Developing the Future: Big Questions, Multiple Answers

When you don't know the answer to a question, ask an expert. If the question is really big, ask more experts. If you have a collection of difficult questions, run a poll of many experts. That, in effect, was the impetus for Eden Biodesign to survey 670 BioPharm International subscribers with questions as to what will be the development mechanism to achieve safe, effective, and cheap new medicines.

Derek Ellison

BIOPHARMACEUTICALS TODAY

Before presenting survey results, which predict the future, we will assess the present state of biopharmaceutical development. Thirteen of the 67 blockbuster drugs with annual sales over $1 billion are biopharmaceuticals.

¹

The growth in biopharmaceutical revenues has been running at over 20 percent compound annual growth between 1998 and 2003.

²

This is significantly ahead of the rate for traditional pharmaceuticals. On a recent list of 100 great new investigational drugs, 30 molecules can be classed as of the biotech variety.

³

Investors are increasingly wary, particularly in Europe, having seen miserable returns on investment. Money is hard to come by for small speculative biotechs. The expected surge in new biotech medicines as a result of mapping the Human Genome has not yet materialized. In 2003, only 19 of the top 100 worldwide biopharmaceutical companies turned a profit.

⁴

In short, biotech companies are under pressure from investors to deliver on the bottom line — sooner — not later.

However, there are reasons for optimism. One of the most promising is the concept of personalized medicine, or more properly, the benefits arising out of pharmacogenetics (the genetics of drug metabolism and action) and pharmacogenomics or pharmacoproteomics (gene or protein expression and drug action). The idea is to match treatments to the specific needs of patients, giving greater clinical success, reducing unnecessary or ineffective treatments, and possibly reducing treatment costs.

Probably the best example of this principle is Herceptin, Genentech's breast cancer monoclonal antibody and its linked HER-2 receptor diagnostic test. For life threatening conditions such as breast cancer, the ability to get the appropriate treatment "right the first time" has obvious benefits.

Introducing tests that significantly reduce the target patient population for a medicine obviously implies a small patient market, and therefore either smaller revenues for pharmaceutical companies or major drug price increases. If the current market for a treatment, for example asthma, were split into ten component parts — each one addressed by a different new drug — then industry would have to develop ten new medicines instead of one for the same number of asthma sufferers. In the age of the blockbuster, when massive sales are required to cover the costs of R&D failures, it looks like a big negative.

One recent estimate of the average cost of bringing a new molecular entity to the pharmaceutical market is $802 million⁵ and projected to be growing year by year at more than seven percent. These controversial findings triggered an independent study in 2004 by the US Federal Trade Commission.⁶ Adams and Brantner reported that there was a higher average cost of $839-868 million.⁶ Admittedly, the cost varied from indication to indication (HIV-AIDS drug, $470 million, rheumatoid arthritis, $936 million) and from company to company, ranging between $521 million and $2.119 billion per drug.) One fact is inescapable, the numbers are large. If costs keep rising, the possibilities for better-targeted medicines aimed at smaller patient groups seem lower and lower, excepting perhaps a few niche indications.

QUESTIONS GALORE

Biomanufacturing and the understanding of the product it confers is increasingly being seen as a key value driver for drug developers, particularly at a time when biogeneric medicines could be just around the corner. We brainstormed a lot of questions, which were formalized later for the survey. These were our ideas, with comments.

• What can be done to control, or better yet, actually bring down the costs of development so that the full potential of biotechnology is realized into new medicines?

• Does the solution lie in reducing the regulatory burden on developers? Recent high profile product withdrawals and safety concerns seem to suggest not.

• Can companies make more use of strategic alternatives such as outsourcing and offshoring?

• Is the answer to perform less rigorous and therefore less expensive clinical trials? In 1994, adverse drug reactions were cited as the fourth-biggest killer (after stokes and before lung disease) in the US.⁷ It seems likely that the future will bring more stringency to trials and not a lighter hand.

Articles on drug development costs are plentiful, but it is rare to find an opinion on this issue from the scientists and managers who are actually responsible for developing new medicines. Eden Biodesign commissioned a survey of just under 700 Biopharm International subscribers, all biopharmaceutical development professionals. Of these, 57 percent were based in the USA, 28 percent in Europe, and seven percent from Asia. Of all respondents, 40 percent worked in companies employing more than 1,000 people, while 30 percent worked in companies employing less than 50. Fifteen percent of the respondents were scientists working for contract manufacturing organizations.

SURVEY RESPONSES

Is development expensive?

