Trends in Innovation and the Business of Drug Discovery
2.5 FACTORS CONTRIBUTING TO PHARMACEUTICAL INNOVATION SETBACK
2.5.1 Research and Development Productivity
Despite historical advances in science and technology and concomitant im- provement in the overall quality of care, pharmaceutical innovation versus capital expenditure balance has been more inclined to capital expenditure.
The number of new drugs approved per billion US dollars spent on R&D decreased over time particularly as the current medical product develop- ment path has progressively been challenging, inefficient, and costly [34].
Recent innovations may not have proved significantly more effective or affordable, and according to the data in Figure 2.3, the average number of drugs produced over the past decade is running at a low average, designated as an “Era of Scarcity.” Yearly new drug introduction has been very modest.
Apart from 2004, the yearly average has been 22 with the highest being 26.
This number, which rose to 30 in 2011 and more steeply to 39 in 2012, preceded a drop to 27 in 2013.
Recent tools and newly created technologies have not been harnessed productively to match technological advancement with pharmaceutical output. A disproportionate development of many new therapies for pa- tients with only marginal improvement over the others has been considered a “pipeline problem.” The principal reason for supplementing the already existing therapies is to avoid the huge R&D expenditures devoted to a high risk, low income results, and high attrition rates associated with drug
Trends in Innovation and the Business of Drug Discovery 39
development in new research areas. Another major problem is that the un- derstanding of biological complexity in the inter- and intrahuman ecosys- tem is not yet absolute [35]. The changing demographics and disease profiles are a limitation that deters the ability to keep a balanced product pipeline.
2.5.2 Complex Biological Systems
The most challenging aspect of drug development is finding an approach that is commercially feasible to bring anticipated market value [36,37]. Numer- ous targets exist due to decades spent in research and suitable technologies that facilitate these findings. Estimates of the number of actual targets range from a few hundred to a few thousand. These need to be sifted through, re- quiring extensive labor and time investment in developing a therapeutically viable molecule. For example, the G-protein-coupled receptor is targeted by 30% of all marketed products but still uncharacterized ones are in the order of hundreds. The translating of this rudimentary arm of discovery to commercialization has been slowed by gaps in bringing definitive solutions to major diseases that afflict mankind, including cancer, cardiovascular dis- ease, Alzheimer’s disease, and diabetes. Intuitively, further development of a target depends on a number of factors. First among these is medical benefit.
What benefit will a new drug bring to victims of the disease it is intended to treat? In the case of treatments for previously untreatable diseases the answer is obvious; that therapeutic outcomes of substantially improved tolerability, greater potency, or avoidance of side effects can justify the development of a new drug. The choice of a therapeutic target has been strategized as a means to address the risk involved. For example, the biomarkers (biological signatures) for diagnosis and the monitoring of progression of diseases have not been clearly delineated. Pharmaceutical R&D in these areas has not been “derisked” and is regarded as high risk and costly projects – the worst feared discovery issues.
2.5.3 The Challenge of Adverse Drug Reactions
Polypharmacology, which refers to off-target interactions that lead to adverse effects, is attributed to complicated biological pathways. Pharma- cological profiling that identifies this attribute in a candidate drug requires adept abilities in scientific discovery and superior biological understand- ing [38]. The lack of fundamental knowledge has become a formidable barrier to understanding the underlying processes associated with disease development and maturity.
One of the aims of clinical development is to detect adverse drug reac- tions in a candidate drug prior to the marketing period. However, certain drug development methodologies do not exactly reflect the real world ex- perience. Clinical development involves an average of 1500 patient expo- sures within a certain period of time or a few years. Thus, it might not pro- vide a definitive estimate of the actual real world population. For example, Bromfenac (Durant), a nonsteroidal anti-inflammatory agent, was recalled in 1998, before its first year of introduction to the market, due to serious hepatotoxicity in a minority of the population taking the drug, which was about 1 in 20,000 patients over 10 years [39]. Thus, drugs that cause rare toxicity responses in humans might pass undetected during development but which could only be detected when exposed to a wider population within an extended period of time when taken by a wide range of patients while on the market. This exposes certain patient populations to safety risk.
Market recalls could also be detrimental to the patient population that needed the drug. To the innovator pharmaceutical company, it means in- novation failure and loss of revenue.
2.5.4 Economic Strategies
The ultimate goal of any pharmaceutical company is to create viable invest- ment opportunities for robust yields, growth, and profits from proprietary drugs. The choice of a business model is informed by the particular thera- peutic areas being pursued. This impresses on the pharmaceutical team a need to find a suitable innovation pathway that promotes the company’s com- petitiveness. Expenditure and revenue generation follows cyclical feedback mechanism with revenue from product sales subsidizing the R&D of new drug compounds (Figure 2.4). In some cases, the path of market success could
Figure 2.4 The Feedback Cycle for Pharmaceutical R&D.
