A history of pharma v1
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A sweeping history of Pharma and an insight into where we are now and possible upcoming developments
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A history of pharma v1
- 1. A History of Pharma Sheila Ash
- 2. Summary • Roots of Pharma • Merging Scientific and Industrial Revolutions • War drives rise of Pharma • Dyes to Pharmaceuticals • Politics and Pharma • Interwar breakthroughs • State & Healthcare – Rise of Social Healthcare systems • State & Healthcare – Legislative Changes • Post WW2 – The Golden Age • The Blockbusters • Rise of “me too” • 1990s-2000s – Merger Frenzy • Megaliths Maintain Market Share • Patent Value • Patent Cliff – Lilly, Otsuka, Pfizer • Late 20th – early 21st C – the Storm of the Biologics • New Business segment • Biologics Patent Cliff • State and Biologics – Costs • Arrival of Biosimilars • Biosimilar Market • Therapeutic Area Focus • Big Pharma becomes Big Biotech • M&A to rationalise markets • Cooperation and Divestments • Biosimilars Manufacturing Investment • 21St C – Alternative Manufacturing and Distribution Techniques • Healthcare in the Community • Digitalisation in Healthcare delivery • Redefinition of MedTech • Mobile Technologies in Healthcare • War for the Consumer • Increased consumer focus • Making the leap - from mobile app to medical device • Wellness and Fitness Markets • Integration of Supply Chains
- 3. Roots of the pharmaceutical industry Middle ages Apothecaries, pharmacies, traditional remedies 17th century Scientific revolution, spread ideas of rationalism and experimentation 18th century Industrial revolution transformed the production of goods Late 19th century modern industrial origins, two concepts married to benefit of human health
- 4. Merging Scientific & Industrial Revolutions – Early Examples • Merck • Possibly earliest to move in this direction • Originating as a pharmacy in Darmstadt in 1668 • In 1827 Heinrich Emanuel Merck began the transition towards an industrial and scientific concern, by manufacturing and selling alkaloids • GlaxoSmithKline • Origins can be traced back to 1715 • Mid-19th C - Beecham industrialises production • Produced patented medicine from 1842 • 1859 - first factory for producing only medicines
- 5. War drives rise of Pharma • Pfizer • 1849 two German immigrants as Fine Chemicals business • Rapid expansion during American civil war due to demand for painkillers and antiseptics • Eli Lilly • A young cavalry commander Colonel Eli Lilly served in the Union army • A trained pharmaceutical chemist • An archetype of the dynamic, multi-talented 19th C American industrialist • 1876 Set up a pharmaceutical business • Pioneer of new methods • One of the first to focus on R&D as well as manufacturing • BMS • Edward Robinson Squibb, a naval doctor during the Mexican- American war (1846–1848) threw drugs overboard due to low quality • 1858 He set up a laboratory, laying the basis for BMS
- 6. Dyes to Pharmaceuticals • Dyestuffs have antiseptic and other properties • Began to market them as pharmaceuticals • Switzerland’s total lack of patent laws led to it being accused of being a “pirate state” in the German Reichstag • Sandoz, CIBA-Geigy, Roche and the Basel hub of the pharmaceutical industry rooted in this boom • Bayer founded in 1863 was a dye maker in Wuppertal • Moved into medicines • Commercialising aspirin around the turn of the 20th C
- 7. Politics and Pharma • Unregulated trade in medicines • Less strict delineation between “pharmaceutical” and “chemical” industries • Sold cod liver oil, toothpaste, citric acid for soft drinks, and hair gel • Prescription medicines • Other products like heroin on the over-the- counter market • The national rivalries and conflicts impacted the developing industry • Bayer’s Russian subsidiary seized during the Russian revolution • Bayer’s US assets seized during WW1 • Compulsory split of German Merck KGaA into Merck & Co (USA) , Merck Sharp & Dohme (elsewhere) • Disruption to Germany’s pharmaceutical leadership position in early 20th C • Allowed others, particularly in the US, to take advantage
- 8. Interwar breakthroughs Insulin • 1921 Frederick Banting isolated insulin • In collaboration with Eli Lilly it was purified, produced industrially and distributed it as an effective medicine Penicillin • 1928 Alexander Fleming discovered penicillium mould’s antibiotic properties • Howard Florey & Ernst Chain’s further experimentation • Mass production via government supported international collaboration including Merck, Pfizer and Squibb during WW2, saving thousands of lives • Immense scale and sophistication of the development effort marked a new era for the way pharma developed drugs 2 breakthroughs heralded the arrival of today’s pharma industry The war encouraged research into everything from new analgesics to drugs against typhus, with collaboration between companies and government
- 9. State & Healthcare - Social Healthcare Systems • 1948 - UK’s National Health Service (NHS) • Created a much more structured system for prescription of drugs and for their reimbursement • In 1957 a price fixing scheme • Allowed reasonable return on investment for drug manufacturers • Solidified the incentive to invest in new medicines • Universal health care NZ (1939-41), Sweden (1955),Iceland (1956),Norway (1956), Denmark (1961), Finland (1964), Japan (1961), Saskatchewan (1962), rest of Canada (1968-72), Soviet Union (1969)
- 10. State & Healthcare - Legislative Changes • Increased government regulation of medicine production • 1961 Thalidomide scandal • Increase in regulation and testing of drugs before licensing • 1962 Kefauver Harris Amendment to US Food and Drug Administration (FDA) rules on • Proof of efficacy • Accurate disclosure of side-effects • 1964 Declaration of Helsinki • Greater ethical strictures on clinical research • Cementing the difference between production of scientific prescription medicines and other chemicals • 1969 UK legislation • all drugs to undergo animal toxicity testing & staged clinical trials • Elongated approval times • 1978 development time for a drug had increased by 10 years • Raised development costs significantly • 1960s - $6m • 1970s - $40m • 1990s - $250m • 2000s - $350m • $5 billion per new medicine
- 11. Post WW2 – The Golden Age • Systematic identification of drug candidates replaced serendipity • More rational methods of mass production (Ford) • Increased understanding of biology and chemistry • Post-war boom • Massive improvements in living standards • Technological optimism of the 40s to the early 70s • Cold War fueled competition in science • Beginnings of the globalisation • Import duties incentivised Wyeth, Sandoz, CIBA, Eli Lilly and MSD etc to set up subsidiaries in UK in the post-war years • 1951 - Pfizer opened subsidiaries in nine new countries • Consolidation in the industry as entry barrier rise • 1960 - Contraceptive pill – huge social impact, enabling women to effectively control their fertility and enabling sexual equality • 1963 – Roche market Valium (diazepam), then the monoamine oxidase inhibitor (MAOI) class of anti-depressants and antipsychotic haloperidol introduced • New era of psychiatric treatment • Effective biological treatments to psychiatry • 1970s - US government’s “war on cancer” • Cancer Report UK showed that survival rates have doubled since the early 70s • due in large part to the massive innovation in oncology medicines that has occurred since then • 1969 - ibuprofen • 1975 - ACE inhibitors - improved cardiac health
- 12. The Blockbusters • Late 70s - shift in pharma industry focus • 1977 – Tagamet • Ulcer medication • First ever “blockbuster” drug • Earning >$1 billion a year & Nobel Prize • Competition to develop the next big blockbuster • 1987 - Eli Lilly - Prozac - first selective serotonin reuptake inhibitor (SSRI) – revolutionized mental health care • 1987 - Merck (MSD) – Mevacor - first statin
- 13. Rise of the “me too” • Huge R&D expense and risks • “me too” formulations to get market share • Rather than innovating novel medications • Example • 2001 - AstraZeneca – Nexium (esomeprazole) - popular proton pump inhibitor • Only a purified single isomeric version of an older drug which was losing patent protection • Lack of Patents became a problem for the industry • The Hatch-Waxman Act of 1984 regularised generic production in the US • Policy decisions in some developing countries to ignore medical patents
