The global pharmaceutical industry still continues to be the custodian of discovering, developing, producing and distributing medicines for the global markets. Historically due to various factors such as the emphasis on innovation, availability of required skilled human resources, finance and markets, the industry has been dominated by corporations operating in the US, Western Europe and Japan.
Thus, while the turnover of the global industry was over $ 800 billion in 2009, the US , Western Europe and Japan together accounted for around 80% with the US market alone over $ 300 billion. However due to slower growth in the currently dominant markets (in low single digits) as opposed to 10 - 20% in economically emerging markets, there is a perceivable shift in interest to the latter in recent times.
The larger players have annual individual turnovers ranging between $ 12 billion to $ 58 billion. To put these figures into proper perspective, it may be mentioned that the sales value of the largest company Pfizer is over 5 times that of the entire Indian pharmaceutical sector. The industry's products have been dominated by blockbuster drugs (with individual turnover of > $ 1 billion per year) with over 100 drugs belonging to that category, the largest single brand being Lipitor of Pfizer which during its peak (patent protected) reaching sales of over $ 12 billion.
Among the emerging markets, India is one of the leaders particularly in the area of being a major supplier of generic (patent expired) drugs to both the regulated and the less regulated markets. With a spate of patent expiries of drugs in the coming years worth over ($ 40 billion) and a relatively poor pipeline of newer drugs, there is going to be some real changes in the top and bottom lines of R&D based pharmaceutical companies in the coming years. The top line gets affected since when a drug loses exclusivity in the market due to patent expiries, sales figures drop in some cases by as much as 50 to 70%. The margins from generic drugs are also considerably smaller than for patented drugs. There is also increasing pressure from healthcare planners and providers to reduce the overall costs of healthcare of which drugs do constitute a substantial part. Consequently wherever it is legally possible, prescriptions will move to the generics space to replace patented products. That also explains the increasing market share of generics over prescription drugs in recent times.
Most of the R&D based companies are striving to enter into deals with leading generic companies such as Teva, Mylan, Sandoz, Watson, Greenstone, Pan Pharma, Hospira, Apotex , Mallincrodt and Dr. Reddy's (the top 10 Generic companies world-wide) to ensure their presence in the fast emerging generic market space. Even though there is only one Indian company in the top ten, cumulatively India is one of the top three among the suppliers of generic drugs (both APIs and formulations) for the global market.
Unlike other industrial segments, the pharmaceutical industry's life line is the introduction of newer and better drugs for diseases where no adequate treatment was available. And that is achieved through massive efforts for the discovery and development of new drugs. Thus the expenditure on this activity alone of the R&D based pharmaceutical companies could be as high as 20% of their sales turnover. And even with such investments and resultant new drugs there is no guarantee that the new drug will remain in the market for any reasonable time. That is because newer and better drugs may replace the existing ones, unexpected adverse drug reactions may surface leading to drug withdrawals or even bans or quality problems may lead to cessation of production and marketing.
Issues on safety of marketed drugs and drugs under devpt
May be due to closer monitoring of safety and efficacy and enforcement of stringent pharmacovigilance and post marketing surveillance standards, many promising drugs for several conditions met with unexpected problems of competition and adverse reactions in 2009. That included marketed drugs as well as promising ones in the pipeline. Thus Xigris a much heralded drug for sepsis predicted to reach sales of over $ 2 billion reached sales of only $ 100 million in the fifth year after launch. The break through non-injectable inhaled insulin of Pfizer expected to reach sales of $ 2 billion was withdrawn due to concerns of proper dosage management. High price of the drug , lack of established evidence for improved efficacy or safety of the drug led Pfizer to withdraw the drug introduced in 2007 which resulted in loss to Pfizer of $ 2.2 billion in revenues including $ 661 of inventory of unused drug.
Recent case of the banning of the front-runner antidiabetic drug Rosiglitazone in Europe and India and severe restrictive warnings in the US have resulted in loss of revenues, litigation expenses and settlements for GSK. Several drugs have failed after reaching Phase III clinical trials. Such catastrophic failures result in an enormous cost burden on the companies involved. For example, the promising drug Dimebon for Alzheimers disease, failed in late Phase III trials resulting in Pfizer paying out over $ 700 million to the Russian innovator company as license and milestone payments. The trials of diabetic drug Taspoglutide of Roche were suspended after gastro intestinal side effects were observed in a few patients. Clinical trials on the Alzheimer drug Semagacestat of Eli Lilly was stopped since in Phase III trials the drug failed to show any improvement in the progression of the disease as was expected from earlier studies. The trial on the anti Rheumatoid drug, Ocrelizumab of Roche was stopped consequent to one death which occurred during the trials even though the cause effect relationship is still not established. Astra Zeneca's Recentrin for Colon Cancer was withdrawn from trials since there was no evidence of improvement in survival rates. Novartis' lung cancer drug clinically tested in a multi centric trial involving 900 patients failed in late stage clinical trials. Novo Nordisk stopped the trials on Dr. Reddy's antidiabetic drug when they observed a bladder tumour in one of the animals undergoing chronic toxicology evaluations. Phase III Clinical studies on Torcetrapib of Pfizer hailed as the potential successor to the block buster drug Lipitor (atorvastatin) was terminated after the Drug Monitoring Committee of U.S.FDA recommended such action following a few cardiovascular events during the trial. The case of a major set back to the field of gene therapy consequent to the death of Jesse Gelsinger undergoing gene therapy is yet another instance, seriously affecting the progress of a major medical advance.
