Taren Grom, Editor
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According to the most recent report from Tufts Center for the Study of Drug Development, it still takes about 10 to 15 years on average for an experimental drug to travel from the lab to U.S. patients. Only five in 5,000 compounds that enter preclinical testing make it to human testing. Only one of those five is approved. On average, it costs a company $1.3 billion to get one new medicine from the laboratory to the hands of the consumer; in 2003, the cost was $897 million. And once the product reaches the market, myriad factors impact adoption and use — from regulatory/legislative changes to patent life to a changing consumer world. Ernst & Young (EY) analysts say companies will succeed or fail based not just on how many units of a product they sell, but rather increasingly on their ability to improve health outcomes, with patients and payers squarely in the middle. Pharma 3.0 does not replace Pharma 2.0 (the current model) as much as supplement the ongoing efforts to address unmet medical needs and expand access to products. EY has identified two trends that are driving the transformation of the industry: healthcare systems’ lack of sustainability and the coming of age of several game-changing technological advances. In this special issue, we will seek to determine how these two trends as well as how many others are impacting the development timeline from the clinic through commercialization. R&D Productivity Historically, pharmaceutical companies relied on developing a few molecules and bringing a blockbuster to the market. “However, the focus has now shifted to developing drugs for disease areas that are much more complex to treat,” says Jennifer Brice, life sciences global program manager, Frost & Sullivan. “To improve this R&D deficit, pharma companies should develop concentrations and focus R&D efforts on a few core areas and exit areas of R&D that are not considered to be their core focus. Greater collaboration, including with academia, is one way to increase R&D productivity and improve the efficiency of trials.” Chris Garabedian, president and CEO, AVI BioPharma, agrees that the collaboration with academia, government funding agencies, and non-governmental organizations such as disease foundations, will need to be expanded and accelerated in a more comprehensive way to help address the R&D productivity question. “If these collaborations can result in a more predictive, cost-efficient model of generating proof-of-concept to support clinical development, the programs may be more de-risked and funding may be easier to find,” he says. David Fishman, president of Snowfish, says there needs to be a stronger alignment between the industry and academic/research institutes. “Over the past five years, the number of BLAs per year has been averaging 22, almost a 50% decrease,” he says. “Using a strategic partner identification and engagement strategy can significantly improve the chances of identifying promising approaches and bring products to market faster. The core emphasis is an approach that involves identifying, screening, and prioritizing research partners based on a multitude of factors. When unique weights and measures are added to further refine the top candidates, companies can significantly increase the effectiveness of their collaborative research projects.” Roslyn Schneider, M.D., senior director, medical affairs, Pfizer, says the healthcare community needs to take a more holistic view of the evolving healthcare system. “R&D productivity, while an important component, should not be viewed as equivalent to value delivered,” she says. “It is inadequate to measure progress across pharmaceutical companies by the launch of new molecular entities per dollar invested. Value may be seen differently whether it is from the vantage point of individuals, patient groups, physicians, other healthcare providers, scientists, payers, shareholders, and government. The qualitative measures of new or more efficient methods of discovery and development, the ability to identify more specific mechanisms of disease and new targets, and changing business models are recognized as important, but reports of innovation and productivity still seem to default to the quantity of new technologies and products. Companies are working in areas of disease prevention and management, which are increasingly complex, and require not only demonstration of safety, efficacy, effectiveness, but also that they are worth any incremental cost. Progressively rigorous decision-making, closer, appropriate collaboration between academia and industry, and other stakeholders, and partnerships to pool knowledge, investments, and share risk are what will propel the industry forward.” Dr. Schneider says stakeholder insights and modeling based on informed assumptions are strategically being incorporated in decision-making earlier in the drug development process. That information is then updated at each major development decision point and time of additional investment. Late-phase attrition is very costly and limits the resources available for new projects. “The failures, however, may provide essential information in the pathogenesis of illness, and impact the plan for future development,” she says. “Using different model-based drug development strategies by multidisciplinary teams enables certain programs to avoid investment, fail earlier, or provide confidence for further investment and development collaboration.” Mr. Garabedian says because the drug discovery process requires a large chemistry and biology effort, it does not conform to a predictable or robust return on investment. “This is the reason many pharma and big biotech companies have streamlined their discovery efforts in fewer areas, and this has been exacerbated by venture capital and public equity investors