Pushing the Innovation Envelope: Strategies for Boosting Productivity and ROI - Kenneth Kaitin, Tufts University School of Medicine
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This document summarizes a presentation on strategies for boosting pharmaceutical innovation given by Kenneth Kaitin. It discusses the current challenging environment for drug development, including expiring patents, competitive markets, and high costs. Drug development times are long with low success rates, driving costs upwards. Oncology has become a major focus of R&D investment. The presentation proposes ways to stimulate innovation in areas of high medical need but low commercial appeal, such as through regulatory and legislative incentives.
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Pushing the Innovation Envelope: Strategies for Boosting Productivity and ROI - Kenneth Kaitin, Tufts University School of Medicine
- 1. Pushing the Innovation Envelope Kenneth I Kaitin, PhD Professor and Director Tufts Center for the Study of Drug Development Evolution Summit 2015 Las Vegas, NV, September 20, 2015 Strategies for Boosting Productivity and ROI
- 2. Agenda • Environment for pharmaceu1cal R&D • CSDD’s current drug development metrics • New models of bioinnova1on
- 3. The Current Landscape for Pharma Innova6on
- 4. Current Realities for Pharmaceutical Developers • Patents on many top-‐selling products are expiring • Marketplace is highly compe11ve and reimbursement environment is increasingly restric1ve • Public support for the industry is low • Regulatory hurdles are increasing • Pharmaceu1cal R&D remains a long, risky, and expensive process Source: Tufts CSDD, 2015
- 5. Patent Expirations of 10 Top-Selling Drugs Each Year 2010 2011 2012 2013 Product 2009 Sales ($MM) Product 2009 Sales ($MM) Product 2009 Sales ($MM) Product 2009 Sales ($MM) Aricept 3,991 Lipitor 12,535 Plavix 9,801 Cymbalta 4,660 Cozaar 3,561 Advair 7,794 Enbrel 6,575 AcipHex 2,728 Effexor XR 3,182 Zyprexa 4,916 Diovan 6,013 Humalog 1,959 Taxotere 3,034 Levaquin 2,648 Seroquel 5,126 Zometa 1,469 Protonix 2,052 Xalatan 1,737 Singulair 4,660 Niaspan* 853 Flomax 1,970 Concerta* 1,326 Lexapro 3,263 Lovaza 705 Arimidex 1,921 Femara 1,292 Avapro 3,088 Xopenex^ 357 Gemzar 1,363 Xeloda 1,160 Actos 2,532 Zomig^ 166 NovoSeven 1,320 Avelox 1,020 Viagra 1,892 Advicor^ 80 Coreg^ 253 Caduet 548 Avandia 724 Fuzeon^ 26 Total $22,647 Total $34,976 Total $43,674 Total $13,003 Sources: Kaitin, Clin Pharmcol Ther, 2010;87:356-361; Medco; FDA Orange Book; (sales data): MedAdNews; www.drugs.com/top200; Medco *Year of first available generic; ^US Sales only
- 6. ‘Industry Leaders’ in Lost Revenues Due to Patent Expirations $3.3 $4.0 $4.6 $4.7 $7.2 $8.8 $9.5 $11.3 $12.9 $29.2 Forest J&J Sanofi Merck AstraZeneca Novartis GSK BMS Lilly Pfizer Billions of US$ Sources: Kaitin, Clin Pharmcol Ther, 2010;87:356-361; Medco; FDA Orange Book; (sales data): MedAdNews; www.drugs.com/top200; Medco
