The World of Big Pharma: waiting for the revolution

Evgenia Lukyanchuk, "Weekly Pharmacy" www.apteka.ua based on the materials of PricewaterhouseCoopers

Now a turning point has come in the evolution of Big Pharma. This is due to the social, demographic and economic changes that are taking place in society and cannot but affect the pharmaceutical industry. The problems are compounded by the need to replenish the product portfolio with innovative medicines.

The Big PerestroikaThe pharmaceutical market is changing very quickly.

There are seven main socio-economic trends that have an impact on the development of the pharmaceutical industry as a whole.

The spread of chronic diseases, such as diabetes mellitus, is increasing. The governments of many countries are raising the retirement age, as a result of which the development of chronic diseases falls on the economically active part of life, which will further increase the pressure on healthcare costs. Accordingly, the social and economic value of the treatment of these diseases will increase. However, pharmaceutical companies will be forced to lower prices for drugs used for the treatment of chronic diseases, and revenue growth will be provided by increasing the physical volume of sales.

The state, insurance companies and patients are putting forward more and more specific requirements for what and how doctors should prescribe. Individual treatment has replaced the protocols regulating the appointment of drug therapy for a particular disease. This has made the target audience of pharmaceutical companies more consolidated and influential, which, in turn, cannot but affect the sales of companies and their marketing strategy. Now, in order to make a profit, you will have to make a lot more effort – to establish interaction with payers and suppliers, to prove the benefits of the drug for the patient.

The market entry price continues to rise. An increasing number of States and insurance companies are resorting to pharmaco-economic assessment of the characteristics of medicines. The widespread use of electronic databases of medical data will provide them with the opportunity to determine the most effective drugs in clinical practice.

Thus, it will be possible to compare the effectiveness of the drug and its cost and already on this basis to make decisions about the appointment of the drug, and not only based on the pharmacological characteristics of the drug. The players of Big Pharma will be forced to prove not only the effectiveness of their drugs, but also the compliance of the price with the positive effect they have. In the case of the existence of similar medicines, it is necessary to demonstrate that the new drug has a number of advantages over its analogues.

The boundaries between different forms of organization of medical care are being erased. The area of primary health care is actively developing, not least in response to the increase in the prevalence of chronic diseases. Self-medication has also become increasingly common lately, due to the expansion of the list of over-the-counter medicines. In accordance with this, the needs of patients are also changing.

Segments where the treatment process is partially or completely shifted to the patient require the provision of broader information support. The shift of priorities from the hospital form of medical care to the primary health care will contribute to the development of a home delivery service for medicines.

It is predicted that in the next 12 years, there will be a significant increase in demand for medicines in emerging markets. Developing countries are heterogeneous in their economic, social and other characteristics. There are also big differences in the legislative norms governing the protection of intellectual property rights. Any company that wants to successfully operate in emerging markets will have to diversify its development strategy taking into account the specifics of the business and local markets.

Many governments are beginning to pay more attention to preventing the development of various diseases, although investing in programs has not yet gained widespread popularity. Big Pharma can also expand its presence in this niche, but for this it will need to actively cooperate with government organizations.

Leading national and multinational regulatory authorities have become much more cautious about approving innovative medicines and are not enthusiastic about risky projects. Thus, the number of new drugs continues to decrease from year to year.

Go to the right…The traditional development strategy of pharmaceutical companies is to invest significant financial resources in a small number of active substances, their active promotion in order to make them blockbusters, which has been consistently approved by shareholders for many years.

However, in recent years, the productivity of this approach has significantly decreased. The development of new active pharmaceutical ingredients covers more and more diverse areas. Thus, active work is being carried out in the field of creating medicines for the treatment of rare diseases, which has led to a reduction in the productivity of laboratory research.

In 2007, the U.S. Food and Drug Administration (FDA) approved the smallest number of drugs since 1983 – only 18 new drugs. After this decline, 24 drugs were approved in 2008, 25 in 2009, and in 2010 the trend resumed – the FDA registered 21 drugs.

Although the number of approved drugs increased slightly in the following years, however, this did not eliminate the problem of the productivity of drug development. The costs of developing new drugs continue to increase, while the result remains unpredictable (Fig. 1).

Fig. 1. Reduced productivity of the R&D segment
(according to data published on the PhRMA and FDA websites).

In addition, the terms of patent protection of many medicines expire within the next few years. According to Sanford C. Bernstein, by 2015, as a result of increased competitive pressure from generics, the profits of the world's 10 largest pharmaceutical companies will decrease by 2-40%, according to various estimates. And at the same time, only 4 out of ten product portfolios of these companies contain drugs whose sales are able to cover these losses.

