Challenges for the Research-Based Industry
Challenges for the Research-Based Industry
Review of New Drug DevelopmentReview of New Drug Development
Kenneth I Kaitin, Ph.D. Director, Tufts Center for the Study of Drug Development
Prof. of Medicine, Prof. of Pharmacology & Exp. Therapeutics
ASENT Annual MeetingDrug Development: Challenges, Consortia, CROs
Bethesda, MD, March 5, 2010
Kenneth I Kaitin, Ph.D. Director, Tufts Center for the Study of Drug Development
Prof. of Medicine, Prof. of Pharmacology & Exp. Therapeutics
ASENT Annual MeetingDrug Development: Challenges, Consortia, CROs
Bethesda, MD, March 5, 2010
AgendaAgenda
Environment for pharmaceutical innovation
TCSDD’s current drug development metrics
The evolving landscape for innovation
The Current Landscape The Current Landscape for Pharma Innovationfor Pharma Innovation
The Current Landscape The Current Landscape for Pharma Innovationfor Pharma Innovation
Current Realities for Pharmaceutical
Developers
Current Realities for Pharmaceutical
Developers Patents on many high revenue products are expiring
Marketplace is highly competitive and reimbursement environment is increasingly restrictive
Public support has declined
There’s a new regulatory regime in the U.S. and new regulatory hurdles
Drug development process is long and risky and increasingly complex and expensive.
Patent Expirations for 10 Top Selling Drugs Each Year
Patent Expirations for 10 Top Selling Drugs Each Year
2009 2010 2011 2012
Product 2007 Sales ($MM) Product 2007 Sales
($MM) Product 2007 Sales ($MM) Product 2007 Sales
($MM)
Prevacid 3,962 Protonix 4,221 Lipitor 13,652 Diovan 5,012
Topamax 2,453 Cozaar/Hyzaar 3,350 Plavix 8,079 Singulair 4,266
Lamictal 2,194 Aricept 3,311 Advair 6,998 Lexapro 3,044
Valtrex 1,868 Levaquin 2,862 Zyprexa 4,761 Viagra 1,764
Cellcept 1,677 Effexor XR 2,464* Actos 4,333 Avandia 1,754
Keppra 1,407 Taxotere 2,569 Seroquel 4,219 Symbicort 1,575
Flomax 1,399 Arimidex 1,730 Avapro 2,685 Zometa 1297
Imitrex 1,370 Gemzar 1,592 Xalatan 1,604 Detrol 1190
Adderall XR 1,031 Coreg 1,174 Avelox 1,013 Geodon 854
Suboxone 282* NovoSeven 1,078 Xeloda 959 Provigil 852
Total $17,643 Total $24,351 Total $48,303 Total $21,608
*US sales only
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
DeniedGenentechColorectal cancerAvastin (bevacizumab)
DeniedImClone SystemsColorectal cancerErbitux (cetuximab)
DeniedBayerCLLFludara (fludarabine)
RestrictedLillyBreast cancerGemzar (gemcitabine)
Restricted
Restricted
Restricted
Patient Access
Genentech/Biogen-Idec
RARituxan/MabThera
(rituximab)
AbbottPsoriatic arthritisHumira (adalimumab)
Biogen-Idec/ElanMSTysabri (natalizumab)
CompanyIndicationDrug
Source: BioCentury, 2008
Patient Access to Selected Biologics Restricted or
Denied by NICE
Patient Access to Selected Biologics Restricted or
Denied by NICE
Dental Services 4%
Other Spending* 14%
Nursing Home Care 6%
Hospital Care 31%
Physician & Clinical Services
21%
Investment 7%
Program Administration
7%
Prescription Drugs 10%
Total U.S. Health Care Expenditures by Category
for 2007
Total U.S. Health Care Expenditures by Category
for 2007
Source: Center for Medicare & Medicaid Services, http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2007.pdf Accessed 7/1/08
*Other spending: Other professional services, other personal healthcare, home healthcare, durable medical products, government public health activities
“Which of these industries do you think are generally honest and trustworthy –
so that you normally believe a statement by a company in that industry?”