- 7. Blockbuster Patent Expirations, 2014-16 Year Brand Generic Company Indication Sales ($BB)* 2014 Nexium Esomeprazole Astra Zeneca GERD 4.5 Cymbalta Duloxitine Eli Lilly Depression, anxiety, nerve pain 4.2 Symbicort Budesonide/Formoterol Astra Zeneca Asthma, COPD 3.1 Celebrex Celecoxib Pfizer Arthritis, acute pain 2.5 Evista Raloxifine Eli Lilly Osteoporosis 1.4 Sandostatin Octreotide Novartis Acromegaly syndrome 1.4 Actonel Risedronate Warner Chilcott Osteoporosis 1.1 2015 Abilify Aripiprazole Otsuka Schizophrenia, bipolar disorder 5.2 Gleevec Imatinib mesylate Novartis Chronic myeloid leukemia (CML) 4.7 Copaxone Glatiramer Teva Multiple sclerosis 3.6 Namenda Memantine Forest Alzheimer's disease 1.4 Zyvox Linezolid Pfizer Antiviral 1.3 Prezista Darunavir Janssen HIV 1.3 Provigil Modofinil Teva Excessive sleepiness 1.2 Avodart Dutasteride GlaxoSmithkline Benign prostatic hyperplasia (BPH) 1.2 Combivent Albuterol/Ipratropium Boehringer Ingelheim COPD 1.1 2016 Crestor Rosuvastatin calcium Astra Zeneca Hypercholesterolemia 7.1 Benicar Olmesartan medoxomil Daiichi Sankyo Hypertension 2.6 Source: EvaluateGroup.com, 2014 * 2011 Global Sales
- 8. Top 20 Companies Spent $ 93.3B in Pharma R&D in 2013 $1.6 $1.8 $1.8 $2.1 $2.2 $2.2 $2.3 $2.9 $3.2 $3.7 $3.9 $4.8 $5.5 $6.5 $6.6 $6.7 $7.5 $8.2 $9.9 $9.9 Merck KGaA Astellas Daiichi Sankyo Gilead Novo Nordisk Celgene Bayer AbbVie Takeda BMS Amgen AstraZeneca Eli Lilly GSK Sanofi Pfizer Merck J&J Novartis Roche Billions of US$ Source: GEN: Genetic Engineering & Biotechnology News, Mar 17, 2014
- 9. Source: Tufts CSDD, 2015; R&D expenditures from PhRMA New Drug and Biologic Approvals Are Not Keeping Pace with Rising R&D Costs 0 14 28 42 56 0 14 28 42 56 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 R&DExpenditures (Billionsof2013$) NME/NBEApprovals * Trend line is 3-year moving average; R&D expenditure adjusted for inflation R&D Expenditures New Approvals
- 10. The Changing Pharma Business Model Source: Tufts CSDD, 2015 High Volume Low Margins Low Volume High Margins Precision Medicines Orphan Drugs Specialty Pharma
- 11. Source: CDER New Drug Review: 2014 Update, JK Jenkins, FDA/CMS Summit, 12-11-14
- 12. The High Cost of Treating Certain Orphan Diseases Source: J Cohen and CP Milne, “Is the Increasing Cost of Treating Rare Diseases Sustainable?” Expert Opinion on Orphan Drugs 2013;1(8):581-3
- 14. Bringing a New Drug to Market: Current TuNs CSDD Drug Development Metrics
- 15. Source: Tufts CSDD, 2015 0 10 AIDS Antiviral Anti-infective* Immunologic Cardiovascular Antineoplastic Gastrointestinal Endocrine Respiratory CNS 5.9 6.0 7.4 7.4 7.5 7.7 7.8 8.3 8.7 0.9 0.8 1.2 1.6 0.6 0.9 1.0 1.6 1.0 Years Clinical Phase Approval Phase Clinical and Approval Times Vary Across Therapeutic Classes, 2010-14 * Anti-infective excludes AIDS antivirals
- 16. Overall Clinical Approval Success Rates for New Drugs has Dropped to 11.8% 0 27 CNS Cardiovascular GI/Metabolism Oncology/Immunology Musculoskeletal Sys. Antiinfective 4.7% 8.7% 9.4% 13.4% 20.4% 23.9% Clinical Approval Success Rate Source: Tufts CSDD, 2015
- 18. 72% 35% 80% 71% 49% 55% 68% 35% 50% 63% 32% 64% 60% 33% 46% 58% 52% 79% 0 100 Phase 1-2 Phase 2-3 Phase 3-Subm TransitionProbability Musculoskeletal Onc/Immunologic GI/Metabolic Cardiovascular CNS Syst Antiinfective Phase Transition Probabilities by Therapeutic Class Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277
- 19. 54% 53% 48% 41% 40% 36% 35% 44% 17% 23% 23% 32% 20% 13% 33% 23% 26% 23% 28% 27% 36% 47% 29% 32% 0% 20% 40% 60% Efficacy Safety Commercial Share of Failures Source: Tufts CSDD Impact Report, Vol 15 (5), Sep/Oct 2013 Reason for Failure Varies by Therapeutic Class
