Five myths of the Drug Delivery IndustryAbstract TextThe drug delivery market is often viewed as the poor relation of the pharmaceuticalindustry. Here many of the common myths associated with the sector are analysed andwhat becomes apparent is that far from being a sector on the wane, drug delivery is avibrant source of technology-based product solutions which pharmaceutical companiescould be well advised to consider as a means of bolstering their lagging product portfolios.The often cited arguments that drug delivery has not performed, is in decline, is a businessmodel that is not sustainable and is a collection of companies offering the same serviceswith little value are examined here and dispelled.1. Drug delivery has not deliveredMany believe that drug delivery as a method to introduce new drugs to the market has gonepast its sell by date. However an analysis of the drug delivery market overall and its placewithin the larger pharmaceutical market, paints a very different picture. There has been asteady flow of drug delivery-based product approvals over the past decade. According to areview by Bossart, Seto and Kararli in May 2010 i, 213 products drug delivery products werelaunched in the past ten years. With 20 approvals in 2009 for drug delivery products (17 ofwhich were enhanced and 3 enabled), this compares very favourably with nine biologics(New chemical entities classed as biologics) approvals for 2009ii. Drug delivery systemscontinue to play a key role in addressing the challenges faced by the pharmaceutical industryby developing and enabling better treatment options for patients and healthcare systems.Based on a recent analysis by MedTRACKiii database, there are over 1,400 controlled releaseproducts currently on the market. Drug delivery has indeed delivered and continues to be avery important source of products for the pharmaceutical market.2. Drug delivery market is in declineAccording to recent analysis by IMS, drug delivery based product growth has outpaced totalpharma growth over the past 10 yearsiv. In 2007 the drug delivery market accounted for 27%of total pharma sales and is expected to account for 32% by 2012, according to IMS. Growthin technology and intensifying industry competition will lead to drug delivery systems growthas companies seek opportunities to extend the lives of their drug candidates. It is interestingto note that approximately 75% of recent drug approvals by the U.S. Food and DrugAdministration (FDA)v are for new or improved formulations of existing drugs. Changesinternationally in healthcare approaches will also favour drug delivery where improvingtherapeutic outcomes, compliance and the reduction of the overall cost of patient treatmentwill be helped through the application of drug delivery solutions. Industry analysts believethat product line extensions will continue to be a key area of pharmaceutical growth.Declining R&D productivity, increasing development costs and pending genericisation ofmany pharmaceutical products mean that companies need to focus on having a constant flowof new products that address real patient needs and more generally the needs of healthcare
systems. Pharmaceutical companies are under increasing pressure to provide value to patientsand healthcare systems while maintaining and enhancing their revenues. Drug deliverysystems and the products developed incorporating them have a significant positivecommercial impact within the pharmaceutical industry.3. The drug delivery model is not sustainableIt is true that not all drug delivery companies are sustainable, and it is a market that includesmany start-ups, as well as many that have struggled for years to reach profitability, similar tothe biotech industry. However it is a very active sector with over 1,000 companies classingthemselves as drug delivery firms. The top 10 drug delivery companies had combinedrevenue in 2009 of $6.8Bvi. Examples include Elan Drug Technologies (part of Elan Corpplc) which as a business unit, have been a stellar performer with its net income increasing by124% between 2005 and 2009 from $29 million to $65 millionvii. Other drug deliverycompanies that consistently perform well include Cima Labs, Alkermes and Nektar. Howeverfor more drug delivery companies to become and remain viable, strategic innovation isimportant to ensure complex and competing technology investments are aligned withemerging market needs and support their clients (the pharma companies) goals.4. Drug delivery based product life cycle management strategies are not worth the bother ofpursuingThere are many approaches to life-cycle manage a product, however those pursued using drugdelivery approaches have proven better than most where patient/clinical benefits are apparent.A Cutting Edge Information reportviii found in particular that new formulations were shown todeliver one of the best returns on investment. New formulations as a strategy provedsignificantly more effective than pursuing an OTC switch, repositioning, seeking newindications or going the branded generic route, according to the report. A Merrill LynchIndustry reportix found that 87% of ‘switch and grow’ strategies not only sustained the valueof the original franchise, but they increased their sales following the switch to the optimisedformulation. Examples include Ritalin® LA which grew the methylphenidate franchise by62% for Novartis over the first four quarters following launch, Xanax® XR enjoyed anincrease of 34% and Fosamax® an increase of 25% in the first year post launch.5. All drug delivery companies offer the same servicesWhile many drug delivery companies offer controlled release technologies, mostly for oraldelivery, there are many drug delivery companies that offer a whole range of technologysolutions. Indeed central to Elan Drug Technologies’ success over the past decade, where itwas seen as the top performer x, was that it had “a broad portfolio of drug delivery assets thatcould embrace their clients’ products”. This broad and unique platform from Elan includestechnology solutions for oral controlled release, delayed release, pulsatile release totechnology solutions for poorly water soluble compoundsxi. While oral drug delivery is stillthe most active in terms of deals signed, the market has evolved significantly over the pastnumber of years with now a variety of goals being sought beyond the more typicalextended/controlled release solutions. Companies offering targeted site delivery, pulsatilerelease, bioavailability enhancement technologies are some examples.
