Trends in Innovation and the Business of Drug Discovery
2.8 STRATEGIES AND APPROACHES TO ADDRESSING INNOVATION FAILURE
2.8.1 Regulatory Approach
The importance of facilitating a better access to medicines has been em- phasized and efforts are addressing the productivity gap while streamlining regulatory consultations and information acquisition to harmonize these efforts. Continuous regulatory reform has led to roadmap initiatives that stimulate pharmaceutical productivity. Modernization incentives increase time to approval especially for the innovator drugs. For example, the FDA issued the Prescription Drug User Fee Act (PDUFA) 1992 requiring drug manufacturers to pay fees to speed up new drug and biologic drug applica- tions reviewing to reduce the time to approval. A guideline document “A revised guideline on current Good Manufacturing Practices (cGMP) for the 21st century” recommends the effective application of new technological advances by the pharmaceutical industry and modern quality management techniques. National and international initiatives are introducing strategies that bring innovative medical solutions to the public. Some examples are Innovation and Stagnation: Challenge and Opportunity on the Critical Path to New Medical Products (United States), Innovative Medicines Initiative (Europe), New Safe Medicines Faster Project (Europe), and the Priority Medicines for Europe and the World Project “A Public Health Approach to Innovation” by the World Health Organization. They propose strategies for providing an enabling environment that fosters the steady integration of new and emerging science into modern medicine that builds on the lessons learnt previously to improve on their preparedness to address challenges.
Multidisciplinary scientific expertise and cross-disciplinary regulatory science training address inefficiencies and challenges posed by novel prod- ucts. In pharmaceutical innovation, to facilitate fewer postapproval timelines, the prioritized values for the pharmaceutical company are speed to mar- ket, regulatory burden miniaturization of cGMP manufacturing, innovation flexibility, less R&D expenditure and freedom from regulatory uncertainties
like inspections and procrastinated approvals. However, realistic and effec- tive laws and regulations that address the patient’s medical needs and neces- sities is the main objective for pharmaceutical regulations and to promote innovations that address the global disease burden. A company’s priorities sometimes clash with those of the regulatory mandates and increasingly, revised legislations attempt to provide an appropriate framework to address these demands. These efforts are intended to promote risk miniaturization, and to explore avenues that would provide a path for correlating clini- cal trial outcomes to real world populations backed with quality scientific assessment in an effective manner. Companies could intensify strategies that build on technologies that deliver therapeutic solutions with diverse clinical indications to address various patent needs.
European regulators have adopted a complementary approach towards addressing global disease burden by setting priorities based on an evidence- based approach. First, decisions are informed by a collective assessment of burden of disease and clinical efficacy.
These include acute stroke, chronic obstructive pulmonary disease, and Alzheimer’s disease. Second, priorities have been based on projections and trends and include antimicrobial resistance and pandemic influenza, whose selection order aligns with the severity of the risk factors. Third, priori- ties are based on social solidarity. The disease areas include the orphan and neglected diseases. Judgment is based on the ethical and moral values, and theories of social justice that justify its prioritization.
2.8.2 Mergers, Acquisitions, and Outsourcing
Mergers, acquisitions, or comarketing deals are strategies used to address phar- maceutical productivity inefficiencies. The pharmaceutical companies are growing the pharmaceutical value chain networks in emerging markets through capital investments, joint ventures, and collaborations with local companies.
Joint ventures with generic manufacturers in emerging markets are intended to capture the value of global generic markets. This is expected to double from
$240 billion in 2011 to $430 billion in 2016 [53].
Pharmaceutical firms use their specific strategies and competencies to gain competitive advantage and optimize economic returns. The big phar- mas are at the frontlines of technological innovation due to the ability to coordinate cross-disciplinary and cross-functional specializations, and with- stand technological instability through learning processes, management expertise, and an ability to undertake and manage multiple technologi- cal specializations. Their strengths could be complemented with the parties
Trends in Innovation and the Business of Drug Discovery 49
involved, who mutually agree to capitalize on the synergy between them and the following are examples given here.
In August 2012, 10 big pharmas, namely, Abbott Laboratories, Astra- Zeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, Glaxo- SmithKline, Johnson & Johnson, Pfizer, Roche’s Genentech unit, and Sanofi, launched TransCelerate Biopharma in the United States. It is a non- profit joint venture intended to promote the sharing of their complemen- tary strengths toward a more cost-effective model of R&D. The union is expected to set the stage for eliminating the major limitations encountered in clinical development [54,55].
A company with specialty research devotes less time to general predis- covery and discovery research but concentrates rather on the preclinical and clinical work. The company partners with other companies with en- hanced abilities in these areas. For example, Humira, a full human mono- clonal antibody for the treatment of rheumatoid arthritis, is a product of a collaboration between Abbott and Cambridge Antibody Technology (cam- bridgeantibody.com). Abbott took advantage of the drug-discovery tools at Cambridge to complement its intrinsic strengths.
Amgen, Genentech, Genzyme, and Biogen merged with other compa- nies to become large integrated companies or “big biotechs.” This is in part due to having commercialized high value orphan drugs for relatively rare, life-threatening diseases, and in small part due to their successful partner- ships with the stakeholder pharmaceutical companies [56].
