The Power of Product Development Partnership
There used to be a perfect wave that Big Pharma could surf to a safe harbor of steady profits. It was the blockbuster drug, developed in shuttered, in-house labs using a rote process of mass chemical screening to treat chronic, clinically undifferentiated conditions requiring a lifetime commitment from patients.
Interest in repurposing this model is growing precisely for the very reason it was created: to minimize market uncertainty in 'neglected' therapeutic areas that look unpromising from a standard ROI perspective. Says Jan Twombly, representing the the Association of Strategic Alliance Professionals (ASAP), "It's no stretch to say that market uncertainty is becoming a standard assumption in all areas of investigation. The future of the pharma business depends on showing a direct link between investment and outcomes, one where product development can progress because there is an unambiguous social return that resonates value." The point is that the PDP is not a one-off activity designed to fill a charitable or reputational gap, but instead a platform for addressing fundamental strategic changes in the way medicines are developed, priced, distributed, and promoted.
Industry certainly has a range of precedents to choose from. ASAP has more than 2,000 company members drawn from an array of industries, with life sciences constituting the biggest share. In pharma, 12 PDPs are now functioning in 17 therapeutic areas in 36 countries and involving the participation of more than 150,000 experts and patients through the conduct of clinical trials and other investigatory platforms. There were no PDPs in place a decade ago. The timeline means that a few of these early partnerships are beginning to bear fruit in the form of approval-ready products.
Catalyst for Change
There are other benefits that derive from the special organizational characteristics of a PDP. Due to the multiple parties involved, a PDP facilitates capacity building, especially across geographies and demographics. Specifically, it encourages the Big Pharma partner to consider a wider range of options in distributing medicines in unfamiliar but high-opportunity emerging markets. This leads to a better understanding of the consumer; for an industry that lags in even defining where its customer base begins and ends, such basic awareness can increase levels of access and adherence to drug therapy. Likewise, many Big Pharma companies—ranging from GlaxoSmithKline and Lilly to Japan's Otsuka—believe that investment in a PDP creates synergies with other, more profitable business segments through the technology transfers that seed the growth of a permanent local science and manufacturing infrastructure in markets where they want to expand their footprint. Many PDPs now have direct experience in emerging and developing countries, helping Big Pharma avoid the pitfalls of operating in these unfamiliar markets.
The scalable, focused approach of a PDP can also have a powerful, positive impact on employee motivation, since the ground rules for engagement around an unmet medical need are fairly clear. Finally, as noted in a Feb. 16 commentary by FDA officials in The New England Journal of Medicine, PDPs are able to facilitate codevelopment around novel combination drugs—an under-represented intervention that is critical to building efficacy in treatments for complex big diseases such as TB and malaria. PDPs are particularly helpful in bringing private companies together so that their best compound assets can be tested, regardless of sponsor.
Adding Public Power to Private Enterprise
Founded in 1900, Fiocruz is today the largest biomedical research institute in Latin America, with a reputation as a skilled negotiator in leveraging the power of partnership to become the dominant player in generics and vaccines geared to low-income patients. Its market clout is such that it has local manufacturing rights to eight of the 16 drugs commonly used in "cocktail" combinations by HIV patients. "The lower prices obtained through this route from the foreign drug makers allow us to subsidize access to these life-extending medicines to the entire HIV+ population in Brazil, securing a key public health policy objective," Fiocruz representative Carlos Morel tells Pharm Exec.
More important, Fiocruz has a set of partnerships with Big Pharma linked to the transfer of technologies to develop new medicines for commercial sale, both inside Brazil and globally. "Fiocruz has as its key objective the capacity to patent, develop, license, manufacture, or sell new medicines to treat priority diseases worldwide," Morel says. "In that sense, we are decidedly not a philanthropic enterprise."