- 14. 1990s/2000s - Merger Frenzy • Larger companies buy up patents, technologies, sites and expertise of others • Megolithic globally dominant companies • Consequential pool of redundant scientific experts • Many new companies formed with Venture Capital funding • Rise of campus and technology parks • Some focused on service elements • E.g. Combinatorial Chemistry libraries of millions of compounds all with drug-like profiles (Biofocus, Cambridge Combinatorial)
- 15. Megaliths Maintain Market Share • The industry focused on • Marketing to maintain market share • Lobbying politicians to protect commercial interests • Enforcement of legal claims on intellectual property rights Outsourcing Re-use Buy-up/Buy-in • Lower fixed costs • Increased use of Contract Research Organisations • Especially in India and China • 2003+ • Growing trend to reduce research capacity in Europe and USA • Especially for commodity services - straightforward, well- tested science • New formulations focus • Old tried and tested drugs • New disease areas for old favourites • Buying up smaller still innovative companies • Buying-in proven technologies and promising drug pipelines • To boost large pharma's drug pipeline • To stave off the always existent fear of “patent cliff”
- 16. Patent Value – a Balancing of Risk & Reward • Buying-in proven technologies and promising drug pipelines • To boost large pharma's drug pipeline • To stave off the feared “patent cliff” • Example: AZ purchases of small biotech 2005/2007 • 2005 AZ buys KudOS Pharmaceuticals • 2006 AZ acquired Cambridge Antibody Technology • 2007 AZ bought Arrow Therapeutics & MedImmune The S-shape curve life cycle of patent value
- 17. Patent Cliff Costs & Implications • Generics firms • manufacture virtually identical drugs • at steeply discounted prices • Branded-version sales can fall off the “cliff” • Lost revenue sources • Pharmaceutical stocks to historically low valuations 2015 Top 10 patent cliff losses > $32 billion in global sales • Lantus Abilify Copaxone • Neulasta Tracleer Namenda • Avodart/Jalyn Zyvox AndroGel • Synagis Industry-wide projected losses > $127 billion in brand spending 2014-2016 A projected view of total consumer spending in developed markets until 2016. Dark blue bars indicate spending on generics for the year, while light blue bars show prescription brand spending. Note that over the upcoming years, prescription medicines are estimated to lose $127 billion in potential revenue to generics. Source: IMS Health
- 18. Life after Prozac – The Patent Cliff • Eli Lilly & Co. (NYSE:LLY) • Became a household name with its antidepressant Prozac in 1987 • 2001 - lost Prozac patent protection • Shares fell ~30% in 12 years • 2013 - again facing severe issues • patent expiration of its biggest seller - antidepressant Cymbalta • sales dropped 73% • 2014 - generic versions of its osteoporosis drug Evista hit the market • Sales volume dropped 16% • Forecasted these two would reduce its 2014 global revenue by 20%, and suspended pay increases for most employees to reduce costs
- 19. Otsuka’s Patent Cliff • Patent Expiry • 1989 Filed +5 yr extension until 2015 • 2015 – US Patent Expiry, Europe patent expired / 2016 - Japan patent expiration • Recent Sales increased • 2002 - FDA Approval for schizophrenia • 2007 - FDA Approval for depression • Patent expiry will “materially and adversely” affect Otsuka according to annual report • Losses • 30 Abilify tablets cost ~$800 • 40% of Otsuka's annual revenue • 2013 - $6.4 billion • 2019 - $6.2 billion (generic competition) • 2020 - $200 million • Otsuka’s America unit co-markets the drug in America with Bristol-Myers
- 20. Pfizer’s Lipitol • 1998 - Released - statin • 2011 - Patent expired • Propellent for Pfizer’s success in early 2000s • $115 billion in revenue • 40% total profits for Pfizer in 2005 • To minimize inevitable patent cliff profit loss • A licensing agreement with Indian pharmaceutical company Ranbaxy • Provided 180 days of exclusive production of the generic version • Profit losses for Pfizer were still very steep • By the end of the first fiscal Qtr after expiration • 42% fall in global sales • 19% drop in Pfizer’s total profit • Unexpected steepness to this decline • Huge warning sign for other pharm, shareholders, competitors, payers, and consumers
- 21. Late 20th – early 21st C – The Storm of the Biologics • Chemistry overtaken by Biology • Bioinformatics, Biomarkers • Molecular Targeting, Nanotechnology • Mapping the Human Genome • Biologics are medicinal products manufactured in or extracted from biological sources e.g. • Monoclonal antibodies, Vaccines • Gene therapies, Cell therapies • First biologics developed by Lilly in 1980s • 2012 - 8/20 top sellers were biologics • Long Development process - 10–15 years • Costly development process - average R&D investment $1.2 billion • U.S. pharma = 80% of world R&D in health care biotechnology Rapid emergence of an entirely new business segment
- 22. 21st C - New Business Segment • 1/3 biopharmaceutical industry R&D pipeline is biologics • By 2016, 10 of the global top 20 bestselling drugs will be biologics • By 2018, sales from biological medicines will be 49% of top 100 drugs in terms of revenue • Long Development process - 10–15 years • Costly development process - average R&D investment $1.2 billion http://ip-science.interest.thomsonreuters.com/biosimilars-report-2014
- 23. Biologics Patent Cliff • 2014-2018 - Patents for >10 blockbuster biologics with annual sales of $60 billion expire in Europe and US • Top pharma repositioning their strategic agendas from approvals to product launches to gain market capitalization = pipeline • "Biosimilars developers have been using emerging markets with less intellectual property protection as their launch pad for established markets" say AMR analysts • "With regulatory framework maturing in established markets, it will be easier for biosimilars manufacturers to quickly enter into such markets" analysts added, citing collaboration between Mylan and Biocon to commercialize biosimilar of trastuzumab in India and the approval of first biosimilar version of monoclonal antibody drug by Hospira in Europe • Due to lower intellectual property rights protection and higher activity of regional players, the Asia Pacific region has emerged as the leader in biosimilars market
- 24. State and Biologics - Cost • 2012 - 25% biopharma sales. 1/3 of the pipeline • 2014 - 150 biologics were being marketed worldwide • 2014 - >370 were under development • 2014 - UK NICE reused approval for Roche’s Genentech breast cancer drug Kadcyla (Trastuzumab emtansin) • £90,831 per patient • Next-generation biologic to replace blockbuster breast cancer drug Herceptin (trastuzumab) - patent expiry 2014 EU , 2019 in US • Abbivie - Humira - U.S. patent expiry 2016 • over 30 times the cost of using the non-biologic treatment Rheumatrex (methotrexate) • 2012 US sales - $4.3 billion • 2012 – w/w/ sales $9.3 billion] • December 2014 - Cadila Healthcare Ltd., launched Exemptia in India - first biosimilar - $200 a vial • Governments and payers looking to biosimilars to revolutionize health care by reducing cost
- 25. 21st C - Arrival of Biosimilars • 2006 – First Eu Biosimilar approval • Omnitrope (somatropin) • 2010 EU biosimilars market ~$172 million • End 2010 - 14 biosimilar drugs approved in EU • 2003 - EU approval procedure • Procedure is based on demonstration of "comparability" of "similar" product to existing approved one • A biosimilar product is a biological product that is approved based on a showing that it is highly similar to an already- approved biological product, known as a reference product. The biosimilar also must show it has no clinically meaningful differences in terms of safety and effectiveness from the reference product • 6 March 2015 – First US FDA approval • Zarxio similar to Amgen’s filgrastim, originally licensed in 1991 - to treat neutropenia and in cancer treatments • US - Biologics Price Competition and Innovation Act • US Patient Protection and Affordable Care Act signed on March 23, 2010 • Amendment to Public Health Service Act • Abbreviated licensure pathway • A biosimilar product can only be approved by the FDA if it has the same mechanism(s) of action, route(s) of administration, dosage form(s) and strength(s) as the reference product, and only for the same indication(s) and condition(s) of use that have been approved for the reference product
