Trends in Innovation and the Business of Drug Discovery
2.2 EVOLUTIONARY TRENDS IN PHARMACEUTICAL INNOVATION
2.2.1 The Global Pharmaceutical Discoveries of the Twentieth Century
(Table 2.1)2.2.1.1 The Changing Pharmaceutical Productivity
Over the last decade, there has been a continual rise in pharmaceutical R&D spending. Drugs approvals by the US Food and Drug Administra- tion (FDA) steadily declined by 40%, despite the growth in cost in R&D of drugs accessed by the public. A study report by Oliver Wyman [17]
examined drugs approved between 1996 and 2010 by the FDA. He re- ferred the “Era of Abundance” as a period when the number of approv- als of new molecular entities (NMEs) reached 36, which was between 1996 and 2004, and the “Era of Scarcity” as a period when the number dropped to 22, between 2005 and 2010 (Figure 2.3); these periods were characterized as boom or failure, respectively, and with a defining separa- tion marked by Vioxx withdrawal in 2004. Scannell et al. [18] also indi- cated that the proposed Eroom’s law theory – “the number of new drugs approved per billion US dollars spent on R&D has halved roughly every nine years since 1950” – agrees with the proposal of Oliver Wyman. A total of $128 billion was spent yearly on R&D from 2009 through 2011,
Trends in Innovation and the Business of Drug Discovery33 Table 2.1 The global pharmaceutical discoveries of the twentieth century
1900–1929
1900 US life expectancy is 45
1908 Tuberculosis vaccine 1920 and on
Launch of the first vaccines, diphtheria, pertussis, and tetanus 1922 Insulin for diabetes 1924 Tetanus vaccine 1928 Discovery of penicillin
1950s
1950 Discovery of prednisone
1951 Chlorpromazine (thorazine) for schizophrenia 1953 First leukemia Rx
1954 Polio vaccine
1953 Discovery of the structure of the DNA molecule
1957 L-Dopa developed
1958 First diuretic to treat high blood pressure
1980s
1981 Launch ACE inhibitor to treat high blood pressure
1986 Launch monoclonal antibody treatment
1987 Launch new class of depression medicines
Launch AIDS therapy
Launch statins to treat cholesterol
1930s and 1940s 1932 Launch antibiotic
(sulfa drugs)
1935 Discovery of cortisone 1938 Launch epilepsy
therapy
1940 Launch penicillin 1944 Launch kidney dialysis 1945 Launch flu vaccine 1948 Launch chemotherapy
drug
1960s and 1970s 1963 Measles vaccine 1967 Launch beta blocker
1967 Launch mumps vaccine; first human heart transplant
1968 Launch antirejection medicines for organ transplants
1972 Advances in anesthesia
1973 Engineered recombinant DNA technique 1977 Launch nonsurgical treatment for ulcers 1978 Launch biotech synthetic human insulin 1978 Launch production of human insulin
Initial biotech application in drug development
1979 First synthesis of human growth hormone 1980 Smallpox cleared
1990s
1993 Launch Alzheimer’s Rx
1994 New breast cancer Rx Polio cleared in the Americas
1994 Breast cancer gene discovery 1996 Parkinson’s disease associated gene
with new suggestions for neurological therapy
1995 Advance AIDS therapy (HAART) 1995 Launch oral drugs for diabetes 1997 Advance Parkinson’s therapies 1998 Launch rotavirus vaccine 1990 Launch human genome initial
experimental gene therapy treatment on a child
Source: Refs [10–16].
compared to only 60% spent per year from 2002 through 2004, and still there are fewer new entrants – only 29 new filings in 2011, compared to 32 in 2004. Some optimism reemerged in 2011, marked by the 30 NME approvals made by the FDA, the highest number recorded follow- ing the 36 NME approvals in 2004; this was the blockbuster era, a period when blockbuster drugs sales were leading the pharma market with high profit yields that prospered the innovator pharmaceutical companies [19].
Blockbuster markets are experiencing a diminishing revenue stream as the top 10 drugs that generated $15 billion in the United States in 2012 had lost their patents in 2013, and, as projected, could lose $8 billion by 2016; leading to a gradual rounding off of the “blockbuster era” for big pharma.
Patent expiry is regarded as the “patent cliff,” which is gradually tak- ing over the optimism that was the hallmark of the blockbuster era. It has been predicted that about $148 billion could be lost between 2012 and 2018 due to patent expiry. In addition, drug spending in developed markets will shrink by $127 billion between 2011 and 2016 due to an increasing focus on low-price generics. Between 2011 and 2016, global brand drug spending will grow by only 8%, compared to 80% growth in generic drug
Figure 2.3 A 10-year Comparison of new Drug Applications/Biologic License Applica- tions/ new Molecular Entities Applications Received by CDER Through 2013. Adapted from January 2014 Novel New Drugs 2013 Summary. US Food and Drug Administration (FDA) Center for Drug Evaluation and Research [23].
Trends in Innovation and the Business of Drug Discovery 35
spending. Expenditures have been redirected to specialty drugs (biologics, orphan drugs) for cancer, HIV, hepatitis C, and rare diseases, which have recently picked up speed.
By 2011, Pfizer had gained profoundly due to its monopoly over the sale of Lipitor (while still on patent). About $115 billion in revenue has been reported since its release with 40% of total profits in 2005 alone [20]. Pfizer is currently facing a huge loss in profits due to loss of patent exclusivity over Lipitor. Also, the innovators of Plavix (clopidogrel) and Seroquel (quetiap- ine) are on the patent cliff with a revenue plunge totaling US $33 billion of sales in 2012 In addition to Lipitor, Plavix and Seroquel have suffered the steepest decline in revenue. In an attempt to minimize loses from patent expiration, a licensing agreement with the Indian pharmaceutical company Ranbaxy, was established [21,22]. Many of the mega-blockbuster drugs are now generic [23]. Other companies affected are Sanofi, Novartis, Roche Astra Zeneca and Eli Lilly.
The figure includes pending applications for 2013.The Center for Drug Evaluation and Research (CDER) approval averaged about 26 NME ap- provals per year excluding the 39 of 2012, an unusually high count above the rest within the decade.
One-third (33%) of the NMEs approved in 2013 (9 of 27) were identi- fied by the FDA as first-in-class – with a new and unique mechanism of action for treating a disease. Orphan drugs, drugs that treat rare diseases (affecting around 200,000 Americans), comprise one-third (33%; 9 of 27) of the NMEs approved in 2013. This has been considered a significant ac- complishment considering the prevailing paucity of orphan drugs due to low incidences of the diseases (see Tables 2.1 and 2.2).
NMEs or innovative new products are a new class of candidate drugs with therapeutic action against a disease that have not been licensed for marketing or clinical use. However, an NME may not therapeutically supersede existing therapies. First-in-class drugs are originator drugs with a novel action mecha- nism for treating a medical condition. Pharmaceutical companies essentially depend on incremental innovations to provide a revenue source that supports the development of the high risk, capital- and research-intensive drugs. Inno- vative new drugs increase manufacturer competition and lower drug prices.
Me-too drugs differ slightly from others within the same class – drugs with simi- lar chemical composition and which treat similar conditions. The slight differ- ence enhances the ability of physicians to tailor drugs to the medical needs of a diverse patient population. Incremental improvements in the new classes of drugs tend to address the limits of the already existing ones. New drugs with adjusted formulations and dosing significantly increase patient compliance and therapeutic value.
2.3 ADVANCES IN PHARMACEUTICAL INNOVATION