“Which of these industries do you think are generally honest and trustworthy –
so that you normally believe a statement by a company in that industry?”
2%
3%
4%
7%
7%
9%
14%
16%
23%
28%
31%
34%
0 40
Tobacco
Oil
Managed Care
Health Insurance
Pharmaceuticals
Automobile
Gas and Utilities
Airlines
Computer Software
Hospitals
Banks
Supermarkets
Source: Harris Interactive Inc, 2007
FDA’s Very Busy Regulatory Agenda in
2010
FDA’s Very Busy Regulatory Agenda in
2010 FDA’s “21st Century Review Process” (formerly GRMPs)
FDA’s “Sentinel Project” (May 2008) (access to 25m patients by 7/1/10; 100m by 2012)
REMS and other risk management tools
Post approval research requirements
Advisory Committee meetings and COI rules
Follow-on biologics review process
Tobacco regulation
Limited resources and low morale
Bringing a New Drug to Bringing a New Drug to Market: Current Market: Current
Development MetricsDevelopment Metrics
Bringing a New Drug to Bringing a New Drug to Market: Current Market: Current
Development MetricsDevelopment Metrics
The Drug Development Pathway
The Drug Development Pathway
BasicResearch
Prototype Design or Discovery
PreclinicalDevelopment
FDA Review/ Approval & Launch
Clinical Development
Phase I
Phase II
Phase III
Phase IV, PMS, Life Cycle Management
IND FilingIND Filing
NDA/BLA SubmissionNDA/BLA Submission
5.96.3
6.87.2
6.4
5.7
7.6
6.1
3.0 2.92.6
2.01.4 1.4 1.5
1.1
0
9
Ye
ars
1984-86 1987-89 1990-92 1993-95 1996-98 1999-01 2002-04 2005-07
Approval Phase Clinical Phase
(n=65) (n=55) (n=74) (n=67) (n=110) (n=82) (n=60) (n=48)
PDUFA Enacted
Clinical and Approval Times over Two Decades
Clinical and Approval Times over Two Decades
Source: Tufts CSDD, 2010
Biopharmaceutical Development Times Are
Increasing
Biopharmaceutical Development Times Are
Increasing
2.5
1.6
4.6
1.4
5.5
1.2
6.3
1.5
7.1
1.1
0
9
Ye
ars
1982-89 1990-94 1995-99 2000-04 2005-09*
Approval Phase
Clinical Phase
4.1
6.0
6.7
7.88.2
(n=18) (n=9) (n=20) (n=31) (n=20)
Source: Tufts CSDD, 2010
* Through 10/1/09
5.2 0.6
5.2 1.7
6.0 1.7
6.5 1.9
7.0 1.4
7.1 1.7
7.9 0.8
0 10Years
AIDS Antiviral
Cardiovascular
Antiinfective*
Anesthetic/Analgesic
Endocrine
Neuropharmacologic
Antineoplastic
Clinical Phase Approval Phase
Clinical and Approval Times Vary Across Therapeutic
Classes, 2003-07
Clinical and Approval Times Vary Across Therapeutic
Classes, 2003-07
* excludes AIDS antivirals
8.7
8.8
8.4
8.4
7.7
6.9
5.8
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
Overall Clinical Approval Success Rate for NCEs has
Dropped to 16%
Overall Clinical Approval Success Rate for NCEs has
Dropped to 16%
8.2%
8.7%
9.4%
19.4%
20.4%
23.9%
0 27Clinical Approval Success Rate
Neuropharmacologic
Cardiovascular
GI/Metabolism
Oncology/Immunology
Musculoskeletal
Sys. Antiinfective
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009295a.html
Phase Transition Probabilities Self-Originated
NCEs in Top 50 Firms
Phase Transition Probabilities Self-Originated
NCEs in Top 50 Firms
67%64%
41% 39%
63% 66%
16% 17%
0
100
Tra
nsi
tio
n P
rob
abili
ty
Phase 1-2 Phase 2-3 Phase 3-NDA subm Phase 1-NDA app
1993-19981999-2004
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009295a.html
Phase Transition Probabilities by Therapeutic
Class
Phase Transition Probabilities by Therapeutic
Class
72% 72%68%
63%60% 58%
35%
49%
35%32% 33%
52%
80%
55%
50%
64%
46%
79%
0
100
Tra
nsi
tio
n P
rob
abili
ty
Phase 1-2 Phase 2-3 Phase 3-NDA subm