One example is the PDP that Fiocruz has inked with GSK for the production and development of vaccines. Here, the UK drug maker is distributing pneumococcal vaccine to an estimated 3 million to 5 million Brazilian children a year, while Fiocruz concentrates on improving and then sharing the science around infectious diseases. "One goal of the partnership is to develop and commercialize a global vaccine for dengue fever, which is a huge public health problem in Brazil," says Morel. "We are creating the science and GSK is contributing its production know-how." Such synergies have allowed the PDP to fill some resource gaps, with Fiocruz recently purchasing from GSK a local manufacturing plant that now makes some 70 essential medicines—ranging from anti-hypertensives to patented ARVs for AIDS—supplied by the Brazilian Ministry of Health for low-income patients.
Bigger Health Impact?
Meeting rising public expectations of the R&D-based industry is vital to preserving that basic "license to operate," the absence of which could break the entire cycle of medicines innovation. This suggests in turn that one of the unheralded merits of the PDP model is its potential to address the very biggest challenges in health, strengthening the industry's association with innovations that require no metrics—because they save lives. "The reputational impact when pharma engages in this space far outweighs any costs," says former Merck CEO P. Roy Vagelos, who pioneered the basic concept of the disease-based partnership back in the 1980s, with Merck's Mectizan program to eliminate the parasite that causes the debilitating condition known as river blindness. "It's become an open-door asset for doing business globally. It is surprising that it has taken the industry as long as it has to recognize that."
TB: If You Can Make it Here
In fact, when you examine the profile of TB, all the elements of a "grand challenge" for the innovative drug industry are there:
Unmet medical need. TB is deadly and highly contagious, responsible for nearly 2 million deaths a year, second only to HIV, to which it also contributes as a key factor in mortality. About one-third of all HIV+ patients also have TB. There are few boundaries against infection and the incidence of TB is rising, with an estimated 9.4 million new cases reported in 2009. There is no doubt that TB is a formidable threat to public health, due to its unique link to other chronic infectious diseases and its role in suppressing the immune system. Even with the science and technological breakthroughs since the gene code was broken a decade ago, it is astounding that today there are more active cases of TB than at any time in history.
Significant indirect economic costs. TB scores among the highest in the global burden of disease, with an estimated cost of $12 billion annually, distributed among all countries—rich and poor. Every year a TB victim goes undiagnosed, he or she will infect another 12 people. In the US, hospitalization charges for a patient with multidrug resistant (MDR) TB can average around $600,000; in developing countries, the cost to administer the standard DOTS drug package is often higher than the annual income of the recipient patient. Failure to treat also carries a spinoff effect by accentuating the adverse public health impact from other communicable diseases that are easier for TB patients to contract. This means there are also fewer resources to address the increasing toll from non-communicable ailments.
Medicines are the vital defense against TB. While preventive public health measures, infrastructure improvements, and overall economic development are critical to eliminating TB, planning for that is complex and long-term. Drugs provide the stopgap solution in regulating the disease and slowing the pace of new infections, yet basic individual therapy guidelines—requiring four or more drugs administered rigorously to ensure patient compliance over six to 30 months—have not changed. The last new drug for TB was introduced over 40 years ago. Yet the sanitariums that once confined TB victims in a cocoon of protection—to benefit the healthy—have been closed. Can a larger pandemic just be waiting to happen?
TB is a test case for new medical innovation. A key barrier to controlling TB is simplifying the treatment regimen, by reducing the number of drugs taken through high-value combination therapies; shortening the length of treatment; and better targeting of the bacillus to control resistance or latent infection. In the latter case, there is an urgent need for drugs to fight MDR TB, which accounts for nearly 5 percent of new cases and is now found in every region, including the US and Europe. At present, however, given the length of treatment, required use of injectables for the first six months, and the cost and complexity of administration and monitoring, global scale-up of MDR treatment is—from a practical point of view—not an option. Drugs that can be designed to combat co-infection with HIV are needed. A new TB vaccine should also be part of the mix.
Despite these big drivers of demand, there is a significant missing link: the incentive to devote scarce resources to these new medicines is not measurable, largely because normal market signals are either non-transparent or don't exist. The current market for TB drugs is characterized by rampant commoditization and a skewed, unpredictable supply chain. Demand tends to fluctuate because purchasing is increasingly dependent on budget cycles in government and donor agencies as well as consumer out-of-pocket spending. What private-sector development there is tends to focus on finding that magic bullet against MDR strains of TB. This has the consequence of crowding out earlier drugs that form the basis for second-line treatments, a segment controlled by only a few suppliers who operate on the basis of very tight margins. Completing the cycle, it discourages real competition.