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be hampered by lack of sufficient revenue for R&D of new pipeline drugs, slowing down the entry of newer products to the market. Successful candi- dates based on a cumbersome process become costly. Product development programs have been dumped due to disproportionate investment of time and resources. Reports indicate that companies currently allocate a substantial portion of sales revenue to marketing their products. Previously, the cost of developing an NME has been increased from around $800 to up to $2 billion.
Failing R&D contributes to rising healthcare costs, with the burden of drug coverage costs and difficulties of medical product development con- tributing to stagnating innovation. Preferential use of generics and rising healthcare budgets in turn negatively impact financial performance for the innovator companies due to depleting revenue and failure in reinforcing pipelines through losses in the revenues as blockbusters come off patent.
The result is a declining number of new drugs, raising doubts about the adequacy of biomedical revolution in addressing the public health burden.
High drug pricing hinders drug accessibility especially for patients in the Third World where certain diseases are endemic while safety issues which has also further compounded the existing problems in part accounts for in- creased death rates. The one-size-fits-all paradigm to drug design and devel- opment, widely adopted by the drug developers, leaves the noncompliant patient population no option than to take drugs that are largely biologically nonconducive or unsafe.
2.5.5 Between Risk and Return: The “Valley of Death”
Most of the proposed research projects are based on speculative research ideas and are, consequently, high risk. The “Valley of Death” is a period of lack of funding and productivity in the drug development pipeline due to the paucity of business investors who are repelled by any high risk business with no clear indicators of future success. The “Valley of Death” is due to drug development projects based on complex pathologies markets, char- acterized as high risk and which have narrowed the probability of success [40,41]. Selection of a new research target is informed by the risk–return assessment, which is essential for the determination of the level of risk in- volved in developing a drug molecule and its costs. Recently, there has been a shift from the risk-adjusted, established project development processes to riskier alternatives. Success depends on the quality of the scientific hy- pothesis that established therapeutic efficacy of the drug and the technical effectiveness. Less validated new drug candidates are filling the pipelines due to the lessening of the number of well-validated options.
The outcome of a high risk venture with low prospects for financial suc- cess is due to difficulty in predicting the late stage success. This has resulted in the failure of important drugs developed at great expense due to unan- ticipated problems. The potential for a high financial return is not over- ruled, but depends on the therapeutic areas of interest, like cancer, inflam- mation, or cardiovascular disease. Speculative research targets and innovative improvements are major categories of consideration in target selection. A proof of biological efficacy would not be established for any candidate drug until the Phase II trial stage for the speculative research target, which is inherently at a greater risk. For the big pharmas, choice is narrowed to the most popular therapeutic areas, which are cardiovascular, central nervous system, cancer, and gastrointestinal, allergic, and metabolic diseases [42].
Sometimes the big biopharmaceutical companies reject certain high risk projects that are mostly taken over by smaller biotech companies with the hope of commercial success and growth if such a new area could be success- fully developed and commercialized for company growth.
2.5.6 Poor Product Strategies
In the present competitive healthcare environment, translating innovation into medicines that are both approvable and commercially viable is diffi- cult. Maintaining a competitive advantage depends on the scientific com- prehension of the disease target. Drugs in development, especially first-in- class drug development (novel mechanisms), require an understanding of product strategies that would maximize the anticipated commercial perfor- mance. Product strategies are evaluated by disease areas that have not found pharmaceutical treatments due to limitation on basic scientific knowledge.
Mostly, the underlying disease causes are not fully addressed, or that the de- velopmental drug could never be optimized. It is also evaluated by patient or physician segmentation, which requires intensive search into the unmet medical needs. Understanding the physician preference by obtaining the information about how many patients are diagnosed, how many doctors are prescribing the drug, and how the treatment options could be com- plemented is essential. Other important aspects to consider are impact on regulatory environment, effect on pricing/reimbursement, and publication strategy. These are all predetermined to meet some fundamental objectives regarding performance in the market place.