who have de-emphasized drug discovery platforms or attached low valuations to new technologies that are unvalidated.” Ramana Reddy, practice leader — life sciences, at Cognizant Business Consulting, contends that life-sciences companies looking to improve the yield of the clinical development process, should prioritize more trials that can result in better business outcomes over trials that may result only in a better scientific outcome. “To improve yield, life-sciences organizations need early intervention in the clinical process to either triage trials or move them aggressively through the clinical process to ensure successful submission,” he says. “There are several strategies that can be leveraged to improve the yield, one of which is implementing concept trials to fill the pipeline with promising drug candidates.” A concept trial is not designed to establish the efficacy of a particular candidate, but rather to help researchers decide if a candidate is worth testing in larger Phase III trials. “Another strategy is incorporating a comparative effectiveness approach early in the process,” Mr. Reddy says. “Leveraging comparative effectiveness information ensures that the right types of trials are progressing through the clinical development process and triaging those trials that do not have improved health outcomes from existing treatment regimens.” Along a similar line, Phil Birch, D.Phil., corporate brand manager, Aptiv Solutions, says the design and implementation of adaptive clinical trials (ACTs) offer significant potential to improve the efficiency of trials. “ACTs rely on the timely collection of data in defined interim analysis steps providing the opportunity for the trial to adapt to emerging data,” he says. “For example, following an interim analysis, a decision may be made to re-estimate the size of the trial, stop the overall trial for futility, drop ineffective treatments, or change the randomization allocation in favor of more effective treatments in defined populations of patients. Importantly, these are not ad-hoc changes but are design changes that are prespecified and planned in advance, which is absolutely essential from a regulatory perspective. Adaptive design concepts are applicable from Phase I to Phase III and regulatory agencies have published specific guidance documents on adaptive trials that support the use of ACTs in both learn and confirm trials.” While adaptive design concepts have been available for some time, Dr. Birch says only recently has implementation, especially for complex design trials, been achievable. “This breakthrough has been possible because of the development of integrated technologies specifically designed to support the execution of ACTs,” he says. Expertise in this area has grown steadily over the last decade not only within pharma companies, but also through the emergence of certain service providers that have specific expertise in adaptive trial design and execution, all of which is enabling sponsor companies to implement complex design trials that were once thought too difficult to achieve. “The integrated execution environment required to support adaptive designs will also increase the number and complexity of designs, leading to trials that more robustly identify critical components of success,” Dr. Birch says. Beyond the Blockbusters The patent cliff story is familiar to most in the industry as is the dearth of blockbusters in the pipeline, which has shifted the focus to specialty pharmaceuticals, including therapies for rare diseases, as well as compounds that include a companion diagnostic. “The current circumstances have contributed to pharma looking more strategically at the business case for investing in rare disease therapies,” says Wendy White, founder and president, Siren Interactive. Financial incentives from The Orphan Drug Act of 1983 have resulted in the development and commercialization of more than 350 orphan drugs to date. Some of these incentives include tax credits, selective grants, and financial assistance that can reduce up to 50% of the cost of clinical trials for orphan drugs. In addition, according to Ms. White, the review process for FDA approval is expedited and provides flexibility on the quantity and quality of the evidence required. “This fast-tracked approval process is critical for attracting potential venture capital investors who typically wouldn’t consider investing because of the standard protracted timeline associated with bringing a drug to market,” she says. “Once approved, the orphan drug receives market exclusivity for seven years in the United States and six to 10 years in the EU.” Several other factors also contribute to the current business climate being conducive to pharma investing in rare disease therapies. “As patents expire on many blockbuster drugs, pharma companies are searching for new products to generate future revenue,” Ms. White says. “Me-too drugs fall flat as payers scrutinize new drugs more carefully and only reimburse for those that demonstrate a better value than what’s currently available. Conversely, therapies that target a smaller patient population and deliver the greatest benefit can justify a premium price. Therapies developed for rare diseases often have a positive impact on advancing established treatments for more mainstream diseases that affect larger numbers of the general population. While improving the quality of life for more patients, this also generates a much greater return on investment for the pharmaceutical company. And there are plenty of opportunities for pharma to evaluate since only about 5% of all rare diseases have an FDA-approved treatment.” Michael Whitworth, head of centralized clinical data sciences at Quanticate, says making the best use of all the clinical and healthcare data available for a product is bringing about advances in personalized