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European Biopharmaceutical Review
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Emerging science, new policies and the changing environment for
reimbursement are driving a transition from ‘one-size-fi ts-all’
blockbuster drugs to niche products
When Pfizer’s $13 billion-a-year cholesterol drug Lipitor lost
patent protection at the end of 2011, many viewed it as a symbolic end
to the blockbuster era. In fact, 2012 represented the steepest part of
the patent cliff as drugs with an estimated $33 billion in annual sales
lost patent protection, opening them up to competition from generic
alternatives. Lipitor, the biggest selling drug of all time, benefi ted
from an army of as many as 38,000 salespeople and a marketing budget in
excess of $3 billion a year at its peak.
However, for most patients, the drug was of limited benefit. In
fact, as press reports noted, while Lipitor reduced the risk of a heart
attack by 36 per cent, clinical studies showed that three per cent of
patients in a control group using a placebo died of a heart attack,
compared to two per cent of patients in the study using Lipitor. Further
studies of Lipitor and other statins suggest that they only benefi t a
limited number of patients at best; so the question remains – how can we
tell which ones work ahead of time?
Making Substitutions
Pfizer has a lot of work ahead to find new drugs that can replace
the revenue that Lipitor has lost to generic competition. In the fi rst
quarter of 2012 alone, sales of the drug dropped by 71 per cent. Among
the drugs that will be fi lling the gap for Pfi zer are Xalkori, but
don’t expect it to capture millions of users as Lipitor did. The Food
and Drug Administration (FDA) approved Xalkori in 2011 to treat certain
patients with late-stage, non-small cell lung cancers who express a
mutated anaplastic lymphoma kinase, or ALK, gene. Only about fi ve per
cent of patients with non-small cell lung cancer, or about 9,000 people a
year with the disease, have the mutation. Xalkori was approved with a
companion diagnostic test that will help determine if a patient has the
abnormal ALK gene.
Even though Xalkori will never gain as many users as Lipitor has, it
is still expected to reach impressive sales levels. In fact, Xalkori is
projected to become a blockbluster drug with peak sales of $2.5 billion
a year. The drug costs $9,600 a month or $115,000 for patients who use
it for a year. As pharmaceutical companies face increasing pressure from
payers and regulators to establish the value of their products, they
have come to embrace orphan indication – indications with 200,000
patients or fewer in the US – not just by targeting rare disease, but
through targeted therapies for the sub-populations of a disease.
As payers increasingly demand proof of value for new therapies, and
regulators seek greater certainty about the safety and efficacy of
drugs, drug developers are focusing more on drugs that address unmet
medical needs as a better route to clinical, regulatory and economic
success. The blockbuster era is not dead. It is only the era of the
‘one-size-fi ts-all’ blockbuster that is coming to an end.
Mass Versus Niche
A 2012 study in Drug Discovery Today from Thomson Reuters and Pfi
zer makes a strong economic case for pharmaceutical companies to develop
drugs for rare or orphan diseases. The financial incentives put in
place to encourage the development of drugs for rare diseases, such as
the US Orphan Drug Act 1983, provide tax breaks, R&D offsets,
R&D grants, waived FDA fees, accelerated approval, and an extended
period of exclusivity. Orphan drugs can also generally command higher
prices than drugs for non-orphan disease. As personalised medicine
redefi nes diseases by their underlying molecular mechanisms rather than
their outward manifestations, it is breaking disease groups into
smaller sub-populations, turning one-time broad diseases into sub-types
that by defi nition constitute rare diseases.
Commenting on the rare diseases sub-sections, Kiran Meekings, lead
author of the Drug Discovery Today study and life sciences consultant at
Thomson Reuters, says: “We’re not just talking about the typical rare
disease; what we are also talking about are the emerging sub-diseases.
You can take something like lung cancer; whereas before it might have
been regarded as one cancer, typically pharma would try something to
stick into lung cancer, [but] now it’s being talked of as 15 or 20
individual, small sub-diseases.”
She adds: “If we look at crizotinib [Xalkori], approved last year,
that is an orphan drug because it is targeting a very small population
of a larger disease. This type of patient stratifi cation or more
personalised medicine approach is actually opening up new markets, which
are smaller populations of larger diseases.”
The Thomson Reuters study found that orphan drugs represent “an
increasingly important component of the pharmaceutical market and have
equal revenue-generating potential to nonorphan drugs.” The authors
state that orphan drugs make up 22 per cent of total drug sales, and
that the cumulative annual growth rate of the orphan drug market
totalled 25.8 per cent between 2001 and 2010. Compare that to a 20.1 per
cent annual growth rate for the matched non-orphan control group.
In fact, the study found that the mean annual economic value of
orphan drugs, in 2010 terms, reached $637 million, compared to $638
million for non-orphan drugs. While the value of non-orphan drugs
remained roughly constant between 2000 and 2010, the value of orphan
drugs nearly doubled during that period. The study found that the higher
prices, increased market share and longer exclusivity afforded to
orphan drugs that reached high unmet medical needs could offset the fact
that they are targeting smaller patient pools.
