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Collaboration For Sustainable Excellence – The Name of The Game in The New Normal

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The union minister of health and family welfare of India recently invited Japanese companies to collaborate with Indian companies on research and innovation in emerging therapies, like precision medicine, cell and gene therapy, biological products, and on the utilization of digital tools and technologies. This was reported on May 16, 2023.

Underscoring this objective, the minister articulated, “such collaboration on research and innovation would help enhance the domestic availability and affordability of these innovative therapeutic options.”

The area of research and drug innovation in emerging therapies and on the utilization of digital tools and technologies has emerged as one of the top focus areas of the country in the new normal. Currently, the Indian pharmaceutical industry is primarily focused on manufacturing generic medicines, exporting bulk drugs, and supplying active pharmaceutical ingredients.

Thus, this goal can be quickly achieved through global collaborations – at a time when India plays a pivotal role in improving health outcomes worldwide by serving as a dependable supplier of affordable and high-quality generic drugs. The country is currently providing approximately 60 per cent of the global vaccine supply, and 20-22 per cent of generic exports. Importantly, ‘In the battle against the Covid-19 pandemic, India has supplied essential drugs to around 185 countries,” he underscored.

Interestingly, after the Covid-19 pandemic, there has been a significant shift in the approach of both Indian and multinational drug companies towards business collaboration. This article will focus on this area with recent Indian examples, culled from available reports. However, before delving into this space, let me also point out that drug MNCs operating in India are also changing focus on their India operations, as reported in recent times.

Drug MNCs operating in India are also changing business focus: 

This was brought to the fore by several recent reports. For example, in February 2022, The Economic Times reported: 

  • In February, Novartis India passed on the sales and distribution rights of three of its established brands to Dr Reddy’s Labs and terminated the employment of 400 staffers.  
  • In October, US drugmaker Eli Lilly sold the marketing rights of its anti-diabetes drugs to Cipla and laid off 120 employees in India. 
  • Around the same time, Danish pharma company Lundbeck decided to exit India as part of its global strategy. 

However, their key goal remains - delivering new patient-perceived value – not just incremental, but in quantum measure for business growth.

The need for increased collaboration and shared resources:

Against the above backdrop, it appears to me that the pandemic has highlighted the need for accelerated cooperation and sharing resources to address global healthcare challenges, effectively. As a result of which, both Indian and MNC drug companies are recognizing the benefits of working together, and are actively seeking collaboration opportunities in the following areas. 
  • Access to Emerging Markets: Indian pharma companies have a strong presence in emerging markets due to their cost-effective generic drug manufacturing capabilities. Multinational companies recognize the potential of these markets and are looking to collaborate with Indian firms to gain access to these regions. By partnering with Indian companies, MNCs can tap into local expertise, distribution networks, and regulatory knowledge. 

- Example: In 2022, Cadila Healthcare entered into a collaboration with Novartis to develop and commercialize multiple oral solids and injectable generics for global markets, including emerging markets.

  • Research and Development: Collaboration in research and development (R&D) activities has become crucial for drug companies. MNCs bring advanced research capabilities, cutting-edge technologies, and substantial financial resources, while Indian companies offer a skilled workforce and a cost-effective environment for R&D. By joining forces, they can pool their strengths and accelerate the discovery and development of new drugs and therapies.

- Example: In 2021, Bharat Biotech collaborated with the Washington University School of Medicine in St. Louis and the International AIDS Vaccine Initiative (IAVI) to develop a novel vaccine candidate for HIV. This collaboration aims to combine the strengths of all three organizations to advance HIV vaccine research.

  • Manufacturing and Supply Chain: The pandemic exposed vulnerabilities in global supply chains, particularly in the pharmaceutical sector. Collaborations between Indian and MNC drug companies can help diversify manufacturing locations and strengthen supply chain resilience. Indian companies’ expertise in large-scale generic drug production can complement the specialized manufacturing capabilities of multinational firms.

- Example: In 2021, Hetero entered into a partnership with the Russian Direct Investment Fund (RDIF) to manufacture the Sputnik V Covid-19 vaccine in India. This collaboration aimed to increase the production capacity of the vaccine to meet global demand.

  • Regulatory Compliance: Regulatory compliance is a critical aspect of the pharmaceutical industry. Indian companies have been working closely with regulatory authorities to meet global standards and gain approvals for their products. Collaborating with Indian companies enables MNCs to leverage their understanding of regulatory processes, navigate local regulations efficiently, and ensure compliance with diverse international requirements.

- Example, in 2022, Biocon Biologics partnered with Adagio Therapeutics, a US-based biotechnology company, to develop and commercialize an antibody treatment for COVID-19. This collaboration involves regulatory support from both companies to navigate global regulatory processes.

  • Market Expansion: Collaborations provide an opportunity for both Indian and multinational companies to expand their market presence. Indian companies can benefit from the MNCs’ established marketing networks, while MNCs can leverage the Indian companies’ extensive distribution channels and market knowledge. Joint ventures and partnerships facilitate market entry, improve market penetration, and help companies capture a larger share of the global pharmaceutical market. 

- Example: In 2022, Torrent Pharmaceuticals collaborated with Swedish multinational company Handicare Group AB to distribute and market Handicare’s range of mobility solutions in India. This collaboration enables Torrent Pharmaceuticals to diversify its product portfolio and expand into the healthcare mobility market. 

