Market Disconnects

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.

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.