ARRRR! Drug ARRRR! Drug Development and Development and

DiscoveryDiscoveryAccess to Essential Medicines Access to Essential Medicines

De-CalDe-Cal

Fall 2006- Week 2Fall 2006- Week 2

Happy International Talk Happy International Talk Like a Pirate Day!Like a Pirate Day!

Drug companies make medicines that cost “lots o' doubloons”

My favorite pirate pick up line: Avast, me proud beauty! Wanna know why my Roger is so Jolly?

RoadmapRoadmap

Evolution of the pharmaceutical Evolution of the pharmaceutical industryindustry

Research & development pipeline:Research & development pipeline: Identifying compoundsIdentifying compounds Pre-clinical and clinical trialsPre-clinical and clinical trials Production and distributionProduction and distribution Marketing and salesMarketing and sales

The reality of PharmaThe reality of Pharma

Evolution of PharmaEvolution of Pharma Previously Previously

unregulatedunregulated Huge gains in Huge gains in

basic scientific basic scientific understanding the understanding the 1950s and 60s1950s and 60s

Modern drug Modern drug industry is industry is centralized in centralized in about ten major about ten major companiescompanies

Then

Now

R&D PipelineR&D Pipeline

The Players:

Basic research institutions

Small Biotech firms

Big Pharma

Contract Research Organizations

FDA

R&D PipelineR&D Pipeline

Step 1: Basic laboratory researchStep 1: Basic laboratory research Step 2: Preclinical testing after a Step 2: Preclinical testing after a

promising compound is foundpromising compound is found Step 3: Investigational New Drug Step 3: Investigational New Drug

filing with FDAfiling with FDA Three phases of clinical trialsThree phases of clinical trials

Step 4: New Drug Application (NDA)Step 4: New Drug Application (NDA) Step 5: SaleStep 5: Sale

Clinical TrialsClinical Trials

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Phase I Phase II Phase III

Non-blind experiments for

dosing

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Single blind experiments for

efficacy

Double blind experiments for efficacy

Less of a pipeline, more Less of a pipeline, more of a funnel . . . of a funnel . . .

Production and Production and DistributionDistribution

Developing Developing production production methods and methods and creating creating facilitiesfacilities

DistributionDistribution Enormous Enormous

marketing marketing expendituresexpenditures

The $800 million pill?The $800 million pill?

Important conceptsImportant concepts

Generic drug manufacturersGeneric drug manufacturers New Molecular Entities (NMEs)New Molecular Entities (NMEs) BioequivalencyBioequivalency

Me-too drugsMe-too drugs Lifestyle drugsLifestyle drugs Second indicationsSecond indications Pharma companies are ruthless Pharma companies are ruthless

profit maximizersprofit maximizers

The Politics of PharmaThe Politics of Pharma

Organized into PhRMA Organized into PhRMA (Pharmaceutical Research and (Pharmaceutical Research and Manufacturers of AmericaManufacturers of America

Huge political lobby:Huge political lobby: In 2001 Name-brand pharma spent $75.4 In 2001 Name-brand pharma spent $75.4

million on lobbyingmillion on lobbying That same year generics spent $2.4 millionThat same year generics spent $2.4 million

The providers for a society that The providers for a society that increasingly relies on drugsincreasingly relies on drugs

The GoodThe Good

In 2004 name-brand pharmaceutical In 2004 name-brand pharmaceutical firms spent approximately $53 firms spent approximately $53 billion on R&Dbillion on R&D

New medicines generated 40% of New medicines generated 40% of the two-year life expectancy gain in the two-year life expectancy gain in 52 developed countries52 developed countries**

* F.R. Lichtenberg, The Impact of New Drug Launches on Longevity, National Bureau of Economics Research Working Paper No. 9754 (June 2003).

The BadThe Bad In 2001 an estimated 1.9 to 2.2 In 2001 an estimated 1.9 to 2.2

million people were driven in million people were driven in personal bankruptcy by health care personal bankruptcy by health care costscosts**

In 2004 pharma spent approximately In 2004 pharma spent approximately $1.25 billion per NME; in 1995 that $1.25 billion per NME; in 1995 that number was $317 millionnumber was $317 million++

* Health care costs main cause of bankruptcy, study finds, The New Standard, at http://newstandardnews.net/content/?action=show_item&itemid=1439

+R&D spending per NME Declines, Drugresearcher.com, at http://www.drugresearcher.com/news/ng.asp?id=61610-r-d-nme-spend

The QuestionableThe Questionable

Decline in the efficiency of R&D (Decline in the efficiency of R&D (i.e.i.e. less NMEs per R&D $ spent)less NMEs per R&D $ spent)

Mergers of big companies hurting Mergers of big companies hurting R&DR&D

The cost of marketing of The cost of marketing of pharmaceuticalspharmaceuticals

Direct to consumer advertisingDirect to consumer advertising Me too and lifestyle drugsMe too and lifestyle drugsArrr! That be questionable,

matey