- 26. Biosimilars Market Of the amounts invested in biosimilars “the largest portions going to manufacturing facilities and trials,” Ronald A Rader, president Biotechnology Information Institute, Maryland, US
- 27. Big Pharma becomes Big Biotech http://www.alliedmarketresearch.com/biosimilars-market
- 28. 21st C - M&A to rationalise markets • 2014 Trend for Big Pharma M&A deals to reorder and reorganize its businesses • Focus on acquiring smaller competitors, proven innovators in a specific field • Focus on establishing the very best R&D teams in specific, viable areas of research • 4 Trends in Big Pharma’s Pipeline • Biologics • Anti-Infectives (Hepatitis C, HIV/AIDS) • Generics • Oncology – Immunotherapies
- 29. Cooperation & Divestments • Disease area focus to Cooperation • GSK and Novartis immunohealth area – GlycoVaxyn • Feb 2015 - AZ acquire the US and Canadian rights to Actavis' branded respiratory drug business • Feb 2015 - AZ partner with Orca Pharmaceuticals autoimmune diseases area • March 2015 – AZ co-commericalise Movantik (Naloxegol) deal with Daiichi Sankyo worth $825 million – chronic non-cancer pain – FDA approval 6 March 2015 • Business area focus for divestment of divisions • Abbot - pharmaceutical business AbbVie (2013) • Retains animal health, nutrition and diagnostics products • Pfizer sold nutrition business to Nestlé (2012) • Pfizer Animal Health - Zoetis (2012) • Novartis sold off diagnostics Business to Grifols (2013) • Feb 2015 – AZ plan to get out of the early-stage anti- infectives R&D space by spinning out this business as independent biotech Deals suggest continued economies of scale to fight ever rarer and more complex diseases Trend to divestment of tail brands and non-core assets
- 30. Biosimilars Manufacturing Investments Biologics • Large (200–1,000 times bigger) complex structures • Complicated manufacturing processes • Characteristics altered by slight changes in type of expression system and temperature used during manufacturing • Biosimilar manufacturers must prove that their version is clinically comparable to the originator biologic in terms of safety, quality and efficacy • Requires preclinical evidence of comparable pharmacodynamics and toxicity, clinical trials • Requires manufacturing and post-approval safety monitoring programmes similar to that of the original innovator companies Small-molecule drugs • Single identifiable and stable structures • Produced by well-controlled chemical reactions involving standard materials • Manufacturing a generic containing the exact copy of the active pharmaceutical ingredient tends to be relatively quick, easy and cheap • Taking three to five years • Costing less than US$5m • Resulting generics can be as much as 80– 90% cheaper than the brand name drugs
- 31. 2020? – Alternative manufacturing and distribution techniques • Biologics medicines - specialist therapies - need different manufacturing and distribution techniques to small molecules • Produced as separate manufacturing lots • Biologics are more susceptible to impurities in the production process and damage during shipping • Each sample must be individually extracted, propagated, prepared and tested before it can be administered • Manufacture finishing at point of care • at the pharmacy, point-of-care, patient • Novel delivery devices • Difficult to produce oral formulations • Micro needles, magnetically targeted carriers, nanoparticles, polymer capsules and multilayered medicated patches are likely to predominate Likely to see significant changes here
- 32. 21st C - Healthcare in the Community • Patients empowerment • Rise in self administration of medicines • Patients encouraged to take more active role in managing their own care • Harness “final mile” distribution networks – like retail • Distribute pharma products to many more locations, including patients’ homes • To deliver medicines to the door as economically as possible • Migrating from a system of health care provision via a relatively small number of hospitals, clinics and surgeries to provision via a diffuse network of nurse practitioners, community carers • Increased Home Treatment • Most of the OECD countries have been trying to reduce reliance on hospitals and specialists since the 1980s. • Clinical advances provide better medicines for acute conditions • Many diseases which must at present be treated in hospital will then be treated at home
- 33. 21st C – Digitalisation in Healthcare Delivery • Vast sets of historical chemical and biological data • To guide ability to fail fast and fail early • To attempt to reduce costs • To become more efficient in getting to patent, to clinic and to patient • Information about patients and their medicines • E-health records • E-prescribing - E-prescriptions = point-of-sale data • Build demand-driven supply chains in which healthcare packages for different patients are assembled at ‘super hubs’ before being delivered to their homes • Remote monitoring • Eg automatic linking daily readings of blood sugars with patient records. Requiring face-2-face monitoring only if levels unstable • Consumer industries retail, electronics, telecommunications - already use digital technologies • To more closely connect to customers • To better understand their needs • To be more responsive
- 34. 21St C - Redefinition of MedTech “One of the complaints I’ve heard over and over is, ‘Why doesn’t my glucometer look like my smartphone?’ The reason people aren’t checking their blood sugar levels is because they have to carry around an extra thing that only does blood sugars, looks clearly like a medical device, and reminds them that they’re sick.” Andrew Atwell, Samsung Open Innovation Center
- 36. The War for the Consumer • Amazon Fire phone includes an array of sensors to enable new digital health applications • Samsung software integrates with mobile devices that allows users to track nutrition, exercise, and weight • Apple HealthKit and app allows health and fitness apps to share their data • Qualcomm Life wireless health technology that aggregates and integrates patient data • Google Fit platform to manage the data from health and wellness apps, sensors and wearable devices • Intel home health gateway sold by the Intel-GE Care Innovations joint venture • Salesforce.com has partnered with Philips to build a connective digital healthcare site in the cloud www.pwc.com/us/en/health-industries/assets/pwc-hri-digital-accelerators-report.pdf
- 37. Making the leap - from mobile app to medical device • Demand for mHealth products • Consumers covet convenience • Consumers used to using digital device for retail activities • Saturated (nearly) free app market • FDA poised to review record number of digital health apps this year • FDA guidance due as to which products need regulatory approval • Need to move to Diagnostic and Treatment capabilities New Zealandbased Nexus6 recently received FDA approval for its SmartTouch inhaler system, which records time of use and transmits that data to the patient’s mobile device, promoting medication adherence GlaxoSmithKline’s Diabetes HealthMate app tracks blood sugar readings and visualizes the relationship between physiological measures and lifestyle factors such as mood, medication intake, activity levels, and diet “By 2020, we will have a healthcare delivery system that is fully digitized. There will be the emergence of real-time analytics. Everybody wins from a patient care perspective with improved information sharing and interoperability.” —Joseph Touey, GlaxoSmithKline
- 38. Growing Wellness and Fitness Market • Less regulated environment • Lots of commercially successful gadgets • Track fitness training • Track personal activity • Link to the internet to record progress • Link with a fitness community for encouragement and competition • Tekes program to support companies seeking to innovate in this area • Finland ahead eg MyHealthWay
- 39. Integration of supply chains