healthcare. “We are being asked to standardize huge amounts of legacy data so that companies can mine the data to look for improvements in personal healthcare and new indications for a product,” he says. “This means that patients can be targeted with the right dose and healthcare package, enabling the provision of optimum efficiency, care, and safety for the patient. The increased use of biomarkers and better access to big healthcare data will also mean more emphasis on larger scale meta analysis and simulations of real-world data. This trend is starting to change the emphasis from running large clinical trials to deliver big blockbuster drugs to more targeted clinical trials that rely on maximizing the use of data from translational science through to real-world evidence.” Another growing sector of the industry is the area of therapeutics combined with a diagnostic component. According to Ron Ellis, CEO and president, Endocyte, co-developing a companion diagnostic with a personalized therapeutic provides answers to key questions that guide decision-making. “In the development of small molecule drug conjugates (SMDCs) we start with the companion diagnostic in order to select the right molecular targets and then select the most promising indications,” he says. “Valuable targets are those that are highly specific to diseased cells. Before we invest aggressively in a therapeutic agent, we have already confirmed the ability to target diseased cells in specific indications. This process dramatically changes development risk. As a result, there is a higher rate of clinical success per research dollar.” Data are King The need for different and more accurate data related to patient care — from clinical trials through outcomes — is growing. EMR and EHR systems are gaining traction, the cloud is providing a safe harbor for clinical and other data, and instant patient feedback technologies are driving researchers, developers, and marketers to re-evaulate the status quo. Jae Chung, CEO and founder of goBalto, says there is a trend toward the “consumerization” of enterprise software, which is increasing the focus on user friendliness and elegant design in corporate enterprise applications. “Unfortunately, consumerization has made little headway in the life-sciences because of regulatory complexities and the need to build an organization familiar with this industry and technology,” Mr. Chung says. He adds in the clinical trials arena, R&D professionals still make do with clunky user interfaces and complex legacy systems for study start-up and monitoring — manual, tedious, and inefficient methods from which it is difficult to extract data. “Over the long haul, such methods can affect a company’s bottom line,” Mr. Chung says. “Each day that a clinical trial sponsor is in development potentially translates into millions of dollars in lost revenue. However, new, cloud-based technologies are helping pharmaceutical companies and CROs to better collaborate, and the ones that incorporate the best practice principles advocated by design research firms will become the norm. People who believe such friendly interfaces are nothing more than a pretty wrapper are completely missing the point: new user interfaces will encourage users to interact with a system in a manner that captures meaningful and actionable data and reports it to end users in real-time to impact outcomes and improve predictability.” “We can no longer make assumptions around technology and its use in the clinical environment,” says Tim Davis, CEO of Exco InTouch. “Being complacent around the end-users’ perception of technology reduces engagement and ultimately has a negative influence on the success of our work. Mobile technologies in all their forms — smartphones, tablet PCs, and laptops — along with the accessibility of the Web are empowering today’s super consumers and we must adapt to accommodate their expectations. But the adoption within the clinical arena is in its infancy and the industry needs to change to adopt these methodologies to meet the end users’ expectations.” Ron Marks, Ph.D., chief scientific officer, Clinipace Worldwide, says technologies exist to integrate trial data in a single system that can maximize transparency of study information for all interested parties from investigators to monitors to sponsor management, as appropriate. “Such integration allows the sponsor to keep enrollment on target, investigators to enter clinical data more accurately and timely, monitors to more expeditiously check and validate clinical data, and data managers and biostatisticians to efficiently produce clean and complete data for analysis,” Mr. Marks says. Daniel Chapple, Ph.D., commercial VP, Quanticate, says the intelligent use of new technologies is already helping to improve the quality of clinical data collection and starting to substantially reduce the cost of monitoring clinical trials. “It is now possible for more data to be verified remotely from the investigator sites while still being compliant with regulatory requirements,” he says. “Advanced methods are starting to be used in conjunction with the development of new technologies and processes to maintain source records. With real-time data becoming more accessible when using technologies such as tablet/handheld devices, there is faster access to data with the ability to visualize at a high level and drill down to the source data if required. The collaboration at the reporting level can be controlled through portals to virtual teams throughout the world allowing faster review cycles through improved workflow and notification. Such portals are also facilitating the training and support of investigators during the start-up and conduct of a trial, delivering improvements in quality and compliance. Future integration with EHR will continue to provide increased efficiencies in clinical development.” At