Another factor behind the low take-up of TB drug research is the challenge of mounting clinical trials around a highly diverse cohort of patients, with multiple symptoms and damaged immune responses that are hard to render statistically. There is a significant capacity constraint in finding the right test population and establishing an acceptable trial infrastructure in impoverished areas. On top of that, there are ethical issues that must be addressed simultaneously.
Big Pharma's Product Play
Nevertheless, the potential to score something big means that Big Pharma has been willing to keep some irons in the fire on TB. "The PDP platform has been the lure that attracted private-sector interest in making a contribution to TB drug development," observes Joanna Breitstein, communications director for the TB Alliance, the chief PDP sponsor of TB drug research (see "Filling Front and Center in the Fight against TB"). "Before the launch of the Alliance in 2000, there were no drugs in clinical development for TB," she continues. Today, it is very different—among Big Pharma, Eli Lilly, Johnson&Johnson, Novartis, GSK, AstraZeneca, Bayer, Sanofi-Aventis, and Pfizer have made varying levels of commitment to the disease.
Outside of drug development, Lilly is perhaps most visible due to its emphasis on the transfer of technology rights to build local capacity to manufacture TB drugs. The focus is on finding new compounds to tackle MDR, in addition to the overall fight against drug resistance. In the latter case, there is the potential for a very large market—including the higher-priced regions of Europe and the US—if the therapy represents a breakthrough. The specific motivation around MDR is that the development pathway for these compounds is quicker due to the targeted level of need and the interest of governments and payers in expediting access against the soaring cost of acute care treatment.
Promising Partner Leads
Most important, Otsuka, along with J&J's Tibotec division, is top of the list on prospects for approval of the first new treatment for TB in more than 40 years. Delamanid, a highly potent compound in the nitroimidazole class, began clinical trials in 2004 and recently has shown encouraging results in countering MDR in a large-scale Phase II (b) trial. Otsuka intends to carry these results forward to Phase III and possible approval by licensing authorities in the near future. The Tibotec entry, TMC-207, is also showing gains against MDR in a trial that Tibotec is leading.
Says Carlevaro, "The premise behind a strong PDP is that each party performs to its strengths. Industry must focus on science and clinical development, while ensuring synergies with NGOs, governments, and international organizations in developing programs linked to access and care." She adds that the goal of a PDP is analogous to a disease management scheme. "What remains to be done is the cost-efficient execution of a package of customized services that take the patient from diagnosis, to treatment, to cure."
Evidence that this approach is already working is the recent rollout of a new, simplified diagnostic for TB, GeneXpert, that permits a clinician to identify positives for TB in as little as two hours, compared to the prevailing standard of as long as two months. Besides the technological breakthrough, it marks a significant improvement in the struggle to secure patient compliance. If a physician can obtain a diagnosis without the patient having to make a return visit, prospects for tracking and monitoring that patient's treatment will soar. Again, the PDP approach paid dividends. While a private company did much of the heavy lifting in creating the product, it was Gates Foundation money that provided the incentive.
Window on the Future
Looking forward, expansion of the PDP approach will depend heavily on a record of results in the form of new products developed, approved, and circulating in the market. Thus, convener groups like the TB Alliance are the crucible for success. Observers also note that through the partnering that represents the essence of the PDP model, overall development costs for new drugs will be lower, which will attract additional entrants to the field.
What is likely is a broadening of the PDP concept as society's definition of a "neglected disease" expands beyond infectious conditions of the very poor to chronic ills of the more affluent, such as diabetes and heart disease, where it is not only the efficacy of the drug that matters, but how it is delivered, and to whom. PDP lessons learned here are every bit as applicable to the rich, mature markets as they are to the developing and emerging countries. And universality bespeaks legitimacy.
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