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Pharmaceutical globalization: Where are drugs invented?

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

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Pharmaceutical globalization: Where are drugs invented?

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