  • Technology and Innovation Sharing: Collaborations foster knowledge exchange between Indian and multinational drug companies. MNCs can share their technological advancements and research findings, while Indian companies can contribute their insights and expertise in managing large-scale production. Such knowledge-sharing initiatives can drive innovation, improve manufacturing processes, and enhance overall operational efficiency. 

- Example: In 2022, Glenmark Pharmaceuticals entered into a collaboration with the Canadian multinational company SaNOtize Research and Development Corp. to develop a nitric oxide nasal spray for the treatment of COVID-19. This collaboration combines Glenmark’s expertise in drug development with SaNOtize’s innovative nitric oxide platform.

  • Intellectual Property and Licensing: Collaboration often involves the exchange of intellectual property (IP) rights and licensing agreements. Indian companies possess a vast pool of generic drug formulations and manufacturing capabilities. MNCs can license their patented drugs or technology to Indian partners for production and distribution in specific markets. These licensing arrangements benefit both parties by expanding the product portfolio and maximizing revenue potential. 

- Example: In 2021, Glenmark Pharmaceuticals signed a licensing agreement with Canadian biopharmaceutical company Xenon Pharmaceuticals to develop and commercialize a potential treatment for epilepsy. This collaboration involves the licensing of Xenon Pharmaceuticals’ proprietary technology for the development of a novel therapeutic product.

Conclusion:

Overall, as the recent trends indicate, the post-pandemic era has accelerated initiatives of strategic collaboration between Indian and multinational drug companies. By leveraging each other’s strengths and with shared value and resources, these collaborations aim to drive innovation, address global healthcare challenges, and deliver affordable and accessible healthcare solutions to patients worldwide. And thereby, will help deliver a unique patient experience.

Additionally, the examples, as available from published sources, highlight an increasing number of such recent collaborations, besides operational re-focusing by several MNC drug majors in India.  

These strategic steps clearly emphasize their joint efforts to drive innovation, expand their market presence, and address critical healthcare needs. From this angle, I believe, for sustainable business excellence and for staying relevant to customers in the new digital world, one of the top focus areas for Indian pharma players deserves to be strategic collaboration initiatives.

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.

Data Integrity Issue Haunts Again With Covid Vaccine?

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On March 22, 2021, by a media release, AstraZeneca announced that its ‘US Phase III trial of AZD1222 demonstrated statistically significant vaccine efficacy of 79% in preventing symptomatic COVID-19 and 100% efficacy at preventing severe disease and hospitalization.’

Quite unexpectedly, on March 23, 2021, the above claim on AstraZeneca’s Covid-19 vaccine, triggered a rare post-midnight statement by the National Institute of Allergy and Infectious Diseases (NIAID) of the United states. It rekindled a lurking fear of many, yet again, on the issue of questionable data integrity within the drug industry, in general.

This News Release articulated: “Late Monday, the Data and Safety Monitoring Board (DSMB) notified NIAID, BARDA, and AstraZeneca that it was concerned by information released by AstraZeneca on initial data from its COVID-19 vaccine clinical trial.”

The concern was on the possible inclusion of outdated information from that trial, ‘which may have provided an incomplete view of the efficacy data.’ It urged AstraZeneca to work with the DSMB to review the efficacy data and ensure the most accurate, up-to-date efficacy data be made public as soon as possible.

Later on that very day, AstraZeneca released another statement saying: “The numbers published yesterday were based on a pre-specified interim analysis with a data cutoff of 17 February. We have reviewed the preliminary assessment of the primary analysis and the results were consistent with the interim analysis. We are now completing the validation of the statistical analysis.”

The company further emphasized, “We will immediately engage with the independent data safety monitoring board (DSMB) to share our primary analysis with the most up to date efficacy data.” And also added that AstraZeneca intends to issue the results of the primary analysis within 48 hours.

However, the impact of the NIAID’s announcement on the unfurling of AstraZeneca’s Covid-19 vaccine in the U.S, is yet to be ascertained. It’s also still unknown what this news could mean for the vaccine’s alleged efficacy. Be that as it may, it all happened at a time when millions of people, in many countries of the world, including India, have already taken, at least, the first dose of this vaccine.

In this article, I shall deliberate on broader aspects of this critical issue and its relevance in the present case. However, before doing so, let’s try to figure out, why data integrity still remains a major concern of many experts in this area.

Why data integrity is still a major issue:

There are many studies that raised serious concern in this area, over a period of time. For example – ‘Dozens of recent clinical trials may contain wrong or falsified data’ – was claimed by the research paper that was discussed in ‘The Guardian’ on June 05, 2017.

This study reviewed data from 5,087 clinical trials, published during the past 15 years, in two prestigious medical journals – JAMA and the New England Journal of Medicine, and six anesthesia journals. In total, 90 published trials had underlying statistical patterns that were unlikely to appear by chance (or be termed as ‘unforced error’) in a credible dataset, the paper concluded.

Even my own article of September 30, 2019 deliberated on various facets of ‘data integrity’ involving novel therapy, across the world. There, I quoted one of the top medical experts related to the above paper, saying: “It’s very scary that we may be treating patients based on false evidence.” He further added: “It may be the case that certain treatments may need to be withdrawn from use.”

The ghost of a recent example still haunts:

Not so long ago, much reported fallout from Novartis’ alleged data manipulation fiasco with its billion-dollar gene therapy Zolgensma, shook all concerned. So much so, that the Company CEO had to pledge during an investor conference that: ‘the company will be more proactive in reporting data integrity issues to the FDA.’

He also added, Novartis has responded to the FDA’s Form 483 and is making documents available as requested, while reiterating that the data manipulation uncovered at the San Diego site “does not impact the safety, efficacy or quality of Zolgensma.”

