Pharmaceutical globalization: Where are drugs invented?

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Maintaining control of pharmaceutical drug innovation is key for national security, public health, and economic development. We know that much of late-stage development has gone overseas, but the …

Maintaining control of pharmaceutical drug innovation is key for national security, public health, and economic development. We know that much of late-stage development has gone overseas, but the question remains: Where are drugs invented? Using the database I demonstrate a model to track pharmaceutical globalization using patents, and reveal the locations of pharmaceutical innovation.

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  • 1. Globalization of Drug Discovery
    Drug Discovery Partnerships: Filling the Pipeline
    October 17th 2011
    Yali Friedman, Ph.D. –
  • 2. Globalization of Drug Discovery
    Why it matters:
    - Challenges of not having domestic drug R&D
    How to measure it:
    - Using patents to track globalization of innovation
  • 3. Global Biopharma Overview
    Location matters
    Workforce cost, availability
    Access to skilled management, supportive services
    Proximity to innovative science and markets
    Who is doing what, where?
  • 4. Technology producers vs. consumers
    • Drugs tailored to domestic healthcare needs
    • 5. Gain foreign currency
    • 6. Tax revenues from domestic companies and workers
    • Reliant on others to develop drugs for domestic needs
    • 7. Non profit-enabling diseases are unlikely to attract investment
  • 8. Strong market opportunities drive innovation
    Why is the U.S. the world leader in biotechnology?
    World’s largest prescription drug market
    Not divided like European countries
    World’s strongest patent protection
    World’s largest absolute expenditures on R&D
    The U.S. once spent more on R&D than the rest of the world combined
    No government price controls
    But, who is inventing the next generation of drugs?
  • 9. What happens when you don’t develop drugs?
    Case Study: Philippines
    Limited domestic drug production capacity
    Must purchase essential medicines from foreign countries with higher wage-costs (e.g. Singapore)
    This is effectively reverse-offshoring
    Government has a limited budget, must make difficult decisions about how much of which vaccines to buy
    Domestic production would reduce costs, preserve foreign currency, keep revenues domestic, and could train workers for innovative drug development
  • 10. Acquiring Medicines
    Develop a domestic drug development industry
    Pros: Can develop drugs for domestic needs, can drive tax revenues, can derive foreign currency from exports
    Cons: Expensive, takes time, requires unwavering government support
    Buy drugs from foreign countries:
    Pros: No need to invest in risky R&D, gain access to best drugs produced by global leaders
    Cons: Expensive, depletes foreign currency, doesn’t generate tax revenues
  • 11. Solution: Produce foreign drugs locally
    Weak patent laws enable domestic production of drugs developed elsewhere
    Pros: Low-cost domestic production of many drugs using domestic workers, tax revenues from production and sales
    Cons: Reduced foreign investment by global firms, reduced motivation to develop drugs for locally-endemic conditions
  • 12. Costs of Weak Patent Protection
    India (mostly) adopts TRIPS accords in 1995
    Amends patent laws to protect product patents, with the notable extra criteria that new drug products must “differ significantly in properties with regard to efficacy”
    In 2007 Novartis failed to obtain a patent on Glivec (sold as Gleevec in the US)
    Novartis CEO: unfavorable patent ruling is “not an invitation to invest in Indian research and development.” Company will redirect hundreds of millions of dollars in investments to countries where it has greater IP protection.
  • 13. Who benefits from not patenting Glivec?
    Novartis provides Glivec free to most patients in India
    Because Indian manufacturers would be unable to compete with Novartis’ free domestic distribution, their target markets would likely be in other countries, where they could potentially erode Novartis’ market.
    Is India forfeiting investments from Novartis simply so that Indian companies can sell Novartis’ drugs abroad? Does this serve the public?
  • 14. Mexico accepts Amgen drug
    Long-standing law:
    International drugmakers must conduct at least some of their manufacturing in Mexico
    Pros: Training of Mexican workers
    Installation of domestic biotechnology infrastructure
    Facilitates growth of domestic biotechnology industry
    Cons: Some companies may decide not to sell drugs in
    Mexico, depriving the country of valuable medicines
    Amgen insists that they only want to have onemanufacturing facility, in California
    Mexico amends rule
    Defines a list of drugs (e.g. anti-HIV, vaccines, hormones) able to be imported without Mexican manufacturing facilities
  • 15. Overcoming weak/poor markets
    River blindness drug developed by Merck
    Affected individuals unable to pay for drug, so Merck distributes the drug for free
    This model is unsustainable. Doesn’t incentivize development of drugs for these conditions, instead relying on companies to support tangential discoveries.
    OneWorld Health, Bill & Melinda Gates Foundation, etc.
    Non-profit drug company solicits foundation support to actively develop shelved drugs for neglected populations
  • 16. Meeting national needs: Economic Development
    Three basic models
    India, Brazil, Thailand
    Weak IP, focus on generic production and foreign sales
    Israel, Cuba, maybe India
    Moderate IP, leverage generic production skills to develop innovative drugs
    Singapore, Puerto Rico
    Strong IP, attract manufacturing investments from global leaders
  • 17. Where are drugs invented?
    Friedman, Y. (2010) “Location of pharmaceutical innovation: 2000–2009” Nature Reviews Drug Discovery 9:835-836
  • 18. Indexed patents covering FDA-approved drugs
  • 19. Assigned relative inventorship based on inventor locations
  • 20. US is slipping, EU stable, Asia rising
  • 21. But, which are the leading countries?
  • 22. And… what about individual US states?
  • 23. Questions?
    Yali Friedman, Ph.D.