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Impact of The Cost of Pharma Marketing Failure On Patients

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‘About half of all products launched over the past 15 years have underperformed pre-launch consensus forecasts by more than 20%.’ It’s one of the findings of a recent study by L.E.K. Consulting, going back to 2004. This number is besides the cost of failure while discovering a successful New Molecular Entity.

Adding this to the cost of the product innovation and development, clinical trials and other regulatory expenses, the wasteful expenditure becomes mind boggling – for any unsatisfactory launch performance. In such a situation, the probability of creating newer blockbuster therapies is not getting any easier.

As is believed by many – and vindicated by several studies, new drug marketing cost is more than its R&D cost. Which is why, ensuring success of a new drug launch is critical to fund new drug innovation – on an ongoing basis. Consequently, leadership focus on high ‘launch success’ rate is so important – as the good old saying goes – ‘well begun half done.’

In addition, prudent optimization of the success rate of new products may also help the company avoid irresponsible pricing, while improving the profit margin. In this article, I shall deliberate on the impact of the cost of marketing failure on patients, in general. Alongside, the avoidable ‘soft ground’ that marketers may wish to avoid while delivering unmet value to patients.

Big Pharma’s Sales and Marketing spend is more than R&D:

According to another recent study of October 27, 2021, ‘in most cases, more of the dollars spent by drug manufacturers go toward selling and marketing costs than toward research and development (R&D) for new treatments, cures, or expanded indications and uses of existing drugs.’ For example, as the paper highlights:

  • AbbVie, which manufactures branded drugs like Humira, spent $11 billion in sales and marketing in 2020, compared with $8 billion on R&D.
  • Bayer, which manufactures branded drugs like Xarelto (codeveloped with Johnson & Johnson) and Eylea, spent $18 billion in sales and marketing, compared to $8 billion on R&D.
  • Johnson & Johnson, which manufactures branded drugs like Xarelto (codeveloped with Bayer) and Stelara, spent $22 billion on sales and marketing, compared to $12 billion on research and development.

Therefore, just as R&D expenses have to be made more productive, so are the sales & marketing expenses, where the expenditure towards new product launches is a critical component.

Why a successful new product launch is important:

An analysis by Deloitte in this area, published on March 26, 2020, found that most new drugs continue with the revenue trajectory set at launch. It said, about 70 percent of products that miss expectations at launch continue doing so in subsequent years, and around 80 percent of products that meet or beat expectations continue to do so afterward. Thus, launch success of a new product is very important, both for the organizations and the patients.

A successful new product launch helps both the company and patients:

Correctly assessing and leveraging full commercial potential of a new product through its effective launch helps both the patients and the company. This subject was discussed in a recent article, published in the Fierce Pharma on October 25, 2021, in the context of many drug launch disasters. The areas of benefits, I reckon, include the following:

  • Patients’ unmet needs are met at a reasonable price
  • Manufacturer can recoup its research and development costs.
  • Fund future drug discoveries.
  • Satisfy investors with handsome returns.
  • Creating a sound brand performance base – as a strong launch is arguably the most critical step in a new drug’s lifecycle.

New product launch failure is across the disease areas – from Big Pharma to Startups:

As the above December 18, 2020, study by L.E.K. Consulting points out that new products’ launch failure is taking place across the disease areas. These include,  Oncology, immunology, infectious disease, ophthalmology, blood disorders, brain diseases, and cardiovascular and metabolic disease. Similarly, the companies responsible for such failure span across global pharma majors to biotech startups.

Why many companies are failing in this process:

To help ascertain the depth of this issue, let me start with the key objective of a new product launch, which is effectively delivering the holistic value of the brand which consumers would appreciate. Several papers also acknowledge, to succeed in this area, pharma players need to prepare their data-based launch plan with cerebral power and ensure that the strategy is working and is being executed flawlessly.

A large number of studies find, ‘many companies fail in this process, due to a combination of factors.’ Some of these are uncontrollable, but many of which are very much within a marketer’s control.

Examples of uncontrollable and controllable variables:

Uncontrollable factors include post marketing approval drug safety issues. Reports indicate, ‘One-Third Of New Drugs Had Safety Problems After FDA Approval.’ This is being reported even in recent times, like, ‘new safety signals that cropped up after the approvals of Novartis’ eye drug Beovu  and Sanofi’s dengue vaccine Dengvaxia.’

Whereas, controllable factors include, poor product differentiation and other management missteps, besides ‘limited market access, poor understanding of market needs or misjudgment of competitive threats.’ For example, poor product differentiation and other management missteps were, reportedly, ‘the cause of trouble for Clovis Oncology’s Rubraca in the PARP inhibitor space, and Merck & Co. and Pfizer’s Steglatro in the SGLT2 field.

Key success ingredients to focus on:

Since long, various research, including one by Bain & Co dated October 2017, has highlighted that over 50% of new product launches are underperforming. This situation can’t, in any way, be accepted as a ‘thumb rule’ by pharma marketers, any longer.  Mainly because: ‘When a drug misses its launch projections, there’s a high likelihood that it will never recover that revenue,’ as their study findings underscore. From this perspective, listed below are some of the basic areas to focus on for greater launch success, as I have experienced:

  • Early launch planning – well before the regulatory approval for new products.
  • Data-based and well-tested target-audience identification, the target markets’ selection and key opinion leaders need to be selected for greater focus in effective stakeholder engagement.
  • Creating differentiated value-propositions that addresses targeted patients’ unmet needs, and, in tandem, offers scope for commensurate premium pricing, are vital.
  • Product pricing should be based on quality of value delivery to patients that they can perceive and would acknowledge. Misvaluing a brand, and just focusing on those who can pay, may attract negative publicity, creating a key barrier to success.
  • Current competition, their ongoing counter strategy, new market competitors and other launch challenges need to be carefully mapped, for strategic fine tuning or course correction, in time, wherever and whenever needed.
  • Execution of the launch plan must be accomplished with military precision, as it were.

Conclusion:

As the above Bain & Co paper articulated, ‘The most consistently undervalued factor contributing to a successful launch is the way leadership teams organize and the manage the launch process.’

It’s again not too difficult to understand that the net accountability of the cost of marketing failure, which is a major contributing factor to stifle the R&D funding, in many cases, squarely falls on pharma leadership.

Instead of taking corrective action in this critical area, most of them choose the easy path – increase new product pricing to achieve targeted revenue from a smaller unit sale of the brand. The net impact of which is on patients due to access barrier caused by high prices.

Such products, without clearly differentiated value propositions that patients would recognize, would further increase sales and marketing costs, and could even result in marketing malpractices. Under this backdrop, serious and thoughtful attempt in making all new product launches successful money spinners, as respective brands will merit, may help the pharma leadership to create a win-win situation for both the company and patients.

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.

 

Setting A Cost Of Time That Patients May Gain From A New Therapy

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Since quite some, an intense ongoing debate about setting a cost of time, often by a few months, that patients could possibly gain from a new therapy for complex diseases. The answer still remains elusive.  Meanwhile, newer therapies for treating cancer, such as, Kymriah, priced at US$ 475,000, alongside several rare diseases, hit the market with jaw-dropping prices. The latest being - Zolgensma of Novartis, carrying a price tag of US$ 2.12 million – the most expensive treatment ever. This trend assumes greater significance as Bio – claimed as the world’s largest trade association representing biotechnology companies, and related organizations, across the United States and in more than 30 other nations, also makes some interesting points in this area.

This article will dwell on the relevance of this important issue, both in today’s and also in the future perspective. It will try to explore, why pharma and biotech companies are not keen to use a ‘transparent multi-factorial life-value calculator’, especially for prolonging life or curing an incurable disease, with a high-priced novel therapy.