Thus, there is an innovation deficit that has affected the pharmaceutical industry as a whole. To solve this problem, each company chooses its own path, but whatever way it chooses to solve the issue, the R&D sector has been and remains one of the main elements of the success of the pharmaceutical business.

Some companies, in order to increase the productivity of their R&D division, prefer to work in a narrow direction, without dispersing their resources, and develop medicines for the treatment of diseases for which there is no effective treatment yet or their mass drug therapy is not available for technological or financial reasons. When developing such medicines, pharmaceutical companies must be absolutely sure that society will not only want, but also be able to pay for them. However, even this is only a temporary solution to the problem.

The main ways that will allow the pharmaceutical industry to increase the productivity of the R&D segment and reduce time and money costs for the development of innovative medicines can be:

• obtaining enough data to create a complete picture of the work of the human body at the molecular level;
• improving the understanding of pathophysiological processes that occur during the development and course of the disease;
• wider use of new technologies to "virtualize" the research process and accelerate the development, research of new molecules;
• expansion of cooperation between pharmaceutical companies, research centers, regulatory authorities, government and medical institutions.

Next, we will focus in more detail on the "virtualization" of the research process and the benefits that it can bring.

Get to know yourself betterToday, only 11% of new active pharmaceutical ingredients go through all phases of clinical trials and receive regulatory approval – which is why the costs of developing new medicines are so high.

According to the estimates of the Center for the Study of Drug Development at Tufts University (Tufts Center for the Study of Drug Development – Tufts CSDD), the cost of developing a new drug, including all stages of research, is US$ 868 million. At the same time, the cost of developing innovative drugs varies in different areas of medicine (Fig. 2). And according to the calculations of the analytical company PricewaterhouseCoopers, the average cost of developing one drug (taking into account the cost of developing new molecules that have not passed any of the phases of the R&D process) it amounts to $454 million.

Fig. 2. The cost of drug development in various therapeutic areas
(according to the data given in the article Christopher P. Adams, Van V. Brantner
“Spending on New Drug Development”, 2006).

One of the possible ways to reduce the cost of this costly process is the development of virtual systems that allow some stages of the development of a new drug to be carried out on their basis. So, one of the promising projects is the creation of a "virtual person", within which all the processes taking place at the molecular and cellular level in his body will be mathematically prescribed. With the help of this program, it will be possible to simulate the physiological reactions of the body in response to the use of various substances.

Nowadays, many organizations and companies are developing models of various organs and cells of the body. For example, the American Diabetes Association and the Entelos pharmaceutical company are creating a virtual mouse with type I diabetes to study the effects of innovative medicines on its condition. At the same time, one of the biggest problems associated with the creation of such models is the lack of fundamental knowledge about the etiology and pathogenesis of many diseases at the molecular level, as well as about genetic and phenotypic variations characteristic of the human population.

Despite these difficulties, various joint research projects to create a virtual model of the human body have already been launched. For example, StepConsortium develops a holistic model of the functioning of the human body, and the Living Human Project is working on a model of the human musculoskeletal system for computer simulation of biological experiments (in silico). The international organization "Physiome Project" intends to develop software for an integrative understanding of the functioning of cells, organs and the body as a whole. All these programs have huge commercial potential and may be of interest to large pharmaceutical companies. However, the probability of creating a "virtual patient" over the next 12 years remains low.

Biomodeling is starting to play an increasingly important role in the R&D process. For example, scientists from University College London (University College, UK) used computer modeling to calculate the effectiveness of HIV infection treatment by blocking one of the key proteins of this virus. Similarly, Roche, when developing the drug Pegasys/ Copegus (peginterferon α-2a), intended for the treatment of hepatitis C, used this method to determine the optimal dosage of the active substance for different populations of the population. Over time, this trend will intensify and by 2020, virtual cells, organs and experimental animals will be widely used in research conducted by pharmaceutical companies (Fig. 3).

Fig. 3. Diagram of the process of developing a new drug.

To introduce computer technologies into the process of drug development, two approaches are currently being used, which allow creating programs based on semantic data entry and automated molecular design.

Traditional approaches in computer science are limited both by the structure of the data they can process and by the form in which they can represent this data. Programs based on the semantic approach will allow researchers to automatically analyze large amounts of information, despite the differences in formulations and names of substances. This will greatly simplify the analysis of the relationship between the chemical compound and its effects on the human body.

The widespread introduction of computer technologies into the process of creating new medicines will reduce the time required for development and save financial resources, and may also eliminate the need to use experimental animals in experiments.

Portal "Eternal youth" http://vechnayamolodost.ru06.05.2011