United States of America, have led to increased availability of specific drugs for the treatment of ‘Rare Diseases’ in the country.

Other countries did – why not India?

1983 signaled the importance of ‘Orphan Drugs’ with the ‘Orphan Drugs Act (ODA) in the U.S.A. A decade after, in 1993, Japan took similar initiative followed by Australia in 1999. Currently, Singapore, South Korea, Canada and New Zealand are also having their country specific ODAs.

Following similar footsteps, India should also encourage its domestic pharmaceutical industry to get engaged in research to discover drugs for rare diseases by putting an ‘Orphan Drugs Act’ in place, extending financial support, tax exemptions and regulatory concessions like smaller and shorter clinical trials, among several other areas, without delay.

Opportunities galore:

The above constraints in the development of orphan drugs have now been turned into an opportunity galore by the global pharma industry, where the domestic players should not lag much behind. Orphan drugs, backed by adequate financial incentives provided by laws in different countries, are now seen as a research and development priority to significantly boost the top and the bottom-line of pharma business.

As IgeaHub has highlighted, orphan drugs, though, cater to a small patient pool, the remunerative price of these drugs offsets the commercial challenges, as mentioned earlier. For example, in 2010, Soliris, which treats paroxysmal nocturnal hemoglobinuria (PNH) that affects 1 out of 500,000, was considered as the industry’s most expensive drug amounting to US$ 409,000 per year of treatment, which generated a total of US$ 541 million revenue for Alexion Pharmaceuticals in that year. In 2012, Soliris recorded a sales turnover of US$ 1.13 billion, which is expected to cross the mark of US$ 3.40 billion in 2018. Further, in 2012, the top selling orphan drug in the USA – Rituxan of Roche – used for the treatment of chronic lymphocytic leukemia, generated US$ 7.15 billion in total sales. Post patent expiry, in 2018, the same drug is expected to yield a revenue of US$ 6.99 billion.

The market:

Evaluate Pharma’s Orphan Drug Report 2017 estimates the worldwide Orphan Drug Sales of total US$ 209 billion, with CAGR of +11 percent for 2017 to 2022 period, which is double of the overall prescription Market Growth. Excluding generics orphan drugs are set to contribute 21.4 percent of Worldwide Prescription Sales by 2022.

Big pharma dominates this segment. Seven of the top 10 companies’ orphan drug sales are from global industry players, who have won approval for their biggest products in various niche indications.

Other commercial benefits:

Thomson Reuters reported additional commercial opportunities with an appropriate ODA, which in the United States are as follows:

  • 15 percent of the ‘Orphan Drugs’ analyzed by them had subsequent launches for other rare illnesses.
  • 6 out of the top 10 ‘Orphan Drugs’ had more than one rare disease indication, with an average peak sales of US$ 34.3 billion in overall sales potential, against around US$ 8.1 billion of the same for drugs with single indication.
  • Time taken for Clinical Trials (CT) focused on orphan drugs is significantly shorter with much quicker review time than trials involving non-orphan drugs.

Conclusion:

Some of the ‘orphan diseases’ are now being diagnosed also in India, and with precision. As the nation takes rapid strides in the medical science, more of such rare diseases are likely to be diagnosed in our country. The global pharma industry has already started taking rapid strides in this area, supported by ODA in various countries. Similar opportunities, both for the patients, as well as, for the industry, need to be made available in India too.

One of the ways to encourage the orphan drug development in India is to follow the model of the Council of Scientific and Industrial Research (CSIR) for ‘Open Source Drug Discovery’ (OSDD)’ with both global and local partnerships and collaboration.

However, speedy enactment of an appropriate ODA for the country, providing adequate financial incentives to the pharma players, for developing and marketing such drugs, both in the local and global markets, at a reasonably affordable price, would go a long way, and be a win-win situation for all.

Alongside, leveraging the knowledge of OSDD acquired by the CSIR, and framing a robust win-win Public Private Partnership (PPP) model to discover and commercialize the orphan drugs, India could well demonstrate the zeal of the country to move beyond the National Policy for Rare Diseases. In that process, it would be able to offer more meaningful and sustainable benefits, both to the domestic pharma industry and the patients, alike, for a long time to come.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.