Transcript The US Pharmaceutical Industry (Why Do Drugs Cost So Much?

The US Pharmaceutical Industry
(Why do Drugs Cost so Much?)
Some Important Numbers
• Average time from discovery to market for
new drug is 15 years
• A very small percent of new drugs make it
to market
– Big investment, no return
• Average cost from discovery
$500,000,000
market is
Global Drug Companies
• All major companies are headquartered in
US, United Kingdom, Germany or
Switzerland
• All drugs must be approved by FDA (Federal Drug
Administration) for use in the US and by the EMEA
(European Agency for the Evaluation of Medicinal Products) for use in
the Europe
• Majority of new drugs are discovered and
brought to market in the US
1. Drugs are “discovered” and developed
2. Patent process, why it is necessary
3. Federal Drug Administration approval
Regulatory Environment
4. Clinical trials of new drugs
5. GMP Manufacture of drug
6. Marketing and sale of drug
7. Post marketing surveillance
8. Off label use and new applications
9. Backup, second-generation drugs
Integrated,
Feed-forward
And
Feedback Process
Discovery Research
• Identify new drug target (Biology)
– Usually a protein
– Role in disease most often not known
• Identify NCE (new chemical entity) that interacts with target
(usually inhibits its function) (CHEMISTRY &
Biology)
• Identification of activity in animal model
– Does this model resemble disease?
– Must be orally active
Patents on Drugs
• 17 year duration from filing of application
(timing of application is important)
• Generics enter into the market after patent
expiry
– price covers cost of manufacture +small profit
– price does not reflect originating company’s
costs of the drug discovery and development
• Patent process is absolutely essential to
support discovery of new drugs
– For global use of drugs, adherence to patent
rights is essential
Development
• Development process similar for all NCEs
– Toxicology in vitro and in rodents
– Drug Pharmacokinectics (describes distribution of
a drug in the body)
– Dose dependence/tolerance
– Formulation/conditions for optimal state for
stability, delivery, and absorption
FDA Involvement Starts
FDA applications managed by
Regulatory Affairs and Quality
Control Departments in Pharma
Companies
Company Files an Investigational New
Drug (IND) Application
• Application to administer an NCE to
humans in a clinical trial
• Summary of all available data is submitted
to FDA, along with clinical plans
– Many meetings of company with FDA precede
this filing
• 30-day waiting period for FDA review.
But before Clinical trials can
begin…, you need the drug
• Production: from mg to gram quantities
– Happens prior to IND filing
• Manufacture: (usually Kg) of drug
– Manufacture must be under federally mandated
cGMP (current Good Manufacturing Procedures), and facility,
process and end-product are reviewed and
monitored by the FDA
Clinical Program: A Single Experiment to
Determine Efficacy
• Phase 1 (usually normal volunteers)
– safety and pharmacokinetics
• Phase 2 (patients -small number)
– initial assessment of pharmacological effect
– safety and pharmacokinetics in patients
– drug metabolism
• Phase 3 (patients -large number)
– definitive demonstration of efficacy
• Phase 4
– studies required as a condition of FDA approval
– new indications
Again, the FDA
• Based on the data from the clinical trials,
company makes a decision on filing for a
New Drug Application (NDA)
• Submit an application with all clinical data,
– For approval must have manufacturing
procedure under control and up to specs:
• Current Good Manufacturing Practice for Finished
Pharmaceuticals (cGMPRS)
• Approval process can take up to a year
• FDA can request additional studies prior or
after NDA approval
Marketing and Sales
• Marketing dept. enters process at beginning of
discovery phase
• Which disease market?
– Is the market big enough to recoup cost of
development?
– What are hurdles/possibilities of selling drug in other
countries?
– Develop continuing strategies for marketing through
life of drug
• How do physicians learn about and obtain the drug?
– Published scientific articles
– Trained sales force
• Targets specific disciplines of medicine
• Pharmaceutical sales force plays major educational role
Post-Marketing Surveillance
• Manages information of adverse drug
reactions (ADRs)
• unforeseen complication of drug treatment (e.g., drug-drug
interactions, low incident events, etc)
• Usually staffed by nurses and physicians
• Maintains patient database
• Disseminates information
– Company receive reports of ADRs from physicians
– Company must immediately:
• Report to FDA
• Inform health care community of adverse events in
every country selling drug
Clinical and Marketing, Again
• Marketing and legal departments monitor
physician and patient use of drug for nonapproved conditions
• Clinical dept. works with researches and clinicians
internally and in academic community to establish
efficacy for other conditions, diseases
Backup, second-generation drugs:
Discovery & Development Again
• Characteristics desired in a second
generation drug
– Derived from
• clinical trials, continued patient use, ADRs, new
applications, absorption, metabolism,
pharmacokinectics
• When does process begin?:
– initial development of parent drug
– results of Phase II clinical trials
Now the whole process begins
anew, with some shortcuts
possible
Challenge for Global Pharma in
21st Century
• Direction of new drug development follows
financial opportunities
– Pharma companies unlikely to develop and/or
sell drugs that treat major diseases of the poor
in developing countries
– Pharma companies unlikely to sell drugs in
poor countries
• What are possible resolutions to economic
considerations Vs world healthcare?
Major points
• Large investment, high risk required for
drug discovery development
• Time frame to market nearing 2 decades
• Highly regulated environment
• New drugs have limited sales life
• Major challenges to industry with respect
to global intellectual property laws and
world health needs