Is time is running out for the obese as drug development costs skyrocket?

Obesity has been linked to cancer, heart disease, high blood pressure, diabetes, and stroke.  As a common underlying factor in so many preventable diseases, it’s no wonder that there is a huge potential market for anti-obesity drugs.  Of course, exercise and diet might be the preferred prescription of many healthcare providers, but the option of a pill to ensure weight loss could improve public health.  The FDA’s recent actions have been pushing drug development costs up to levels that have frustrated or stymied pharmaceutical company efforts to develop drugs to reduce the incidence of obesity.

Three companies have run the FDA’s gauntlet with their obesity drugs of late, without much to show for their more than $830 million invested¹.  Arena Pharmaceuticals took their drug, Lorqess, through Phase III clinical trials with good results.  It was tested in almost 9000 patients at a cost of more than $400 million, only to be turned back by the FDA because they had disproven a negative: that their drug would not cause heart-valve disease¹.

Orexigen’s Contrave is another example of an obesity drug that failed in Phase III clinical trials when the FDA requested a long-term heart attack study.  Such a studies drive drug development costs even higher; the company had already invested more than $200 million in Phase III clinical trials.  Additional trials could cost over $100 million¹.

The only potential success story is Vivus’s weight-loss drug Qsymia, the first to make it to market in a decade.  Its approval came after the Senate Appropriations Committee pressed on the FDA to bring more options to bear against America’s battle with obesity.  Nudging the FDA from the outside might be what’s needed to increase the number of drugs on the market, and to encourage Pharma to keep developing.

If Orexigen and Arena can tolerate the drug development costs involved in more trials, they may yet get approved.  But will they want to take the chance?  In spite of so much need, Qsymia hasn’t had blockbuster sales².  Time will tell if pharmaceutical companies find the reward worth risky high drug development costs in the fight against obesity.

References:

1. A.S.A. Roy.  Stifling New Cures: The True Cost of Lengthy Clinical Drug Trials.  Manhattan Institute for Policy Research.  April 2012.
2. T. Staton.  Faced with flat sales, Vivus offers free trial on Qsymia weight loss drug.  FiercePharma.  Nov 26, 2012.

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Key points

Outsourcing drug discovery can connect parties from around the world

• The outsourced company and/or team of scientists are located in different locations
• All parties have access to the internet
• A platform has been designated for communication and transfer of information

Technology

“Consistent themes across different views of technology are that it must provide support for communication, for information exchange, and for structuring a team’s process.”^[1] Working virtually must replace or improve what is missing from working together in person. Team members must learn how to effectively exchange information on the platform, as well as how their job function fits in the framework of the technology. In the context of outsourcing drug discovery, project management technology needs to be able to oversee communication between procurement, scientist, and vendor.

Complexity vs Risk

Choosing to run a program virtually runs into issues the larger scale the project. The more people involved, tasks to track, and data to manage runs the risk of a project becoming overwhelmed and communication lines losing effectiveness. In a paper by Zigurs, it was found that complexity can be mitigated by “reducing temporal distance through collaboration with organizations in closer time zones and reducing the intensity of collaboration by giving up some part of control to localized teams.^[1]” This supports our previously asserted notion that nearsourcing, rather than overseas outsourcing, offers definitive benefits on important projects. The finding also indicates the project lead must be comfortable delegating responsibility to a greater degree when working on a complicated, virtual projects. A single person would have much difficulty micromanaging outsourcing drug discovery, with the need to oversee vendor vetting, communication, scientist needs, payment, and delivery.

Conclusion

As technology improves, it will become easier to outsource drug discovery programs with minimal loss in project management abilities. As long as communication is easy and trackable, projects will be coordinated and controlled. If the new mechanism for outsourcing drug discovery can integrate within existing processes and become attractive enough for easy adoption, then virtual drug discovery will prove to be an important innovation for pharma. We hope to apply these lessons as we deploy enterprise research exchanges in Pfizer and other large pharma organizations.