Emotional ads to justify the trend, against tough practical questions: 

A part of a sleek looking advertisement from Bio, depicting the power of new therapies to prolong life, carries a headline – ‘Time. The Currency of Life,” followed by three emotive lines and two equally emotive questions: “Another decade with a spouse. A few more years with your best friend. A rich, fuller life rather than one cut short. How do we place value on these?” It then asks: “What is more precious? What is more priceless?”

Turning this emotive question on its head to a rational one, an article published in the Stat News on February 25, 2016 questioned: “How much is an extra month of life worth?” It asked the drug makers to calculate the same. The same article also quoted a Yale University economist and practicing radiologist asking: “It’s all well and good to just say life is priceless, but the reality is we are paying for it.”

Emotive ads try to justify funding towards innovation for such drugs:

The same advertisement, as above, while trying to indirectly justify such exorbitant drug costs, used yet another emotive note in its playbook. It emphasized: “By continuing to fund the innovation pipeline that has served us so well, we will be able to reduce the costs associated with modern-day health care.”

Such claims are being scientifically challenged – head on, by many important studies. To illustrate this point, I shall quote the following two, both were published in the JAMA Network. The first one in the JAMA Otolaryngology-Head & Neck Surgery and the next one in JAMA Oncology.

The first article is the ‘John Conley Lecture’, carrying a title, ‘Unintended Consequences of Expensive Cancer Therapeutics—The Pursuit of Marginal Indications and a Me-Too Mentality That Stifles Innovation and Creativity,’ appeared on December 2014. On innovative drugs of such genre, the paper concluded: “The use of expensive therapies with marginal benefits for their approved indications and for unproven indications is contributing to the rising cost of cancer care. We believe that expensive therapies are stifling progress, by:

  • Encouraging enormous expenditures of time, money, and resources on marginal therapeutic indications and
  • Promoting a me-too mentality that is stifling innovation and creativity.

The second article is an ‘original investigation, titled ‘Assessment of Overall Survival, Quality of Life, and Safety Benefits Associated with New Cancer Medicines.’ It also underscored: ‘Although innovation in the oncology drug market has contributed to improvements in therapy, the magnitude and dimension of clinical benefits vary widely, and there may be reasons to doubt that claims of efficacy reflect real-world effectiveness exactly.’

Here again, the emotional appeal is being made by creating a ‘perfect World’ scenario. Whereas, scientific analysis of the innovative and high-priced drugs, reveals the reality for other stakeholders to take note of. Different pharma trade associations, although being a part of the same orchestrated effort, try differently to take the eyes off the humongous prices of new life-saving drugs. But many continue to believe that new cancer drug prices have long gone beyond control.

90 percent Biopharma companies do not earn a profit – A bizarre claim?

As is well-known, besides justifying high drug prices by highlighting ‘high R&D cost,’ drug manufacturers often say, as the Bio ad campaign makes an eyebrow raising claim – “Of the approximately 1,200 Biopharma companies in the United States, more than 90 percent do not earn a profit.”

Citing the example of the US market where drug prices are very high, it justifies, the general focus on list prices of the drugs is misplaced. This is because, the ‘manufacturers provide billions of dollars in rebates and discounts on their innovative therapies annually, to federal, state and private payors, in addition to offering direct assistance through patient assistance programs.’ It further added, these discounts vary but can result into a significant total of as much as 50 percent or greater depending on the program.

Experts have challenged even this claim that the list prices do matter, even in the US, for many, including uninsured population and those with co-payment arrangement, which are not based on the discounted prices. Leaving aside America, what happens in those countries, such as India, where out-of-pocket expenses on health care are considered the highest in the world?

With new cancer drug prices going beyond control, the price of postponing death is growing:

That the new cancer drug prices have long gone beyond control, isn’t a new realization. A research paper, published in the Journal of Clinical Oncology on May 06, 2013, also noted emphatically: ‘Allowing the producer-dominated market to set drug prices has spiraled the cost of cancer drugs out of control.’  So did another 2015 study, published in the Journal of Economic Perspective.

According to various studies, such as the one published in the JAMA Otolaryngology-Head & Neck Surgery, as quoted above, also found after studying over 70 of such new drugs that the median improvement in survival was around 2.1months. Some other reports indicated this number to be around 3.5 months on an average.

Interestingly, the 2015 study, published in the Journal of Economic Perspective found that ‘the price of postponing death is growing. In 2013, one extra year of life for cancer patients costs US$ 207,000, on average, nearly quadruple what it did in 1995.

Is it quality of life over the quantity of life, or vice versa?

The above findings may lead one to the critical question – what type of treatment choice would create the most desirable net impact on individual cancer patients? This evaluation should include all the three parameters – the extent of prolongation of the ‘Length of Life (LoL)’, the ‘Quality of Life (QoL)’ the patients experience during this period – and the additional drug cost that needs to be incurred.

It should ideally be up to patients whether they will choose quality over quantity of life or vice versa. To facilitate this process, an informed briefing by the doctor on the most likely scenario, vis-à-vis other available treatment alternatives, is expected to help individual cancer patient exercise the best affordable individual option.

This point was scientifically addressed in a research article - ‘Quality of life versus length of life considerations in cancer patients: A systematic literature review,’ published in the Journal of Psycho-Oncology on May 15, 2019. The study noted, ‘Patients with cancer face difficult decisions regarding treatment and also the possibility of trading the Quality of Life (QoL) for Length of Life (LoL).’ Little information is available on patients’ preferences in this regard, including ‘the personal costs they are prepared to exchange to extend their life.’

Another related question that also remains equally elusive, is the relationship between the cost of a medication and the amount of quality-time that it offers to patients. Quantifiable assessment of such nature could bring more transparency in drug pricing, especially for those that help treat life-threatening ailments, such as cancer.

Similar questions are raised on pricey therapy for rare diseases:

The cost of drugs for rare diseases is threatening the health care system – articulated an article, published in the Harvard Business Review (HBR) on April 07, 2017. The paper stated, in December 2016, US-FDA announced the market approval of nusinersen (sold as “Spinraza”), an effective Spinal Muscular Atrophy (SMA) treatment licensed to Biogen by Ionis Pharmaceuticals. SMA is considered the most common genetic cause of infant mortality.

As the author penned, “Patients and providers greeted the approval with near ecstasy, but the celebration was bittersweet. Five days after the FDA approved, the drug, Biogen announced each dose would cost US$ 125,000. Given that patients need six doses in the first year and three per year after that, it means the drug costs US$ 750,000 per patient in the first year and US$ 375,000 annually thereafter.”

A desperate father’s reaction for the price – and the economics behind it:

The HBR article captured the reaction of the father of an infant on this price, who is desperate to save the baby – in the following words – “Then there’s Will’s heartbreaking reaction, which I’m sure echoes the sentiments of many touched by SMA. – “The Biogen announcement of the cost of nusinersen floored me in every way possible,” he says. “Words cannot describe the sickening feeling I get when I think about it.” If this could be a father’s reaction in America, one can well imagine what happens in a similar situation to people in the developing world.

At that time, Zolgensma of Novartis, wearing a price tag of US$ 2.12 million for treatment of the same disease, was also shaping up for market launch. On this drug, the author of this HBR article who also happened to be a professor, vice chair of research, and chief of the Division of Neuromuscular Medicine at the University of Utah School of Medicine, wrote: “A very promising gene therapy for SMA is on the horizon, which would require only one dose and potentially render nusinersen obsolete. Did such mercenary economics influence Biogen’s pricing decision? We may never know; drug companies are not required to justify their prices.” On the contrary, as many believe, the concerned global CEOs, reportedly, get a hefty financial reward, for the same.

