A recent cover story in a leading Indian Business Magazine under the title ''Future Shift'' reports on a tete-a-tete at a Round Table between some of the foremost industry leaders on the role of the Indian Pharmaceutical industry in the rapidly evolving new wave global Pharmaceutical industry scenario. That scenario has seen the emergence of huge behemoths in the global scene, formed through the mergers and acquisitions route. The compulsions for the big Companies to become bigger are related to the experience of recent years, when the R&D pipelines of most companies are shrinking or even drying up and as a consequence the costs of new drug discovery have reached levels which are unaffordable to even the largest R&D-based Pharmaceutical Companies.
The Indian scene need to be assessed not only in the context of the structural changes taking place in the industry, world-wide, but also from the possible impact of the introduction of a globally harmonized patent system by January 2005. This means radical changes in the mind set and working methods of Indian Companies to face the challenges of the coming years.
In the preamble to the report on the Round Table, the editorial team spells out the objectives, which include, setting up an achievable goal for this sector, identifying constraints in achieving those goals, and evaluating the impact of global changes in the industry''s structure and approaches, on the Indian industry. The Captains of the Indian industry, who participated in the discussions were candid and persuasive and at the same time cautious and defensive.
The topics covered a wide range of issues, including the impact of the impending product patent regime in 2005, potential for the Indian industry to be a major player in the global generic market, entry into the big league of research for discovery of new drugs, international alliances in R&D as well as marketing, Indian industry''s part in the ''Biotech Boom'', need to utilize Indian systems of Medicine as part of healthcare, Governments role in supporting the growth strategies of the industry, the future of small and medium sized companies, the gap between the regulatory standards in India and their counterparts in the developed world etc.
The views of the participants perhaps reflect the views of the recently formed Indian Pharmaceutical Alliance (IPA), since they were founding members of this elite group with 11 members, all of them according to the Articles of the Association of IPA, having a commonality in their Agenda to become R&D-based global pharmaceutical companies. Between these companies they have a market share of over 35% of the Indian market and over 90 % of the Country''s R&D spending in this sector. While it is easy to recognize the resolve of these companies to emphasise R&D as the basis of their future, it is unlikely that they will have a common agenda with respect to the approaches they adopt to ensure achieving their objectives.
It is also debatable whether the micro interests of individual companies will match the macro interests of the industry, let alone of the Country. Corporates, as a rule, are intent on maximizing value for their share-holders, for which they need to stay ahead of competition by having, if possible, unique strategies and that includes R&D strategies as well. For the Indian Companies, the competition is no longer domestic, but global. One of the basic premises during the discussions on R&D efforts by Indian Companies, at the Round Table, was that the only viable approach to drug discovery research, by the new breed of R&D-based Indian Companies, is to follow the Western model of drug research to develop products for therapeutic areas catering to the global markets.
Is There Yet Another option?
One of the most challenging tasks for the Pharmaceutical industry, perceived by many, as a welfare providing industry, has been to create a balance between economic interests to create wealth through value addition and global markets access and the social needs of countries suffering from depravity and denial of basic healthcare. Since Indian Companies are on the threshold of engaging themselves in Drug discovery research as part of the compulsions of a new patent regime, this is perhaps the right moment to deliberate on what sort of portfolio of research projects would be appropriate for their efforts.
If the leaders of the Indian industry feel that the domestic market or even the combined markets of the developing world, where three fourths of the World''s population of 6.2 billion reside, are not adequate to ensure returns on investments in drug research for discovery of new drugs for diseases endemic to third world countries, to whom does the World turn to, for the drugs needed by the poor? India is perhaps the only Country among the developing countries, which has the technical skills and capability to meet these needs. The question is, how do you make such an endeavour pay? Neither the National Health Policy 2001
nor the IPA represented by the opinions at the Round Table seems to have addressed this issue from such a perspective. The fact is that, the Western model of drug discovery and development practiced by the R&D- based MNCs, would not be suitable to answer these very relevant questions.
Current Areas Of New Drugs Research
The trends in the Western World for new drugs discovery have followed a pattern which follows strictly, well-established economic models, largely based on market needs and marketability rather than medical needs, many of which are still unmet, mostly for diseases of the developing world. And there is a strong and valid reason for this. The Western model of drug development compels deployment of financial resources to the tune of around $ 800 million for every new drug discovered and developed. Even then, only one third of those reaching the market pay back, the rest of them piggy ride on the successful ones. To play this game, leading Companies need to spend$ 2 billion each per year, and to be successful; at least 4 new drugs should come out of their stables, every year. At present the average is around one per year and even for that there is no guarantee that it will realize the minimum threshold sales level of $ 350 million, in the second year post-launch. An important consideration for these Companies, while selecting the therapeutic areas for R&D investment, therefore, is to ensure that they work in therapeutic segments which has large markets and adequate innovative potential and yields successful products, if not block-busters.