Reference

1. Zigurs I, Khazanchi D, Mametjanov A. The Practice and Promise of Virtual Project Management. IGI Global.  http://www.isqa.unomaha.edu/dkhazanchi/vita/Research%20Papers/91.pdf

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Diabetes Prevalence in USA; rising drug development costs make it hard for patients to get cost-effective treatments. [image courtesy www.cdc.gov/diabetes]

For the last five years, Phase III clinical trials for diabetes drugs have faced a new hurdle: proving cardiovascular safety.  This comes after GlaxoSmithKline’s Avandia (rosiglitazone) disaster^[1].  Avandia was once the world’s best-selling diabetes pill, with more than $3 billion annual revenue.  A potential link to heart attacks and other serious heart problems led to it being banned in Europe, and is now available in the U.S. through a very limited access program.  Following questions about the cardiovascular safety of diabetes drugs, the FDA ruled that all new Type 2 diabetes drugs prove cardiovascular safety on top of demonstrating their ability to lower blood sugar.

Cardiovascular disease is the biggest cause of mortality among diabetics, so this move by the FDA makes sense.  The problem for pharmaceutical companies is that adding the burden of demonstrating cardiovascular safety on top of glycemic control greatly increases drug development costs.  The new regulation greatly expands the size and length of Phase III clinical trials.  It could take more than 10 years to develop a new diabetes drug; the investment for pharmaceutical companies is huge^[2].

It’s not all doom-and-gloom.  Johnson & Johnson just won conditional FDA approval for its new first-in-class diabetes drug, Invokana (canagliflozin).  The effort was huge, involving nine late-stage studies with more than 10,000 patients, breaking pharma R&D records^[3].  With ongoing cardiovascular trials, they’re not quite done, but it’s looking good.

Right now, drug development costs limit the field to Big Pharma.  Smaller drug development outfits can’t raise the capital to bring drugs through clinical trials.  They are either forced into partnerships with bigger pharmaceutical companies, or are unfortunately driven away from entering the market.

References:

1. T. Staton.  Pharmacies say goodbye to Avandia in November.  FiercePharma.  May 19, 2011.

2. L. Nainggolan.  Heart-smart diabetes drugs: Pipe dream or possibility.  TheHeart.org.  March 28, 2013.

3. R. McBride.  Updated: J&J wins first FDA approval for new class of diabetes drug.  FiercePharma.  March 29, 2013.

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Pharma and universities both benefit by working together

Why the need for a deeper relationship

“Academic scientists tend to be driven by academic research questions that need to be carefully aligned with the commercial interests of their colleagues in industry.”^[1]

Licensing out technology from universities certainly happens on a fairly common basis, but it is usually by chance and not by design. For pharmaceutical innovation to benefit from this relationship, there needs to be a match in research and industry needs, and one way to drive this, is for pharma to step in with a bigger contribution and sense of direction early on. This would allow academic research to translate to real world applications, have more reliable funding and thus greater  success, all whilst helping pharma with it’s struggling pipelines.

Working together for pharmaceutical innovation

Pharma is essentially outsourcing many aspects of research in R&D and focusing on other areas internally. In respect to pharmaceutical innovation through academia, “pharma companies invest directly into research collaborations to preferentially develop, assess and acquire their early stage outputs.”^[1] Recent developments in some universities have indicated an ”apparent desire to develop drugs or clinical candidates”^[2], as seen by the addition of many drug discovery related core facilities, but this should be avoided without pharma support as even seasoned industry professionals struggle during drug development.

Fortunately, universities are embracing their new role as they have “become more aware of the potential commercial reward” and begun to promote the creation of a “scaled-down pharma model comprising most of the functions required for small molecule drug discovery.” ^[1] Although even with issues of publications, possible patent information, and the move away from “pure” research, the benefits seem to outweigh the negatives. Greater collaboration with experts, the ability to focus on under-served diseases, and financial stability provides for a smoother R&D environment.