Conclusion:

It is not difficult to understand either, that some drugs, especially for rare diseases, will be used for treating a smaller number of patients. Hence, the optimal economies of scale in manufacturing can’t be attained. At the same time, the cost of R&D of the therapy needs to be recouped along with a reasonable profit, for investment towards future drugs. This is in addition to market exclusivity the drug will enjoy through patent thicket.

Nevertheless, despite the existence of several methods of a human life value calculation, such as in the insurance industry the use of a transparent and drug industry specific, multi-factorial live-value calculator is still not in vogue. As the drug industry often highlights, the ‘value of human life is priceless’ – regardless of the costs of drugs. In this situation, many industry experts, academics and patient groups advocate that the ongoing uncontrolled pricing mechanism for such medicines should be brought under a leash. This could come in the form of a tough price negotiation’ before the drug marketing approval, as was promised by the Government, or putting in place a stringent price regulatory system.

Be that as it may, the bottom line is to understand and find an answer to: ‘Why Does Medicine Cost So Much?’ This issue was analyzed by the Time Magazine in its April 09, 2019 edition. Quoting Dr. Aaron Kesselheim, an associate professor of medicine at Harvard Medical School, it emphasized: It all starts with the manufacturers. There are essentially no regulations governing how new drugs are priced – drug companies select a price what they “believe the market will bear.” Blockbuster first-in-class treatments, therefore, command a stratospheric price, like what happened with Gilead’s hepatitis medication – Sovaldi, way back in 2013. It was priced at US$ 1,000 a pill, or US $84,000 for the full course of treatment. From this perspective, although, setting a cost of time that patients may gain from a new therapy has a moral and ethical relevance – but actually, it doesn’t seem to be business-friendly in the drug industry.

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.

Patient Services Aren’t Optional Any More For Pharma Business Excellence

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In the modern world of abundance of information through various sources and platforms, patients are increasingly looking for greater engagement in their healthcare decision-making process with the doctors, slowly but steadily, and in that process seeking better services from different service providers in this area, including the pharmaceutical companies.

This trend has now been well-captured, globally. Various research studies have conclusively established that greater patient’s engagement in health care contributes to improved health outcomes. The obvious question that surfaces in this context is what is this patient engagement?

Patient engagement:

It broadly means a process that realizes the importance of providing adequate knowledge, skills and related services to people effectively, making them understand various disease management and alternative treatment measures, and thereby facilitating them to be an integral part of their health care related interventions, for better health outcomes.

When patients, physicians, other related constituents, including the pharma companies share both the process and goal of disease management or treatment processes, a win-win situation evolves to everybody’s full satisfaction. This has immense commercial relevance too.

Deserves to be a part of the grand design:

In that sense, pharmaceutical companies, especially those operating in India, would need to roll up sleeves and pull up socks to play a greater role in delivering a better experience for patients through effective engagement and offering relevant high quality services. This exercise now deserves to be an integral part of a grand design and planning of any sales and marketing strategy. A recent survey by Accenture Consulting also concluded that patient services from pharma companies are most important to patients.

Key patient service providers:

Besides several others, especially the following two important constituents can play defining roles as patient service providers by directly engaging with patients, to achieve this objective:

  • Patient advocacy groups or organizations (PAO): These entities provide a special attention to patient care and protection of their rights, and engage them accordingly. Patient advocates of these groups are a liaison between patients and various healthcare providers to improve or maintain a high quality of health care for the former. Some global drug players also recognize that these groups possess a highly influential voice in the healthcare system.
  • Pharmaceutical, biotech or device companies: Some of these companies, mostly in the developed world have established strategic patient advocacy functions within their corporate structure to foster relationships with patients, their caregivers, and the disease-specific nonprofit advocacy groups usually support them. These interactions should ideally ensure that the voice of patients is understood across every function within the company, from R&D to commercialization, as articulated in a recent Whitepaper of BioNJ on this subject.

There is a need to strengthen this approach within the Indian pharma industry, as well, for the benefit of local patients, of course, by scrupulously avoiding any possible serious controversy, which I shall discuss below.

A recent study:

A 2016 report by Accenture concludes that patient services are no longer optional for pharma companies, as they are gradually becoming a cutting edge competitive driver. In a situation like this, the question isn’t whether they should really gear up to offer such services, the immediate need, instead, is to put their ears on the ground to carefully decide which ones would be most appropriate for the individual players, and how best to offer them.

For this study, Accenture surveyed more than 200 patient services executives, covering seven therapeutic areas: heart, lungs, brain, immune systems, bones, hormone/metabolism and cancer. The respondents agreed that much work and greater resources need to be invested in this area to gain a competitive edge in business.

This is further evident from the trend that around 84 percent of pharma companies in the United States plans to invest more in patient-centric services, such as adherence, remote monitoring and medication delivery – over the next 18 months, as the report highlights.

For marketing patient services alone to facilitate direct communications to patients, the digital platforms are most preferred with social media and web page usages being 51 percent and 49 percent, respectively.

A serious concern:

Providing various health related services useful to patients, by the PAOs or by pharma, biotech or device companies separately, without any form of financial relationship or influence of any kind to one another, would probably earn a great appreciation from all stakeholders.

Nevertheless, serious concerns are often expressed on the core intent of various pharma company’s generous funding to various patient advocacy organizations, including the eminent ones involved with patients suffering from cancer, HIV, Alzheimer’s, and other diseases. Several of them don’t even report such contributions, besides providing justifiable explanations on the objectives and actual use of such financial contributions.

If one wants to draw a simile, this is what exactly allegedly happening today, because of such type relationship, between pharma, biotech or device companies on the one hand, and doctors, many other health care providers, including retail chemists, on the other. In the Indian context, as well, it holds good. A paper from ‘CUTS International’, aptly drives home this point. Another September 17, 2016 article published in ‘The New York Times’, reiterates the same.

What’s wrong in funding PAOs?

Some may argue, what’s wrong with pharma industry’s funding the PAOs. On the face of it, there may not appear to be anything wrong either. However, scholarly articles still express serious concern on such practices, mainly for conflicts of interest. For example, a September 2013 article titled, “Patient Advocacy Organizations: Institutional Conflicts of Interest, Trust, and Trustworthiness”, published in The Journal of Law Medicine & Ethics unambiguously states as follows:

“Numerous studies have found that even established and respected researchers and physicians are influenced by drug company money and gifts, which can bias study conclusions and encourage increased prescribing of potentially harmful medications. There is no reason to believe that PAOs are any less susceptible to such influence. In fact, there is little oversight of relations between PAOs and their for-profit donors, which in itself increases the potential for undue influence. Similar concerns regarding the lack of oversight have been raised regarding the physician professional groups that develop clinical care guidelines.”

Why is it a potential conflict of interest?

Many construe such financial relationships as potential conflicts of interest, because pharma players appear to be more interested in earning maximum possible profit through high drug pricing, while PAOs advocate for highly efficacious, safer and more affordable medicines for all, besides some other interests and rights of patients. Moreover, some large constituents of patient advocacy groups aren’t even seen lending their voices to the concerted protests of other stakeholders, including the political leaders – irrespective of their affiliations, against the sharp increase in prices of many life-saving drugs, covering both patented and generic medicines.

Several studies on this concern: 

A March 02, 2017 report titled, “Conflicts of Interest for Patient-Advocacy Organizations”,

published in ‘The New England Journal of Medicine (NEJM)’, probably vindicates this point. This is mainly because, if pharma funding gets reciprocated through their remaining quiet, passive or even indirectly supporting any possible bias in the physicians prescribing decisions for high cost drugs – having other cheaper alternatives, that may not be in the best health and economic interest of many patients.

After examining and analyzing 104 large patient-advocacy organizations with an annual revenue of minimum USD 7.5 million, the researchers of the above study found that 83 percent of PAOs receive significant financial support from drug, device and biotechnology companies; and more interestingly, industry executives often serve on these groups’ governing boards.