New Drugs Approved in US in 2001
A look at the drugs approved by the US FDA in 2001 is revealing from the point of view of the areas of priority for R&D-based MNCs. Of the 32 drugs approved in 2001, 24 were of synthetic origin and 8, biologicals. Of the new drugs in the former group, there is one for AIDS/HIV, which afflict 800,000 Americans, 2 for Arthritis which affects 20 million people in U.S., 3 for Cancer, the second leading cause of death in the U.S., 2 for Glaucoma, a major cause of Blindness, 5 for Heart Diseases, the number one killer in the U.S., 5 for Infectious Diseases of bacterial, viral and fungal origin, 2 for Alzheimer''s, 2 for migraine, which affects 10% of Americans and 2 vaccines for hepatitis. Except for the Cancer drug Gleevec of Novartis, none of the others could be considered breakthrough drugs.
Would Genomics & Proteomics Reduce Costs Of Drug Discovery?
In spite of the hype around the new technologies involving Combinatorial Libraries, High Through Put Screening and use of molecular targets based on pharmaco-proteomics, the fact is that none of these techniques are likely to reduce the time required for new drug development, nor the costs involved. The main advantage of the new techniques is that drugs with more specificity of action and better rationale would be developed for diseases for which genetic aetiology is dominant.
Even if one takes the case of one of the first drugs discovered using the new methodology, Gleevec, the anti-Chronic Myeloid Leukemia drug, discovered by Novartis, it will become apparent that the path of discovery and development for this drug, was not any less arduous than the earlier empirical methods.The bcr-abl gene was identified as cause of leukemia in mice in 1990, based on which Gleevec was designed and developed.
In spite of such rationale, the drug was approved for use only in 2001. The fact that annual costs of treatment with this drug is $ 24,000 also indicates that the cost of development was quite high, even though the drug approval by FDA took only a record 2.4 months, in view of its life saving properties and orphan drug status. It is also obvious that research efforts to develop these products were triggered by the needs of the American markets, often times not matching with those of the developing World.
Case Of The Third World Diseases
It is a fact that the diseases of the poor including Tuberculosis, Malaria, Childhood Diarrhoea, Cholera, Leishmaniasis, Onchocerciaisis, Trypanosomiasis, Schistosomiasis, Ebola, Dengue, Japanese Encephalitis and a host of parasitic infections, in addition to diseases brought about by hunger, poverty, malnutrition and water-borne infections, are not the prime target areas for drug development by the Western Pharmaceutical Companies.
Clearly, none of these diseases, singly or even collectively qualify for investments based on current costs of drug discovery and development. For example, the total global market for all the four Anti-TB drugs, Rifampicin, INH, Pyrazinamide and Ethambutol is around $ 700 million. No wonder, no Company will be willing to invest in research on TB. In fact, even in the case of Antibiotics, no new class of Antibiotic has been discovered during the last three and a half decades, partly due to complacency on the part of the Companies that infections are under control, partly due to late recognition of the problems of drug resistance, but mostly due to lack of commercial interest.
In the U.S. the Orphan Drugs legislation provides for support through fiscal incentives and fast track drug approval, for R&D on Orphan drugs, defined as drugs for diseases of which there are less than 200,000 cases per year or where the sales of the drug will not ensure adequate returns on investment. No such system is operative for drugs for the diseases of the poor.
Global Alliances For Drug Development
Due to increasing pressure to address these issues, Global alliances are being set up under the aegis of the U.N. and Non-Governmental Organisations to encourage and support R&D efforts in disease areas of relevance to developing Countries. Such alliances have already been formed in the case of T.B. and Malaria. To be successful in their objectives, they need the required skills, motivation and financial resources.
The U.N. Secretary General Kofi Annan has pleaded to the World Community to make available $ 10 billion towards these efforts. It is obvious that funds alone will not ensure the development of new drugs. The Publicly funded Institutions, including Universities are hardly equipped, capable or interested in the pursuit of such activities. The multiple skills and co-ordination of diverse activities involved in new drug development are available only with pharmaceutical companies, which of course, would expect adequate payback for their efforts. For example, the National Cancer Institute on the heels of its discovery of the outstanding anti-ovarian cancer properties of Paclitaxel (Taxol), turned to Bristol Myers Squibb to develop and market the product on terms of exclusivity granted as a special case.
