The Times They Are a-Changin’

Craig McInnes reports on the changing face of the pharmaceutical sector and asks “who will make the medicines of tomorrow?”

For many years now, multinational pharmaceutical companies have been carrying out the business of drug discovery in an extremely competitive market. They have been making substantial profits, bringing new and innovative drugs to market and, as a result of their efforts, saving lives. Recently however, the outlook for this industry has started to change in a rather dramatic way. The research and development sector has started to shrink and companies have started to shed jobs by the thousands as they fall off ‘the patent cliff’. In a recent meeting in Toronto, Canada, the focus was clearly directed at this ailing business model and suggestions were made to try and ensure that new drugs keep making it to market.¹

To understand why the outlook is so bleak and why so many people are calling for a change in the pharma sector we must first understand a few things:

• What the traditional model of drug discovery is
• Who is involved in this process
• Why prospects aren’t looking so bright
• Finally, what are the experts and insiders suggesting as a remedy to the situation?

The traditional model

Typically the process of drug discovery can take anywhere from 15 – 25 years and has 8 distinct stages:

• Target identification – finding compounds that are active for the required biological effect, also known as a ‘hit’
• Hit to lead – synthesising derivatives of the initial hit in an attempt to find a group of molecules with improved properties
• Lead optimisation – focusing in on the most promising group to find the optimal molecule(s)
• Preclinical development – studies carried out using animals
• Phase 1 trials – tests in around 10 – 100 healthy volunteers
• Phase 2 trials – tests in around 20 – 300 patients
• Phase 3 trials – randomised tests in around 300 – 3000+ patients
• Governing body approval – referred to as Registration

This process requires an increasing amount of time through each stage and as such requires increasing amounts of funding. In 2006 a report in Health Affairs put the cost at taking a drug from hit to market at around £535 million.² However, this report doesn’t consider the cost that drugs companies pay for attrition (drug candidates failing trials), highlighting the fact that it’s an expensive process to save lives.

So who is performing this costly work?

Typically this task was overseen by large multinational corporations such as Pfizer, GSK and AstraZenica to name but a few. Small companies and academia have always had an active interest in the early stages of this process and usually lead the way when it comes to low profit areas such as neglected diseases. Inevitably though, it falls to the large corporations to run the costly clinical trials.

Why the bleak outlook?

Drug developers are facing increasing pressure from generic drug suppliers. These suppliers don’t pay the cost of developing drugs and can manufacture large quantities at a relatively low price. As a result they start earning a profit on their projects very quickly. In stark contrast to this, much of the time that the developers have patent protection is spent recovering the cost of trials. However, this isn’t the only problem developers face, as in order to stay ahead of the game, new and successful drugs must be continually brought to market. Of late, this has proven to be something that developers have struggled to do and it has been pointed out that the current climate of legislation actively discourages drug developers from treating existing diseases through unexplored biochemistry.³

With promising candidates becoming rare and patent protection running out, large pharmaceuticals have started to lessen their interests in development and started to focus more on what they do best, clinical trials. However the burning question still remains, “who is going to develop the medicines of tomorrow?”

A new approach

The phrase ‘paradigm shift’ is much too often abused in society these days. However that is the only way to describe what Chas Bountra (head of the Structural Genomics Consortium at The University of Oxford) is suggesting. He proposes that early patent protection restrictions be lifted and only reinstated after a candidate has been proven to be potentially safe and effective. Bountra takes the view that this would stop developers working on the same targets secretly in parallel and would also stop companies from testing candidates that are already known to be ineffective. He suggests that this duplication is one such way that developers are wasting money and resources. Bountra’s model would shift the focus of early drug development onto academic research labs and global initiatives. These small research organisations would be well placed to carry out the creative discovery processes and would benefit hugely from large developers’ existing knowledge. This would still require heavy investment from governments, pharmaceuticals and charities, however if the candidate proved to be potentially effective the investors would be allowed to buy the project and take it to market. This could drastically reduce the risk of early drug discovery, a prospect that large developers can’t afford to turn their noses up at.

Whilst large developers agree that publishing results early avoids duplication, some point out that the most contentious part of this model centres on intellectual property. Developers are extremely cautious when it comes to talking about molecules that aren’t protected by patents as they fear they will not be able to protect their investment at a later date. Nobody wants to develop a viable drug candidate only to be told that it now belongs to the public domain.

This raises a very interesting point, what is the incentive for academia – under Bountra’s model – to develop drugs if they can’t patent them? Many academics form start-up companies from successful candidates and many make large sums of money from licensing their patents out to developers. In actuality, Bountra’s model could be of use in a more indirect manner, as opposed to just lining the pockets of a few academics. He suggests that for the model to work, financial support would have to flow from multinational corporations into academia, thus helping the stability of university-based research as a whole.

So what does the future hold?

So far there doesn’t seem to be a commonly held consensus as to how the industry is going to tackle the problem of the ‘patent cliff’, but as the drug development pipeline begins to dry up, industry attitudes will be forced to change in order for companies to survive. With a large selection of pharmaceutical, academic and private representatives meeting in April to further discuss the details of Boutra’s model, it appears that we are one step closer to dealing with the changing face of the pharmaceutical industry. In the words of Dylan, “The times they are a-changin’.”

1. Cressey D. Nature, 2011
2. Adams CP, Brantner VV. Health Affairs, 2006, 25, p420
3. Editorial. Nature Biotechnology, 2011, 29, p 171