Legislative Push
Helping support the pharmaceutical industry’s embrace of rare
disease drugs and targeted therapies are new incentives contained in the
US Safety and Innovation Act, which reauthorises the FDA to collect
user fees from industry to fund drug reviews. The big winner in the Act
may have been the rare disease community, which saw a list of pending
bills forged by patient advocates folded into the fi nal legislation.
Rare disease advocates succeeded in getting five separate pieces of
legislation approved, aimed at creating incentives for drug companies to
develop new therapies for rare diseases, speed up the regulatory review
process, and allow a greater role for patients in FDA discussions about
the review of medical products.
The success of the rare disease community in its legislative push is
credited to a well-coordinated grassroots campaign involving a wide
range of organisations advocating for specifi c rare diseases and the
involvement of a large number of people from the patient community. The
effort included an email campaign from patients to members of the US
Congress as well as a lobbying day organised by the Rare Disease
Legislative Advocates – a collaborative group that supports rare disease
advocacy – which brought 70 patient advocates to the nation’s capital
in support of the legislative initiatives.
Accelerated Approvals
The provisions folded into the legislation included the creation of
an incentive for drugmakers to pursue rare disease drugs. Under the Act,
companies that bring a rare disease drug to market are granted a
voucher that provides accelerated FDA review of another drug, an
incentive that could be worth hundreds of millions of dollars for
large-market drugs. The legislation also includes language to provide
for accelerated approval of treatments for rare diseases by allowing the
FDA to use surrogate endpoints for determining the efficacy of a drug.
In addition to this, it directs the FDA to ensure that rare disease
experts have greater input into the FDA review process, making it easier
for staff to access such experts to help them understand the risks and
benefi ts of therapies under review. At the same time, the legislation
pushes the FDA to increase its engagement with patient advocates in
reviewing medical products.
While the number of product approvals for the last decade has
increased by only 15 per cent over the previous 10-year period, the
number of orphan drug designations has grown at a much faster rate,
according to a Burrill & Company analysis. There were only 650
orphan designations between 1993 and 2002. This number increased to
1,500 during the last 10 years. Today, the FDA issues 150-200 such
designations annually, and nearly half of the new drugs approved by the
FDA in 2013 had orphan drug status.
Branching Out
Though biotechnology and speciality pharmaceutical companies
continue to be the richest sources of orphan drugs, there are
indications that Big Pharma has embraced the area of rare disease and
orphan drugs. That can be seen by such events as Sanofi’s $20.1 billion
acquisition of Genzyme in 2011, and the establishment of rare disease
divisions within leading Big Pharma companies.
Some companies, such as GlaxoSmithKline, see orphan drugs as buffers
for downturns during the business cycle, at least for now. Mike Diem,
director of business development for GSK’s rare diseases unit, was
quoted as saying that the immediate goal was not to replace blockbusters
with orphan drugs, but to provide stable revenue: “If you have 10-15
orphan diseases in the portfolio, you can weather the business cycle
quite well,” he said. Currently, GSK lists only three orphan clinical
programmes in its portfolio.
Other companies, such as Novartis, view the area with greater
potential. Novartis knows that orphan drugs can be profitable. Its
chronic myelogenous leukaemia drug Gleevec was first approved in 2001.
Over the next 11 years, Gleevec was approved for an additional six rare
oncologic indications, establishing a lucrative franchise. Novartis
generated $4.6 billion in Gleevec revenue in 2011.
Rather than viewing rare disease as merely a buffer, Novartis has
integrated rare disease research into all of its R&D, according to
Mark Fishman, president of the Novartis Institutes for Biomedical
Research. Novartis is currently targeting more than 40 rare diseases,
and discoveries made in the orphan setting are expected to pay dividends
for indications that are more common. Fishman points to the example of
Afinitor, which was approved in 2009 for treating advanced kidney
cancer. Similarly to Gleevec, Afinitor has since been approved for a
number of other indications: prevention of organ rejection (2010);
astrocytoma associated with tuberous sclerosis (2010); progressive or
metastatic pancreatic neuroendocrine tumours (2011); and
hormone-receptor-positive, HER2-negative breast cancer (2012).
Pfizer is also putting great effort behind its rare disease drug
development work. The company’s Orphan and Genetic Disease Research Unit
is actively seeking academic or commercial collaborations in at least
11 target areas. Not surprisingly, it is interested in chaperones and
other modifiers of protein trafficking, misfolding or degradation, as
these mechanisms appear to be common among a number of orphan diseases.
Finding a method to reverse the course of one condition may lead to a
solution for another. Pfizer may see a larger potential pay-off in
orphan drugs. By tackling, for example, Huntington’s disease, a
modifying therapy may be found for a disease such as Alzheimer’s – a
condition far from being orphan, with more than five million affected
Americans.
Conclusion
That’s a big lure: developing drugs for small markets with unmet
medical needs can provide a pharmaceutical company with a faster path to
market, as well as a greater chance of winning regulatory approval,
premium pricing and minimal competition. The potential to expand
indications for these drugs, though, can unlock even more lucrative
markets ahead.
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