- 40. Key findings – PwC Report March 2015 • New entrants poised to disrupt the $9.59 trillion world healthcare market ($1.49 trillion in US) • As the world pivots towards the “virtualisation of care”, new entrants from sectors including telecom, technology and retail will be well positioned to offer amazing breakthroughs • Opportunities to fill gaps between consumer expectations and current medical infrastructure http://www.pwc.com/us/en/health-industries/healthcare-new-entrants/assets/pwc-global-new-entrants-chart-pack.pdf (March2015)
- 41. Summary • Roots of Pharma • Merging Scientific and Industrial Revolutions • War drives rise of Pharma • Dyes to Pharmaceuticals • Politics and Pharma • Interwar breakthroughs • State & Healthcare – Rise of Social Healthcare systems • State & Healthcare – Legislative Changes • Post WW2 – The Golden Age • The Blockbusters • Rise of “me too” • 1990s-2000s – Merger Frenzy • Megaliths Maintain Market Share • Patent Value • Patent Cliff – Lilly, Otsuka, Pfizer • Late 20th – early 21st C – the Storm of the Biologics • New Business segment • Biologics Patent Cliff • State and Biologics – Costs • Arrival of Biosimilars • Biosimilar Market • Therapeutic Area Focus • Big Phar becomes Big Biotech • M&A to rationalise markets • Cooperation and Divestments • Biosimilars Manufacturing Investment • 21St C – Alternative Manufacturing and Distribution Techniques • Healthcare in the Community • Digitalisation in Healthcare delivery • Redefinition of MedTech • Mobile Technologies in Healthcare • War for the Consumer • Increased consumer focus • Making the leap - from mobile app to medical device • Wellness and Fitness Markets • Integration of Supply Chains
Editor's Notes
- 1. http://www.merck.de/en/company/history/history.html 2. http://www.gsk.com/about/history.htm 3. http://www.pfizer.com/about/history/history.jsp 4. http://en.wikipedia.org/wiki/Kefauver_Harris_Amendment http://www.pharmaphorum.com/articles/a-history-of-the-pharmaceutical-industry
- After many years of finding new drugs by serendipity and stumbling across observations, post war industrial techniques and chemistry success enabled rapid progress for companies creating drugs. Synthetic analogues of natural drugs and hormones were able to be produced on industrial scale and tweaking molecules enabled a single company to file many patents around the same chemical scaffold and structures. Then came the crisis of Thalidomide, no longer would inadequately tested drugs be allowed to be given. (more on FDA history http://www.fda.gov/AboutFDA/WhatWeDo/History/Overviews/ucm304485.htm) New Zealand created a universal health care system in a series of steps from 1939 to 1941. On July 5, 1948, the United Kingdom implemented its universal National Health Service. Universal health care was next introduced in the Nordic countries of Sweden (1955), Iceland (1956), Norway (1956), Denmark (1961), and Finland (1964). Universal health insurance was then implemented in Japan (1961), Saskatchewan (1962) followed by the rest of Canada (1968–1972). The Soviet Union extended universal health care to its rural residents in 1969. Universal health insurance was implemented twice in Australia (1974 and 1984). Universal national health services were then introduced in the Southern European countries of Italy (1978), Portugal (1979), Greece (1983), and Spain (1986), followed by the Asian countries of South Korea (1989), Taiwan (1995), and Israel (1995). From the 1970s to 1990s, the Western European countries of Austria, Belgium, France, Germany, and Luxembourg expanded their social health insurance systems to provide universal or nearly universal coverage, as did the Netherlands (1986 and 2006) and Switzerland (1996).
- After many years of finding new drugs by serendipity and stumbling across observations, post war industrial techniques and chemistry success enabled rapid progress for companies creating drugs. Synthetic analogues of natural drugs and hormones were able to be produced on industrial scale and tweaking molecules enabled a single company to file many patents around the same chemical scaffold and structures. Then came the crisis of Thalidomide, no longer would inadequately tested drugs be allowed to be given. (more on FDA history http://www.fda.gov/AboutFDA/WhatWeDo/History/Overviews/ucm304485.htm)
- Systematic identification of drug candidates replaced serendipity More rational methods of mass production (Ford) Increased understanding of biology and chemistry Post-war boom Massive improvements in living standards Technological optimism of the 40s to the early 70s Cold War fueled competition in science Beginnings of the globalisation Import duties incentivised Wyeth, Sandoz, CIBA, Eli Lilly and MSD etc to set up subsidiaries in UK in the post-war years 1951 - Pfizer opened subsidiaries in nine new countries Consolidation in the industry as entry barrier rise
- Outsourcing to cut fixed costs ahead of patent cliff Reversed for efficiency, to retain control VPoC started in 2008 with six people overseeing two discovery programs, and we’ve grown to 25 managing 15 projects today,” says Allen Oliff Snr VP Alternative Discovery and Development. “Nowadays, the name “virtual” to indicate we are outsourcing has become something of a misnomer. While maybe not to our level of whole-project outsourcing, externalization has become a standard for pharmaceutical research. For us, it is predominantly externalized to Asia.” “Until the early 2000s, the quality of the work you could get at most Asian CROs was not up to the level of Western Europe and North America,” he says. “In the last decade or so the quality is absolutely as good there as it is any place else on the planet.” Where quality is in common, the benefit of other comparative factors become amplified. “We have a team of only 25 people. Our side occupies office space; no internal lab space whatsoever and therefore reduced infrastructure costs. We have about 100 to 125 people at CROs. I can’t give you a less vague number because we go up and down depending on the stages of the program and other factors.” He continues, “This really is a key advantage. We do not maintain scientists irrespective of how the programs are progressing. We flex resources as needed, and the best CROs are amazingly responsive to this. Some of the CROs in China and India we work with have literally thousands of chemists and hundreds of biologists, and they shift them adeptly. Compare this to running through internal committees or bartering for resource realignment.” “Our general calculation,” concludes Oliff on this point, “is we can get the same level of activity between 20 and 30 percent less cost than if we did this internally,” he says. Oliff makes clear what this calculation has meant for GSK and its employees. “We started VPoC as an attempt to counter the rising cost of drug discovery, and so that we did not have to reduce or limit the number of projects GSK could work on. We’ve been able to save jobs internally with this program.” Oliff also points out that toxicology, pharmacology and other groups within GSK run continuously in support of all programs, and “VPoC is a benefactor to GSK internal resources.” “I do think the key is the post docs in the states and Europe going back to Asia and populated those companies with valuable experience.” As he has throughout our conversation, Oliff then hammers home the point: “The West educated its competition and added that value to the Asian companies on a cost basis the West cannot easily compete with dollar-for-dollar.” Others in the industry point out that the cost differential is closing, with rising salaries and other expenses elevating in China particularly. How much of a factor for big pharma in global outsourcing decisions this becomes is still largely anecdotal, although some pharma have openly expressed frustration with outsourcing in the East and announced pulling back whole programs to the West. A salient point then is that the playing field is not static; market dynamics are in flux: Better quality in Asia is coming at somewhat elevated Asian pricing. Oliff has experienced the shifting sands. “We have seen more Asian CROs become better, although you still do have to be careful with who you hook up. There still are companies in Asia not as good as what we have here in the U.S. More to the point nowadays, there are still companies in Asia not as good as other Asian CROs.” Even more than quality concerns are IP breaches; Oliff says GSK was very concerned about this when VPoC was starting out. He said GSK’s legal group and others worked carefully to create enforceable agreements surrounding IP and detailing how IP is protected and handled. “The CROs are keenly aware that their survival depends on maintaining confidentiality,” says Oliff again getting to the bottom line. “In our six years of doing this, we have never had a problem.” One counter-measure to IP lapses that GSK implemented was establishing groups in China and India specifically dedicated to any IP issues. “We have only used them once in six years for a concern, and it was quickly taken care of.” Of course, getting back to costs, these are added expenses to the outsourcing operations http://www.outsourcedpharma.com/doc/gsk-s-real-value-in-outsourcing-to-china-and-india-0001