The key point to ponder, therefore, especially in AstraZeneca’s Covid-19 vaccine case – is the same ghost haunting us, yet again?

Is it happening again? 

One may, possibly, find some cue of the answer to this question while looking at what followed after ‘validation of the statistical analysis’ by AstraZeneca, as it was promised by the company. Interestingly, the following day, after apparently a thorough analysis, the data released by AstraZeneca, re-iterated effectiveness of its COVID-19 vaccine, which apparently, is broadly similar to the results released earlier.

The Company highlighted therein, ‘US Phase III primary analysis confirms safety and efficacy,’ with the following points:

  • 76% (earlier shown as 79%) vaccine efficacy against symptomatic COVID-19
  • 100% efficacy against severe or critical disease and hospitalization
  • 85% efficacy against symptomatic COVID-19 in participants aged 65 years and over.

It may continue to remain unclear to many – whether or not there was some suspected issue of data integrity – till the answers, at least, to the following questions are made public:

  • Why did the data and safety monitoring board for the trial write a harsh letter to AstraZeneca on its claim, and copied the leadership of NIAID and the Biomedical Advanced Research and Development Authority?
  • As the proof of the pudding is in its eating, why there will even be a slight downward revision in the rate of efficacy of AstraZeneca Covid-19 vaccine?

Conclusion:

I wrote in this blog, way back on August 03, 2015 that data manipulation issues are dangerously leapfrogging into clinical trial domain, even in India. As a result, many domestic drug players had to pay a heavy price – in terms of drug import bans by USFDA and other regulators. Several questions on the quality of efficacy and safety of Indian generic drugs were also raised in many developed countries. A number of best-selling books were also written on this issue.

Some may recall, just ahead Covid pandemic struck, trial data of a highly complex and very expensive gene therapy was also questioned by the US-FDA, for the same reason. However, on March 31, 2020, on completion of its review of the information, records of the inspection, the evidence collected, and the firm’s corrective actions, US-FDA stated: “Objectionable conditions were found and documented but the objectionable conditions observed during the inspection do not meet the threshold for regulatory action.”

Almost in a similar line, after the NIAID decided to make its data related concern public on AstraZeneca Covid-19 vaccine, its head, Anthony Fauci, reportedly, characterized this issue as “an unforced error.” This is indeed a cryptic comment. The root cause of this entire saga with details is still awaited.

Interestingly, the term “unforced error’ is widely used in Tennis, and means, ‘a mistake in play that is attributed to one’s own failure rather than to the skill or effort of one’s opponent.’ From this perspective, after AstraZeneca’s statement of clarification on its Covid-19 vaccine data, the concern on its phase three trial data would possibly be put to rest. At least for now, let’s not see the ghost of data integrity for this vaccine, where there doesn’t seem to be any.

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.

 

A New Facet of ‘Data Integrity’ With Novel Therapy… And Much Beyond

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The peril of breach of data integrity involving a top Indian pharma player, jolted many, probably for the first time, on September 17, 2008. On that day, the USFDA, reportedly, issued two ‘Warning Letters’ and an ‘Import Alert’. These were related to deficiencies in the drug manufacturing process and deviations from U.S. current Good Manufacturing Practice (cGMP) at Ranbaxy’s Dewas and Paonta Sahib plants in India.

Since then, instead of demonstrable corrective measures, similar incidents had started ballooning – inviting more serious US-FDA actions, such as Import ban, consent decree, loss of market value, Loss of customer trust, among many others. The research article – ‘Overview of Data Integrity issues in the Pharmaceutical industry,’ published by the International Journal of Pharmaceutical Sciences Review and Research, in its May-June 2018 issue, also reflects the same trend.

Much reported instances of breach of ‘Data Integrity’ were specific to generic drugs and mostly manufactured by Indian companies, besides China. While this may be true at that time, it is now spreading much beyond generic drug manufacturing in India and China – making its way into the global clinical trial arena. I also wrote earlier that ‘Data Manipulation: Leapfrogging Dangerously Into Clinical Trial Domain.’ With greater focus, this article will discuss not just how ‘Data Integrity’ issue is cropping up into clinical trials of even modern, complex, highly innovative and exorbitantly priced lifesaving treatments. Going beyond that, I shall also point towards increasing attempts to exaggerate the success of many cancer drug trials due to strong bias. Nevertheless, let me start by rehashing the relevance of ‘Data Integrity’ on patients’ health interest.

Data Integrity ensures safe, effective and high-quality drugs for patients:

According to US-FDA: ‘Data integrity is an important component of industry’s responsibility to ensure the safety, efficacy, and quality of drugs, and of FDA’s ability to protect the public health.’ Thus, data integrity-related cGMP violations may lead to regulatory actions, including warning letters, import alerts, and consent decrees, as the drug agency notified. In other words, maintain all types of ‘Data Integrity’ is a key requirement in the pharma industry to demonstrate that the final products conform to the required quality parameters.

These requirements are known to all generic drug exporters catering to the regulated markets, including the local manufacturers in the United States. Curiously, it continues to happen despite their full knowledge of the grave consequences of violations. The June 12, 2019 paper – ‘An Analysis Of 2018 FDA Warning Letters Citing Data Integrity Failures,’ published in Pharmaceutical Online, brings out some interesting facts, related to drug manufacturing area.

