Challenges for the Research-Based Industry Review of New Drug Development Kenneth I Kaitin, Ph.D....

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

http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2007.pdf

“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)


* 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


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


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


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


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%


* 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


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

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