Can Indian Companies Step In?
Since the large MNCs have their portfolio for R&D projects already defined on the basis of market economies, is it possible that the Indian Companies can step into this unchartered territory and meet the twin objectives of economic viability and social relevance? First and foremost, the Indian industry has reached a level of maturity, which will enable them to successfully enter the area of new drug discovery research. Secondly, it would appear that what is not economically viable by Western standards and models can be viable for India?
If Public funding from global alliances and incentives from international and national agencies through expeditious regulatory approvals are available, the Indian Companies which enter into areas of R&D for the diseases of the developing countries can ensure adequate returns on the investments. This is primarily because, the total costs of drug research, of which a major portion is for clinical research, can be substantially lower in India. As the buying power of the developing and least developed countries go up in the coming years and as more and more international aid can be directed for healthcare, such an involvement would be even attractive for India to undertake.
During the last seven years, more than a dozen leading Indian Companies have entered the fray of new drug discovery research. They are, Ranbaxy, Dr. Reddy''s, Wockhardt, Cadila Pharma, Zydus Cadila, Torrent, Alembic, Nicholas Piramal, Cipla, Dabur, Sun Pharma, Unichem, Glenmark, Orchid and Kopran, with annual R&D expenditure of each ranging from Rs 5 Crores to Rs 100 Crores.
Of the total R&D expenditure of the Indian Pharmaceutical industry of around Rs 350 crores, which represents only 1.7% of the domestic turnover of the industry, over 90% is spent by these companies.
The therapeutic areas of interest to these Companies have been Cardiovascular diseases, Diabetes, Obesity, Cancer, Infectious, Gastro-intestinal and Respiratory diseases and Benign Prostatic Hyperplasia. Most of the programmes have been based on established leads from marketed or pipeline products. Even though some efforts are being made, notably in CDRI, to use modern tools of drug discoveries, such as development of Combinatorial Libraries and High Throughput Screening, these efforts have been marginal and have not led to any meaningful results so far. So too, efforts in the area of pharmaco-genomics and proteomics as sources of molecular targets for drug discovery.
Many A Slip Between The Cup and the Lip
The recent reports on the withdrawal of clinical trials on Ragaglitazar, the anti-diabetic candidate drug molecule, licenced by Dr. Reddy''s to Novo Nordisk, has raised the eyebrows of many, even of those who are presumed to be knowledgeable. The fact is that the reported withdrawal of the trials was the most responsible action taken by Novo Nordisk, exhibiting prudence and abundant caution. Those who argue that all toxicity studies including carcinogenicity studies on the drug should have been completed prior to use in the first human are ignorant of the drug development process.
Carcinogenicity studies are often full term studies conducted during the life of the animals lasting even up to 2 or more years and in the absence of any indication, particularly of mutagenic effects in early experiments, there is no requirement to complete these studies ahead of human trials. In fact, carcinogenicity studies are conducted concurrently with human trials, unless there are reasons for their evaluation prior to human studies.
No one knows the significance, if any, of the results in rats administered Ragaglitazar, particularly, since the hepatic microsomal enzymes and some times even enzymes in the gut, including Choline esterases are very different in rodents compared to humans.
Under these conditions the Company''s action is in line with the principle of safety first and when in the slightest doubt, the right strategy is to stop trials and investigate the observed toxico-pathological results before proceeding further. The public and the media need to learn that nothing is certain about the outcome of drug research and unexpected adverse reactions can come up any time, even post-marketing, in spite of all the precautions taken, during the entire cycle of drug development.
Approaches For Discovery Research In India?
While the selection of therapeutic areas for carrying out new drug discovery research is the responsibility of each individual Company and is based on its strengths and resources, in order to be competitive and successful, efforts should be focused in niche areas where in the coming years India can be a leader, like in the case of Bulk drug production for the global generic markets.
Leadership among the developing countries for drug discovery for diseases affecting over 2 billion inhabitants on the planet is never going to be unrewarding in the long run. An objective evaluation of the oriental systems of medicine would be another attractive area for R&D inputs by the Indian Companies and Publicly fun-ded Research organizations.
At the same time, in selected areas of global relevance, in terms of markets and profits, life-style-related diseases could be targeted, and drugs developed in collaboration with R&D based MNCs to tap the enormous markets waiting to be tapped. A judicious mix of these approaches alone will ensure a dominant place for India among the leading Countries engaged in all aspects of the pharmaceutical industry activities and more importantly, basic R&D for discovery of new drugs.
-- The author is one of India''s top research scientists and is based in Chennai