From the analysis of 194 ‘Data Integrity’ associated ‘Warning Letters (WL).’ from 2008 to 2018, the top 5 countries in this regard came out as follows:

Rank

1

2

3

4

5

Country

China

India

United States

Europe

Japan

No. of WL

58

54

36

14

7
% to Total

29.8

27.8

18.6

7.2

3.6

Interestingly, over 76 percent of US-FDA Warning Letters (WL) are on manufacturing ‘Data Integrity’ and were issued to pharma companies located in China, India and the United States. Moreover, when it comes to all types WL related to various types of regulatory malpractices, India again featured as one of the top violators. Be that as it may, I shall now focus on the spread of this decay in other important drug safety related areas, such as clinical trials.

Ironically, breach of ‘Data Integrity’ in another crucial area, like clinical trials for new drugs, doesn’t seem to attract public attention as much, which I shall reason out below – also explaining why it’s so.

Breach of ‘Data Integrity’ in clinical trial – more crippling for the company: 

‘Data Integrity’ concern pertaining to clinical trials was recently expressed in an article, published by the Food and Drug Law Institute, in the April-May 2019 issue of its Update Magazine. The paper reiterated: ‘Good Clinical Practice (GCP) data integrity issues can at times be more crippling to a company than Good Manufacturing Practice (GMP) data integrity issues.’ Elaborating the point further, the authors highlighted, where such issues are severe, the drug regulatory agency may completely reject the data submitted in new drug applications, supplemental drug applications, and abbreviated new drug applications.

This outcome is quite akin to import bans for generic drugs into the United States, as it would cause a huge setback for the company, affecting clinical development programs for the new drug. Moreover, as the article says, such action would be ‘costing the sponsor substantial time, money, and reputational credibility, not to mention delaying patient access to new drugs.’

‘Dozens of recent clinical trials may contain wrong or falsified data’:

This is claimed by the research paper that was discussed in ‘The Guardian’ on June 05, 2017 carrying the headline - ‘Dozens of recent clinical trials may contain wrong or falsified data, claims study.’

In this study, John Carlisle, a consultant anesthetist at Torbay Hospital, reviewed data from 5,087 clinical trials published during the past 15 years in two prestigious medical journals, JAMA and the New England Journal of Medicine, and six anesthesia journals. In total, 90 published trials had underlying statistical patterns that were unlikely to appear by chance in a credible dataset, the review concluded.

As one of the top medical experts quoted in this paper, said: “It’s very scary that we may be treating patients based on false evidence.” He further added: “It may be the case that certain treatments may need to be withdrawn from use.”

Another October 01, 2013 report, citing a specific example of the same, wrote: ‘Japan’s ministry of health has concluded that studies based on clinical trials for Novartis’s blood pressure drug Diovan contain manipulated data.’ It also added: ‘Diovan was approved for use in Japan in 2000, but recently two universities who hosted and analyzed trials for Novartis – the Kyoto Prefectural University of Medicine and Jikei University School of Medicine – reported finding evidence of data fabrication.’

Thus, from available reports, it appears, just as the saga of ‘Data Integrity’ related drug manufacturing keeps continuing, the same related to clinical trials doesn’t seem to fall much behind. But, the valid question that may follow – why then reported instances of breach of clinical trial data integrity isn’t as many?

Breach of ‘Data Integrity’ found by USFDA is rarely reported: 

The answer to the above question may be found in The BMJ study, published on February 10, 2015. It brought to the fore – ‘Research misconduct found by FDA inspections of clinical trials is rarely reported in journal studies.’ This review was based on identified 57 published clinical trials for which an FDA inspection of one of the trial sites had found significant evidence of research misconduct, including falsification or the submission of false information, problems with adverse event reporting.

The researcher also noted that serious misconducts related to clinical trials, are rarely mentioned in subsequently published journal articles in the same area. More disturbing to note, this critical gap in the transparency of clinical trial reporting is now sneaking into even highly specialized treatment, such as ‘Gene Therapy’, and that too involving a Big Pharma name.

US-FDA has now raised this question even for a ‘Gene Therapy’:

A media report of September 09, 2019 highlights, that Novartis is facing an uproar over data manipulation involving USD 2.1 million gene therapy Zolgensma, which treats spinal muscular atrophy, a leading genetic cause of death in infants. According to this report, Novartis gave “detailed explanations” on Aug. 23 to the FDA about the company’s investigation into the data manipulation and addressed regulators’ questions over why the company waited until late June to make disclosures. However, quoting the FDA, the report indicates, ‘Novartis could face possible civil or criminal penalties.’

Prior to this, another report of August 13, 2019, stated that ‘documents referenced in a Form 483 by the FDA, which inspected the lab a month after it learned of the falsified records, also suggest the data-fudging began at least in early 2018 and could have been uncovered by managers at AveXis during several steps in the clinical outcome assessment.’ The gene unit of Novartis is called AveXis, which had announced the US-FDA approval of Zolgensma on May 24, 2019.

Such instances involving clinical trials with new, complex and highly innovative therapies, further reinforces already existing ‘Data Integrity’ related health safety concern. The cost of these new treatments being so high, it’s perplexing to fathom the necessity of cutting corners in clinical trials, if at all. More so, when these are avoidable to establish efficacy, safety and high-quality standard of the therapy to drug regulators for marketing approval.

Beyond ‘Data Integrity’ – in clinical trials:

Just as ‘Data Integrity’ issue in generic drug manufacturing has intruded in the clinical trial arena for novel treatments, yet another concern, also related to data, goes much beyond what is happening today in this area. This fast-emerging practice is related to ‘cherry-picking data’ for biased clinical trial reporting, adversely impacting public health safety, as brought by several research studies.