- 20. Long Development Times + Low Success Rates = High R&D Costs Source: Tufts CSDD, 2015 430 965 1,395 1,098 1,460 2,558 Pre-human Clinical Total Millionsof2013$ Out-of-Pocket Capitalized
- 21. Capitalized R&D Costs Have Increased 145% Since Early 2000s Source: Tufts CSDD, 2015 (based on CSDD cost study series publications, 1979-2015) 109 70 179 278 135 413436 608 1,0441,098 1,460 2,558 Pre-human Clinical Total Millionsof2013$ 1970s 1980s 1990s-early 2000s 2000s-early 2010s
- 22. Source: Tufts CSDD, 2015
- 23. Drivers of High Development Costs • Poor preclinical screens and predic1ve models • Chronic and complex indica1ons • Clinical trial size • Pa1ent recruitment/reten1on • Increased protocol complexity • Regulatory demands • Commercial demands Source: Tufts CSDD, 2015
- 24. Typical Phase III Protocol 2002 2012 Scientific Total Number of Endpoints 7 13 Total Number of Procedures 106 167 Total Number of Eligibility Criteria 31 50 Average Number of Major Amendments 2.3 3.6 Proportion of ‘Non-Core’ Procedures 18% 31% Operating Total Number of Countries 11 34 Total Number of Investigative Sites 124 196 Total Number of Patients Randomized 729 597 Total Number of Data Points Collected 494,236 929,203 Increase over Plan Timeline to Reach LPLV 28% 73% Protocol Complexity is Increasing Source: Tufts CSDD, 2015; *Medidata Solutions
- 25. Source: Tufts CSDD, 2015 Portfolio Decision-Making Grid Oncology CNS Cardiovascular Infectious Disease Medical Need Competitive Landscape Technical Challenge Exploitable Science
- 26. Compounds in Development by Therapeutic Area: Oncology Leads Source: EvaluatePharma® (3 May 2012) Oncology 31% Systemic Intiinfectives 15% Central Nervous System 14% Cardiovascular 7% Musculoskeletal 5% Endocrine 5% Gastrointestinal 4% Respiratory 4% Dermatology 3% Sensory Organs 3% Genito-Urinary 3% Blood 3% Other 4%
- 27. Trends in New Drug and Biologics Approvals Within Four Largest Therapeutic Class Source: Tufts CSDD, 2015 0% 10% 20% 30% 40% 50% 60% 70% 2010-13 2000-09 1990-99 1980-89 Share of US New Drug Approvals Anti-infective* Antineoplastic Cardiovascular CNS * Anti-infective excludes AIDS antivirals
- 28. Source: Tufts CSDD, 2015 How to Stimulate Innovation in Areas with High Medical Need but Low Investment Appeal and/or High Technical Risk • Legisla1ve and regulatory push/pull ini1a1ves, such as BTD, priority vouchers and market exclusivity • Establish public support by making disease area a na1onal priority: e.g., “War on Cancer”, AIDS, Ebola, White House BRAIN Ini1a1ve • Invest in basic research • Foster strategic partnerships and integrated alliances
- 29. The Bioinnova6on Landscape is Changing
- 30. Strategies Driving Development Performance 1990-1999 2000-2009 2010-present Operating Changes • Project Management • Procurement/ Cost-containment • Globalization • Downsizing/ Consolidation • Downsizing and Consolidation • Flexible and virtual workplaces Alliances • M&As • Public-private partnerships • Transactional Outsourcing • M&As • In-Licensing and Joint Ventures • Functional service outsourcing • M&As • In-Licensing, JVs • Public-private partnerships • Precompetitive alliances • Integrated outsourcing Technologies • Rapid screening • Combinatorial chemistry • EDC and IVRS • -Omics • eClinical Trial Solutions (e.g., CTMS) • Platform technologies • Companion diagnostics • Integrated Big Data • Social media • Mobile health Source: Tufts CSDD, 2015
