Strategic Issues of the Pharmaceutical Industry 2015-2050

Strategic Issues of the Pharmaceutical Industry 2015-2050

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Description: The evolution of the pharmaceutical industry is putting pressure on the traditional R&D model. There is a need for evolution of R&D prompted by the expected paradigm shift in healthcare. The present situation brings a world of opportunities.

Provide integrated solutions (from diagnostics to personalized therapeutics) in a given market to personalized therapeutics) in a given market segment for near total management of the disease process. .

 
Author: Jean-Claude Muller (Fellow) | Visits: 4029 | Page Views: 6117
Domain:  Medicine Category: Biotech/Pharma Subcategory: Business 
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Contents:
Nouveaux enjeux strat�giques de l'industrie pharmaceutique pour 2015-2020
Jean-Claude Muller Acad�mie de Pharmacie, Paris le 17 f�vrier 2010

The Public Health Fundamental Challenges

The Healthcare Challenges

The Science Challenges

The Industry Challenges
2
Acad�mie de Pharmacie - 17/02/10

The evolution of the pharmaceutical industry is putting pressure on the traditional R&D model
Heightened regulatory scrutiny Generic competition Innovation coming from external sources

Access and pricing pressures

Traditional Pharma R&D model

Talent pools more globally dispersed

Intense competition on a few targets / indications Shift towards personalized medicine

Novel R&D approaches

Need to fundamentally rethink the R&D model

3

Acad�mie de Pharmacie - 17/02/10

Need for evolution of R&D prompted by the expected paradigm shift in healthcare
The Current Paradigm: Manage Disease The Future Paradigm: Manage & Preempt Disease

Pre / non Symptomatic symptomatic symptomatic tolerable intolerable

Curative treatment

Pre / non Symptomatic symptomatic symptomatic tolerable intolerable

Curative treatment

Disease burden

Increase in Life Expectancy

Symptom management

Disease burden

Increase in Life Expectancy

Symptom management

Cost

Cost

Molecular preemption

Time (illustration from Elias Zerhouni presentation) 4
Acad�mie de Pharmacie - 17/02/10

Time

Present brings a world of opportunities
Unmet needs

Healthcare system reforms

R&D

New Networks

Disruptive science and technologies



'Omics', stem cells, and better knowledge of diseases
Industrial revolution driven by NBIC, the convergence of :

Nanotechnologies, Biotechnologies, Informatics and Cognitive Sciences

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Acad�mie de Pharmacie - 17/02/10

The Industry Challenges (1)
Major shifts in market demands and response strategies Adapt the offer to the needs and requirements of each country or region Maintain innovation and productivity: Adequate Pipeline Intellectual Property Management Increase Generic Competition Heightened Regulatory Scrutiny: Studies versus and on top of "Gold Standards" Risk Management Plans (RPM) Access and Pricing Pressures

6

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The Industry Challenges (2)
Shift from "one product-one disease" to an integrated family of products for a class of patients Provide integrated solutions (from diagnostics to personalized therapeutics) in a given market segment for near total management of the disease process Impact of the increased adoption of Electronic Health Records (HER) Arrival of "New Players" Need to redefine scope and core competencies
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The Pharmaceutical Industry
The pharmaceutical sector has, over the last decades, developed a business model focused on discovery, development, manufacture and commercialisation of "blockbusters" which are drugs with an incremental clinical benefit for a large population. This model has recently shown its limits and is not sustainable for the years to come

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Big Pharma Pipelines failing to meet expectations
Number of new FDA registrations at record low since 15 years: In 2007 Total 18 In 2008 Total 20 In 2009 Total 21 In 2009 Pharma Industry invested around $90 billion in R&D Life Sciences world wide R&D investment are close to $150 billion For the first time in five years, the mean number of active substances for first launch (portfolio of major companies) has decreased from 72 to 65
9
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Creativity and innovation will drive future success

From....
a mechanism based innovation... a blockbuster mass market focus... a drug focus... a developed countries focus ...