Very recently, this was vindicated by another paper published in The BMJ on September 18, 2019. It raised a serious concern of bias in clinical trial data submitted to regulatory agencies for marketing approval of even lifesaving drugs. The findings of the above paper concluded:

Between 2014 and 2016, almost half of the most pivotal studied forming the basis of European Medicines Agency (EMA) approval were judged to be at high risk of bias, based on their design, conduct or analysis. Accepting that some of these might be unavoidable because of complexity of cancer trials, it noted that regulatory documents and the scientific literature had gaps in their reporting. Journal publications also did not acknowledge the key limitations of the available evidence identified in regulatory documents. This concern too keeps growing.

Conclusion:

As discussed above, six broad and important points to note for any ‘breach of integrity’ or ‘cherry-picking’ of data in the pharma industry:

  • Takes place mostly in two known areas – manufacturing and clinical trials.
  • Involves both cheaper generic drug manufacturing, as well as, clinical trials of most innovative and highly expensive treatments – conducted even by Big Pharma constituents.
  • ‘Cherry-picking data’ for biased clinical trial reporting while obtaining marketing approval, involves even cancer drugs.
  • Any such avoidable malpractices with ‘data’, could seriously impact patients’ health interest, raising a public concern.
  • Instances of such malpractices usually become public, only when the perpetrators are caught by vigilant drug regulatory agencies, such as the US-FDA, or when external experts can trace their footprints through sophisticated analytical tools.
  • Multiple instances of wrongdoing of this nature, often by the same company, despite requisite regulations being in place, and also after facing penal actions, make it mostly a self-discipline issue of repeat offenders.

It’s a different discussion all together, whether or not ‘data’ is a new oil – air or water. But maintaining the sanctity of data, while generating, interpreting, presenting or even leveraging these, including for commercial considerations, must not be compromised, at any cost.

Today, breach of ‘Data Integrity’ and ‘Cherry-Picking of Data’ for biased reporting, are creeping into new drug clinical trial domain – from its usual habitat of generic drug manufacturing, posing a greater threat to patient safety. At the same time, none can say, either, that it’s happening with all drugs, at all the time and by all drug manufacturers. But, if and when it happens, it could lead to a catastrophic consequence both for patients and their family.

Be that as it may, country’s top drug regulators should strive harder for an ongoing and meaningful engagement with the pharma industry on this avoidable development. It could well be a carrot and stick approach, where repeat violations by any company would pose a risk of legal survival of the business.

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.

Gene Therapy Price: Commercial Viability And Moral Dilemma

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On May 24, 2019, Novartis announced the US-FDA approval of ‘the first and only gene therapy’ – Zolgensma, for a type of Spinal Muscular Atrophy (SMA), a lifesaving treatment for infants of less than 2 years of age. This unique drug halts disease progression with a single, one-time intravenous (IV) infusion.

On value offerings of Zolgensma,the Novartis CEO said: “The approval of Zolgensma is a testament to the transformational impact gene therapies can have in reimagining the treatment of life-threatening genetic diseases like spinal muscular atrophy. We believe Zolgensma could create a lifetime of possibilities for the children and families impacted by this devastating condition.”

Unquestionably, this development in medical science is indeed commendable. But, the jaw-dropping price tag – USD 2.125 millionattached to this product, has brought back gene therapy at the center stage of the incensed debate on access and affordability of such treatment for a vast majority of the population, across the world. Besides, two important issues related to gene therapy need to be effectively resolved – long-term commercial viability and the ‘moral dilemma’ that its market launch would prompt. And both are interconnected and also associated with the pricing rationale of such therapies.

I am terming  the second factor as a ‘moral dilemma’ rather than an ‘ethical dilemma’ because, “ethics is a more individual assessment of values as relatively good or bad, while morality is a more intersubjective community assessment of what is good, right or just for all.”In this article, I shall deliberate on these two interrelated issues. But, before delving into it, let me recapitulate in simple terms, what exactly is ‘Gene Therapy.’

What exactly is ‘Gene Therapy?’

According to US-FDA, human gene therapy seeks to modify or manipulate the expression of a gene or to alter the biological properties of living cells for therapeutic use.

Gene therapy is a technique that modifies a person’s genes to treat or cure disease. Gene therapies can work by several mechanisms:

  • Replacing a disease-causing gene with a healthy copy of the gene
  • Inactivating a disease-causing gene that is not functioning properly
  • Introducing a new or modified gene into the body to help treat a disease

Gene therapy products are now being studied to treat diseases including cancer, genetic diseases, and also infectious diseases.

Gene therapy price has been going higher than highest, thus far:

‘At USD 2.1 million, newly approved Novartis gene therapy will be world’s most expensive drug,’ says another report of May 24, 2019.It is noteworthy that Zolgensma price has been kept higher than the highest priced drug before this product came. If his trend continues, the future gene therapy cost is likely to exceed even Zolgensma price, the implication of which for patients who will need such treatment to save life or manage the disease, will be huge.

Intriguingly, the high treatment cost for a rare ailment like, SMA - a degenerative disorder that usually kills an infant within two years, is not limited to just gene therapy.  According to the April 04, 2019 article titled, ‘Biogen SMA drug price, Novartis estimates for its treatment far too high – U.S. group’ of Reuters, the price of another drug for SMA – Biogen’s Spinraza, which is not a gene therapy, is also very high. Its list price is USD 750,000 for the initial year and USD 375,000 annually. As reported, ‘Spinraza, an important growth driver for Biogen, took in USD 1.7 billion in 2018 sales.’