A shift in the pharmaceutical business model that is currently in vogue is the outsourcing of some aspects of the drug discovery projects to labo- ratories in developing countries. This international engagement, especially with the low-income countries, is no longer a concern as the increasing technological revolution is bringing novelties to these foreign sites, with laboratories that are increasing in sophistication. Special consideration is the much lower operating cost when compared to those of the United States and the European Union. The cost effectiveness plays a role in sustaining the business. Other needs include educational training. It has helped to raise new and well-informed scientists to help drive the healthcare indus- try forward. For example, in April 2013, Sanofi launched a €20 million new logistics hub in Casablanca, Morocco, for distribution of Sanofi drugs to Moroccan and sub-Saharan African markets. Collaboration agreements have the major objective of clinical education related to standard of care for type 1 diabetes patients, which are, first, training clinical professionals of im- mediate-need specialties and public awareness in favor of mental disorders
and epilepsy. Training professionals to help promote the development of Moroccan pharmaceutical industry was part of the plan including build- ing collaboration networks. Collaboration agreements were signed with the Ministry of Trade, Industry and New Technologies and the Ministry of Health of Morocco [57].
New business models that incorporate venture capital firms bear the risk of early stage R&D to try to settle the problematic high monetary investments toward their successes. Even though it places a demand on the pharmaceutical companies to share the profits of successful products, it allows a concentration on the key requirements for a new therapeutic advance.
Companies are increasingly moving towards a more competitive envi- ronment by diversifying into biologics, vaccines, over-the-counter medi- cines, branded generics, and other care products. Professional intelligence will mean assessing the risk–benefit profile of a compound that enables a decision on the compounds to prioritize. The pharmaceutical industry is taking new innovation paths leading to “open innovation” models. Innova- tion networks are incorporating leading academic researchers and biotech- nology and pharmaceutical companies to boost drug R&D.
2.8.3 Pharmaceutical Research and Development
R&D productivity has been a role model for translating cutting-edge science into promising practical value. However, the slump in R&D has been a recurring issue. Strategies applied to enhance R&D are creating a value-driven drug development to strengthen the pipeline by mitigating the risks in drug development while providing the valued and purposeful drug candidates deemed fit for regulatory approval. It might entail R&D reorganization that dissects and discerns various elements for thorough comprehension of the system as required for bringing a change. This will certainly upgrade efficiencies and performance of the organization. A busi- ness model based on this will capture value from early stage technology converting it to economic value [58].
Another strategy is data management. Efforts have been directed to en- sure adequate handling of the increasing body of information being gener- ated for accessibility; integrating modeling and analytics, like bioinformatics, cheminformatics, engineering, mathematical modeling, and optimization statistics and data sciences. Virtual libraries are expected to be part of larg- er and more focused libraries, brought about by new techniques in drug
Trends in Innovation and the Business of Drug Discovery 51
discovery. The breaking down of distinct steps of the R&D value chain by industry players and outsourcing of the others are part of the revitalization process. This enables a faster time to market, reduced operating and produc- tion costs, and improvement in quality standards. Restructuring is expected to attract new business models with an open door for new entrants and alliances. For example, GlaxoSmithKline, in its bid to refine its approach to R&D, divided its drug development teams into smaller and more fo- cused groups that incorporate a focus on results with a view to creating and sustaining value [59]. The purpose was to benefit from cross-functional collaboration.
2.8.4 New Avenues of Personalized Medicine: Application of Pharmacogenomics Technology in Drug Development
A satisfactory drug’s safety profile lowers cost and protects the safety of the patient population. Most importantly, it gives confidence to the responsible practitioner that a new drug’s safety profile has been fully defined. Personal- ized medicines allow a more specific targeting of a drug to the responder populations who exhibit less adverse effects and positive responses to the drug therapy to save money invested in a nonresponsive population. The field of pharmacogenomics provides a new avenue for effective drug de- sign targeted to the patient population and certain promising outcomes have been reported recently. For example, in May 2013, two advanced skin cancer drugs, Tafinlar and Mekinist, that target skin cell tumors with muta- tions to the BRAF gene were approved by the FDA for GlaxoSmithKline.
The BRAF gene mutation accounts for half of all skin cancer cases. In ad- dition to a molecular diagnostic test, a “THxID BRAF mutation test” was developed by French company bioMérieux. The diagnostic test was used in clinical trials to identify patients with the BRAF gene mutation to produce a more directed drug therapy against the disease [60,61].
2.8.5 Drug Repositioning/Repurposing
A plethora of unapproved drug compounds that could not be marketed are being redirected to other therapeutic applications by a process known as repositioning or repurposing. This has been considered a high growth op- portunity as these drugs have been derisked and thus would require signifi- cantly less R&D investment; it also avails for the pharmaceutical company the privilege to extend the patent protection.
2.8.6 Building the Pharmaceutical Ecosystem
Effective integration of all aspects of the pharmaceutical ecosystem will lead to high performance standards. For example, a cross-functional team of professionals concerned with drug discovery could work out a proof of concept in the clinical phase to design a compound capable of filling the gaps in regards to patient, regulator, and payer needs. This will enhance pro- ductivity and lower total healthcare costs and technological “spillovers” that will benefit the general society.