Pharmaceutical innovation needs collaboration to come about – pharma certainly cannot do it alone. The help of academics brings in a new source of ideas and candidates. With the help of government programs, such as non-profit drug development corporations^[3], there a possibility of greater pharmaceutical success, more drugs in the clinics and hopefully lower drug costs to the patients.

References

1. Tralau-Stewart C, Wyatt C, Kleyn D, Ayad A. Drug discovery: new models for industry -academic partnerships. Drug Discovery Today. 2009 http://www.far.fiocruz.br/farmanguinhos/images/stories/mestrado/2011/Industry_academic_partners.pdf
2. Weigelt J. The case for open-access chemical biology. A strategy for pre-competitive medicinal chemistry to promote drug discovery. EMBO. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2750055/
3. Juliano RL. Pharmaceutical innovation and public policy: the case for a new strategy for drug discovery and development. Science and Public Policy. 2013

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San Diego Business Journal talks to Kevin Lustig about the Carlsbad Community Lab

San Diego Business Journal recently interviewed Assay Depot’s CEO Kevin Lustig about his latest side venture ‘Bio, Tech and Beyond; the world’s largest garage laboratory”

Click to read the full article about the Carlsbad Community Lab which was published last week in the San Diego Business Journal Innovation section.

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It’s becoming easier to effective outsource drug discovery, but mental and organizational barriers are slowing down wide adoption.

1) Uncertainty: Any changes to the status quo are often accompanied by fear of the unknown. Why is this changing? How does this affect me? I don’t want to learn something new. This is the overwhelming thought process for employees, whether they are a researcher, procurement, or IT. The perceived negative connotation of outsourcing strikes fear in the hearts of all, as other industries have felt the bite through job losses. Education about outsourcing trends fight uncertainty; many new tools to outsource drug discovery improve experimental workflow and vendor communication, rather than threaten jobs. It is a matter of learning how to take advantage of outsourcing than be a victim of it.

2) Integrating with current processes: Established processes are important to a smoothly run company and employees become familiar with their role in the workflow. Supplementing or replacing an existing process could be great innovation, but it breaks this continuity and requires assessment of the new system. If the new way of outsourcing drug discovery proves to be far more effective, managers need to revise the workflow and train their teams. Given the amount of change being introduced, pharmaceutical companies are extra careful about new processes and will take as long as it takes before the critical step of company adoption.

3) CRO Training: The market for CROs and outsourcing drug discovery is expected to grow annually, but some CROs are unconvinced about the new ways of finding leads. Traditional business development calls for trade shows, print publication, banner ads, and having a website. These are viable ways of getting your name out there, but the reality is that innovation in outsourcing will predominantly come from the customer, not the CRO. Pharma has incentive to pick the best CROs and CROs have incentive to be the company that is picked; who has the upper hand in this relationship? As more CROs adopt new types of pharmaceutical outsourcing platforms, they will be able to showcase their qualities and capabilities much more aptly.

We look forward to seeing the new innovations in outsourcing drug discovery from the industry. We’re excited to be working with Pfizer, AstraZeneca, and other organizations on developing enterprise Research Exchanges.

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Cost of Drug Discovery and Development

As previously discussed, drug development costs have been rising to almost prohibitive levels.  In 1975, the average approved drug cost $100 million dollars (inflation-adjusted) to develop and approve.  In 2005, that number had soared; it cost more than $1.3 billion to bring a drug to market¹.  Skyrocketing drug development costs cause pain across the board.  They hurt pharmaceutical companies, who have to re-think how they manage their drug pipelines, and which gambles they take bringing a drug to market.  It is also creating a public health crisis, as new drugs are not brought to market for the most common chronic diseases plaguing our society today.

Bringing new drugs to market has a clear public health benefit.  When new heart drugs arrived on the market between 1999 and 2005, there was a 45% drop in hospital deaths due to heart attack in coronary-artery disease patients.  When new anti-HIV drugs became available between 1995-1997, the annual death rate from HIV fell by 63%.  These correlations provide clear incentive for bringing more drugs to market.  The best way to do that is to reduce drug development costs.