The investigational drug could be well positioned in the competitive market place in collaboration with the marketing specialist. The marketing specialist collects, analyzes, and communicates information on the disease
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indication market place and, collecting information from the hospital situ- ations (doctor–patient responses) pricing, acquires all the important facts related to the disease in a market place. The health outcomes personnel give information about patient segments. Commercial evaluations consist of an expected sales profile of the drug compound, which considers volume of sales, speed with which the drug compound reaches its maximum revenue potential, and possible decline from sales. The strategic and planning process incurs huge expenses in order to understand all conceivable risks and forms of success. Thus, not adequately incorporating these commercial assessments could lead to prioritizing a drug compound of limited potential over one of high potential. Failing to strategize the drug compound effectively and failing to maximize the compound’s potential and returns would lead to in- novation failure. This further leads to limiting possible revenue streams that could cover costs of failed compounds.
2.5.7 Patent Protection
Intellectual property is the proprietary knowledge that underlies the devel- opment of the marketed drug and could be seen as intangible capital that is secured through patent protection. Patent protection is a legal right that allows exclusive entitlement to the sale of an innovator drug for an allotted period of time. It is used as a tool by the innovator company to recoup the R&D investments expended in developing the drug. When patents expire, the so-called patent cliff results in depleting revenue streams, which impacts pharmaceutical innovation.
2.5.8 Clinical Development Challenges
In the drug development cycle, all the stages are important and contribute to product progression to marketing (Figure 2.3). A well-executed preclini- cal development contributes to effective clinical development and product success. A major concern in the preclinical drug development is the in vitro and in vivo models. Sometimes, the data generated using in vitro screening techniques do not recapitulate the systemic biology of the cell, organ, or whole organism, and cellular bioactivity. For example, the issue of animal models that do not exactly replicate the human pathophysiology and time to disease progression is not taken into consideration in experimental de- signs. This could lead to errors in presented data, which affect the integrity of generated clinical data. Thus, identification of candidates with a high probability of effectiveness remains a challenge [43]. Response to a drug
tested in several healthy adults sometimes deviates from that in the target population manifesting the disease for the tested drug. In addition, adverse drug reactions (ADRs) might surface many years later. This rare type of ADR is called idiosyncrasy. It brings an abnormal trend in in new drug investigation.
New technologies require methods of evaluation that might be more complex than traditional methods, suggesting further validation steps, and time and money investment for complete utilization. Problems in the design, characterization, and manufacturing programs are other examples. Drug companies keep trying to reinvent themselves, or at least their research labs, with varying degrees of success and failure. Using study protocols in clinical trials that are poorly validated and targeting the wrong population in trials using poorly validated biomarkers to assign clinical endpoints are limita- tions in clinical development. More than 70% lack of success in Phase II trials have often been blamed on the market landscape and unmet medical needs. Additionally, recent large-scale Phase III failures, for example, Ax- itinib, Figitumumab, and Torcetrapib owned by Pfizer; Elesclomol and Syn- tha owned by GSK; AS404 and Antisoma owned by Novartis; Iniparib and BiPar owned by Sanofi; and Vandetanib owned by AstraZeneca have been attributed to scarcity of late-stage assets [44].
Bristol-Myers Squibb’s candidate drug for hepatitis C is a nucleotide polymerase (NS5B) inhibitor. In 2012, drug administration in a Phase IIb study was suspended due to a heart failure response in a patient who had the highest daily dose, 200 mg, in combination with Bristol-Myers Squibb’s daclatasvir, another hepatitis C drug candidate. Zaltrap (aflibercept) is an angiogenesis inhibitor for prostate cancer developed by Sanofi and Regeneron Pharmaceuticals. In 2012, the pipeline project was terminated as it failed to meet the threshold for primary endpoint of improvement in overall survival when administered intravenously as a first-line treatment.
The treatment was for metastatic androgen-independent prostate cancer in combination with docetaxel and prednisone, in a VENICE Phase III study [45].
The dose–response evaluation is very critical and the methods need to be well established. The effectiveness of the use of clinical safety biomarkers in evaluating a disease condition has been questioned. This is why clinical pharmacology needs to be integrated into the multidisciplinary teams in this situation. Bioinformatics has led to a better understanding of human disease although it is not optimal. The filters are robotic and not based on the rational scientific judgment capability of humans.
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2.5.9 Regulatory Burden
Drug companies undergo rigorous, heavily restricted and regulated discov- ery, applied research, and development processes, which on average, span 5 years of laboratory research and 8–10 years of clinical studies. Effectiveness must incorporate the regulatory-imposed elements in order for the appro- priate legal and scientific standards to be met for drug licensing. Thus, the pharmaceutical company has to comply with standards strictly for business continuation and integrity. Novel compounds are produced under heavy regulatory guidance and the huge financial investment makes it a huge challenge [46]. Stringent regulatory standards are increasingly adding more filters that tend to constrict all the gateways to drug licensing.
2.6 CASE: CHALLENGES IN ANTIMICROBIAL DRUG