- Outsourcing to cut fixed costs ahead of patent cliff Revered for efficiency, to retain control VPoC started in 2008 with six people overseeing two discovery programs, and we’ve grown to 25 managing 15 projects today,” says Allen Oliff Snr VP Alternative Discovery and Development. “Nowadays, the name “virtual” to indicate we are outsourcing has become something of a misnomer. While maybe not to our level of whole-project outsourcing, externalization has become a standard for pharmaceutical research. For us, it is predominantly externalized to Asia.” “Until the early 2000s, the quality of the work you could get at most Asian CROs was not up to the level of Western Europe and North America,” he says. “In the last decade or so the quality is absolutely as good there as it is any place else on the planet.” Where quality is in common, the benefit of other comparative factors become amplified. “We have a team of only 25 people. Our side occupies office space; no internal lab space whatsoever and therefore reduced infrastructure costs. We have about 100 to 125 people at CROs. I can’t give you a less vague number because we go up and down depending on the stages of the program and other factors.” He continues, “This really is a key advantage. We do not maintain scientists irrespective of how the programs are progressing. We flex resources as needed, and the best CROs are amazingly responsive to this. Some of the CROs in China and India we work with have literally thousands of chemists and hundreds of biologists, and they shift them adeptly. Compare this to running through internal committees or bartering for resource realignment.” “Our general calculation,” concludes Oliff on this point, “is we can get the same level of activity between 20 and 30 percent less cost than if we did this internally,” he says. Oliff makes clear what this calculation has meant for GSK and its employees. “We started VPoC as an attempt to counter the rising cost of drug discovery, and so that we did not have to reduce or limit the number of projects GSK could work on. We’ve been able to save jobs internally with this program.” Oliff also points out that toxicology, pharmacology and other groups within GSK run continuously in support of all programs, and “VPoC is a benefactor to GSK internal resources.” “I do think the key is the post docs in the states and Europe going back to Asia and populated those companies with valuable experience.” As he has throughout our conversation, Oliff then hammers home the point: “The West educated its competition and added that value to the Asian companies on a cost basis the West cannot easily compete with dollar-for-dollar.” Others in the industry point out that the cost differential is closing, with rising salaries and other expenses elevating in China particularly. How much of a factor for big pharma in global outsourcing decisions this becomes is still largely anecdotal, although some pharma have openly expressed frustration with outsourcing in the East and announced pulling back whole programs to the West. A salient point then is that the playing field is not static; market dynamics are in flux: Better quality in Asia is coming at somewhat elevated Asian pricing. Oliff has experienced the shifting sands. “We have seen more Asian CROs become better, although you still do have to be careful with who you hook up. There still are companies in Asia not as good as what we have here in the U.S. More to the point nowadays, there are still companies in Asia not as good as other Asian CROs.” Even more than quality concerns are IP breaches; Oliff says GSK was very concerned about this when VPoC was starting out. He said GSK’s legal group and others worked carefully to create enforceable agreements surrounding IP and detailing how IP is protected and handled. “The CROs are keenly aware that their survival depends on maintaining confidentiality,” says Oliff again getting to the bottom line. “In our six years of doing this, we have never had a problem.” One counter-measure to IP lapses that GSK implemented was establishing groups in China and India specifically dedicated to any IP issues. “We have only used them once in six years for a concern, and it was quickly taken care of.” Of course, getting back to costs, these are added expenses to the outsourcing operations http://www.outsourcedpharma.com/doc/gsk-s-real-value-in-outsourcing-to-china-and-india-0001
- http://www.ibtimes.com/maker-americas-best-selling-drug-lose-billions-patent-cliff-approaches-1748123 http://www.marketminder.com/s/fisher-investments-weighing-two-drivers-for-pharmaceutical-stocks/13ad7ca9-a3b7 http://www.fiercepharma.com/special-reports/top-10-patent-expirations-2015 -404e-b2f4-fbf484f39321.aspx focus on the patent cliff has obscured an equally important but lesser-known positive driver: positive pipeline developments—namely, New Molecular Entity (NME) approvals. An NME is a unique drug without precedent and no derivative or version of it has been approved by the FDA. These drugs have the potential to cure or treat various diseases and disorders in a novel way. Or perhaps treat a disease for which no current treatment exists. NMEs can translate into blockbuster sales and pricing power for Pharmaceutical firms biosimilar drugs may not be automatically substitutable for the brands they're seeking to replace. There's a battle going on over this exact issue: Biosimilar makers want their drugs to be labeled with the same generic names as the brands; branded drugmakers say biosims should carry their own unique names. If the biosim makers win, their drugs will more easily substitute for brands, digging deeper into brand sales when patents expire. If the unique-name advocates prevail, doctors will have to prescribe biosimilars specifically, and brands will be better insulated. "With forecasts now to 2020, we have an extended view of how equity analysts are modeling the impact of biological patent expiries and the subsequent entry of biosimilar products," Evaluate Pharma said in a recent report. "[T]hey continue to expect a softer landing, post-patent expiry, and limited biosimilar substitution. "It seems future metaphorical patent cliffs are being transformed into much more manageable rolling hills."
- Read more at http://www.insidermonkey.com/blog/eli-lilly-co-lly-what-does-the-patent-cliff-mean-for-this-drugmaker-206308/#oqOKw3TzDKuGffXH.99
- http://triplehelixblog.com/2014/07/the-patent-cliff-implications-for-the-pharmaceutical-industry/ - The Patent Cliff: Implications for the Pharmaceutical Industry By Rizwan Ahmed - July 10, 2014 Major pharmaceutical companies like Novartis experienced losses after the patent for their blood-pressure-reducing drug Diovan expired in 2012. Merck had a similar issue with Singulair in the same year; Bristol-Myers Squibb with Plavix in 2011; and Sanofi-Aventis with Lovenox in 2012. Even looking onwards, the patent cliff does not end for blockbuster drugs by large pharmaceutical companies. Nexium, a drug produced by AstraZenica that produced over $4.9 billion in sales in 2010, faces patent expiration in 2014. Eli Lilly’s Cymbalta, which grossed $4 billion in global sales in 2011, will face a similar fate in 2014 Pfizer, Allergan, GlaxoSmithKline, and many other major pharmaceutical companies will have patents for many drugs expiring within the next three years. Losses in revenue for major pharmaceutical companies will be tremendous, with projections showing the pharmaceutical industry will lose upwards to $127 billion in brand spending by 2016 due to patent expiration and cheaper generics in the market “The Global Use of Medicines: Outlook Through 2016.” IMS Institute for Healthcare Informatics. Web. 2013 Dec 8.