Musculoskeletal
Onc/Immunologic
GI/Metabolic
Cardiovascular
CNS
Syst Antiinfective
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009295a.html
Capitalized Cost per Approved Biotech Product is Similar to that for Pharma
Capitalized Cost per Approved Biotech Product is Similar to that for Pharma
615
439
626
879
1,2411,318
0
1500
Mil
lio
ns
of
20
05
Do
lla
rs
Non-Clinical Clinical Total Costs
Biotech Pharma (Time Adjusted)
Source: DiMasi & Grabowski, Managerial Decision Econ, 2007;28:469-479
Time Adjusted Capitalized Clinical Costs by Therapeutic
Area
Time Adjusted Capitalized Clinical Costs by Therapeutic
Area
$604
$741 $750$792
$849
0
1000
Mil
lio
ns
of
20
05
Do
lla
rs
Anesth/Analg Cardiovascular All Antiinfective CNS
Source: DiMasi et al, Drug Info J, 2004;38:211-223
Other 3%
Sensory organs 2%
Dermatology 2%
Blood 3%
Genitourinary 4%
Musculoskeletal 5%
Gastrointestinal 4%
Respiratory 5%
Oncology and immunomodulators
28%
Central Nervous System 17% Endocrine 6%
Cardiovascular 7%
Antiinfectives 14%
R&D Project Counts by Therapeutic Category:
Oncology Leads
R&D Project Counts by Therapeutic Category:
Oncology Leads
Source: EvaluatePharma®, Apr 2008; in Parexel Statistical Sourcebook 2008-2009
Global Pharma Sales in 2008 by Therapeutic
Category
Global Pharma Sales in 2008 by Therapeutic
Category
$12.0 bil
$17.1 bil
$18.9 bil
$19.1 bil
$21.7 bil
$23.9 bil
$34.6 bil
$43.8 bil
$59.9 bil
$78.0 bil
$84.7 bil
Hematology
Gastrointestinal
Hormone Control
Vaccines
Inflammation
Diabetes
Respiratory
Antiinfectives
Cancer
CNS
Cardiovascular
Source: Lehman Brothers, Sept 2008; in Parexel Statistical Sourcebook 2008-2009
10.3% of Global Market
Drivers of Rising R&D Costs
Drivers of Rising R&D Costs
Chronic and complex indications
Clinical trial size
Protocol design complexity
Patient recruitment/retention
High cost discovery/research tools
Regulatory demands
Market oriented studies
Late-stage attrition
New Drug Approvals Are Not Keeping Pace with Rising
R&D Spending
New Drug Approvals Are Not Keeping Pace with Rising
R&D Spending
0
15
30
45
60
1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Ne
w D
rug
Ap
pro
va
ls
0
13
26
39
52
R&
D E
xp
en
ditu
res
(Billio
ns
of 2
00
8$
)
R&D Expenditures
New Drug Approvals
* Trend line is 3-year moving average; R&D expenditure adjusted for inflation
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
For the Research-Based For the Research-Based IndustryIndustry
““Business as Usual”Business as Usual” is No Longer an Optionis No Longer an Option
For the Research-Based For the Research-Based IndustryIndustry
““Business as Usual”Business as Usual” is No Longer an Optionis No Longer an Option
A Merging of Operational A Merging of Operational and Strategic and Strategic
Performance ObjectivesPerformance Objectives
A Merging of Operational A Merging of Operational and Strategic and Strategic
Performance ObjectivesPerformance Objectives
Reported Success Factors – Best Practices of Top-
Performing Firms
Reported Success Factors – Best Practices of Top-
Performing Firms Focus on core competencies, higher
level of outsourcing, prioritize resources
Active collaboration with global regulatory agencies
Enhanced utilization of e-data management technologies
OffshoringSource: Tufts CSDD, 2010
Formalized
Virtual/Competency-based
Planned, portfolio outsourcing
Lean operation, coordination SOPs
Senior management committee
Few Partner-Providers
Ad-Hoc