Although only four percent of respondents disagreed with the basic premise that development costs for biopharmaceuticals were high, it is perhaps not surprising that the majority (53 percent) thought that biopharmaceutical companies charge a fair price, considering the investments made and risks taken to develop new medicines (Figure 1). Still, it seems worth considering the finding that a sizeable minority (28 percent) thought that the companies they worked for should consider reducing the level of profits. For US-based respondents, this was even more pronounced with over one-third (35 percent) appearing to disagree with the industry's focus on margins.

Figure 1. As someone who works in the biopharmaceutical industry, what is your opinion of the industry's pricing strategies in general?

Why is development so expensive?

When asked to name the most important factor contributing to the high cost of biopharmaceutical development from a list of options (or suggest an alternative), there was a big difference of opinion (Figure 2). The narrow favorite was "overcoming the technical challenges in product development." There was a fairly even split between this and the next two options: the costs of running clinical trials and general regulatory requirements. No surprise — biopharmaceutical development is viewed as challenging by the people who are experts in it.

Figure 2. Do you think the high cost of biopharmaceutical development is mainly due to:

How can we tackle costs?

Each of the survey respondents was asked to rank a selection of possible strategies as a means of reducing development costs while maintaining safety, quality, and efficacy of new biopharmaceutical medicines, or to suggest their own alternatives (Table 1). The results revealed two prominent strategies. "Developing new high-yield process technologies to increase productivity," came in second; and the top answer was "using best practice biopharmaceutical development skills to streamline product development, thereby reducing time and costs." Outsourcing options and reducing the regulatory burden were far lower in terms of preference.

The popularity of high-yield technologies is not a surprise as bioprocessing technology has been cited many times recently as critical to the future of biopharmaceutical production.⁸ In the UK, the government has recently committed over £3 million to a National Bioprocessing Knowledge Transfer Initiative, aimed at, among other things, promoting the flow of ideas and technologies from academia to industry.⁹

Only 8.5 percent of respondents thought that biomanufacturing was a key factor in high development costs (Figure 2), and similarly outsourcing to contract manufacturers, no matter where located, did not score highly as viable strategies, at least in terms of reducing costs (Table 1). Surprisingly, the survey findings from only those respondents who worked for a contract manufacturing organization exactly mirrored those for biopharmaceutical developers. In other words, contract manufacturers themselves don't have any stronger belief than drug developers that greater outsourcing represents the solution to lowering biopharmaceutical development costs.

Table 1. In your opinion, which represents the most viable strategy to reduce the cost of product development and manufacturing while still maintaining quality and efficacy? Please rank these in order of importance, with 1 being the most important and 6 the least important.

The fact that the number one response was "using best practice biopharmaceutical development skills to streamline product development" must be significant. "Best practice" and "streamlining product development" sound like fine phrases, but what do they actually mean? Surely they refer to know-how — genuine expertise honed by the experiences of actually developing process after process for product after product, learning from setbacks and successes, and applying the accumulated knowledge to overcome those technical challenges cited earlier as the main factor for high costs. The problem in the biopharmaceutical industry is that development know-how rests in the minds of a very few, while innovations with potential to make a real impact on healthcare are spread among the many. Out of the 4,471 biotech companies worldwide,¹⁰ only 45 have actually taken even one recombinant protein biopharmaceutical all the way through development to market.¹¹

A probable panacea?

The final question asked on development costs was, "What is the one issue that the biopharmaceutical industry needs to tackle to make sure the potential of biotechnology is fully realised in new medicines over the next decade?" This is a tough question and only one-half of the survey respondents answered. It is impossible to list every response, however, they have been grouped, in as far as is possible, by category (Figure 3). The four top categories were: introduction of new technology, development expertise, controlling drug pricing, and regulatory issues.

Figure 3. If there is one issue that the biopharmaceutical industry needs to tackle to make sure the potential of biotechnology is fully realised into new medicines over the next decade, what is it?

Developing and utilizing new process and product technologies to provide better medicines was a broad category, and responses varied from the narrow, for example, "more cell therapies," to the wide, for example, "increase the productivity of production processes by using novel technologies to develop more potent medicines more quickly and more cheaply." The common theme was best summed up by another response: "innovate, innovate, innovate."

Common themes from the wide range of responses provided under the loose heading of development expertise were "streamlining development operations" and "sharing know-how through training." There were several responses specifically relating to overcoming the challenges of biomanufacturing.