Another article on this report commented though, that this study may have some limitations as the most organizations examined in this study did not provide exact figures for their reported donations, besides only 10 percent of patient-advocacy organizations revealed how they used the industry donations.

This NEJM study is not just one of its kind, another January 2017 report published in JAMA Internal Medicine, also concluded that there is a need to improve this conflict of interest issue of the patient advocacy groups or PAOs on their conflict of interest policies to help maintain public trust.

In conclusion:

Keeping aside altogether the contentious issue of funding PACs by the pharma, biotech or device companies, I would submit that it’s about time that the pharma industry in India realizes that patients have started perceiving themselves as consumers of health care. This perception is increasing by a manifold with improving access to not just the Internet, but consequent word of mouth sharing of such information with even those who do not have digital or health literacy.

The quest of many patients to ride the crest of this wave by gaining relevant information, especially through numerous digital platforms, besides word of mouth, is increasing. A lot more would eventually seek a wide range of relevant information on various disease treatment options and their effective management processes. Facilitated by this knowledge, many patients would opt only for those ones offering the best value within their respective economic means. Some enlightened individuals have already started expressing their preference to take part in the treatment and prescribing decision making process with the doctors. This visibly ascending trend is unstoppable now, as patients increasingly perceive themselves as consumers of health care.

Consequently, the pharma, biotech or device players in India would require to deeply understand the patients’ needs on the ground, not what they think those are, and treat patients as the key partner for business excellence – at least, as much as what they consider for other stakeholders, such as doctors and hospitals, if not even much more than that. Some companies are trying to make it happen through doctors, which don’t seem to be working as much as these should, according to another Accenture study.

Currently, several global pharma, biotech or device players claim that they follow ‘patient-centered’ approaches, and try to drive home this point through advocacy campaigns. However, many stakeholders don’t buy it any more. This is because such an approach must always lead to a win-win outcome. It, therefore, requires passing the acid test of conformance to the very definition of a ‘patient-centered’ approach, which requires establishing a partnership to ensure that all related decisions would respect patients’ wants, needs and preferences and solicit patients’ input on the education and support they need to make decisions.’

Thus, respective players in this arena need to shift gears fast, as the ball game is fast changing with its traditional version unlikely to yield the desired business results any longer. The name of the new version of this game is ‘direct engagement with patients’ to impart high quality of meaningful services in the therapy areas that the respective companies are in, by charting clear, innovative and well integrated strategies, and not just through single minded focus on sales and marketing. It’s important for all of us to realize that providing patient services aren’t optional any more for pharma business excellence.

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.

‘The Memory Thief’ Still Eludes Grasp Of Pharma R&D

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Over several decades, in fact, since its very inception, pharma R&D has been playing a crucial role in alleviating diseases of various types – from severe acute infections, to a large variety of non-infectious chronic illnesses, including many dreaded diseases, such as, cancer.

In the battle against diseases, pharma research and development initiatives, both by a large number of academia and also the pharma players, have mostly won, decisively. R&D has been consistently coming out with flying colors, both in finding cures and also in effective disease management, to prolong and improve the quality of life of billions of people, the world over.

However, there is still an important disease area, where pharma R&D has not been successful yet. Without any prior warning, this disease stealthily affects the human brain and completely erases the entire lifetime memory of the person, gradually but surely, over a relatively short period of time. This disease is known as Alzheimer’s, following the name of Dr.  Dr. Alois Alzheimer, who first detected it in 1906. Due to its devastating impact on human memory, some, very appropriately, term the Alzheimer’s disease – ‘The memory thief’.

I discussed this subject in one of my previous articles titled, “It Took 90 Years To Accept The Dreaded Disease Discovered In A Mental Asylum”, published in this Blog on December 01, 2014.

A recent alarm for a future epidemic:

A January 6, 2016 paper titled, “Sounding the alarm on a future epidemic: Alzheimer’s disease”, published by the well reputed public research university in the United States, ‘The University of California, Los Angeles (UCLA), made the following noteworthy observation:

“If the aging trend illustrates the success of public health strategies, it also raises the specter of a major public health crisis – a sharp rise in the number of people living with Alzheimer’s disease.”

Causing havoc in many lives and families:

‘Alzheimer’s Disease Education and Referral (ADEAR) Center’ of the United States, currently ranked Alzheimer’s disease as the sixth leading cause of death in the United States, but recent estimates indicate that the disorder may rank third, just behind heart disease and cancer, as a cause of death for older people.

According to Mayo Clinic, the frightful disease – Alzheimer’s, is progressive in nature. At the onset, the afflicted persons may exhibit just mild confusion and some difficulty in remembering.

Tragically, in around five years or a little after, Alzheimer’s would erase the entire lifetime memory of most of the affected persons, when they may even forget the important people in their lives and undergo dramatic personality changes.

The dreaded disease – Alzheimer’s, still without any effective medication in place, has been causing havocs in many lives and families since long, involving many great international personalities too. It is one of those ailments, where the disease process mostly commences almost a decade before the visible appearance of above clinical symptoms.

Worldwide Projections of Alzheimer’s Disease Prevalence:  

The above UCLA report highlights the worldwide projections of Alzheimer’s disease prevalence from 2005 to 2050, which includes both the early and late stage patients.

According to this report, the number of people afflicted by this total memory-erasing disease, would grow from 35.26 million in 2015 to as high as 106.23 million populations in 2050, as follows:

Year Alzheimer’s disease prevalence (in Millions)
2005 25.73
2010 30.12
2015 35.26
2020 41.27
2025 56.55
2040 77.49
2050 106.23 
Similar situation in India: 

The situation in India seems to be no different, though we are living today in the midst of the hype of ‘Demographic Dividend’.

According to the March 2012 report of ‘The Population Reference Bureau’ of Washington DC of the United States, India’s population with ages 60 and older, who are more prone to Alzheimer’s disease, is projected to increase dramatically over the next four decades, from 8 percent in 2010 to 19 percent in 2050. By mid-century, this age group is expected to encompass 323 million people, a number greater than the total US population in 2012.

Currently available treatment:

At present, there are no treatments available that can stop or slow down the progression of Alzheimer’s disease in the brain of the affected persons.

As I wrote earlier, very often the onset of this disease starts decades before the visible manifestation of even preliminary symptoms. Thus, there is a critical need for early medical interventions to arrest the disease progression.

Again, quoting Mayo Clinic, current Alzheimer’s disease medications and management strategies may at best temporarily improve symptoms. These symptomatic treatments can sometimes, help Alzheimer’s patients maximize cognitive and other related functions to the extent possible, and thereby maintain independence for a little while longer.

Primary reasons:

Many earlier research had postulated that plaques and tangles are primarily responsible for the permanent damage and destruction of nerve cells.

While the plaques are abnormal clusters of beta-amyloid protein fragments between nerve cells, tangles are twisted fibers made primarily of a protein called “tau” that accumulates in the brain cells, damaging and killing them.

The appearance of these two in the brain structure makes the affected persons suffer from almost irreversible memory loss, altered thinking pattern and associated behavioral changes, which are usually serious in nature.

However, I shall discuss below about a very recent research that is focusing on a different and novel target.

Key hurdles in Alzheimer’s drug development:

Despite all these, almost at a regular interval, we have been getting to know about various new studies on Alzheimer’s disease, mostly from academic and scientific institutions. It clearly vindicates, at least, the global academia and also some pharma players, are working hard to get an effective key to unlock the pathway of Alzheimer’s disease process.