To...
... customer centric innovation driven by patients need ... effective targeted therapies ... integrated solutions at every life stage ... customized products adapted to every regions

Unleashing all creativity and innovation drivers

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Innovation in the Pharmaceutical Industry

Three, non exclusive trends are now appearing and will reshape the entire business model of the industry: Drugs will become a piece of an integrated "therapeutic solution" in response to a pathology and to a given context The "personalised medicine" concept "Customised products" adapted for every region
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The Pharmaceutical Industry: A paradigm shift (1)
" Le m�dicament n'est plus la composante dominante, voire unique, des soins, et encore moins de la sant�. Il devient une r�ponse cibl�e � une pathologie et � un contexte donn�, r�ponse qui sera le plus souvent int�gr�e dans une � solution th�rapeutique � adapt�e � chaque individu. La valeur �conomique sera en cons�quences davantage associ�e � la solution qu'� ses composantes, comme cela est par exemple d�j� le cas dans l'informatique. Cette nouvelle approche, que l'on pourrait qualifier de syst�mique, aura sans doute des cons�quences lourdes sur la strat�gie des laboratoires, qui seront amen�s � chercher des partenaires et des alliances avec d'autres producteurs de biens ou de services de sant�. Elle pourrait �galement avoir un effet sur l'approche th�rapeutique ellem�me: en induisant une vision plus globale de sant� et en restaurant une vision plus globale de sant� et en restaurant le concept de m�decine de terrain.
Jacques Marceau (IEP d'Aix en Provence), Les Echos (Janvier 2009)

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Diabetes burden climbing rapidly
Millions
80 60 40 20 0

Major growth in prevalence of diabetes expected from 2000 to 2030...

Deaths /100,000/yr
30

...will result in a large increase in mortality and morbidity

25

20

India China USA

Brazil

EU

Japan

15 1970

1975

1980

1985

1990

1995

2000

2005

Diabetes prevalence 2000-2030 for selected countries

Age-adjusted diabetes mortality in the US 1970-2001

Indirect cost Direct cost

192 156
54

Direct and indirect costs of type II Diabetes (e.g: USA)

Costs in $bn

132
40

47

138 92 109

Only 10% of direct costs attributable to drug treatment Main driver of cost is diabetic complications Payers looking for ways to reduce overall medical costs

2002

2010

2020

13

Acad�mie de Pharmacie - 17/02/10 Large opportunity for (drug) therapy reducing "complications", not only HbA1c

Complications drive "new" R&D offerings toward more efficient glycemic management
Latent disease Overt disease

Risk

Complications

Disease progression

Correct metabolic dysfunctions, address risk from obesity �-cell medicine (preservation / regeneration / substitution) Reverse or modify disease Directly target complications

Monitoring & Tx Delivery

STOP OR DELAY

Increasing complexity of disease / co-morbidities

Need to Simplify monitoring and treatment

14

The Ultimate Objective is to offer a complete solution to the patient
Integrated approach...
Understanding the needs of all the stakeholders Patients � KOL's � Providers � Payers � Health Authorities Providing an integrated solution that goes beyond glycemic control Therapeutics � Devices � Nutrition- Services

... with following key R&D offerings
Strengthen leadership via better use of insulin supported by innovative devices, novel insulins ... and simpler oral therapies Go to new paradigm beyond glycemic control, with insulin resistance and fatty liver through strategic partnerships (i.e. : IMI)

... And leapfrog via greater challenges, such as -cell medicine and diabetic complications

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Growth of 65+ group will drive a large increase in health costs over the next two decades
% population 30 Over 65 20 10 0
Japan EU-5 USA China India Brazil

$ ('000s) 2010 2030
300

Cumulative expenditure per person from age 65 (US) 1

Total Medicare Nursing home care Prescription drugs

200

100

2
0 65 70 75 80 85 90 95

Services Age at death

5 000 $B Share of 2004-2030 growth in US health 4 000 costs by age group

< 75 costs driven by medicare (hospital and physician) services > 85 costs driven by nursing home care services

3 000 2 000 1 000

0
2004 0-18 19-44 45-64 65+ 2030 16

Aging strategy: full spectrum of offerings from wellness to illness for customers with varied needs
Unconventional and safe approaches Hormonal and growth factor therapies Prevention and Neurosensory treatment of sarcopenia disease and musculoskeletal pain Innovative drug delivery e-health interface

Nutraceuticals

Maintain well-being...