Phase III clinical trials are the biggest obstacle to drug development, and are the reason behind skyrocketing drug development costs.  Even though relatively few drugs are brought to Phase III, the process consumes about 40% of pharmaceutical companies’ R&D expenditures¹.  When you consider that most of the drugs Pharma researches never see patients, the numbers get worse.  For an approved drug, 90% of the money invested in the drug was spent on Phase III clinical trials¹.

Phase III trials grow ever larger. There are more demands put on researchers, stricter limits on enrolling patients, and more manpower needed to complete the required tests.  The FDA can come back at any time with new demands for more trials.  The rules are a little more lax for orphan diseases and diseases with acute mortality rates, so it’s no surprise that pharmaceutical companies find those diseases more attractive.  More people would benefit from drugs that address our most pressing public health concerns, which we’ll explore in future posts.

References

1. Roy, ASA.  Stifling New Cures: The True Cost of Lengthy Clinical Drug Trials.  Manhattan Institute for Policy Research.  April 2012.

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Maintaining good vendor relations differs when nearsourcing vs global outsourcing.

Outsourcing a project is often seen as an all or nothing proposition: either an entire project is outsourced or everything is kept in house. The reality is that a mixed approach can be taken for outsourcing by complementing core competencies and sourcing of weaknesses¹. One benefit of nearsourcing is that your lead scientists can work with CROs much easier. Nearsourcing research allows for a greater level of connection and collaboration that may be missed from global outsourcing. It’s tough to augment your core competencies with outsourced solutions when they are located half a world away; this is the reason why you often see high quality CROs around pharmaceuticals hubs, whether it is New Jersey, Cambridge, or San Francisco. The reputation of these regions are living proof that nearsourcing is always an important option to consider.

Using Inc’s good vendor relationship management tips², how does a company’s relationship with vendors change when outsourcing overseas versus locally?

• Shift in Communication Channels: Globally outsourced projects rely on regular assessments of projects and measurable requirements to get an idea of progress. Local projects encourage more frequent updates and even in-person collaboration. Rather than getting updates over email, scientists can easily evaluate projects in real-time, make adjustments as needed, and even learn more about a new scientific area. 
• Customer Loyalty: Making the effort to work closely with the nearsourced partner benefits both parties. The vendor gains consistent business and you get your research services completed. If you’ve found a quality partner nearby, it’s worth discussing discounts for continued business to solidify a long-term relationship that helps both sides. Conversely, you may also find out firsthand that nearby CROs do not live up to expectations, allowing you to comfortably make the decision to try overseas outsourcing (help future customers by writing reviews).
• Increased Expectations: People expect more and are disappointed easier when they put a face to their work. Being able to actually visit the laboratory also means that an underwhelming laboratory environment could end up hurting the chance of a deal. Additionally, when nearsourcing it is expected that all services will be delivered on time; if a global company can ship deliverables on time, then it should be trivial for one 50 miles away.

Effectively managing vendor relation is critical to project success. Keeping a central location for information, such as Research Exchanges or Sharepoint, helps keep track of vendor communication.

References

1. http://logisticsviewpoints.com/2011/10/19/logistics-outsourcing-vs-in-sourcing-three-questions-to-consider/
2. http://www.inc.com/ss/tips-on-maintaining-good-vendor-relationships#4

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Outlining a process for research in the information age allows scientists to overleap the competition and accelerate their research projects as never before by tapping into all of the resources now available online. Using specific examples from scientists that have already embraced the power of public information, outsourcing, and crowdsourcing to make real discoveries and develop real products using virtual resources. These resources are available to all of us if you just know where to look.

The cycle below shows the new virtual drug discovery path of research from ideation to results. In this series, we will examine each of the elements in turn and show how science is open for business as never before.

Path of online drug discovery

Figure 1: Cycle showing the new path of virtual research from ideation to results.

Part I of IV: Using online data to generate new ideas. Read more ……

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