the end of the day, or decade in the case of drug development, it’s all about the product and its safe use to help meet a unmet demand. “The ability to provide on-demand product information is critical in reaching both professional and consumer audiences, so that the product can more readily establish its position around ease of use and high-value customer service, in a manner that creates meaningful brand differentiation,” says Steve Wray, president and CEO, Cadient. Because product positioning in the marketplace is more critical than ever, one of the biggest factors moving forward will be the need to provide clinical outcomes to both patients and providers in marketing materials. “Back in the day, a statin could just demonstrate that it produced a significant reduction in cholesterol endpoints, which was sufficient to get the point across that the mediation worked,” says Ken Kramer, Ph.D., senior VP and medical director, Alpha & Omega Worldwide, part of The Core Nation. “Consumers are now looking for outcomes, such as reductions in first or second heart attacks when it comes to choosing a cholesterol-lowering drug. This links the drug’s mechanism of action to tangible health benefits. This will certainly come with a cost, literally and figuratively. This translates into tougher, perhaps more extensive clinical trials, which we know can run into the billions of dollars. However, this level of evidence will become the new cost of entry for products entering established therapeutic areas.” Along the Continuum The statistics on development to commercialization remain staggering, despite a decade marked by major technology improvements, process enhancements, and R&D realignment by most pharmaceutical companies. No doubt drug development is extremely complex, yet it is one of the most vital endeavors. Steve Wray n Cadient Group “The ability to provide on-demand product information is critical in reaching both professional and consumer audiences.” Dr. Roslyn Schneider n Pfizer “R&D productivity, while an important component, should not be viewed as equivalent to value delivered.” David Fishman n Snowfish “Using a strategic partner identification and engagement strategy can significantly improve the chances of identifying promising approaches and bring products to market faster.” Dr. Ken Kramer n Alpha & Omega “A higher level of clinical evidence will become the new cost of entry for products entering established therapeutic areas.” Wendy White n Siren Interactive “Therapies developed for rare diseases often have a positive impact on advancing established treatments for more mainstream diseases that affect larger numbers of the general population.” The paradigm shift to placing the patient at the center means pharmaceutical companies will have to develop and implement new processes and ideologies to respond accordingly. “Pharma companies have the opportunity to conduct online intelligence to identify the unmet needs of patients and caregivers along with the language they use in their conversations,” says Wendy White, founder and president, Siren Interactive. “Armed with that insight, pharma companies can engage key stakeholders with relevant content. By focusing on a relationship marketing approach that educates patients before selling the brand, companies provide value and earn acceptance and trust from patients, which is critical to initiating new patient starts and maintaining adherence to therapies.” Social media and open innovation are blurring the lines of how companies need to communicate with their stakeholders. This new and open environment is shaping how pharma companies and their partners communicate with these various groups. “Effective communication through social media begins with conducting online listening, which, for example, AEs are being monitored on social media and reported as with any other channel to make sure they are,” Ms. White says. “It’s critical to understand what stakeholders need and to provide value by addressing their unmet needs through relevant information, targeted resources, and specialized tools.” Consumers are able to use a variety of ever-improving technologies in their daily life. These same consumers then expect to see these technologies transition into their patient life. Ms. White says there’s an opportunity for pharma to establish a two-way conversation with these superconsumers, who are hyperconnected through the Internet. “Game-changing technology includes video sharing channels, in particular on YouTube,” she says. “Video will play an increasingly important role in pharmaceutical marketing since it’s a persuasive medium that provides a unique opportunity for brands to tell their stories.” Manhattan Research found that one in two e-pharma consumers prefers video to text due to his or her learning style. “This study shows that online health videos result in consumers following up on the call-to-action, with three-quarters of viewers doing additional research,” she says. “Plus, YouTube provides a safe way for biopharma companies to interact with consumers. Comments on a single video or a channel on YouTube can be turned off, allowed to go live immediately, or sent for approval via email.” Mobile technology, which is helping to fuel the superconsumer movement, will take on more importance with the global expansion of pharma marketing. “In many developing countries, people are leapfrogging over owning a desktop or laptop and are accessing the Web via a mobile device,” Ms. White says. “This trend is expected to continue as costs come down and networks expand. Patients increasingly rely on their mobile devices to access healthcare information. Google estimates that 26% of all U.S. prescription searches this year have been done via mobile devices. Some people may correlate mobile with apps, but the functional focus of mobile is actually on search and websites.”