What should have been the actual prices of these drugs?

Interestingly, to determine the value of these drugs, the nonprofit Institute for Clinical and Economic Review (ICER) ‘used a measure known as “quality-adjusted life year” (QALY), in which each year of healthy or near-healthy life resulting from the treatment is worth USD 100,000 to USD 150,000.

Using the QALY benchmark, ICER, reportedly, said Spinraza should cost between USD 72,000 and USD 130,000 for the first year of treatment, and cost USD 36,000 to USD 65,000 per year after that, for infants not yet showing symptoms of the disease.

Further, with an alternative benchmark, known as life-year gained (LYG) based on the additional number of years a person lives due to a treatment, Spinraza is, reportedly, worth USD 83,000 to USD 145,000 in year one, and USD 41,000 to USD 72,000 annually thereafter, as ICER determined.

Zolgensma, on the other hand, would, reportedly, be worth USD 310,000 to USD 900,000 for Type 1 SMA patients based on the QALY assessment, and USD 710,000 to USD 1.5 million using the LYG calculation, ICER said.

Notwithstanding, whether one takes the QALY assessment or LYG based price of Zolgensma and Spinraza, the treatment cost of rare diseases, such as SMA for infants, is beyond the affordability of most people – whenever these drugs become the only choice to save lives. Thus, the question comes: Is gene therapy commercially viable or sustainable?

Is gene therapy commercially sustainable?

Undoubtedly, the development of gene therapy signifies yet another milestone in medical science to save lives, which is highly commendable. Nevertheless, the question arises, who will be able to afford this treatment? Thus, is development of gene therapy commercially viable and could be a money churner for a company on a long-term basis? There doesn’t appear to be a clear answer to these questions, just as yet. There are several reasons for this apprehension. But, I am citing below just two examples – related to their humongous treatment cost.

According to the article, published in the Scientific American, in the past five years, two gene therapy drugs have been approved in Europe and one in the United States. The name of this article is ‘Gene Therapy Is Now Available, but Who Will Pay for It?’ Interestingly, only three patients have so far been treated commercially with gene therapy, in Europe.

UniQure’s Glybera, used for a very rare blood disorder, costing around USD 1 million per patient, has been used just once since approval in 2012. However, in 2017, due to commercial reason UniQure decided to withdraw Glybera from the market. Similarly, Strimvelisof Orchard Therapeutics – used for severe Combined Immunodeficiency, costing USD 700,000, ‘has seen two sales since its approval in May 2016, with two more patients due to be treated later this year.’ Interestingly, these apprehensions have not deterred many companies. The ball keeps rolling.

But the ball keeps rolling:

That the ball keeps rolling, and at a faster pace, is evident from what US-FDA envisages in this field. According to US-FDA, by 2025, they are likely to approve 10 to 20 cell and gene therapy products a year. This is based on an assessment of the current pipeline and the clinical success rates of these products.

Importantly, despite apprehension of many, even some of the top pharma players, are fast moving into this space – based on their own assessment of the market. But, to move meaningfully in this direction, there are many several critical success factors, most of which are quite challenging and cost-intensive. A few of these, for example, are – a right collaborative model, ability to develop a scalable manufacturing process and overcoming various technical and regulatory challenges on the way. Interested pharma players, apparently, have realized these needs.

Big Pharma players joining ‘Gene Therapy’ bandwagon:

Big Pharma players, such as, Pfizer and Johnson & Johnson (J&J) have started moving into this space. Let me illustrate the point with just a couple of examples.

On March 20, 2019, Pfizer announced: ‘Pfizer has acquired a 15 percent equity interest in Vivet Therapeutics and secured an exclusive option to acquire all outstanding shares.’ Both the companies will collaborate on the development of Vivet’s proprietary treatment for Wilson disease – a rare and progressive genetic disorder, if remains untreated may cause liver (hepatic) disease, central nervous system dysfunction, and death.

Just before this, on January 31, 2019, Janssen Pharmaceutical of Johnson & Johnson (J&J) announced a worldwide collaboration and license agreement with MeiraGTx Holdings plc – a clinical-stage gene therapy company, to develop, manufacture and commercialize its clinical stage inherited retinal disease portfolio, including leading product candidates for achromatopsia. Even prior to this, on January 05, 2018, J&J had announced that the company has established an exclusive research collaboration with the University of Pennsylvania’s ‘Gene Therapy Program’ for fighting Alzheimer’s disease with gene therapy. There are several such instances of gene therapy collaboration for Big Pharma.

With a slightly different collaborative model for gene therapy, on April 12, 2018, GlaxoSmithKline (GSK) signed a strategic agreement to transfer rare disease gene therapy portfolio to Orchard Therapeutics, taking a 19.9 percent stake in the company and a seat on the board. Simultaneously, this agreement strengthens Orchard’s position as a global leader in gene therapy for rare diseases.

What could be the moral dilemma in gene therapy pricing?

The dilemma with gene therapy is that they are frightfully expensive, but at the same time is ‘life-transforming’ for many, across the socioeconomic spectrum. This could be another ‘moral dilemma,’ as such exorbitant, if not seemingly ‘vulgar pricing’, as it were, would raise many questions on the company’s own principles regarding right and wrongin saving lives of patients with its gene therapy.