- 31. Transforming R&D Strategy: Innovation Partnerships u Academic-Industry: (‘upstream/TR focus’) e.g., PFEs-CTIs; J&J Innovation Centers, LLY-Lilly Innovation Fellowship Awards; ADDCs u Multi-Stakeholder Consortia and PPPs: e.g., ADNI (26 partners); Enlight Biosciences (8 cos); TransCelerate BioPharma (18); IMI; MS Outcome Assessments Consortium; Coalition Against Major Diseases (CAMD) u Outsourcing providers: (virtual) LLY-Chorus; (functional) LLY-Covance/ Advion; BMS-Accenture; AZN-(API) u Patient groups: e.g., VRTX-CFF; Breast Cancer Alliance; Lupus Foundation; Michael J. Fox Foundation u Payer-Industry u VC partnerships u Open innovation and Crowdsourcing: e.g., LLY-Open Innovation Drug Discovery; Transparency Life Sciences Source: Tufts CSDD, 2015
- 32. Source: Giniatullina et al, Nature Biotechnology 2013;31:284-7 Partnering Interest Among Pharma Firms
- 33. A FIPNet Model for Drug Development: The Emergence of Innovation Nodes Phase IV StudiesApproval Late Stage Development Early Stage Development Discovery Preclinical Research Pre-Discovery Large Pharma Academia Biotechs/ Small Pharma CROs/Patient Groups/ Other Partners Basic Research Translational Medicine Execution, Monitoring, Analysis Innovation, Partnerships Coordination, Management Execution, Monitoring, Analysis Large Scale Clinical Trials Data Analysis Medical Writing Regulatory Approval Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361
- 34. Source: Tufts CSDD, 2015 Lupus Innovation Nodes: 21st Century Bioinnovation Type 2 Diabetes Alzheimer’s Disease Accelerating Medicines Partnerships Government • NIH • FDA Founda6ons • American Diabetes Assoc • Alzheimers Assoc • Founda1on of NIH • Geoffrey Bean Founda1on • Lupus Founda1on of America • Rheumatology Research Founda1on • USAgainstAlzheimers Companies • Abbvie • BiogenIdec • BMS • GSK • J&J • Eli Lilly • Merck • Pfizer • Sanofi • Takeda Rheumatoid Arthritis
- 36. Risk-Sharing Collaboration Inefficiencies Source: Tufts CSDD, 2015 74.9 17.0 91.5 66.0 15.8 82.0 70.2 16.4 86.5 Clinical Phase* Approval Phase** Total Phase*** Months Interrupted Uninterrupted All * p=0.0131; ** p=0.4147; ***p=0.0116
- 37. Characteristics of Top-Performing Strategic Partnerships Source: Tufts CSDD, 2015 • High level of partner specializa1on • Shared governance and opera1ng risk • Integrated systems, SOPs, processes • Sophis1cated planning and coordina1on • More efficient interac1ons • Faster engagement • Innova1ve ideas
- 38. Bottom Line: Integrated strategic partnerships allow stakeholders to spread risk and leverage knowledge and resources, offering the best hope of finding new treatments for many unmet medical needs. Source: Tufts CSDD, 2015
- 39. Tufts Center for the Study of Drug Development Tufts University, Boston, Massachusetts, USA Email Kenneth.Kaitin@tufts.edu Website http://csdd.tufts.edu Kenneth I Kaitin, PhD Professor and Director Tufts University School of Medicine
- 40. For more information about theFor more information about the marcus evans Pharma S it iSummits series: pharmaseries@marcusevanscy.com