From the responses grouped under drug pricing and costs, it is clear many feel that the pharmaceutical industry's spending on drug marketing is inappropriate. In other words, patients are paying for too much product promotion. The money might be better spent on actually developing more effective medicines or reducing prices. The common theme was best summed up by the response: "make drugs affordable."

Virtually all the responses in the regulatory grouping were on the two themes of better harmonization of regulations between nations and greater cooperation between regulators and industry. A significant minority of the respondents appeared to believe that regulatory agencies are stifling innovation and unreasonably restricting development of new medicines.

From the responses in the social, political, and ethical category and also the communication category, it is apparent that a lot of people have are concerned with how well the biotechnology industry represents itself and society's overall image of it. Many perceive risks that threaten future innovation if this is not addressed.

The fairly low response for greater financing of biotech companies was interesting. Perhaps people working within the industry believe there is enough money available; it's a question of spending it more wisely.

Elsewhere in the survey (data not shown), respondents were asked to select from a list of major European contract manufacturers those who had genuine experience and understanding of product development. The consensus response was none. These data are in no way authoritative because we only included seven companies.

As part of a total survey, we see indications that most development scientists don't believe that access to development expertise and innovative bioprocessing technology is through the existing model of a contract-manufacturing partner. This could be because the majority of biological manufacturing organizations have their roots in fine chemicals and small molecule drug substances and therefore lack biopharmaceutical development expertise. Also, many of the smaller companies have an offering based only around a piece of novel technology rather than actual product development experience. There is a strong profit incentive for manufacturers to reduce the complex task of biopharmaceutical production to as simple a unit operation as possible, which is not always beneficial to the product or the client.

FUTURE ACTION

There is obviously no simple, straightforward answer to the question of how to control the costs of biopharmaceutical development. These survey findings suggest that the majority of development professionals believe that the starting point lies in the experience and expertise of product development and in the promise of new bioprocessing technologies.

The promotion of best practices in product development is not well addressed by governmental bodies, although there are some signs that this is changing. Recently, Canada proposed a national training network to increase the supply of highly qualified personnel in biomanufacturing. The state of North Carolina has established an ambitious biomanufacturing training program, and the UK now has a National Vocational Qualification in Biomanufacturing based around The Partnership for Learning initiative in Liverpool. One of the founding principles of the UK National Biomanufacturing Centre is to provide access to genuine product development expertise in addition to funding for small companies and state-of-the-art biomanufacturing facilities. This public-private partnership is a unique model and perhaps could be part of the answer.

This survey opened a new set of questions that could be asked in a second survey. How can expertise in product development be shared better? How can biotech companies with little real development experience hope to evaluate the best bioprocessing technologies and utilize them to best effect? If you can formulate any other formidable questions, please forward them to us.

Derek Ellison,Ph.D. is the business development director of Eden Biodesign, D5 Stanlaw Abbey Business Centre, Dover Drive, Ellesmere Port, Cheshire CH65 9BF UK, 44.0151.356.5632, Fax: 44. 0151.356.5633, derek.ellison@edenbiodesign.com

REFERENCES

1. 200 best selling prescription drugs.

MedAd News.

2004; May, 13(5):60.

2. AS Insights. Biopharmaceuticals: Current Market Dynamics and Future Outlook, 2003; November. Bioportfolio.com Dorset UK.

3. King J. 100 great investigational drugs. R&D directions 2004; March, 10(3).

4. Dibner MD. Biopharmaceuticals in 2005 and Beyond. BioExecutive International, 2005; Jan.

5 . DiMasi JA, et al. The price of innovation: new estimates of drug development costs. Journal of Health Economics, 2003; March, 22(3):151-185.

6. Adams C, Brantner VV. Estimating the costs of new drug development: Is it really $802 million? New York NY. Social Science Research Network 2004 December. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=640563

7. Lazarou J, et al. Incidence of adverse drug reactions in hospitalized patients. JAMA, 1998; April 15, 279(15):1200-1205.

8. Thiel KA. Biomanufacturing, from bust to boom...to bubble? Nature Biotechnology, 2004; November, 22 (11):1365-1372.

9. Bioindustry Press Release. BIA Awarded £3m Government Funding for Bioprocessing Knowledge Transfer Network. 2005; Jan. 28. Available at www.bioindustry.org/cgi-bin/contents_view.pl

10. Ernst & Young. Refocus, the 11th Annual Report on European Biotech, London UK. 2004 May.

11. Ball P. Eden Biodesign. Data compiled 2005 March 14 from http://www.bio.org/speeches/pubs/er/approveddrugs.asp