The hurdles in developing a suitable drug for effective treatment of Alzheimer’s disease are many. A paper titled, “Researching Alzheimer’s Medicines: Setbacks and Stepping Stones Summer 2015”, published by the Pharmaceutical Research and Manufacturers of America (PhRMA) – a trade association of leading biopharmaceutical researchers and biotechnology companies of the United States, cited the following three major reasons as examples:

  • Scientists still do not understand the underlying causes and mechanisms of the disease. It remains unknown whether many of the defining molecular characteristics of the disease are causes, effects, or signs of progression. This scientific knowledge gap makes the identification and selection of viable targets for new medicines difficult. 
  • Current preclinical models of Alzheimer’s disease are limited in the extent to which they can be extrapolated or translated to the human condition. Better models are needed to facilitate preclinical testing of drug candidates and better predict the effects of the drug in humans. 
  • The absence of validated, non-invasive biomarkers to identify disease presence and progression means the diagnosis is delayed until an individual becomes symptomatic. This makes it particularly challenging to evaluate, enroll, retain, and follow up with patients in clinical studies. It also makes it challenging to assess the effects of the drug candidate. Ultimately, this leads to long and very expensive clinical trials. 

The PhRMA publication also states that “researchers believe that no single medicine will be able to defeat Alzheimer’s; rather, several medicines will probably be needed to combat the disease. Thus, researchers need not one, but an array of options to prevent or treat Alzheimer’s disease.”

High rate of R&D failure, with flickers of success:

The above PhRMA publication also indicates, between 1998 and 2014, 123 medicines in clinical development have been halted and have not received regulatory approval.

In this rather gloomy R&D scenario, there are also some flickers of success in this pursuit.

In a recent study, the scientists at the University of Southampton announced that their findings added weight to evidence that inflammation in the brain is what drives the disease. A drug, used to block the production of these microglia cells in the brains of mice, had a positive effect. The study, therefore, concluded that blocking the production of new immune cells in the brain could reduce memory problems seen in Alzheimer’s disease. This finding is expected to pave the way for a new line of treatment for Alzheimer’s disease.

Currently, most drugs used for the treatment of dementia targeted amyloid plaques in the brain, which are considered as a key characteristic of people with the Alzheimer’s disease. According to an article published in Forbes on March 20, 2015, several amyloid-clearing drugs have failed to show statistically significant benefits in large clinical trials. Notable among those are Bapineuzumab – developed by Elan Pharmaceuticals, Pfizer and Johnson & Johnson failed in 2009; Solanezumab of Eli Lilly failed in 2012; and so did Gantenerumab of Roche in 2014.

The latest study, as quoted above, published in the journal ‘Brain’, on January 8, 2016 suggests that targeting inflammation in the brain, caused by a build-up of immune cells called microglia, could halt progression of the disease.

Another flicker of hope is, another drug being developed by Biogen Idec for the treatment of Alzheimer’s disease appeared to slow down the inexorable cognitive decline of patients’, though in a small and a preliminary study.

Lack of research funding is a critical impediment:

Be that as it may, many experts believe that not enough is still being done in Alzheimer’s research, especially in the area of funding.

In an article titled, “Alzheimer’s disease: are we close to finding a cure?” published by ‘Medical News Today (MNT)’ on August 20, 2014, quoted the Alzheimer’s Society, as follows:

“Dementia is the biggest health and social care challenge of our generation, but research into the condition has been hugely underfunded. This lack of funding has hampered progress and also restricted the number of scientists and clinicians working in the dementia field.”

As an illustration, MNT mentioned that in the United States Alzheimer’s research received US$504 million in funding from the National Institutes of Health (NIH) in 2014, while cancer received more than US$5 billion. Breast cancer alone received more funding than Alzheimer’s at US$674 million. 

Quoting an expert in this field the report highlighted, “Other diseases have demonstrated that sustained investment in research can improve lives, reduce death rates and ultimately produce effective treatments and preventions. We have the tools and the talent to achieve breakthroughs in Alzheimer’s disease, but we need the resources to make this a reality.”

Conclusion:

From the published research reports, it appears that the quest to decipher the complicated Alzheimer’s disease process continues, at least by the academic and scientific institutions, with equal zest. 

These scientists remain committed to finding out the ‘magic bullet’, which would be able to effectively address the crippling disease. As a result, the research has also moved from discovery of effective amyloid-clearing drugs to search for new molecules that targets inflammation in the brain, caused by a build-up of immune cells called microglia. 

Undeniably, the challenges ahead are still too many.

Nevertheless, enough confidence is also building up to halt the epidemic of Alzheimer’s by overcoming those hurdles, the world over. Experts are hoping that both a cure and also successful preventive measures for the disease, are not too far anymore.

Though some Global Pharma majors invested significantly to discover effective drugs for Alzheimer’s disease, overall research funding in this area is still far from adequate, according to the Alzheimer’s Society. 

For various reasons, not many pharma players today seem to believe that it would be financially prudent for them to make significant investments in developing new molecules for the treatment of Alzheimer’s – the disease that robs memory of millions of people, completely, and without any prior warning whatsoever.

‘The Memory Thief’ continues to prowl, undeterred, still eluding otherwise brilliant Pharma R&D, across the world.

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.

 

‘Repurposing’ Older Drugs: Has The Process Started Rolling?

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On October 22, 2015, BBC News reported, “The world’s largest clinical trial to examine whether aspirin can prevent cancers returning has begun in the United Kingdom (UK).”

About 11,000 people, who have had early bowel, breast, prostate, stomach and esophageal cancer will be involved in this study with one tablet a day dosage for five years. This trial is being funded by ‘The Charity Cancer Research, UK’ and ‘The National Institute for Health Research (NIHR).’

The scientists feel, if it works, this ‘repurposing’ of an older and much-known drug would be a “game-changing” one. It would then be able to provide a cheap and effective alternative to prevent recurrence of cancer to a large number of cancer survivals. Interestingly, no global pharma players are involved in this cancer prevention research, as yet. 

Aspirin was developed by Bayer way back in 1897 for pain and inflammation. Thereafter, the scientists found a ‘repurpose’ in its use as an anti-platelet drug for treating and preventing heart attacks and strokes.

Similarly, the anti-inflammatory drug Ibuprofen, which was developed by Boots in the 1960s for the treatment of rheumatoid arthritis, is now showing promises that it can help protect against Parkinson’s disease.

Again, a number of studies claim that statins, a cholesterol-reducing drug, can help prevent Alzheimer’s Disease, resulting in low levels of beta-amyloid. Further research needs to be done in this area, as this finding has not been universally accepted, just yet.

All such commendable initiatives, throw open a relevant question for debate: ‘Can the existing drugs be re-examined in a systematic manner to discover their other possible radically new usages at a much lesser treatment costs to patients?’

In my view, available data emphatically prompts the answer ‘Yes’ and I shall deliberate on on that in this article.

‘Repurposing’ older drugs:

The Oxford Dictionary meaning of ‘repurpose’ is: ‘Adapt for use in a different purpose.’

Accordingly, the process of discovering new usages of older drugs is often called by many scientists as ‘repurposing’.   

Currently, we come across various articles reporting a number of such new initiatives. This process is safer, much less expensive and takes much lesser time.

These laudable R&D initiatives needs encouragement from all stakeholders, especially from the Government. Given proper focus and attractive financial and other incentives, more and more players are expected to get attracted to a different genre of innovation. It is a whole new ball game of discovering new purposes of old and cheaper drugs with known and well-documented long term safety profile.