...Avoid morbidity...

...Address pathology

Increasing disease specificity
60 and well Is well but fearful of functional decline Wants to continue to feel functionally young 75 and complex medical issues 10 pills a day, 5 doc appointments a month, cannot keep track, and suffering from side effects Wants simpler, easier and adapted solutions The dependent patient Requires assistance for activities of daily living Care-takers need solutions. Pain mgmt. critical to QOL.

75 and frail Decreased autonomy, vulnerable to insults Wants protection from events leading to loss of autonomy. Pain mgmt. key to sustained physical status.

17

The Pharmaceutical Industry: A paradigm shift (2)

The "personalised medicine" which intends to discover, develop and commercialise drugs which will provide a large clinical benefit to a targeted population of patients and which will not only address symptoms but progressively become disease modifiers. Such an approach, if successful, will qualify as breakthrough innovation and should rapidly disseminate as a novel paradigm. Such an approach based on initial genome-wide association studies and analysis of large populations will provide novel therapeutics, novel diagnostics and potentially novel disease prevention strategies

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The Pharmaceutical Industry: A paradigm shift (2)

A "personalised medicine" approach relies on two key principle: A translational research process and organisation (from target to patient) An access to specific targets/pathways biomarkers to identify and select the right patients to treat A "personalised medicine" treatment will therefore often need a "companion approach" A "personalised medecine" approach requires: a treatment associated with specific biomarkers, used as diagnostic and/or prognostic tools In some cases the "companion" diagnostic discovery and development will be an integrated part of the clinical drug development itself

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The translational research strategy
Better science Identify targets within pathways with highest potential and select related compounds

Cancer

Pathways

Drug

Pathogenesis
Speed in development Be able to reach market before competition on highly competitive validated targets
Key differentiating factors

20

Personalized Medicine: Biomarker research: Key organizational elements
Personalized medicine, drug discovery and development to be tightly integrated

Discovery

Early dev
Biomarker R&D

Late dev

Drug R&D

21

The Pharmaceutical Industry: A paradigm shift (3)
The fact that a large proportion of patients in developing and emerging countries does not have access to adequate treatment is intolerable and needs to be rapidly addressed Several avenues are being considered:
Easy access to well established and well tolerated existing drugs Access at no profit/no loss of essential anti-infective and antibiotic drugs as well as vaccines Health research for "geopathologies" of emerging countries Development of cheap to make, easy to use and rugged enough for use on the field diagnostic tools Practical solutions which can be provided to patients of lower education in order to increase efficacy and overall compliance

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Practical solutions to increase efficacy and overall compliance: The example of the � polypill concept � The combination of three blood-pressure-lowering drugs at low doses, with a statin, aspirin and folic acid can reduce cardiovascular events by more than 80% in healthy individuals aged 55 years and more. The proposed association in a single pill (Polycap) could be priced at less than ONE $/day of treatment. The Indian Polycap Study (TIPS) has shown the validity of the concept in a primary care prevention setting with 2,050 subjects Better adherence (compliance) needed to improve the management of chronic diseases can be expected from such an association of safe and effective drugs
TIPS , S. Yusuf and al., Lancet April 18, 2009

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Infectious diseases identified as key opportunities for new R&D pharma approaches
Infectious diseases are a significant burden, affecting both developed and developing world
Nosocomial infections are a major concern in the hospital setting, causing approximately 7M cases each year There are 3M cases of bacterial community infections which requires hospitalization More than 300.000 invasive fungal infections each year Nursing homes becoming an increasing segment with aging trend Malaria and TB are major pathologies in developing countries, with increasing drug-resistant strains Case for sustained R&D investment in ID with the following scope Global offering to hospitals and nursing homes: (Treatments, diagnostics, vaccines, decontamination) Improved therapies for developing countries diseases to fight resistance and improve compliance

