TK Kanchana, Director-General, Organisation of Pharmaceutical Producers of India (OPPI) talks about the trends which are most likely to drive the industry’s fortunes and company strategies over 2017
A review of the pharmaceutical industry landscape as we approach the end of 2016 highlights a few key developments. It also sets the stage for the issues that may well dominate the industry’s attention in 2017, impacting business trends, product strategies and regulatory actions. This could well be true for any year, but 2016 is special.
About 25 major drugs will be going off patent this year. According to estimates by Evaluate Pharma – a UK-based market intelligence and research firm that covers the pharma industry – about $120 billion in sales was lost to patent expirations between 2009 and 2014. The firm forecasts that $215 billion in sales will be at risk from patent expirations from 2015 to 2020.
A number of factors are coming together to impact the fortunes of research-based drug manufacturers and not all of them are benign. A quick review of some other numbers will underscore the big challenges that the industry faces. For example, 95 per cent of new medicines fail during development, and just two out of 10 recoup research and development (R&D) costs.
At the same time, new diseases and conditions call for greater innovation and drug discovery. Take biotechnology, that has given pharma firms exciting new pathways for new drug discovery; it sets the stage for targeted and specialised therapies that target rare diseases, but cost too much.
So what trend are most likely to drive the industry’s fortunes and company strategies over 2017 and perhaps until 2020? Four principal ones come to mind: healthcare access and affordability, empowered patients, specialty drugs and personalised medicine, bio-similar and generics growth, and going digital.
In India, pricing issues are an important part of the discourse, particularly between research-based companies and the policy makers. The overall ecosystem in India needs affordable medicines. However, as a 2013 IMS Health report showed, affordability ranks lower than physical proximity, functionality and access to appropriate care for even the poorest patients.
Access to healthcare and medicines has to emphasise patients’ needs. Public policy on healthcare is focussed on communicable rather than non-communicable diseases. This is despite studies that have shown that 53 per cent of the disease burden in rural India, where the bulk of the poor people live, can be attributed to diabetes, cardiovascular disease, pulmonary disease and cancer.
To improve the effectiveness of policy and implantation, the conversation about access to healthcare has to shift from affordability to the larger challenges of creating the necessary health infrastructure, having the appropriate level and availability of care and adequate public spending on healthcare.
Patients today are more empowered, as information is easily accessible. They learn about their health conditions online. They have greater awareness of the various treatment alternatives and choose the one they prefer most. Doctors have less power to influence this choice. In other words, and often supported by regulatory changes, patients are becoming increasingly organised and influential.
Risk-benefit assessments involve greater patient involvement and input. Globally, drug companies are becoming more patient-centric, leveraging demographic changes. Advancements in genome technology, data science methodology and investments in public and private sector programmes are taking us closer to the ideal of personalised medicine.
Statistics reveal approximately 94 per cent of drug companies actively research specialised therapies. One reason is that individual responses to current therapies are not completely satisfactory. Research by Arthur D Little, a consulting firm, suggests that patient sub-groups optimise treatment response and help better manage side effects and foster innovation.
Innovation, however, is becoming more complex. Again, Arthur D Little’s research shows that despite a substantial increase in R&D spending – estimated at an annual compound growth rated of 8-9 per cent – the number of new, original drug approvals has stabilised. Biotech ventures also generate a large number of late-stage molecules.
What about the innovation in India? As a report by PhRMA supported by knowledge partner, PricewaterhouseCoopers (PwC) pointed out, India’s intentions are clear: We have started to recognise that developing an enabling ecosystem that supports investment, technology transfer and growth in innovative areas such as biosciences is possible. It is also in line with other government initiatives such as Make in India, Start-up India, National Education Policy, the National Health Policy and Digital India.
Creating an innovative ecosystem to foster growth and development in the pharma research sector requires four key pillars: infrastructure, financing, human resources, and a legal, IPR (Intellectual property rights) and regulatory framework.
An innovation-oriented industry will lead to generation and commercialisation of home-grown IP and help position India globally as a strong knowledge-driven economy with advanced capacities in science and medicine. However, as the PwC report points out, time-bound implementation of policy interventions is a prerequisite to realise India’s innovation potential and vision.
Going digital is a key component of innovation; big data, digital technology and the Internet are transforming lives on an almost daily basis, and drug companies are no exceptions. In 2014, four top pharmacompanies made it to Forbes magazine’s list of the Top 20 World’s Most Innovative Companies.
Then, there is mHealth; mobile and wearable devices that can track movement, take measurements and record information that is highly useful in post-market studies. An mHealth app engages very large numbers of individuals in different locations. By increasing the amount of data, the patient pool becomes more representative, and resulting in more accurate results.
In 1966, Isaac Asimov, physicist and science fiction novelist, novelised a film script called, Fantastic Voyage. In the film, a group of doctors are miniaturized along with a submarine, and injected into an injured scientist’s bloodstream. They navigate their way to his brain, and repair the damage to it.
Science fiction is reality today, with nanotechnology. Nanoparticles can easily travel around the human body in the blood stream and assist in the delivery of anti-cancer drugs. Researchers are also examining the potential use of nanobots, or microscopic robots, that can be preprogrammed to perform tasks inside the human body.
The next frontier in technology is what many call machine learning, or artificial intelligence. Already, there are computers that can absorb and interpret millions of pages of scientific literature and data, like IBM Watson. Global pharma companies are teaching Watson to read and understand scientific papers that detail clinical trial outcomes used to develop and evaluate medications and other treatments. They are also exploring how it can speed up the discovery of alternative indications for their existing drugs.
Can India be part of such a vision? Yes, and to do that we have to strengthen our pharmaceutical innovation ecosystem across multiple dimensions. Such an environment needs close collaboration between the government, academia and the pharma industry. Learning from economies that have strong innovation systems and others that have moved up the value chain in recent times will help, along with a policy framework aimed at the holistic development of the ecosystem for innovation.
Realising India’s potential as an incubator of pharma innovation will create more job opportunities, increase local and foreign investment, and help the government collect higher tax and export revenues. This is separate from vastly improved health outcomes through access to newer medicines. An innovation-oriented industry will lead to creating home grown IP, positioning India globally as a knowledge – driven economy with proven capacity in science and medicine. That is a worthwhile dream to pursue.