- Before the Storm". Chemical & Engineering News 89 (49): 12–18. 2011. http://www.forbes.com/sites/simonking/2013/01/28/the-best-selling-drugs-of-all-time-humira-joins-the-elite/ http://cellculturedish.com/2013/03/biologics-take-top-spots-in-best-selling-drugs-of-2012/ OHE briefing. What is the Role of HTA for Biosimilars. April 2014. http://www.pharmaceutical-journal.com/news-and-analysis/features/forces-driving-the-evolution-of-biologics-into-biosimilars-and-biobetters/20067091.article#fn_1 http://www.fiercebiotech.com/story/10-next-gen-biologics-platforms-watch/2012-09-27 http://ip-science.interest.thomsonreuters.com/biosimilars-report-2014 Over the past decade, a wave of scientific advances and new technologies have dramatically changed how medicines are discovered. Greater knowledge of how diseases work at the genetic and molecular level has allowed researchers to pursue new targets for therapy and better predict how certain biopharmaceuticals will affect specific subpopulations of patients. • Bioinformatics—Bioinformatics use systems and mathematical models to advance the scientific understanding of living systems. At its simplest level, bioinformatics involves the creation and maintenance of biological databases, including DNA sequences. Bioinformatics also includes calculation tools. These tools can decipher the molecular pathways of disease, fid patterns in the way genes respond to drugs, interpret the three-dimensional structure of important proteins, and enable the computer-aided design of new drugs. • Biomarkers—Every disease leaves a signature of molecular “biomarkers” in our body—genes that turn on and of or proteins released into the bloodstream. Biomarkers measured in blood and other samples can tell us the state of our health and how we might respond to treatment. They are powerful tools that can detect certain diseases at their earliest stages before symptoms appear, when they are most treatable. The identification of biomarkers is the fist step in developing a personalized medicine. • Molecular Targeting—The idea behind molecular targeting is to design drugs that specifically attack the molecular pathways that cause disease, without disrupting the normal functions in our cells and tissues. • Nanotechnology—You can’t see it, but soon it will be everywhere. Nanotechnology is the science of building microscopic devices at the molecular and atomic levels. In medicine, nanotechnology may also be used to help diagnose and treat diseases. For example, tiny gold-coated “nanoshells” could act like smart bombs, zeroing in on a tumour, entering cancer cells, and lying in wait until an infrared beam or radio wave signals the particles to release an intense, deadly dose of heat energy that destroys the cancer cells. • Personalized Medicine—The sequencing of the human genome produced a “map” of the human genes in DNA. This new genetic knowledge opens up the possibility of developing “targeted” therapies for people with specific gene sequences, and it can help physicians choose the best treatments based on individual genetic, lifestyle and environmental factors. Additionally, researchers are developing genetic tests that can tell if we are susceptible to certain diseases.
- U.S. pharma = 80% of world R&D in health care biotechnology
- http://www.marketwatch.com/story/biosimilarsfollow-on-biologics-market-is-expected-to-reach-35-billion-globally-by-2020-2014-07-21 http://www.alliedmarketresearch.com/biosimilars-market Biosimilar launches will come in waves in highly regulated markets when blockbuster biologics patents expire US wave comes after EU because of differences in IP law and start date of biosilimar advance Wave 1 EU last decade approvals of figrastim, somatropin and epoetin biosimilars Wave 1 US Sandoz filed fist biologic license application (bla) for a biosimilar with Fda in July 2014. Zarxio bla references amgen’s neupogen (figrastim), which lost u.S. patent protection in 2013 Celltrion inc. submitted bla with Fda for Remsima, referencing Janssen biotech inc.’s Remicade (inflximab) and is challenging Remicade’s remaining US patents which expire 2018 Wave 2 in regulated markets will reference biologics that lose IP protection in 2020 or beyond Some of these FobS in these waves will not be considered biosimilars in US of the $143 billion in global biologic sales in 2013, $4 billion stemmed from biologics that were off patent in the u.S. $15 billion from ones that were off patent in the rest of the world by 2018, $31 billion worth of biologic sales are expected to come from off-patent drugs in the u.S. $43 billion from off-patent biologics in the rest of the world patents will have expired for originator biologics accounting for about $100 billion in global sales the market for biosimilars is predicted to rise rapidly as patents expire for blockbuster biologics BUT biosimilar sales are not expected to keep pace with the opportunity, largely due to the complexity of biologics, slow market uptake and regulatory issues total global sales of biosimilars in 2011 ~$510 million by 2013, sales ~$1.36 billion imS Health expects biosimilar sales to hit $25 billion by 2020 25% of $100 billion worth of sales stemming from off-patent biologics by the end of the decade Period of market exclusivity up to date of patent expiration for the Top 10 selling biologics for 2011 *Enbrel has been granted approval in 2011 for a patent filed in 1995, extending its patent life further 17 years
- the UK’s national institute for Health and clinical Excellence (nicE) refused in august 2014 to approve payment for Roche AG’s breakthrough breast cancer drug Kadcyla (trastuzumabemtansine), which at £90,831 (uS$152,533) per patient is the most expensive treatment available for breast cancer. while Roche was willing to discount its price, it wouldn’t give the 60 percent discount nicE said it would need to recommend Kadcyla, which was developed by Genentech, a Roche subsidiary. nicE based its assessment on interim trial results showing median overall survival was 5.8 months longer in patients treated with Kadcyla than in patients treated with standard-of-care lapatinib and capecitabine. As part of its lifecycle approach to drug development, Roche is positioning Kadcyla as a next-generation biologic for blockbuster breast cancer drug Herceptin (trastuzumab), which is set to lose patent protection in the EU in 2014 and in the US in 2019. the price of biologics also has affected policy in the u.S. in some instances. the Fda looks the other way when compounding pharmacies market diluted versions of Genentech’s avastin (bevacizumab) for treating age-related macular degeneration (amd), an off-label use, and medicare encourages the use of avastin over Genentech’s lucentis (ranibizumab), which is approved for amd. when diluted to the concentrations called for in ophthalmic indications, avastin, at $100 or less per injection, is one-twentieth the price of lucentis, which sells for about $2,000 per injection. the price difference between lucentis and avastin is serving as a catalyst for some cash strapped European governments to enact laws that would allow for off-label use even if on-label treatments are available. italy passed a bill in June 2014, permitting avastin to be used instead of lucentis in amd. a month later, France was following suit, raising fears that the governments were undermining the Eu’s biologic regulatory standards. Governments aren’t the only ones restricting access to high-priced biologics. in the u.S., thirdparty payers are kicking some drugs – biologics and small molecules – off their formularies because of the cost. both cvS caremark and Express Scripts have become more aggressive about excluding high-priced drugs when there are alternatives – even if the alternatives may not be as convenient for patients. rather than forgo the benefis of biologics, governments and payers are counting on biosimilars to revolutionize health care by reducing the cost of important biologics and increasing access to life-saving drugs. By fostering competition, biosimilars could bring the benefits of biological medicines to more patients at potentially lower costs
- Data exclusivity for biosimilars is 11 years 10 years for new biologics 8-year data exclusivity 2-year market exclusivity 1-year extension for a new indication While the first to hit the market were the structurally simpler molecules, “eventually, all biologics are candidates for biosimilars.” Biosimilars = copycat biologics that can be marketed after the patents on originator biologics have expired EMEA Guideline on Similar Biological Medicinal Products, CHMP/437/04 London, 30 October 2005 http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm436648.htm The U.S. Food and Drug Administration today approved Zarxio (filgrastim-sndz), the first biosimilar product approved in the United States. Biological products are generally derived from a living organism. They can come from many sources, including humans, animals, microorganisms or yeast. A biosimilar product is a biological product that is approved based on a showing that it is highly similar to an already-approved biological product, known as a reference product. The biosimilar also must show it has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products. Sandoz, Inc.’s Zarxio is biosimilar to Amgen Inc.’s Neupogen (filgrastim), which was originally licensed in 1991. Zarxio is approved for the same indications as Neupogen, and can be prescribed by a health care professional for: patients with cancer receiving myelosuppressive chemotherapy; patients with acute myeloid leukemia receiving induction or consolidation chemotherapy; patients with cancer undergoing bone marrow transplantation; patients undergoing autologous peripheral blood progenitor cell collection and therapy; and patients with severe chronic neutropenia.
