Review of New Drug
Development
Challenges for the
Research-Based Industry
Kenneth I Kaitin, Ph.D.
Director, Tufts Center for the Study of Drug Development
Prof. of Medicine, Prof. of Pharmacology & Exp. Therapeutics
ASENT Annual Meeting
Drug Development: Challenges, Consortia, CROs
Bethesda, MD, March 5, 2010
Agenda
 Environment for pharmaceutical innovation
 TCSDD’s current drug development metrics
 The evolving landscape for innovation
The Current Landscape for
Pharma Innovation
Current Realities for
Pharmaceutical Developers
 Patents on many high revenue products are expiring
 Marketplace is highly competitive and
reimbursement environment is increasingly
restrictive
 Public support has declined
 There’s a new regulatory regime in the U.S. and new
regulatory hurdles
 Drug development process is long and risky and
increasingly complex and expensive.
Patent Expirations for 10 Top Selling
Drugs Each Year
2009
2010
2011
2012
Product
2007 Sales
($MM)
Product
2007 Sales
($MM)
Product
2007 Sales
($MM)
Product
2007 Sales
($MM)
Prevacid
3,962
Protonix
4,221
Lipitor
13,652
Diovan
5,012
Topamax
2,453
Cozaar/Hyzaar
3,350
Plavix
8,079
Singulair
4,266
Lamictal
2,194
Aricept
3,311
Advair
6,998
Lexapro
3,044
Valtrex
1,868
Levaquin
2,862
Zyprexa
4,761
Viagra
1,764
Cellcept
1,677
Effexor XR
2,464*
Actos
4,333
Avandia
1,754
Keppra
1,407
Taxotere
2,569
Seroquel
4,219
Symbicort
1,575
Flomax
1,399
Arimidex
1,730
Avapro
2,685
Zometa
1297
Imitrex
1,370
Gemzar
1,592
Xalatan
1,604
Detrol
1190
Adderall XR
1,031
Coreg
1,174
Avelox
1,013
Geodon
854
Suboxone
282*
NovoSeven
1,078
Xeloda
959
Provigil
852
Total
$17,643
Total
$24,351
Total
$48,303
Total
$21,608
*US sales only
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
Patient Access to Selected Biologics
Restricted or Denied by NICE
Drug
Indication
Company
Patient Access
Tysabri (natalizumab)
MS
Biogen-Idec/Elan
Restricted
Humira (adalimumab)
Psoriatic arthritis
Abbott
Restricted
RA
Genentech/BiogenIdec
Restricted
Fludara (fludarabine)
CLL
Bayer
Denied
Gemzar (gemcitabine)
Breast cancer
Lilly
Restricted
Avastin (bevacizumab)
Colorectal cancer
Genentech
Denied
Erbitux (cetuximab)
Colorectal cancer
ImClone Systems
Denied
Rituxan/MabThera
(rituximab)
Source: BioCentury, 2008
Total U.S. Health Care Expenditures
by Category for 2007
Physician &
Clinical Services
21%
Prescription
Drugs 10%
Program
Administration
7%
Investment 7%
Nursing Home
Care 6%
Dental Services
4%
Hospital Care
31%
Other Spending*
14%
*Other spending: Other professional services, other personal healthcare, home healthcare,
durable medical products, government public health activities
Source: Center for Medicare & Medicaid Services,
http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2007.pdf
Accessed 7/1/08
“Which of these industries do you think are generally
honest and trustworthy – so that you normally believe
a statement by a company in that industry?”