A clear need for new approaches, going beyond a pure-drug solution
Quick and early diagnostic, allowing accurate detection of pathogens Enhanced prevention of disease Access to treatments in developing countries

24

Why so much interest for Asia Pacific?
Fastest growing medical needs and business opportunities "Geopathologies": liver, GI tract, high level of smoking Dramatic increase of prevalence of chronic diseases: 1992 14.4% 31,4% 1.9% 2002 Increase 18.8% 31% 50% 59% 5.6% 195%

Hypertension CVT Diabetes

Cancer mortality: half of all worldwide cancer patients are already in Asia

25

New Players (1)
After the very successful entry of new players coming from the Imaging area (GE Healthcare, Siemens, Philips, Boston Scientific, Varian, Bruker) one can expect a series of other new comers from various domains such as the TIC (Google, Oracle, IBM Biologicals Sciences) and the "solution integrators" (Orange, Nokia, Samsung, Apple...). All these players will develop novel tools and technologies to make best, fast and simple use in order to increase the adoption of EHR
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Conclusion (1)
New major non exclusive trends are now appearing and will reshape the entire business model of the pharmaceutical industry:
Drugs could become a piece of an integrated "therapeutic solution" in response to a pathology and to a given context and will no longer be the dominant or unique component of care The "personalised medicine" approach could provide novel targeted therapeutics, novel diagnostic tools and potentially novel disease prevention strategies In adapting the offer to the needs and the requirements of each country or region the industry will have to provide "customised and affordable products including vaccines"

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Conclusion (2)
The industry's strategies to address these trends:
Diversification in becoming more "Healthcare" than pure "Pharma" (incl. OTC, vaccines, medical devices, generics, branded generics, bio-similars, patient care, etc...) sanofi-aventis, Novartis, Pfizer,.... Focus: Pharma and Diagnostics Roche, AstraZeneca,....

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Acad�mie de Pharmacie - 17/02/10

Nouveaux enjeux strat�giques de l'industrie pharmaceutique pour 2015-2020
Merci de votre attention

Nouveaux enjeux strat�giques de l'industrie pharmaceutique pour 2015-2020
Annexes

The Healthcare Challenges

Costs and efficiency Access and affordability Resource allocation strategies Aging population Children From late cure to early preemption From episodic care to managing the full life cycle of the disease process
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Acad�mie de Pharmacie - 17/02/10

The world population today and tomorrow...
2008 2050 SHAPED BY POPULATION SIZE...

447 339

731

5217

653 4030 1803

767 572 965

Source: Worldmapper, SASI group, Universities of Sheffield and Michigan

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Acad�mie de Pharmacie - 17/02/10

The Science Challenges
Biological complexity Predictive capabilities Mechanistic understanding of diseases in humans Functional reclassification of diseases More effective translation strategies Systems approach to science

33

Acad�mie de Pharmacie - 17/02/10

Tackling Biological Complexity

Image courtesy of UCSD 34
Acad�mie de Pharmacie - 17/02/10

� Geopathologies �
Research in diseases of major importance in emerging countries Malaria Tuberculosis AIDS Dengue Leishmaniasis Human African Trypanosomiasis (sleeping sickness) Vaccine approach Education and communication

35

Acad�mie de Pharmacie - 17/02/10

Building an E-Health Strategy
Investigators and healthcare systems wish to have a comprehensive data base of all patients through a single entry system based on Electronic Healthcare Records (EHR)

Resources and data exist outside the company owned by healthcare providers, payers, academic institutions and governments The richness of data generated through healthcare, especially in those settings where it is linked with genetic data provide insight not available in the internal environment Integrating this model into the R&D process brings the scientist closer the care provider and the patient and provides access to real world clinical and health outcome data
36

New Players (2)
When is an iPhone a Medical Device?
A special issue from the "Silver Sheet" (April 2009) of the increasing FDA regulation of consumer electronics and software in medical devices and electronic health record systems At least 150 different iPhone "Health Applications" are already available to the medical community

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Cancer mortality: half of all worldwide deaths from cancer are in Asia

Source: Parkin, D.M. et al. CA Cancer J Clin 2005;55:74-108
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