Some old drugs with ‘new purpose’: 

The following table gives an example of some well known older drugs, for which fresh R&D initiatives discovered their new purpose of treatment, at a much cheaper cost: 

Drug Old Indication New purpose
Amantadine Influenza Parkinson’s Disease
Amphotericin Antifungal Leishmaniasis
Aspirin Inflammation, pain Antiplatelet
Bromocriptine Parkinson’s disease Diabetes mellitus
Bupropion Depression Smoking cessation
Colchicine Gout Recurrent pericarditis
Methotrexate Cancer Psoriasis, rheumatoid arthritis

(Source: Indian Journal of Applied Research, Volume: 4, Issue: 8, August 2014)  

A clarion call to join this movement:

The well-known researcher, Dr. Francis S. Collins, the Director of the National Institutes of Health (NIH) in a TED talk (video) strongly argued in favor of ‘translational research’ to produce better drugs, faster. To make this process to work successfully Francis Collins hopes to encourage global pharmaceutical companies to open up their stashes of drugs that have already passed safety tests, but that failed to successfully treat their targeted disease. 

He wants to study, how drugs approved for one disease could successfully treat another or more ailments and also gave examples of the following drugs, which I am quoting below, as such:

  • Raloxifene: The FDA approved Raloxifene to reduce the risk of invasive breast cancer in postmenopausal women in 2007. It was initially developed to treat osteoporosis.
    .
  • Thalidomide: This drug started out as a sedative in the late fifties, and soon doctors were infamously prescribing it to prevent nausea in pregnant women. It later caused thousands of severe birth defects, most notably phocomelia, which results in malformed arms and legs. In 1998, thalidomide found a new use as a treatment for leprosy and in 2006 it was approved for multiple myeloma, a bone marrow cancer.
    .
  • Tamoxifen: This hormone therapy treats metastatic breast cancers, or those that have spread to other parts of the body, in both women and men, and it was originally approved in 1977. Thirty years later, researchers discovered that it also helps people with bipolar disorder by blocking the enzyme PKC, which goes into overdrive during the manic phase of the disorder.
    .
  • Rapamycin: This antibiotic, also called sirolimus, was first discovered in bacteria-laced soil from Easter Island in the seventies, and the FDA approved it in 1999 to prevent organ transplant rejection. Since then, researchers have found it effective in treating not one but two diseases: Autoimmune Lymphoproliferative Syndrome (ALPS), in which the body produces too many immune cells called lymphocytes, and lymphangioleiomyomatosis, a rare lung disease.
    .
  • Lomitapide: Intended to lower cholesterol and triglycerides, the FDA approved this drug to treat a rare genetic disorder that causes severe cholesterol problems called homozygous familial hypercholesterolemia last December.
    .
  • Pentostatin: This drug was created as a chemotherapy for specific types of leukemia. It was tested first in T-cell-related leukemias, which didn’t respond to the drug. But later NIH’s National Cancer Institute discovered that the drug was successful in treating a rare leukemia that is B-cell related, called Hairy Cell Leukemia.
    .
  • Sodium nitrite: This salt was first developed as an antidote to cyanide poisoning and, unrelated to medicine, it’s also used to cure meat. The National Heart, Lung, and Blood Institute is currently recruiting participants for a sodium nitrite clinical trial, in which the drug will be tested as a treatment for the chronic leg ulcers associated with sickle cell and other blood disorders.
  • Zidovudine (AZT): The first antiviral approved for HIV/AIDS in 1987.
  • Farnesyltransferase inhibitor (FTI): This was used to successfully treat children with the rapid-aging disease Progeria in a 2012 clinical trial.

“None of these drugs could have been developed without collaborations between drug developers and researchers with new ideas about applications, based on molecular insights about disease,” Dr. Collins said.

The examples that I have given, so far, on ‘repurposing’ older drugs are not exhaustive, in any way, there are more such examples coming up almost regularly.

The key benefits: 

The key benefits of ‘repurposing’ older drugs may be summarized as follows:

  • Ready availability of the starting compound
  • Previously generated relevant R&D data may be used for submission to drug regulators
  • Makes clinical research more time-efficient and cost-effective
  • Possibility of much quicker market launch

Slowly gaining steam: 

On November 27, 2012, ‘The Guardian’ reported that a number of university-based spin-outs and small biotech companies are being set up in the United States to find new purpose for old drugs. They express interest especially, on those drugs, which were shelved as they did not match the desired efficacy requirements, though showed a good overall safety profile.

Such organizations, take advantage of the declining cost of screening, with some compound libraries, such as, the Johns Hopkins library, which includes 3,500 drugs, available for screening at a small charge, the report highlighted.

Quoting a specialist, the report stated, “Existing drugs have been shown to be safe in patients, so if these drugs could be found to work for other diseases, then this would drastically reduce drug development costs and risks. Of 30,000 drugs in the world, 25,000 are ex-patent – it’s a free-for-all.”

‘Repurposing’ may not attract many pharma players, Government should step in:

Notwithstanding the clarion call of Dr. Francis Collins to global pharma players for their active participation in such projects, I reckon, the positive response may not be too many, because of various reasons.

Although, ‘repurposed’ drugs offer similar or even greater value to patients than any comparable ‘me-too’ New Chemical/Molecular Entity (NCE/NME), there may not possibly be any scope here for ‘Obscene Pricing’, such as ‘Sovaldi’ and many others, as some experts feel. And that’s the reality.

Moreover, new usages of the same old molecule, in all probability, may not get any fresh Intellectual Property (IP) protection in India, either.

Hence, considering the health interest of patients, in general, the Government should assume the role of ‘prime mover’, primarily to set the ball of ‘repurposing of older drugs’ rolling in India. This has already started happening in some of the developed countries of the world, which I shall dwell upon here.

Funding clinical development for ‘repurposing’:

Let me give a couple of examples of funding such admirable initiatives in two different countries.

I have already mentioned above that the clinical development for ‘repurposing’ Aspirin in the prevention of cancer, is being funded by the charity Cancer Research UK and the National Institute for Health Research (NIHR).

In a similar initiative, National Institutes for Health (NIH) of the United States, launched the ‘National Center for Advancing Transnational Sciences (NCATS), in May 2012.

New Therapeutic Uses program of NCATS helps to identify new uses for drugs that have undergone significant research and development by the pharma industry, including safety testing in humans. NIH claims that ‘using drugs that already have cleared several key steps in the development process gives scientists nationwide a strong starting point to contribute their unique expertise and accelerate the pace of therapeutics development.’

By pairing researchers with a selection of specific drugs, NCATS program tests ideas for new therapeutic uses, ultimately identifying promising new treatments for patients. Funding for this purpose is done by NCATS through NIH. For example, In July 2015, NCATS planned a funding of around US$3 million to support four academic research groups to test a selection of drugs for new therapeutic uses, as follows:

  • Type 2 diabetes
  • Glioblastoma (one of the most aggressive brain tumors in adults)
  • Acute myeloid leukemia (an aggressive blood cancer)
  • Chagas disease (a neglected tropical disease that causes heart, digestive and neurological problems)

According to NIH, each award recipient will test a selected drug for its effectiveness against a previously unexplored disease or condition. The industry partners for these projects are AstraZeneca and Sanofi.

Can it be done in India?

Of course yes, provided the Government considers health care as one its priority focus areas with commensurate resource deployment of all kinds for the same.

As things stand today, India still remains beyond any visibility to give a tangible shape to this specific concept of ‘repurposing’ of older drugs. There does not seem to be any other valid reason why similar model of funding can’t be followed locally too, for this purpose.

The nodal agency to spearhead such initiatives, and to create appropriate groundswell to help gain a critical mass, may well be the ‘Council of Scientific & Industrial Research (CSIR)’ or any other body that the Government decides in consultation with domain experts, together with reasonable financial incentives for commercialization of new usages at an affordable cost.

Conclusion:

As we all know, many people, across the world, are currently going through the pain of seeing their loved ones suffer, and even die, from serious ailments, the treatments of which either do not exist or when exist, the therapy costs may be out of reach of a vast majority of patients. In tandem, the R&D pipeline of the global pharma industry is gradually drying up.