34%
Supermarkets
31%
Banks
28%
Hospitals
23%
Computer Software
16%
Airlines
14%
Gas and Utilities
9%
Automobile
Pharmaceuticals
7%
Health Insurance
7%
4%
Managed Care
3%
Oil
2%
Tobacco
0
Source: Harris Interactive Inc, 2007
40
FDA’s Very Busy Regulatory
Agenda in 2010
 FDA’s “21st Century Review Process” (formerly GRMPs)
 FDA’s “Sentinel Project” (May 2008) (access to 25m
patients by 7/1/10; 100m by 2012)
 REMS and other risk management tools
 Post approval research requirements
 Advisory Committee meetings and COI rules
 Follow-on biologics review process
 Tobacco regulation
 Limited resources and low morale
Bringing a New Drug to Market:
Current Development Metrics
The Drug Development Pathway
Basic
Research
Prototype Design
or Discovery
Preclinical
Development
IND Filing
Phase I
Phase II
Clinical
Development
Phase III
NDA/BLA Submission
FDA Review/
Approval & Launch
Phase IV, PMS, Life
Cycle Management
Clinical and Approval Times over
Two Decades
9
PDUFA Enacted
6.8
7.2
6.4
6.3
5.9
7.6
6.1
Years
5.7
3.0
2.9
2.6
2.0
1.4
1.4
1996-98
(n=110)
1999-01
(n=82)
1.5
1.1
0
1984-86
(n=65)
1987-89
(n=55)
1990-92
(n=74)
1993-95
(n=67)
Approval Phase
Source: Tufts CSDD, 2010
Clinical Phase
2002-04
(n=60)
2005-07
(n=48)
Biopharmaceutical Development
Times Are Increasing
9
8.2
Approval Phase
7.8
Clinical Phase
6.7
1.1
1.5
6.0
1.2
Years
1.4
4.1
7.1
1.6
5.5
6.3
4.6
2.5
0
1982-89
1990-94
1995-99
2000-04
(n=18)
(n=9)
(n=20)
(n=31)
* Through 10/1/09
Source: Tufts CSDD, 2010
2005-09*
(n=20)
Clinical and Approval Times Vary
Across Therapeutic Classes, 2003-07
7.9
Antineoplastic
Neuropharmacologic
0.8
7.1
Anesthetic/Analgesic
1.4
5.2
AIDS Antiviral
5.2
0
1.7
0.6
6.9
5.8
Years
Clinical Phase
* excludes AIDS antivirals
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
8.4
7.7
1.7
6.0
Cardiovascular
8.4
1.9
6.5
Antiinfective*
8.8
1.7
7.0
Endocrine
8.7
Approval Phase
10
Overall Clinical Approval Success
Rate for NCEs has Dropped to 16%
23.9%
Sys. Antiinfective
20.4%
Musculoskeletal
19.4%
Oncology/Immunology
9.4%
GI/Metabolism
8.7%
Cardiovascular
8.2%
Neuropharmacologic
0
Clinical Approval Success Rate
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009295a.html
27
Phase Transition Probabilities SelfOriginated NCEs in Top 50 Firms
100
Transition Probability
1993-1998
1999-2004
67%
64%
63%
41%
66%
39%
16%
17%
0
Phase 1-2
Phase 2-3
Phase 3-NDA subm
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009295a.html
Phase 1-NDA app
Phase Transition Probabilities by
Therapeutic Class
100
Musculoskeletal
Onc/Immunologic
GI/Metabolic
Cardiovascular
CNS
Syst Antiinfective
Transition Probability
72% 72%
68%
63%
80%
64%
60% 58%
52%
49%
35%
79%
55%
50%
46%
35%
32% 33%
0
Phase 1-2
Phase 2-3
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:272-277
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009295a.html
Phase 3-NDA subm
Capitalized Cost per Approved Biotech
Product is Similar to that for Pharma
1500
1,318
Millions of 2005 Dollars
1,241
879
626
615
439
0
Non-Clinical
Clinical
Biotech
Pharma (Time Adjusted)
Source: DiMasi & Grabowski, Managerial Decision Econ, 2007;28:469-479
Total Costs
Time Adjusted Capitalized Clinical
Costs by Therapeutic Area
1000
$849
Millions of 2005 Dollars
$741
$750
$792
$604
0
Anesth/Analg
Cardiovascular
Source: DiMasi et al, Drug Info J, 2004;38:211-223
All
Antiinfective
CNS
R&D Project Counts by Therapeutic
Category: Oncology Leads
Antiinfectives 14%
Central Nervous
System 17%
Cardiovascular 7%
Endocrine 6%
Respiratory 5%
Musculoskeletal 5%
Gastrointestinal 4%
Genitourinary 4%
Blood 3%
Oncology and
immunomodulators
28%
Dermatology 2%
Sensory organs 2%
Other 3%
Source: EvaluatePharma®, Apr 2008; in Parexel Statistical Sourcebook 2008-2009
Global Pharma Sales in 2008 by
Therapeutic Category
Cardiovascular
$84.7 bil
$78.0 bil
CNS
Cancer
$59.9 bil
Antiinfectives
$43.8 bil
$34.6 bil
Respiratory
Diabetes
Inflammation
$23.9 bil
$21.7 bil
Vaccines