Capacity-based
Reactive, project task outsourcing
Larger operation, sponsor SOPs
Mid-management governance committee
Lowest-bid/Many Providers
PARTNERPARTNER(Multiple FSPs and (Multiple FSPs and
Alliances)Alliances)
PROVIDERPROVIDER(Transactional (Transactional
services)services)
Evolving Sponsor/CRO Relationship StructuresEvolving Sponsor/CRO
Relationship Structures
Demand for Clinical Services Outsourcing is Growing
Demand for Clinical Services Outsourcing is Growing
2001 2003 2005 2007 2009PAnnualized
Growth
Total Global Clinical Spending
$27.3 $33.6 $41.5 $49.6 $54.8 9.1%
Total Spending on Contract Clinical Services*
$2.7 $4.9 $6.4 $8.5 $10.1 13.4%
Source: Tufts CSDD, 2010
* Does not include pass-through clinical services, e.g., central lab fees, investigator grants
All figures in billions of US$
R&D Reorganization Divested functions: e.g., LLY-Chorus/Vanthys; LLY-Covance
Focused units: e.g., GSK (CEDDs DPUs), PFE, ROG, NVS, BMS, SAN, LLY, AZN
Partnerships Academic institutions, PPPs, Patient groups
Large pharma/Small pharma: e.g., GSK and Concert
Pharma/Pharma: e.g., MRK & AZN (onc); GSK & PFE (HIV); Enlight Biosciences (JNJ, LLY, MRK, NVS, PFE); Asian Cancer Research Group, non-profit (LLY, PFE, MRK)
Risk-sharing: e.g., Quintiles & LLY
Innovation Networks FIPCos FIPNets ( VIPNets) [Celtic, Debiopharm, other
PDC]
New R&D StrategiesNew R&D Strategies
A FIPNet Model for New Drug Development
A FIPNet Model for New Drug Development
Phase IVStudiesApprovalLate Stage
DevelopmentEarly Stage
DevelopmentDiscoveryPreclinical
ResearchPre-Discovery
Large Pharma
Academia
Biotechs/Small Pharma
CROs/OtherPartners
Basic Research Translational Medicine
Execution, Monitoring, Analysis
Innovation, Partnerships
Coordination, Management Execution, Monitoring, Analysis
Large Scale Clinical TrialsData Analysis
Medical WritingRegulatory Approval
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361 http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
ConclusionsConclusionsConclusionsConclusions
ConclusionsConclusions
The time, cost, and risk to bring a new medicine to market continue to represent formidable challenges for drug developers.
These challenges have led to a heightened focus within the industry on R&D efficiency and performance, and on new strategies, including R&D reorganization, partnerships, and network innovation.
“You can be on the right track,and moving in the right
direction,but if you’re not moving fast
enough,the train will still run you over.”
Will Rogers
Tufts Center for the Tufts Center for the Study of Drug Study of Drug DevelopmentDevelopmentTufts University, Boston, Tufts University, Boston,
Massachusetts, USAMassachusetts, USA
Kenneth I Kaitin, Ph.D.Kenneth I Kaitin, Ph.D.DirectorDirectorProfessor of MedicineProfessor of MedicineProfessor of Pharmacology & Exp. TherapeuticsProfessor of Pharmacology & Exp. Therapeutics
Websitehttp://csdd.tufts.eduhttp://csdd.tufts.edu
[email protected]@tufts.edu
Tufts Center for the Tufts Center for the Study of Drug Study of Drug DevelopmentDevelopmentTufts University, Boston, Tufts University, Boston,
Massachusetts, USAMassachusetts, USA
Kenneth I Kaitin, Ph.D.Kenneth I Kaitin, Ph.D.DirectorDirectorProfessor of MedicineProfessor of MedicineProfessor of Pharmacology & Exp. TherapeuticsProfessor of Pharmacology & Exp. Therapeutics
Websitehttp://csdd.tufts.eduhttp://csdd.tufts.edu
[email protected]@tufts.edu