In a situation like this, drug ‘repurposing’ that is directed towards meeting unmet medical needs of patients of all types irrespective of financial status, needs to be increasingly encouraged and pursued as a critical solution to this growing problem.

The good news is that some global pharma majors, though very few in number, have now expressed their intention to salvage their failed molecules and are open to help explore whether such drugs may work in other disease conditions.

India seems to be still miles away from this space, and a bit directionless too. That said, the country is scientifically quite capable of making up the lost ground in this area, provided the Government decides so, garnering requisite wherewithal.

Thus, in my view, the process of ‘repurposing’ older drugs has already started rolling in some major countries of the world, in a well structured manner with requisite funding in place. Tangible outcomes are already noticeable today, with some examples quoted in this article.

As Dr. Francis Collins said, collaborations between drug developers and researchers with new ideas about applications, based on molecular insights about disease are critical in the way forward to achieve this cherished goal in a sustainable manner.

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.

R&D: Is Indian Pharma Moving Up the Value Chain?

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It almost went unnoticed by many, when in the post product patent regime, Ranbaxy launched its first homegrown ‘New Drug’ of India, Synriam, on April 25, 2012, coinciding with the ‘World Malaria Day’. The drug is used in the treatment of plasmodium falciparum malaria affecting adult patients.  However, the company has also announced its plans to extend the benefits of Synriam to children in the malaria endemic zones of Asia and Africa.

The new drug is highly efficacious with a cure rate of over 95 percent offering advantages of “compliance and convenience” too. The full course of treatment is one tablet a day for three days costing less than US$ 2.0 to a patient.

Synriam was developed by Ranbaxy in collaboration with the Department of Science  and Technology of the Government of India. The project received support from the Indian Council of Medical Research (ICMR) and conforms to the recommendations of the World Health Organization (WHO). The R&D cost for this drug was reported to be around US$ 30 million. After its regulatory approval in India, Synriam is now being registered in many other countries of the world.

Close on the heels of the above launch, in June 2013 another pharmaceutical major of India, Zydus Cadilla announced that the company is ready for launch in India its first New Chemical Entity (NCE) for the treatment of diabetic dyslipidemia. The NCE called Lipaglyn has been discovered and developed in India and is getting ready for launch in the global markets too.

The key highlights of Lipaglyn are reportedly as follows:

  • The first Glitazar to be approved in the world.
  • The Drug Controller General of India (DCGI) has already approved the drug for launch in India.
  • Over 80% of all diabetic patients are estimated to be suffering from diabetic dyslipidemia. There are more than 350 million diabetics globally – so the people suffering from diabetic dyslipidemia could be around 300 million.

With 20 discovery research programs under various stages of clinical development, Zydus Cadilla reportedly invests over 7 percent of its turnover in R&D.  At the company’s state-of-the-art research facility, the Zydus Research Centre, over 400 research scientists are currently engaged in NCE research alone.

Prior to this in May 14, 2013, the Government of India’s Department of Biotechnology (DBT) and Indian vaccine company Bharat Biotech jointly announced positive results, having excellent safety and efficacy profile in Phase III clinical trials, of an indigenously developed rotavirus vaccine.

The vaccine name Rotavac is considered to be an important scientific breakthrough against rotavirus infections, the most severe and lethal cause of childhood diarrhea, responsible for approximately 100,000 deaths of small children in India each year.

Bharat Biotech has announced a price of US$ 1.00/dose for Rotavac. When approved by the Drug Controller General of India, Rotavac will be a more affordable alternative to the rotavirus vaccines currently available in the Indian market. 

It is indeed interesting to note, a number of local Indian companies have started investing in pharmaceutical R&D to move up the industry value chain and are making rapid strides in this direction.

Indian Pharma poised to move-up the value-chain:

Over the past decade or so, India has acquired capabilities and honed skills in several important areas of pharma R&D, like for example:

  • Cost effective process development
  • Custom synthesis
  • Physical and chemical characterization of molecules
  • Genomics
  • Bio-pharmaceutics
  • Toxicology studies
  • Execution of phase 2 and phase 3 studies

According to a paper titled, “The R&D Scenario in Indian Pharmaceutical Industry” published by Research and Information System for Developing Countries, over 50 NCEs/NMEs of the Indian Companies are currently at different stages of development, as follows:

Company Compounds Therapy Areas Status
Biocon 7 Oncology, Inflammation, Diabetes Pre-clinical, phase II, III
Wockhardt 2 Anti-infective Phase I, II
Piramal Healthcare 21 Oncology, Inflammation, Diabetes Lead selection, Pre-clinical, Phase I, II
Lupin 6 Migraine, TB, Psoriasis, Diabetes, Rheumatoid Arthritis Pre-clinical, Phase I, II, III
Torrent 1 Diabetic heart failure Phase I
Dr. Reddy’s Lab 6 Metabolic/Cardiovascular disorders, Psoriasis, migraine On going, Phase I, II
Glenmark 8 Metabolic/Cardiovascular /Respiratory/Inflammatory /Skin disorders, Anti-platelet, Adjunct to PCI/Acute Coronary Syndrome, Anti-diarrheal, Neuropathic Pain, Skin Disorders, Multiple Sclerosis, Ongoing, Pre-clinical, Phase I, II, III

R&D collaboration and partnership:

Some of these domestic companies are also entering into licensing agreements with the global players in the R&D space. Some examples are reportedly as follows:

  • Glenmark has inked licensing deals with Sanofi of France and Forest Laboratories of the United States to develop three of its own patented molecules.
  • Domestic drug major Biocon has signed an agreement with Bristol Myers Squibb (BMS) for new drug candidates.
  • Piramal Life Sciences too entered into two risk-reward sharing deals in 2007 with Merck and Eli Lilly, to enrich its research pipeline of drugs.
  • Jubilant Group partnered with Janssen Pharma of Belgium and AstraZeneca of the United Kingdom for pharma R&D in India, last year.

All these are just indicative collaborative R&D initiatives in the Indian pharmaceutical industry towards harnessing immense growth potential of this area for a win-win business outcome.

The critical mass:

An international study estimated that out of 10,000 molecules synthesized, only 20 reach the preclinical stage, 10 the clinical trials stage and ultimately only one gets regulatory approval for marketing. If one takes this estimate into consideration, the research pipeline of the Indian companies would require to have at least 20 molecules at the pre-clinical stage to be able to launch one innovative product in the market.

Though pharmaceutical R&D investments in India are increasing, still these are not good enough. The Annual Report for 2011-12 of the Department of Pharmaceuticals indicates that investments made by the domestic pharmaceutical companies in R&D registered an increase from 1.34 per cent of sales in 1995 to 4.5 percent in 2010. Similarly, the R&D expenditure for the MNCs in India has increased from 0.77 percent of their net sales in 1995 to 4.01 percent in 2010.

Thus, it is quite clear, both the domestic companies and the MNCs are not spending enough on R&D in India. As a result, at the individual company level, India is yet to garner the critical mass in this important area.

No major R&D investments in India by large MNCs:

According to a report, major foreign players with noteworthy commercial operations in India have spent either nothing or very small amount towards pharmaceutical R&D in the country. The report also mentions that Swiss multinational Novartis, which spent $ 9 billion on R&D in 2012 globally, does not do any R&D in India.

Analogue R&D strategy could throw greater challenges:

For adopting the analogue research strategy, by and large, the Indian pharma players appear to run the additional challenge of proving enhanced clinical efficacy over the known substance to pass the acid test of the Section 3(d) of the Patents Act of India.

Public sector R&D:

In addition to the private sector, research laboratories in the public sector under the Council for Scientific and Industrial Research (CSIR) like, Central Drug Research Institute (CDRI), Indian Institute of Chemical Technology (IICT) and National Chemical Laboratory (NCL) have also started contributing to the growth of the Indian pharmaceutical industry.