- http://www.pharmaceutical-journal.com/news-and-analysis/features/forces-driving-the-evolution-of-biologics-into-biosimilars-and-biobetters/20067091.article#fn_1 Biopharmaceutical companies are also working on developing next-generation biologics, known as biobetters (also referred to as biosuperiors) As of December 2013, 16 biosimilars are authorised: five erythropoietins (EPO) for treating anaemia caused by renal dialysis and chemotherapy; seven granulocyte-colony stimulating factors (G-CSF) for lowered white blood cell counts after chemotherapy; one human growth hormone for growth disorders; a follicle stimulating hormone for fertility disorders; and two anti-tumour necrosis factor (anti-TNF) monoclonal antibodies for autoimmune diseases, such as rheumatoid arthritis and Crohn’s disease[1]. And more products are expected to be launched over the next few years as many of Europe’s top selling biologics — worth an estimated US$81bn in global annual sales — face patent expiration[2] (Herceptin in 2014, Enbrel in 2015, Lucentis in 2016, Humira in 2018, Avastin in 2019). The main question is affordability. Herceptin, for breast cancer, costs up to £28,000 a year per patient, while Crohn's disease drug Remicade costs £12,500 a year. Smith believes biosimilars – cut-price versions of the original biological medicines – are the answer. The BGMA estimates that by 2020 biosimilars could shave up to €33bn off drug bills in eight EU countries.
- https://www.visiongain.com/Report/1235/Next-Generation-Biologics-R-D-Industry-and-Market-2014-2024 Visongain report on 17 next-generation biologic world submarkets, including Regenerative medicine - tissue engineering, stem cells, and gene therapies Antibodies, including monoclonal antibodies (mAbs), antibody-drug conjugates (ADCs), engineered, and bispecific agents Antibody fragments and antibody-like protein (ALP) platforms Biosimilars (follow-on protein products) Insulins - ultra-long acting, oral, and ultra-rapid-acting insulins Growth hormones Recombinant coagulation factors Other types of next-stage therapeutic proteins Market forces and issues – what affects biopharma developers, producers, and sellers? The report explains trends, processes, and events affecting the biopharma industry and market from 2014, including these forces: • Limitations of existing biologics • Promise of next-generation biologics, and product launches • Extension of half-life – pegylation and other technologies • Demand rising for biological therapies • Contract manufacturers (CMOs) serving those developmental needs and trends. And you explore these influences, among others: • Disease incidence affecting demand for those more-developed medicines • Improvements in therapeutic antibodies, including targeted cytotoxic therapies • R&D pipelines – e.g. for immunotoxins – including agents in clinical development • Biosimilar insulins likely from 2015 – transformation of that market • Effects of rising incidence rates in cancer, diabetes, and cardiovascular disorders. https://www.frost.com/sublib/display-market-insight.do?id=241715269 Biosimilars were first introduced in Europe largest biosimilars market in the world Data exclusivity for biosimilar manufacturers is around 11 years, comprising 10 years for new biologics (8-year data exclusivity and 2-year market exclusivity) and a 1-year extension for a new indication In 2010, the European biosimilars market generated revenues of approximately $172 million As on 31st December 2010, 14 biosimilar drugs have been approved in Europe. Biosimilars market is in nascent stage of the industry life cycle with limited market and product development experience Significant market opportunity from patent expiries High initial investments are still a major barrier for new entrants Collaborations among large pharmaceutical companies with financial capabilities and specialty biotech companies with technical expertise Strong integration of marketing and research and development skills is the key to success Increase in Biosimilar Approvals Europe holds the highest number of biosimilar approvals, and this number will continue to increase in the near future. Further biologic patent expiries will boost the number of biosimilars to be approved, thereby bringing in an increased number of products that will help increase market size and competition among market participants Low Costs of Drugs Leading to Higher Demand At present, the price of biosimilars is 20 to 30 per cent lesser than the original price. An increase in competition in the marketplace might lead to further price reductions, thereby reducing treatment costs by 15 to 30 per cent. This will also allow a higher number of patients to benefit from innovative and expensive treatments New Protein Class Segments to Emerge in Europe Initially, biosimilar manufacturers will focus on the three protein classes of erythropoietin, HGH, and G-CSF. This is because of the recent patent expiry of blockbuster biologics. In the long run, insulin, interferon and more complex proteins like monoclonal antibodies are likely to emerge. However, some companies may concentrate on certain therapeutic classes depending on their capabilities and strategic fit Uncertainties and Risks for Biosimilar Manufacturers The uncertainties and risks for biosimilars manufacturers will continue to be relatively high. In addition, reluctance from physicians and patients to prescribe and use biosimilars due to potential efficacy and safety issues might have a negative impact on the market. With robust biosimilar guidelines being put in place in Europe, the probability of a successful product launch is lower when compared to the generic market The biosimilars market would have a double digit growth rate and garner billions of dollars from the reference biopharmaceutical industry during 2013-2020. Developing economies such as China and India would act as the principle contributors to the growth of the biosimilar industry. This is due to the increase in healthcare expenditure, change in the quality of lifestyle and prevalence of chronic diseases in these regions. Additionally, under-developed economies such as those in Africa are also allowing biosimilars to be commercialized under the guidance of government regulations. Demand for biosimilar drugs in developed economies is still yet to gain popularity, as the consumer base in these countries shows an inclination towards branded drugs instead of biosimilars; hence, the biosimilars market is expecting sluggish growth in developed countries during the analysis period 2013-2020.
- http://www.cheatsheet.com/business/up-and-comers-4-trends-in-big-pharmas-pipeline.html/?a=viewall#ixzz3Y9tSqjQA n a report late last month, The Guardian also notes that the companies at the center of the flurry of deals that occurred between Novartis AG (NYSE:NVS), GlaxoSmithKline plc (NYSE:GSK), and Eli Lilly & Co. all make vaccines and other biological drugs. Biological medicines, The Guardian says, are “hot properties.” In particular, the report adds, biological drugs treat cancer and auto-immune disorders such as psoriasis and rheumatoid arthritis. http://www.theguardian.com/business/2014/apr/27/biological-drugs-big-pharma-healthy M&A GSK-Novartis asset swap, which he and others described as a win-win for both companies. Tidying up its portfolio to focus on four areas, GSK will get Novartis's vaccines unit, cementing its position as world leader, while the Swiss firm becomes an even bigger cancer heavyweight with the acquisition of GSK's oncology division. The companies will also create a joint consumer healthcare division, bringing together brands such as Aquafresh and Beechams. Spiltting up Some drugmakers went the other way and split themselves up to become more nimble: AbbVie, known for multi-use blockbuster anti-inflammatory Humira, split from Abbot of Chicago just over a year ago. (Humira, currently the world's top-selling medicine, with annual sales over $10bn, was developed by Cambridge Antibody Technology, but wound up in Chicago after the firm was sold.) • The Swiss company Novartis will buy Brentford-based GlaxoSmithKline's oncology arm for up to $16bn (£9.5bn). • GSK will buy Novartis's vaccines business for up to $7.05bn. • Both companies will create a consumer healthcare division, which will include well-known brands such as Aquafresh, Beechams and cough mixture Tixylix. • GSK will return £4bn to shareholders as part of the deal. • Novartis will sell its animal health arm to Eli Lilly of the US for $5.4bn. Finalised March 2015 as GSK has acquired Novartis’s global Vaccines business (excluding influenza vaccines) for an initial cash consideration of $5.25 billion; has created a new world-leading Consumer Healthcare joint venture with Novartis in which GSK will have majority control and an equity interest of 63.5%; and has divested its Oncology business for an aggregate cash consideration of $16 billion. http://www.gsk.com/en-gb/media/press-releases/2015/gsk-completes-major-three-part-transaction-with-novartis/