Indeed what has shown to be more effective than having a unique offering is having a provenrange of technology solutions. A recent Bionumbers reportxii showed that a product with avalidated technology has twice the chance of gaining approval over an un-validated one.When speed to market for a life cycle management strategy is key, a drug delivery solution isa significantly faster way of getting approval than for example a new chemical entity withaverage time from initial development to market approval being ~5.8 years (NCE averageover 8 years). Considering that every six month delay in launch results in a loss of around$100M on the NPV or a drop of 0.5 percentage points in the IRR as calculated byPriceWaterhouseCoopersxiii, having a proven technology behind the product innovation is key.ConclusionsThe pharmaceutical industry faces a significant challenge to provide genuinely improvedtreatment options for patients and healthcare systems that are also cost effective. New drugoutput continues to stagnate, while R&D costs remain high. Addressing this challengerequires that pharmaceutical companies rethink their approach to new drug discovery anddevelopment, develop improved products that address real needs and to commercialise thoseproducts. Scientific advances in our understanding of diseases, new molecules which treatthose diseases and methods to best deliver those molecules for patients, continue to evolve.Elan Drug Technologies’ Athlone facility - the drug delivery business has developed 35products over the past 40 years for its clients.Optimally delivering new and existing molecules to improve patient treatment is core to thedrug delivery industry. As an industry leader, Elan Drug Technologies has been at theforefront of drug delivery for over 40 years and has been the most prolific drug deliverycompany in terms of products developed and launched for its clients with 12 product launchessince 2001. Singularly focused on the drug delivery model, Elan Drug Technologies strivesto continue developing and growing the drug delivery industry for the benefit ofpharmaceutical products for many decades to come.For more information on how Elan Drug Technologies can help you realise your products’potential, check out www.elandrugtechnologies.com or e-mail email@example.comReferences
i Delivery Report – Drug Delivery Products & Technologies – a decade in review: Approved Products 2000-2009, Bossart, Seto, Kararli, Drug Delivery Technology, May 2010 Vol 10 No 4ii The FDA New Product Approvals 2009 http://www.fiercebiotech.com/story/fda-approvals-2009/2010-01-25iii MedTRACK presentation made by Sarah Terry, CRS Annual Meeting, Portland Oregon, July 2010iv IMS database, 2009 reportv Sourced from FDA drug approval lists 2002-2009 from FDA databasehttp://www.fda.gov/drugs/informationondrugs/default.htmvi Yahoo sector analysis http://biz.yahoo.com/ic/513.htmlvii Elan Drug Technologies’ Business Review 2009, www.elandrugtechnologies.comviii Defending brand revenue – pharmaceutical life cycle management planning – Cutting Edge Report, 2008ix Merrill Lynch Industry Report, January 2006x Delivery Report – Drug Delivery Products & Technologies – a decade in review: Approved Products 2000-2009, Bossart, Seto, Kararli, Drug Delivery Technology, May 2010 Vol 10 No 4xi Elan Drug Technologies website – technology page http://www.elandrugtechnologies.com/technologyxii Parameters of Performance Series – An overview of key parameters that impact clinical development andapproval of drug delivery enabled and enhanced pharmaceutical products – Bionumbers, March 2010xiii Pharma 2020 The Vision – which patch will you take, PWC report http://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/pharma-2020-vision-path.jhtml