As McKinsey & company estimated, given adequate thrust, the R&D costs in India could be much lower, only 40 to 60 per cent of the costs incurred in the US. However, in reality R&D investments of the largest global pharma R&D spenders in India are still insignificant, although they have been expressing keenness for Foreign Direct Investments (FDI) mostly in the brownfield pharma sector.

Cost-arbitrage:

Based on available information, global pharma R&D spending is estimated to be over US$ 60 billion. Taking the cost arbitrage of India into account, the global R&D spend at Indian prices comes to around US$ 24 billion. To achieve even 5 percent of this total expenditure, India should have invested by now around US$ 1.2 billion on the pharmaceutical R&D alone. Unfortunately that has not been achieved just yet, as discussed above.

Areas of cost-arbitrage:

A survey done by the Boston Consulting Group (BCG) in 2011 with the senior executives from the American and European pharmaceutical companies, highlights the following areas of perceived R&D cost arbitrage in India:

Areas % Respondents
Low overall cost 73
Access to patient pool 70
Data management/Informatics 55
Infrastructure set up 52
Talent 48
Capabilities in new TA 15

That said, India should realize that the current cost arbitrage of the country is not sustainable on a longer-term basis. Thus, to ‘make hay while the sun shines’ and harness its competitive edge in this part of the world, the country should take proactive steps to attract both domestic as well as Foreign Direct Investments (FDI) in R&D with appropriate policy measures and fiscal incentives.

Simultaneously, aggressive capacity building initiatives in the R&D space, regulatory reforms based on the longer term need of the country and intensive scientific education and training would play critical role to establish India as an attractive global hub in this part of the world to discover and develop newer medicines for all.

Funding:

Accessing the world markets is the greatest opportunity in the entire process of globalization and the funds available abroad could play an important role to boost R&D in India. Inadequacy of funds in the Indian pharmaceutical R&D space is now one of the greatest concerns for the country.

The various ways of funding R&D could be considered as follows:

  • Self-financing Research: This is based on:
  1. “CSIR Model”: Recover research costs through commercialization/ collaboration with industries to fund research projects.
  2. “Dr Reddy’s Lab / Glenmark Model”: Recover research costs by selling lead compounds without taking through to development.
  • Overseas Funding:  By way of joint R&D ventures with overseas collaborators, seeking grants from overseas health foundations, earnings from contract research as also from clinical development and transfer of aborted leads and collaborative projects on ‘Orphan Drugs’.
  • Venture Capital & Equity Market:  This could be both via ‘Private Venture Capital Funds’ and ‘Special Government Institutions’.  If regulations permit, foreign venture funds may also wish to participate in such initiatives. Venture Capital and Equity Financing could emerge as important sources of finance once track record is demonstrated and ‘early wins’ are recorded.
  • Fiscal & Non-Fiscal Support: Should also be valuable in early stages of R&D, for which a variety of schemes are possible as follows:
  1. Customs Duty Concessions: For Imports of specialized equipment, e.g. high throughput screening equipment, equipment for combinatorial chemistry, special analytical tools, specialized pilot plants, etc.
  2. Income tax concessions (weighted tax deductibility): For both in-house and sponsored research programs.
  3. Soft loans: For financing approved R&D projects from the Government financial institutions / banks.
  4. Tax holidays: Deferrals, loans on earnings from R&D.
  5. Government funding: Government grants though available, tend to be small and typically targeted to government institutions or research bodies. There is very little government support for private sector R&D as on date.

All these schemes need to be simple and hassle free and the eligibility criteria must be stringent to prevent any possible misuse.

Patent infrastructure:

Overall Indian patent infrastructure needs to be strengthened, among others, in the following areas:

  • Enhancement of patent literacy both in legal and scientific communities, who must be taught how to read, write and file a probe.
  • Making available appropriate ‘Search Engines’ to Indian scientists to facilitate worldwide patent searches.
  • Creating world class Indian Patent Offices (IPOs) where the examination skills and resources will need considerable enhancement.
  • ‘Advisory Services’ on patents to Indian scientists to help filing patents in other countries could play an important role.

Creating R&D ecosystem:

  • Knowledge and learning need to be upgraded through the universities and specialist centers of learning within India.
  • Science and Technological achievements should be recognized and rewarded through financial grants and future funding should be linked to scientific achievements.
  • Indian scientists working abroad are now inclined to return to India or network with laboratories in India. This trend should be effectively leveraged.

Universities to play a critical role:

Most of Indian raw scientific talents go abroad to pursue higher studies.  International Schools of Science like Stanford or Rutgers should be encouraged to set up schools in India, just like Kellogg’s and Wharton who have set up Business Schools. It has, however, been reported that the Government of India is actively looking into this matter.

‘Open Innovation’ Model:

As the name suggest, ‘Open Innovation’ or the ‘Open Source Drug Discovery (OSDD)’ is an open source code model of discovering a New Chemical Entity (NCE) or a New Molecular Entity (NME). In this model all data generated related to the discovery research will be available in the open for collaborative inputs. In ‘Open Innovation’, the key component is the supportive pathway of its information network, which is driven by three key parameters of open development, open access and open source.

Council of Scientific and Industrial Research (CSIR) of India has adopted OSDD to discover more effective anti-tubercular medicines.

Insignificant R&D investment in Asia-Pacific Region:

Available data indicate that 85 percent of the medicines produced by the global pharmaceutical industry originate from North America, Europe, Japan and some from Latin America and the developed nations hold 97 percent of the total pharmaceutical patents worldwide.

MedTRACK reveals that just 15 percent of all new drug development is taking place in Asia-Pacific region, including China, despite the largest global growth potential of the region.

This situation is not expected to change significantly in the near future for obvious reasons. The head start that the western world and Japan enjoy in this space of the global pharmaceutical industry would continue to benefit those countries for some more time.

Some points to ponder:

  • It is essential to have balanced laws and policies, offering equitable advantage for innovation to all stakeholders, including patients.
  • Trade policy is another important ingredient, any imbalance of which can either reinforce or retard R&D efforts.
  • Empirical evidence across the globe has demonstrated that a well-balanced patent regime would encourage the inflow of technology, stimulate R&D, benefit both the national and the global pharmaceutical sectors and most importantly improve the healthcare system, in the long run.
  • The Government, academia, scientific fraternity and the pharmaceutical Industry need to get engaged in various relevant Public Private Partnership (PPP) arrangements for R&D to ensure wider access to newer and better medicines in the country, providing much needed stimulus to the public health interest of the nation.

Conclusion:

R&D initiatives, though very important for most of the industries, are the lifeblood for the pharmaceutical sector, across the globe, to meet the unmet needs of the patients. Thus, quite rightly, the pharmaceutical Industry is considered to be the ‘lifeline’ for any nation in the battle against diseases of all types.

While the common man expects newer and better medicines at affordable prices, the pharmaceutical industry has to battle with burgeoning R&D costs, high risks and increasingly long period of time to take a drug from the ‘mind to market’, mainly due to stringent regulatory requirements. There is an urgent need to strike a right balance between the two.

In this context, it is indeed a proud moment for India, when with the launch of its home grown new products, Synriam of Ranbaxy and Lipaglyn of Zydus Cadilla or Rotavac Vaccine of Bharat Biotech translate a common man’s dream of affordable new medicines into reality and set examples for others to emulate.

Thus, just within seven years from the beginning of the new product patent regime in India, stories like Synriam, Lipaglyn, Rotavac or the R&D pipeline of over 50 NCEs/NMEs prompt resurfacing the key unavoidable query yet again:

Has Indian pharma started catching-up with the process of new drug discovery, after decades of hibernation, to move up the industry ‘Value Chain’?

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.