$19.1 bil
Hormone Control
$18.9 bil
Gastrointestinal
Hematology
$17.1 bil
$12.0 bil
Source: Lehman Brothers, Sept 2008; in Parexel Statistical Sourcebook 2008-2009
10.3% of
Global Market
Drivers of Rising R&D Costs
 Chronic and complex indications
 Clinical trial size
 Protocol design complexity
 Patient recruitment/retention
 High cost discovery/research tools
 Regulatory demands
 Market oriented studies
 Late-stage attrition
New Drug Approvals Are Not Keeping
Pace with Rising R&D Spending
52
60
39
45
30
26
New Drug Approvals
13
15
0
1963
1968
1973
1978
1983
1988
1993
* Trend line is 3-year moving average; R&D expenditure adjusted for inflation
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
1998
2003
0
2008
R&D Expenditures
(Billions of 2008$)
New Drug Approvals
R&D Expenditures
For the Research-Based Industry
“Business as Usual”
is No Longer an Option
A Merging of Operational and
Strategic Performance
Objectives
Reported Success Factors – Best
Practices of Top-Performing Firms
 Focus on core competencies, higher
level of outsourcing, prioritize
resources
 Active collaboration with global
regulatory agencies
 Enhanced utilization of e-data
management technologies
 Offshoring
Source: Tufts CSDD, 2010
Evolving Sponsor/CRO
Relationship Structures
PROVIDER
(Transactional services)
PARTNER
(Multiple FSPs and Alliances)
Ad-Hoc
Formalized
Capacity-based
Virtual/Competency-based
Reactive, project task outsourcing
Planned, portfolio outsourcing
Larger operation, sponsor SOPs
Lean operation, coordination SOPs
Mid-management governance committee
Senior management committee
Lowest-bid/Many Providers
Few Partner-Providers
Demand for Clinical Services
Outsourcing is Growing
2001
2003
2005
2007
2009P
Annualized
Growth
Total Global Clinical
Spending
$27.3
$33.6
$41.5
$49.6
$54.8
9.1%
Total Spending on
Contract Clinical
Services*
$2.7
$4.9
$6.4
$8.5
$10.1
13.4%
All figures in billions of US$
* Does not include pass-through clinical services, e.g., central lab fees, investigator grants
Source: Tufts CSDD, 2010
New R&D Strategies
 R&D Reorganization


Divested functions: e.g., LLY-Chorus/Vanthys; LLY-Covance
Focused units: e.g., GSK (CEDDs  DPUs), PFE, ROG, NVS,
BMS, SAN, LLY, AZN
 Partnerships



Academic institutions, PPPs, Patient groups
Large pharma/Small pharma: e.g., GSK and Concert
Pharma/Pharma: e.g., MRK & AZN (onc); GSK & PFE (HIV);
Enlight Biosciences (JNJ, LLY, MRK, NVS, PFE); Asian Cancer
Research Group, non-profit (LLY, PFE, MRK)

Risk-sharing: e.g., Quintiles & LLY
 Innovation Networks

FIPCos  FIPNets ( VIPNets) [Celtic, Debiopharm, other PDC]
A FIPNet Model for New Drug
Development
Research
Pre-Discovery
Large Pharma
Academia
Biotechs/
Small Pharma
Discovery
Preclinical
Early Stage
Development
Coordination, Management
Basic Research
Translational Medicine
Innovation, Partnerships
CROs/Other
Partners
Source: Kaitin, Clin Pharmacol Ther, 2010;87:356-361
http://www.nature.com/clpt/journal/v87/n3/full/clpt2009293a.html
Late Stage
Development
Approval
Phase IV
Studies
Execution, Monitoring, Analysis
Large Scale Clinical Trials
Data Analysis
Medical Writing
Regulatory Approval
Execution, Monitoring, Analysis
Conclusions
Conclusions
 The time, cost, and risk to bring a new
medicine to market continue to represent
formidable challenges for drug developers.
 These challenges have led to a heightened
focus within the industry on R&D efficiency
and performance, and on new strategies,
including R&D reorganization,
partnerships, and network innovation.
“You can be on the right track,
and moving in the right direction,
but if you’re not moving fast enough,
the train will still run you over.”
Will Rogers
Tufts Center for the Study of
Drug Development
Tufts University, Boston, Massachusetts, USA
Kenneth I Kaitin, Ph.D.
Director
Professor of Medicine
Professor of Pharmacology & Exp. Therapeutics
Website
http://csdd.tufts.edu
Email
kenneth.kaitin@tufts.edu