August 14, 2009 6:11 pm

Remedy for a malady

merck sharpe and Dohme technicians

In a London gentlemen’s club where the pre-eminent scientific questions of the 19th century were often debated, a group of senior pharmaceutical company executives recently met funders, regulators and policymakers to discuss one of their greatest concerns for the 21st.

The Athenaeum Group, named after the venerable club in Pall Mall, is one of a growing number of high-level forums taking place around the world to tackle a disturbing divergence: the number of new medicines has steadily dropped, while the cost of bringing each one to market has risen sharply to more than $1bn (£605m, €700m). Their hope is to redress the problem with initiatives to overhaul individual companies, foster collaborations with rivals and create broader partnerships with researchers and regulators.

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“It’s very important that we move away from just saying this is extraordinarily expensive,” says Richard Barker, chief executive of the Association of the British Pharmaceutical Industry, the UK’s trade body, who convened the group. “If we extrapolate the current line, we will not have affordable medicines.”

The debate has never been more urgent. Pharmaceutical companies face the disappearance of billions of dollars in revenues in the next few years as patents expire on their existing medicines, undermining the sales that have kept them in business. Meanwhile, state and private healthcare systems alike – none more so than in the US under President Barack Obama, where passions rose this week in “town hall” meetings on how and for whom to fund future treatment – are seeking ways to cut costs and are balking at the rising price of new medicines.

Kenneth Kaitlin, director of the Tufts Centre for the Study of Drug Development, which produced the $1bn per drug cost estimates, says: “The industry has been talking about the issue for many years, but there were never the drivers that there are now. I don’t think it has ever had so much at stake. There are companies that are not going to survive.”

He cites as symptomatic the large-scale takeovers this year of Wyeth by Pfizer and Schering-Plough by Merck, which he argues were primarily designed to defer patent expiries and cut costs rather than provide a solution to falling research productivity.

A first tactic companies are adopting to deal with their troubled drug “pipelines” is to overhaul internal processes. Stephan Danner of Roland Berger, a consultancy, says drug development has begun to receive the cost-cutting scrutiny previously given to operations such as sales forces. “The industry looked on the commercial side because it was easy. It’s realised it cannot afford to shy away from looking at the black box of R&D.”

At the centre of this approach is speeding up the clinical trials that are required to test experimental drugs on patients. The more quickly that promising new medicines are launched, the greater the revenues generated before their patents expire. By the same token, the more swiftly that drugs with problems are identified, and abandoned before expensive late-stage testing begins, the lower the wasted development costs.

Greater computerisation of the results of drug tests in patients is a start, says Patrice Matchaba, head of drug safety at Novartis, another big producer. Much data is still collected on paper, which takes longer to process. He also sees a sharp rise in trials taking place in developing countries such as China, where costs are lower and it is quicker to find patients.

Karen Gotting-Smith, vice-president of continuous improvement at AstraZeneca, cites her company’s Project Zero Delay, which has been working to introduce standard agreements with medical centres that conduct trials in order to speed up their launch. “Confidentiality agreements alone could take two weeks to six months to agree, for every drug, centre and trial,” she says.

Companies are also seeking to create structures that foster innovation. Chris Viehbacher, who has been overhauling Sanofi-Aventis since he became chief executive late last year, says: “We had 11 management levels in research and development and you had to dig down quite a few before you found anyone doing research. We need to reconfigure. We’ve just been tweaking things. We have to change how people think and interact.”

Many other industry leaders have tried to do the same, although no clear winning model has emerged. When he took charge of GlaxoSmith­Kline at the start of the decade, Jean-Pierre Garnier introduced a series of smaller “centres for excellence in drug discovery” focused on types of therapy. Andrew Witty, who replaced him last year, says these groups now need to be subdivided further to deliver better results.

A second approach to boosting innovation involves intensified collaboration between companies. Eli Lilly has signed cost- and revenue-sharing deals with operators including Covance and Quintiles. AstraZeneca has agreed development projects with Bristol-Myers Squibb on a diabetes drug and with Merck for a cancer treatment.

GSK this year went much further, announcing a deal with Pfizer to pool all of their existing and experimental drugs for HIV. They must share future revenues – but also stand to gain more than either could separately, by combining expertise and funding and sharing the high risks of failure. By making their venture a separate entity, they also strip out other overheads, boosting accountability and focus.

Some of the more radical drug company partnerships are taking place with nonprofit organisations. Cancer Research, a UK charity, has lately signed three deals, including two with AstraZeneca, to test experimental treatments that the company was unwilling to pursue on its own.

Their approach also raises a third, and still more radical, way of tackling the innovation drought: collaborative alliances that go beyond individual partnerships to span the entire pharmaceutical industry as well as academic researchers and regulators.

One advantage is greater information sharing to cut costly duplication. Rival companies spend large sums on similar research programmes that lead to dead ends when they discover that a compound is toxic or fails to have the hoped-for curative effect.

Traditionally, companies have had no desire to accelerate their rivals’ relative progress – and medical journals have little interest in publishing reports on research that does not work. While the limitless space of the internet helps tackle the latter issue, incentives may be needed to deal with the former. Mr Barker from the British trade grouping says: “In principle, we all learn a lot from rigorous analysis of failures. We need a Journal of Outstanding Clinical Failures.”

In the US through the Critical Path Initiative, and more recently in Europe via the Innovative Medicines Initiative – both in tight co-operation with their respective regulators – progress has been made in identifying common “biomarkers” by which competing companies agree on the best ways to measure an experimental drug’s efficacy or safety.

“Companies have recognised there is no comparative advantage in safety,” says Ray Woosley, Critical Path president. But he concedes that they are most willing to co-operate in areas where they are failing to make much headway on their own, such as treatments for Alzheimer’s disease. “If they had a magic bullet, they would not share data.”

Regulators are in the spotlight because their ever-rising demands for more data to prove safety as well as efficacy – which require larger and longer clinical trials – form a prime reason for the escalating costs of drug development. “Regulators are generally a bit conservative and want to develop more experience,” says Li Zheng from Sanofi-Aventis.

He argues for greater use of sophisticated statistical techniques, such as Bayesian analysis, to scrutinise the data generated in drug tests and adapt as necessary the clinical trials that are already under way. Currently, most trials waste time and money by continuing as originally agreed with regulators even if, for example, initial results show that a particular dose is useless.

In the same way, there are calls for more “conditional approvals” of new drugs, in recognition that it is impossible to identify extremely rare side effects during even large trials. Compounds would instead be authorised for use after smaller trials provided they are then closely watched for signs of danger once in broader use.

There is also a growing recognition that rather than testing each new drug sequentially against existing medicines, some novel compounds may need to be tested together. AstraZeneca’s recent joint development deal with Merck was agreed in the hope that regulators will approve a parallel test of their two compounds that tackle cancer in different ways.

Thomas Lonngren, head of the European Medicines Agency, the European Union’s regulator, says that since the innovation drought became clear this decade, much progress has been made through earlier and deeper consultation with industry.

He argues that the biggest barrier to progress is science itself. “We are going into a new era of drug development where it’s getting more and more complex. It is generally accepted that we have moved from low- to high-hanging fruit. Mother Nature is saying that she has the cards.”

While the Athenaeum Group and its ilk identify new approaches, its participants might perhaps recall that alongside the scientists, another group prominent in the club of yore was the clergy. Optimism about progress in innovation is still significantly an act of faith.

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