The reason for this moral dilemma in, especially gene therapy pricing is aptly elucidated in an article titled, ‘How to pay for gene therapies in developing nations,’ published in  Evaluate Vantage on March 22, 2019. Admitting that discrepancies in healthcare between rich and poor nations are nothing new, the article also raises a flag, indicating: ‘The potentially curative nature of many gene therapies heightens the moral conundrum that companies will face if and when these projects get to market.

Acknowledging that gene therapies are hot right now, with their developers taking aim at everything from hemophilia to rare eye diseases prevalent in rich nations,the author raises a pertinent question: ‘With rich countries like the US finding it hard to fund gene therapies, it is worth asking whether these projects will ever reach patients in developing countries. And if they do how will companies cope?’

Intriguingly, to create a larger market some are also targeting disorders, largely seen in poorer areas, such as sickle cell disease that could prove valuable also in the developing world. Expectedly, the pressure will mount from many corners to provide gene therapy at an affordable price. Big pharma players are likely to face this strong head wind, adding further fuel to fire of the moral dilemma of gene therapy pricing, especially for the developing world. As on date, no one knows what percentage of people in the developing world will have access to gene therapy. Even Novartis, reportedly, does not seem to have any plan to make its product available in the developing nations.

Conclusion:

Despite what has happened so far, as described above, looking around, we find a steady flow of gene therapy, some even promise remedial treatment outcomes. Big pharma companies, as well, have commenced a long-haul journey in this direction, with big stake investments.

Regarding, not achieving a huge commercial success with gene therapy, so far, one point is common for all, these are for the treatment of very rare diseases. Probably, because of this reason, some companies, having taken a cue from it, are moving away from ultra-rare diseases. Illustratively, GSK is still looking to use gene therapy in a collaborative platform, to develop treatments for more common diseases, including cancer and beta-thalassemia – another inherited blood disorder – as the above Scientific American article reported.

That said, the point to ponder now, if the effort to come out with a remedial gene therapy for these indications fructifies, would it ensure a long-term commercial viability, alongside giving rise to a moral dilemma on the rationale for gene therapy pricing? This seems to be akin to a ‘chicken and egg’ situation. It will be interesting to witness how it pans out, as we move on.

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.

An Evolving Paradigm of ‘Price-Value Model’ Of Pharma Value Delivery System

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May 4, 2016 edition of the ‘MIT Technology Review’ published an interesting article carrying the headline, “The World’s Most Expensive Medicine Is a Bust”.

The obvious question that floats at the top of mind: What is this most expensive drug in the pharma history, and why has it failed commercially, despite being a product of disruptive innovation and a marvel that stands out in the space of contemporary drug innovation? 

The product is called Glybera (alipogene tiparvovec). It heralded the dawn of the “first gene therapy” in the Western world, whose approval helped ignite an explosion of investment and excitement around treatments that correct DNA, as the MIT article said.  

Glybera promises to cure rare inherited diseases with one-time repairs to a person’s DNA. A single dose of gene therapy can change the genetic instructions inside a person’s cells in ways that last many years, or even a lifetime. 

Interestingly, even with this unprecedented product offering, the product has become a commercial flop, due to its staggering million-dollar price tag, which very few patients can afford.

Is this an extreme example of price-value relationship for a new breakthrough pharma product? Yes, of course!  Nevertheless, it makes us ponder on some key fundamentals, afresh, such as:

  • The core purpose of drug innovation
  • The price-value relationship of even breakthrough drugs

The proper understanding of these points comprehensively, especially the above two fundamentals, would enable the drug companies to achieve both, the core purpose of intricate drug innovation initiatives, and also making these medicines commercially successful with increased access to patients, through innovative ‘value delivery’ mechanisms.

I believe, the pharmaceutical industry is now at the threshold of a paradigm shift. The new paradigm would signal a metamorphosis in the price-value equations for all drugs, mostly due to changing socio-political environment, across the world, as we have started witnessing in the topmost free economy of the world – the United States.

Pharma business is a ‘value delivery system’: 

Way back in June 2000, an article published in ‘McKinsey Quarterly’ on delivering value to the customers, deliberated on a 1988 paper of Michael J. Lanning and Edward G. Michaels. The study combines the value-maps developed in the price-value models with the idea of the “business system,” which was introduced in 1980.

The paper titled, “A business is a value delivery system,” emphasizes the importance of a clear, well-articulated “value proposition” for each targeted market segment. This means a simple statement of the benefits that the company intends to provide to each segment, along with the approximate price the company will charge each segment for those benefits. 

Looking at this concept in pharma perspective:

Keeping the above paper in perspective, when we look at the pharma value delivery system, besides the key benefits that a drug offers, one of the most critical value parameter continues to be the financial value.

The healthcare value chain, across the world, has started sharpening its focus on the drug cost today, more than ever before. This is primarily based on the differential value that a drug offers as compared to its closest alternatives. We may like it or not, it is happening irrespective of, whether the drug in question is a breakthrough innovation, or an off-patent high-priced generic medicine.

As I said before, not just in India, the affordability of health care in general, and medicines in particular, is rapidly emerging as a key concern for all developed and the developing nations, including the United States.

Thus, even after careful consideration of all novel product’s benefits and the costs associated with these, the stakeholders’ focus is getting sharper on the overall financial value of the product offerings to the patients. This is reality, and can’t just be wished away by any measure of powerful and expensive advocacy campaigns, together with clever media management. 

The drug companies may continue to crib about it, but this will possibly lead them nowhere, in the long term. Instead, they would require to search for a workable win-win and level headed solution, for this most fundamental business issue.