The lessons to be learnt from all these is that in spite of all the data from simulated models (animal models) and positive indications in Phase I & II studies, many drugs fail in Phase III studies and many more even after they are marketed. The economic consequence of such late stage failures is enormous since to reach that late stage clinical trials,companies would have spent three fourth of the total drug development costs estimated at $ 1.5 billion or more for every new drug reaching the market.
Current drug discovery models
New drugs, ever since the advent of chemotherapy, have been discovered from two major sources, synthetic chemicals and natural products including plants, animals and microbes. During the last two decades the new field of use of recombinant DNA technology has also made a foray in new drug discovery. While these sources are still the major ones, there has been a paradigm shift in the ways they are being used to discover and develop new drugs. The approach practiced by all the major R&D-based companies for almost three to four decades was to a large extent a numbers game with a heavy element of chance and luck contributing to success.
Analog synthesis and screening to optimise the activity observed in a lead molecule and developing the selected candidate was the preferred approach until recently. Yet another important aspect of this approach was the positive role that serendipity played in drug discovery. Serendipitous discoveries resulted from observations during the pre-clinical drug development phase as well as in the clinical phase or in rare cases post-marketing.
The best known example even today was the discovery of Penicillin by Alexander Fleming which revolutionised anti-infective therapy and led to a plethora of Antibiotics in future years. The discovery of Minoxidil for hair loss , Metronidazole for anaerobic infections, Carbamazepine for epilepsy, Aspirin for Platelet aggregation, Sildenafil citrate (Viagra) for erectile dysfunction and many others are all examples of serendipity playing a major role in drug discovery. However serendipitous discoveries are possible only if scientists and clinicians keep their minds , eyes and ears open to unexpected results observed during pre-clinical studies , clinical trials or even after the drugs are in use for the original indications.
Late stage failures and strategies to overcome them
Classical drug development models carry out in-vitro tests (wherever available) and based on the positive outcome from such tests , they are then subjected to screening in animals where the disease has been simulated. The biological and toxicological screening results are then used as benchmarks for determining the suitability of the candidate molecule for human trials.
These yardsticks which indeed are the determining factors for initiating clinical trials are very often not applicable to humans since the presumption that those experimental animal models are truly representative of the human disease condition is often fictitious. In terms of the enzyme profiles responsible for health and disease in humans and absorption , distribution, metabolism and excretion patterns, the human beings are vastly different from animals. That indeed is one of the reasons why drugs shown to be very promising based on animal screening fail in clinical trials. It is also known that drugs do not work across populations since in many cases particularly in cancer the pattern of the disease is heterogeneous in terms of molecular pathogenesis in different patients. Testing the drugs in assays of high human relevance during the early phase of the development process is a much needed imperative to reduce the chances of late stage attrition.
Pharmacokinetic parameters which defines the Absorption, Distribution, Metabolism and Excretion (ADME) of a drug when ingested by humans is an important factor which determines the activity and safety of an experimental drug. It therefore stands to reason that these parameters are evaluated very early in the development cycle to ensure that valuable time and resources are not expended before the decision to take the candidate molecule for clinical evaluation is made.
The high 'late stage attrition' rates of new candidate drugs is due to non availability of such vital information early on. One of the theories to enable knowledge of these parameters is based on Lipinsky's rule of five which is deemed to have predictive value to judge whether the drug has indeed drug-like(druggable) features based on its physico-chemical characteristics. The rule is, however very empirical and has limited use when dealing with diverse molecules and structures. With the advent of modern genomics and proteomic techniques and the emerging system biology tools, rational approaches for drug discovery and development and for the planning of clinical trials are being developed.
The use of biomarkers both for predictive and prognostic use with regard to the potential for a drug to be bioactive in humans as well as for determining clinical outcomes , while in early stages , is yet another attractive approach. Most cancer drugs benefit only very limited number and types of patients. Knowledge about where they work and where they do not work is very useful to ensure that unnecessary treatments which result in avoidable adverse effects and huge expenditure on drugs are avoided. A recent development is the use of embryonic stem cells which has the capacity to differentiate into various tissues and organs in the body as targets particularly by using important cell types such as hepatocytes for new drugs discovery.
For the pharmaceutical industry to sustain its R&D efforts in the interests of discovering and developing new drugs, it is essential that the overall economics of this activity is evaluated and new strategies developed to ensure increased productivity and a favourable cost to benefit ratio. Every segment of R&D efforts has to be cost-effective and to guarantee that, it is essential that there are predictive models which would minimise late stage failures and enable early decisions on continuing the drug development process. If such models are available and effectively used, R&D costs and time required for new drug discovery could be considerably reduced. That indeed is the need of the hour, since otherwise even the largest pharmaceutical company will find drug discovery research unaffordable and prices of new drugs will be outside the reach of populations all over the world.
The author is a senior research scientist & industry expert based in Chennai.