The next innovation in pharmaceuticals

By Marcel Velterop

After the latest generic acquisition by a big pharma company, even the most conservative thinkers in the pharma industry will have to face the reality of 2010; affordability and global access of medicines have become key strategies for innovators too. The former nemesis and frequently quoted reason for the top-line decline of innovators now commands large premiums as a way to capture emerging market growth and improve revenues quickly. Today, with one exception, most big pharma companies have become larger generic suppliers than the majority of the global generics industry itself.

But what about innovation? By increasingly sourcing innovation from the biotech sector and academia, pharma innovators seem to be acknowledging that the way they innovate needs drastic innovation too. More nimble and therapeutic area-focused R&D units are setup to mimic the sense of urgency displayed by biotech companies. Defending the US$1 billion or more development costs for new molecules is no longer acceptable, and needs to be reformed into a question of how to develop and launch a truly new drug for less than US$250 million?

Just imagine the impact for society’s unmet needs if for the same ‘standard cost’ not one but four new drugs are launched? Furthermore, imagine instead of taking on average 10 years to reach the market this is done in 6-7 years. “Wishful thinking and not possible” is a frequent response. What then can make the difference? Simply put: people in our industry deciding to change things and aspire to truly groundbreaking innovation.

Clearly the model of doing everything in-house is gone at big pharma, and outsourcing and in-licensing are in progress. However this is but a first step in the process to begin to truly integrate external collaboration. The pharma 2020 report by PwC provides many compelling new ways of looking at innovation. In addition, the increased use of genetics to define the right target set of clinical trial patients will reduce unexpected side-effects and improve attrition rates. Regulators are likely to support a smaller, more precisely targeted launch, with quicker approvals linked with post-launch monitoring. Therapeutic expansion can be staged from here to ensure sufficient earnings.

The question this raises is what then should change in the way of innovation program management? Intelligence in biological systems is achieved when the number of connections increase exponentially, ultimately leading to human thinking. State-of-the-art technology and communication can enable spiderweb-like partnerships between the NCE development team and a variety of external partners required to bring innovation to patients. Integration of drug substance and product, toxicology, clinical development and medical specialists validating the real patient need will allow reduction of waste in development and time lost in the process.

A more transparent sharing of goals, timelines and developmental requirements will not only minimise time-lags between an otherwise serial set of events but energise all partners to achieve the same goal of lower costs and faster development. Clinical service providers sharing their timelines with CMC partners will directly reduce the risk of late supplies. Increased visibility of target dates, as seen in other industries, has reduced lead-times, working capital and costs of development.

Lack of trust and fear about losing IP currently prevents such new ways of working in the pharma industry, as well as the more complex set of service agreements such an approach would require. As with any innovation, developing a prototype in order to test the problem areas seems a pragmatic and prudent way forward. Once proof-of-concept has been identified and IP filed, partner selection and signing a joint Letter of Intent are among the next steps. A Master Service Agreement and business principles can be defined; either a risk-reward sharing or a more typical cost-margin based approach funded by the innovator.

Dr Reddy’s Custom Pharmaceutical Services is open for novel ways to service innovation and able to interact in more complex consortiums. We invite the more daring innovator to discuss options and the set-up of a pilot to innovate the way our industry innovates.

Biography

Marcel Velterop is Vice President, Global Head Sales & Business Development
Dr Reddy’s Laboratories SA, Custom Pharmaceutical Services. Marcel joined Dr Reddy’s Laboratories in January 2004 as European Director Sales & Marketing. He currently heads the global business development team for Dr Reddy’s CPS business, which caters to innovator pharma companies.