Drug makers are in a world of hurt, and there’s little they can do about it — unless they embrace pharmacogenomics, according to the co-director of MIT’s Program on the Pharmaceutical Industry.
Despite huge growth in R&D outlays — pharmas collectively spent more than $45 billion on drug discovery and development in 2001 compared with $35 billion in 1985 — drug makers successfully brought to market fewer than 30 candidates two years ago compared to more than 60 in 1985, according to POPI.
In addition, the combined compound annual growth rate at pharmaceutical companies is planned to inch up just 8 percent in 2004 to $506 billion from $337 billion in 1999, the POPI numbers show — a poor showing considering that most drug makers said they would like to grow twice that much each year.
And a report released by Bain & Co. this week showed that it cost drug makers on average $1.7 billion to bring a single drug to market between 2000 and 2002, including marketing costs. By comparison, it cost $1.1 billion between 1995 and 2000, the consulting group said.
The delicate environment has also made Wall Street jittery, and investors have roundly punished companies that concede failures — such as Merck, which last month said that it was nixing two potential blockbusters, as well as pharmas that forecast good news, such as GlaxoSmithKline, whose stock fell more than 2 percent last week after the company said it had 20 potential blockbusters in its pipeline.
“Nothing matters — good news or bad news,” Anthony Sinskey, professor of microbiology at MIT and co-director of POPI, said during his keynote address at POPI’s ann-ual Future of the Pharmaceutical Industry Symposium in Cambridge, Mass., this week. “The pharmaceutical industry is in trouble … it’s challenged on several fronts. All of these things become drivers for a paradigm shift in the way pharmas make drugs,” he said. “Perhaps what we’ll see in the future is more pharmaceutical companies aligned with personalized medicine.”
However, the direction in which they have so far been headed leads Sinskey to believe that pharmas will likely suffer some more before they begin making that shift.
Fire the ‘Damn Marketers’
Sinskey, outspoken and well respected, said there are a few steps drug makers can take that will ensure their pipelines rebound, and the biggest step is to take advantage of pharmacogenomics technologies. It’s a no-brainer, he said, especially since the US Food and Drug Administration in two months plans to tell the industry exactly what kind of pharmacogenomics data it wants to see in new drug applications, and how they should be submitted. Besides, it’s not as if drug makers aren’t already using these technol-ogies in R&D, he said.
“Personalized medicine will take place regardless of whether pharma wants it to or not,” Sinskey said. One of the biggest hurdles for this adoption, he added, is pharma’s reluctance to give up the blockbuster ghost. And one of the biggest components in this reluctance is big pharma marketers. “The damned marketing people have focused on blockbusters” for too long, he said to nervous laughter from the audience following a question. “I think those guys should be fired.”
According to Sinskey, the industry has known for some time that drug makers are loath to admit that blockbusters “are rare events.” These drugs, which are defined by their ability to earn pharmas at least $1 billion in revenue per year, are being approved less frequently. Still, drug makers feel compelled to stick to that model. Why this phenom-enon continues to exist is anyone’s guess, though one popular theory holds that pharmas believe it is easier to develop a drug that works pretty well for many, many people than one that is highly effective for a much smaller group. The principle behind this theory is anathema to pharmacogenomics.
Sinskey said pharmas are obliged to begin moving their R&D mindset into the direction of smaller drug categories, including orphan drugs and especially cancer, if they want to stay in business. “It’s as simple as that,” he said. “Take Gaucher disease,” he said. There are around 15,000 patients with the disease worldwide, and the one company that makes a drug for them earns between $500 million and $600 million per year. “No doubt the market will be smaller. But that doesn’t mean [drug makers] can’t make money,” he said.
Is Industry Ready?
Though Sinskey’s opinions don’t resound throughout the industry, there are some minority voices in big pharma that agree with him. For instance, an AstraZeneca official said he believes that narrowly targeted cancer therapeutics, and even theranostics, will offer greater reassurance than any other disease area to pharmaceutical companies leery of using pharmacogenomics technology in drug discovery.
The numbers might also impress Wall Street: The global market for cancer drugs is poised to triple over the next seven years to more than $64 billion. Drugs like Gleevec, Herceptin, and Xeloda have taken pioneering strides in personalized medicine. Plus, the unique specter of cancer tends to encourage regulatory agencies to grant pharmas greater incentive to develop new drugs.
The AstraZeneca official, Karol Sikora, said that standing in the way is pharma’s belief that pharmacogenomics will endanger the blockbuster even though others contend that big pharma and Wall Street’s marketing mantra — that the blockbuster is king — does not apply to cancer.
“I think right now the difficulty is that for all of the [pharma] companies, their motivation is capitalism — we accept that because that’s the way the world works,” Sikora told SNPtech Reporter recently. For cancer, he said, pharmacogenomics will create a market for “hundreds of niche-marketed drugs” just as blockbusters begin to fade.
But even with drugs like Herceptin, Gleevec, and Xeloda, which are designed for small cohorts of cancer patients, the notion of pharmacogenomics faces a bizarre twist. According to Sikora, pharma firms see a drug like Herceptin or Gleevec and they begin to hear a chorus of cash registers. “They want to start giving Herceptin to everyone with breast cancer,” he said. “The market drives you to take the latest, the newest, the most innovative, because that has the highest value” for big pharma.
“A marketing director I know — not one at AstraZeneca — once told me it’s no fun marketing a drug that works; ‘It’s much more fun to take one that doesn’t work or one that doesn’t work very well,’ he said. That’s the challenge in marketing. If you’re a marketer that’s what you do: You try to maximize the value of your drug,” Sikora said.
Sikora said he reckons the argument for pharmacogenomics is likely only to work with cancer because other widespread diseases — hypercholesterolemia or gastric ulcers — already have an abundance of therapeutics, like statins and proton-pump inhibitors, that work safely and pretty well. Safety and efficacy rates for cancer drugs are not nearly as good, and there is a growing body of research showing they can improve if cohorts were narrowed based on a patient’s or tumor’s biomarkers.
“The mantra in big pharma is ‘Make a big drug or two as quickly as possible … and make a blockbuster,’” said Sikora. “Pharmacogenomics complicates [this] mentality. There will be hundreds of niche-marketed drugs, and I think we’re beginning to see the whole market break into niche-marketed drugs that come with their own diagnostic.
“It will balance off,” he went on. “You will have drugs that are more effective — essentially more people will want them and will take them for longer — but there may never be another Taxol again. There will instead be a hundred compounds whose total value will be the same as [a single] billion-dollar drug.”
“To not have pharmacogenomics in cancer [research] is craziness,” said Sikora. “It would make nonsense of doing it.”