Saturday 10 May 2014

Transition in Pharma

What needs to be prescribed to an industry in distress?

by Toby Benham

Recent large scale closures of R&D sites in the UK from pharma giants Pfizer, Merck, GSK and now Novartis has led to the nationwide desolation of the pharmaceutical industry. With cuts extending around the world, and several big challenges ahead, it appears the industry is heading into a time of transition. To emerge through this transition stronger it is important for pharmaceutical companies to collaborate, working together for the collective good of the field.

Difficult times
The dominant business model adopted in recent times by pharmaceutical companies involved investing heavily into promising drug candidates, attempting to create the next big blockbuster. For associated with these iconic blockbusters are fame and fortune. Drugs such as Lipitor and Plavix have allowed their respective companies to thrive previously. However, the industry has been looming over the edge of the “patent cliff” (when many current blockbuster patents expire) for several years and now companies are lining up for the plunge. It means that these drugs can be manufactured and sold by any generics company at the detriment of the inventor company’s profits. This strategy relies on new blockbusters to come through the system but current pipelines appear relatively fruitless. 

Developing new drugs is an expensive business. Forbes estimates that it now costs approximately $5 billion per new drug created; this is not a sustainable figure. Costs spiral during the 15 years that contribute to getting a drug to market. The drug discovery, optimisation, clinical trials, patent protection and marketing involved are all long expensive processes. However, the main reason that the figure is so high is due to the unseen added cost of research into unsuccessful drug projects. Thus, there could not be a worse time for worldwide scandals to be breaking out in the news, smearing the image of pharma. Just last year, both GSK and Novartis were alleged to have bribed doctors and healthcare officials in China. There are also questions over the safety of some drugs already on the market.  GSK’s “Avandia” for diabetes treatment has been under intense scrutiny for several years now with restrictions in the US only lifted recently. With so many hurdles in the development process - ranging from toxicity to manufacturing - high risk, high reward projects may now be considered just that bit too risky. 

The future
Most importantly, big pharma need to ditch their profit alone method and support one another for their collective benefit. In 2013, data analytics company SAS announced the creation of a globally accessible but private bank of data for pharmaceutical companies to pool clinical trial data. GSK have been the first to share. Perry Nisen, the GSK senior vice president for science and innovation, announced that, “in sharing our data with researchers across the world, we hope to further scientific research and increase understanding about our medicines.”  This exemplary collaborative model will allow companies to improve efficiency and enhance the decision making progress which is so crucial in pushing forward drug candidates. Working on projects across companies should also be encouraged with the chance to explore new opportunities, widen portfolios and spread risk. GSK and Novartis recently announced an asset swapping deal, but this could go even further.

In addition, the big pharmaceutical companies can collaborate with the smaller businesses to flourish from symbiotic relationships. Companies such as Aurigene offer cost effective outsourcing of R&D in their respective areas of expertise, creating what Aurigene describe as a “win-win partnership” that accelerates discovery. The opportunities are not limited to industry with many experts in academia to link up with. Sanofi-Aventis and Pfizer have already created strong partnerships for drug development with Harvard University and UCFS respectively. Back in the UK, Astra Zeneca is building a new headquarters located in Cambridge with the intent to partner with Cambridge University and local hospitals.  By sharing scientific talent and resources, the drug development process gains extra quality and creativity from fresh perspectives. Diversity and partnerships lead to innovation which is essential to feeding hungry company pipelines. A wider communication with regulators would also be invaluable. Hopefully this could put an end to public scandals and improve the clinical trial process. 

Change is required to replace the current unsustainable business model in the pharmaceutical industry. With the right partnerships, a new streamlined, cost effective and innovative R&D system is possible. This will reduce the price of creating a drug by increasing productivity whilst simultaneously cutting expenditures. Through sharing scientific talent, resources and knowledge it is possible for the industry to return from the drop of the patent cliff to emerge stronger by optimising the potential of collaboration. Pharmaceutical companies should consider working in unison for the common goal and share the rewards. This is important not just for the companies concerned but for the patients that benefit as a result.