- http://www.gsk.com/en-gb/media/press-releases/2015/gsk-strengthens-early-stage-vaccine-pipeline-with-acquisition-of-glycovaxyn-ag/ GlycoVaxyn AG – was incorporated in 2004 as a spin-off from the ETH Zurich, Switzerland. The company is focused on the development of next-generation bioconjugate vaccines against bacterial infections, utilizing its versatile and innovative bioconjugation platform http://www.insidermonkey.com/blog/eli-lilly-co-lly-what-does-the-patent-cliff-mean-for-this-drugmaker-206308/ http://www.fiercebiotech.com/story/exclusive-astrazeneca-spinning-out-its-anti-infectives-unit-waltham/2015-02-26 GEN - News Highlights:AstraZeneca Buys U.S., Canadian Rights to Actavis Respiratory Drugs for $600M+" GEN - News Highlights:AstraZeneca, Orca Launch Up-to-$122.5M Autoimmune Collaboration". GEN - News Highlights:AstraZeneca Launches $40M Early-Stage Anti-Infectives R& Unit" http://www.genengnews.com/gen-news-highlights/for-up-to-825m-daiichi-sankyo-joins-astrazeneca-in-co-marketing-movantik/81251048/ "We'll behave as a biotech company would when it comes to products that are not core," AstraZeneca CEO Pascal Soriot said, pointing to the company's September deal with Eli Lilly ($LLY) in which AstraZeneca handed over a 50% share of the Alzheimer's disease candidate AZD3293 in exchange for up to $500 million. http://www.fiercebiotech.com/story/astrazeneca-embraces-biotech-lifestyle-ahead-big-year/2015-02-05 Ireland's Shire on Monday agreed to buy NPS Pharmaceuticals for $5.2 billion (EUR 4.4 billion), while Switzerland's Roche also announced it would spend up to one billion euros for control of molecular and genomic analysis firm Foundation Medicine. (Jan 2015) http://www.dw.de/pharma-deals-continue-sector-consolidation/a-18185497 6 March FDA Approval for Movantik first once-daily oral peripherally acting mu-opioid receptor antagonist (PAMORA) medication indicated for the treatment of opioid-induced constipation (OIC) in adult patients with chronic non‑cancer pain
- Biosimilars Cheaper and less risky to develop than originator biologics Development cost US$100–200m 8-10 years High investment and risk involved is reflected in the relatively small discount — typically 10–35% — on the cost of the originator biologic Biologics Long Development process - 10–15 years Costly development process - average R&D investment $1.2 billion
- Consumer industries such as retail, electronics, and telecommunications already use digital technologies to more closely connect to customers, better understand their needs, and be more responsive According to the 2013 PwC Global Innovation Survey, drug and device companies are placing bigger bets on innovation than other industries are. But nearly half are focusing on traditional product innovation as the top priority over the coming year, rather than on service and business model innovations that could help them prove their value beyond the efficacy and safety of their drugs and devices.
- “By 2020, we will have a healthcare delivery system that is fully digitized. There will be the emergence of real-time analytics. Everybody wins from a patient care perspective with improved information sharing and interoperability.” —Joseph Touey, GlaxoSmithKline www.pwc.com/us/en/health-industries/assets/pwc-hri-digital-accelerators-report.pdf After investing in analytics, drug and device companies are still uncertain about managing data and gaining quality insights Digital record handling to digitise and secure and accurately transmit patient records within a healthcare system Some are more successful than others – Finland manages quite well, UK disaster of IT infrastructure project costing upwards of 100m http://www.computerweekly.com/news/2240150522/Giles-Wilmore-on-the-NHS-Information-Strategy Patient centric monitoring asking patients to become more responsible for their own health through more consistent monitoring for conditions such as diabetis linking daily readings of blood sugars etc with records automatically and therefore only requiring face-2-face monitoring if levels aren't stable or patient aren't compliant.
- 2 PwC Global CEO Survey 2014. 3 PwC Digital IQ Survey 201 www.pwc.com/us/en/health-industries/assets/pwc-hri-digital-accelerators-report.pdf http://pwchealth.com/cgi-local/hregister.cgi/reg/pwc-hri-healthcare-technology-and-innovation.pdf 9 Fortune 50 companies have entered the digital health space (HRI’s Report on new health industry entrants) new digital entrants are more likely to: Regard themselves as true innovation pioneers Have derived a greater percentage of annual revenue from major new products and services launched during the past year Implement business model innovation to create new services rather than a single product Tap social media to support innovation and collaborate with competitors to deliver innovative products and services One-quarter of drug and device executives say new entrants are influencing their strategic agendas
- Approved apps Radiologists to review images on cellphone Cardiologists to monitor patients for irregular heartbeats
- Open innovation is a term promoted by Henry Chesbrough, adjunct professor and faculty director of the Center for Open Innovation at the Haas School of Business at the University of California, in a book of the same name, though the idea and discussion about some consequences (especially the interfirm cooperation in R&D) date as far back as the 1960s.[3] The term refers to the use of both inflows and outflows of knowledge to improve internal innovation and expand the markets for external exploitation of innovation “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”. Alternatively, it is "innovating with partners by sharing risk and sharing reward.“ The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward. The central idea behind open innovation is that, in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e. patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g. through licensing, joint ventures or spin-offs) The open innovation paradigm can be interpreted to go beyond just using external sources of innovation such as customers, rival companies, and academic institutions, and can be as much a change in the use, management, and employment of intellectual property as it is in the technical and research driven generation of intellectual property. In this sense, it is understood as the systematic encouragement and exploration of a wide range of internal and external sources for innovative opportunities, the integration of this exploration with firm capabilities and resources, and the exploitation of these opportunities through multiple channels http://facultybio.haas.berkeley.edu/faculty-list/chesbrough-henry Chesbrough, Henry William (1 March 2003). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press. ISBN 978-1578518371. HARTMANN, DAP; TROTT, PAUL (Dec 2009). "WHY ‘OPEN INNOVATION’ IS OLD WINE IN NEW BOTTLES" (PDF). International Journal of Innovation Management 13 (4): 715–736. Retrieved 22 January 2015. Cheng, C. C. J. and Huizingh, E. K. R. E. (2014), When Is Open Innovation Beneficial? The Role of Strategic Orientation. Journal of Product Innovation Management, 31: 1235–1253. doi: 10.1111/jpim.12148 "100%Open". 2010. Chesbrough, Henry William (2003). "The era of open innovation". MIT Sloan Management Review 44 (3): 35–41. West, J.; Gallagher, S. (2006). "Challenges of open innovation: The paradox of firm investment in open-source software". R and D Management 36 (3): 319. doi:10.1111/j.1467-9310.2006.00436.x. edit 6 John Lechleiter, “Eli Lilly at JPMorgan Healthcare Conference” (07 January 2014), CQ FD Disclosure 7 “Merck Enters Strategic Collaborations with Amgen, Incyte and Pfier to Evaluate Novel Combination Anti-cancer Regimens with MK-3475” (05 February 2014), http://www.mercknewsroom.com/news-release/oncology-newsroom/ merck-enters-strategic-collaborations-amgen-incyte-and-pfier-evaluat 8 “Pfizer And GSK To Initiate Study Of Novel Combination Therapy In Patients With Melanoma” (21 November 2013), http://www.pfier.com/news/press-release/press-release-archive-detail/pfier_and_gsk_to_initiate_study_of_novel_ combination_therapy_in_patients_with_melanoma 9 “Pfizer Reports Third Quarter 2013 Results” (29 October 2013), http://www.pfier.com/news/press-release/pressrelease-archive-detail/pfier_reports_third_quarter_2013_results 10 PwC Health Research Institute, ‘New chemistry - Getting the biopharmaceutical talent formula right’ (2013) 11 Innovative Medicines Initiative: Mission, http://www.imi.europa.eu/content/mission 12 PwC 10Minutes industry series, ‘Drug value in the new health ecoysystem’ (2013)
- Source: “Telus Health partners with Sanofi Canada to launch Starsystem platform” news release, (28 May 2012); “SK Telecom Enters into the Chinese Healthcare Market” news release, (04 July 2014); Dawinderpal Sahota, “Telefonica eyes e-health opportunity with Brazilian acquisition”, telecoms.com, (4 February 2013)