Understanding the evolving paradigm:

We are fast arriving at this new paradigm. There, the financial value of a drug, in the ‘value delivery system’ of pharma marketing, would occupy the center stage. The drug companies would need to arrive at this financial value, not just by understanding the professional mindset of the doctors and taking them on board somehow, but by properly understanding what would the majority of stakeholders want to pay for a new drug, and then perhaps work backwards to translate that finding into reality. 

Its successful application would soon assume a pivotal role in the pharma value delivery system. A company may contemplate pricing a drug high, limiting its access to a few rich, and still succeed in making its cash register ringing, such as, some new hepatitis C or cancer drugs. Nonetheless, this could ultimately make their overall business socio-politically too vulnerable, and may not be sustainable either, in the long run. 

The same old and current approach does not create a wholesome value for a new drug to most of the customers, despite the company having a state of art ‘value delivery platform’, for unleashing a dazzling marketing blitzkrieg.                                 

The pharma marketing strategy remains unchanged and stale: 

At a time, when a paradigm shift is taking place, especially in the way the entire world views at the price-value equation of a new drug, the overall strategic approach of the pharma marketers, as I see it, still remains in the old paradigm, with its roots firmly entrenched there.

I think it so, because the traditional pharma marketing has always been a unilateral communication process, predominantly involving the doctors, and trying to fathom their needs, wants and professional mindset.

Accordingly, the product value delivery process for the doctors, with or without the medical representatives, is basically woven around those needs, wants and mindsets of the target doctors. It, by and large, continues even today, with some cosmetic changes in tools and formats here or there. 

Therefore, when the basic marketing and communication process aims at effectively delivering the value of drugs, let us discuss briefly what does the core value of a drug mean?

The value of a drug: 

For this purpose, I reckon, it would be prudent to avoid an ethereal approach to arrive at the financial value of a drug, such as, what is the cost of a life, as often raised by many pharma players. A practical approach to resolve this issue would benefit all, in every way.

Without going much into the core purpose of pharma innovation, usually the drug companies define the value of a medicine based on what they think about its attributes. Accordingly, respective players arrive at its financial value, that the patients or the payers must pay for, if they want to have an access to it. 

Usually not many independent studies are conducted by the drug companies to ascertain how much the majority of stakeholders, including the governments, payers and patients, would want to willingly pay for a new drug, after well considering its value offerings.

Competitive Scenario:

The ever increasing, and virtually obsessed focus on drug ‘innovation’, while justifying the high financial value of a medicine for the patients, also restricts competition, especially for newer ones. For most of the patients this situation is a double whammy.

Additionally, the consolidation process within the industry is also fuelling this situation further. The virtual monopoly of a few companies with some new drugs, in key therapy segments, such as, diabetes, cancer, vaccines and HIV, is restricting the overall competitive environment. This would continue.

A September 24, 2014 Article, published in the ‘Insight’ of Bain & Company on the throws some light on the subject. It says, “over the past 20 years, and especially since 2000, building leadership in a category has become a crucial route to success in pharma. Seven of our 10 leading value creators, including Roche in oncology and Novo Nordisk in diabetes care, generated at least 50 percent of their revenues from one therapeutic area or primary care. In two cases – Biogen Idec in neurology and Celgene in oncology – more than 90 percent of revenues came from a single therapeutic area.”

As I said, this process is expected to continue, it is necessary for the drug companies, governments, other payers and the patients understand the new paradigm, and act accordingly to address this issue to protect mutual benefit.

If it does not happen, the evolving socio-political environment, across the world, would occupy the driver’s seat to navigate through this complexity, in the healthcare space in general and pharma in particular, safeguarding the patients’ health interest. 

The core issue:

In the prevailing scenario, the core issue that gets reinforced, yet again, as raised by many, including the World Health Organization (WHO), is the growing inherent conflict between predominantly the profit driven business goals of the pharma players, and the public health interest of a nation.

Possibly for this reason, Dr. Margaret Chan, the Director General of the World Health Organization (WHO), at a briefing to discuss the Ebola outbreak in West Africa at the UN Foundation in Washington on September 3, 2014 said:

“Big Pharma’s greed for profits, not lack of funding, delaying Ebola treatment development.” 

Many countries are now seriously striving to arrive at a middle path to resolve this perennial conflict, India included. The drug companies may wish to take note of it.

I discussed this issue in an article published in this Website titled, “Is The Core Purpose of Pharma Business Beyond Profit Making?” on November 10, 2014.

Conclusion:

As the above ‘McKinsey Quarterly’ paper articulated, the strength of the buying proposition for any customer is a function of the product value minus the price. In other words, the ‘surplus value’ that the customer will enjoy once that product is paid for. As the paper clarified, the “value” in a price-value map will necessarily be informed guesses, though after well-considering multiple variables.

Delivering more of this ‘surplus value’ to patients, willy-nilly, would soon be the name of the game, especially for the winners in both the global and local pharma industry. 

In the entire drug sector, including India, this ‘price-value model’ could help a pharma company ascertain the sustainability of its competitive position, well considering the stakeholders’ perspective, and accordingly take the right business decision.

Thus, proper understanding of the ‘surplus value model’ while pricing a drug, and its immaculate execution through state of the art marketing and communication strategies, will separate the men from the boys, for sustained excellence in the pharma business.

Sans understanding of this ‘price-value model’, which is so important in the evolving new paradigm of a pharma value delivery system, a pharma player would risk getting caught in a tough headwind, especially with new high-priced products. This situation could, in turn, jeopardize its long term success, and even erode the well-earned company reputation, in tandem, at times mercilessly.

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.