India Should Carefully Study Proposed Future Pharma Business & Technology Models

http://www.financialexpress.com/news/Virtual-man-to-aid-pharma-R&D-says-PwC-report/325624/1

'Virtual man’ to aid pharma R&D, says PwC report


Financial Express


June 21, 2008


By 2020, the pharma R&D process may be shortened by two-thirds, success rates may dramatically increase and clinical trial costs could be cut substantially. And how? New computer based technologies will create a greater understanding of the biology of disease and the evolution of ‘virtual man’ to enable researchers to predict the effects of new drug candidates before they enter human beings.


According to a research launched by PricewaterhouseCoopers, entitled `Pharma 2020: Virtual R&D, which path will you take?’
(http://www.pwc.com/extweb/pwcpublications.nsf/docid/B3988A72D5A236BA8025747300343B17/$file/pharma_2020_rd.pdf ), the industry is at a pivotal point in its evolution, particularly in relation to R&D. The patents on many of the medicines launched in the 1990s will expire over the next few years, leaving it very exposed and only four out of the top 10 companies have enough products in their pipelines to fill the impending revenue gap.


Reduced productivity of effective novel treatments in the lab means that additional improvements to R&D are no longer enough. The resulting commercial deficit in pharma has enormous ramifications for industry, society and governments as a whole. In order to remain at the forefront of medical research, help patients live longer healthier lives and deliver the revenue returns that shareholders have come to expect, pharma needs a faster, more predictive way of testing molecules before they go into humans.


Says Sujay Shetty, associate director in PricewaterhouseCoopers for the pharmaceutical practice in India:

“Investments made by the pharmaceutical industry into R&D should not be allowed to suffer, and this issue should be at the forefront of the socio-political agenda in India. As a society we have to be conscious that any financial constraints in pharma leading to reduction in R&D will also lead to reduction in new and improved medication.”


‘Virtual man’ could ultimately evolve from the deployment of existing technologies that are connected in a new way. Models of the heart, organ, cells systems and musculoskeletal architecture are already being developed by academics around the world. Such technologies can be used to simulate the physiological effects of interacting with specific drugs and identify which drugs have a bearing on the course of a disease. Some companies using virtual technology have reduced clinical trial times by 40% and reduced the number of patients required by two thirds.


Of course, virtually-modelled molecules will still have to be tested in real human beings.


However as a complete picture is developed of human biology and reliable biomarkers for identifying and monitoring patients become widely available, pharma companies will be able to optimise their trial designs and minimise the number of patients on whom new medicines are tested. They will develop treatments which have value in the eyes of patients, healthcare payers and for the companies themselves.


“New technologies will help pharma move forward, and will augment its capability of producing treatments which have measurable improvements in safety, efficacy and ease of compliance.


“Such treatments are valuable not only to healthcare spenders but also to companies creating them. They will result in considerable savings, and could also halve development time and attrition rates, thereby reducing the costs per drug radically”, says Sujay.


The necessary in-depth knowledge about the human body and the pathophysiology of disease will be generated through a collaborative research network of pharmaceutical companies, academia, independent research houses, IT providers, industry regulators, payers and providers.


For the first time, pharma will have to consider sharing intellectual property (IP) with other research bodies and potentially new entrants such as IT providers.


Pharma industry across the globe is witnessing two significant trends: Stagnating R&D pipelines and Generic erosion on big pharma’s revenues. MNC pharma companies will see their business eroded due to generic competition by as much as 13% to 40% in the coming five years. Most exposed are Pfizer, Lilly, BMS and Astra Zeneca. The other area where MNC pharma will have to reform is R&D. These are future models which apply to drug development in the western world and which India pharma who have aspirations to become drug discovery companies may do well to study, he added.

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http://www.reuters.com/article/pressRelease/idUS109708+20-Jun-2008+PNW20080620

Pharmaceutical Companies Will Use Virtual R&D to Increase Innovation and ReduceCommercial Deficit, According to New PricewaterhouseCoopers Report, Pharma 2020


NEW YORK, June 20, 2008 (PRIME NEWSWIRE) -- By 2020 the pharmaceutical researchand development (R&D) process may be shortened by two-thirds, success rates maydramatically increase and clinical trial costs could be cut substantially,according to a report issued today by PricewaterhouseCoopers entitled Pharma 2020: Virtual R&D, which path will you take?


The report forecasts that new computer-based technologies will create a greaterunderstanding of the biology of disease and the evolution of 'virtual man' toenable researchers to predict the effects of new drug candidates before they aretested in human beings. Along with changes underway in the regulatory and socio-political environment, this will enable the pharmaceutical industry toovercome one of the most fundamental issues it needs to resolve over the next decade: The lack of innovative new drugs being introduced into the market.


As outlined in PricewaterhouseCoopers' previous report Pharma 2020: The Vision, the pharmaceutical industry is at a pivotal point in its evolution, particularlyin relation to R&D. The patents on many medicines launched in the 1990s will expire over the next few years, leaving pharma very exposed. Only four out ofthe top 10 companies have enough products in their pipelines to fill the impending revenue gap.


"Plummeting productivity of effective novel treatments in the lab means incremental improvements to R&D are no longer enough," said Steve Arlington,PricewaterhouseCoopers' global pharmaceutical and life sciences industryadvisory leader. "The resulting commercial deficit in pharma has enormous implications for the industry, society and governments as a whole. To remain atthe forefront of medical research, help patients live longer, healthier livesand deliver the revenue returns shareholders have come to expect, pharma needs afaster, more predictive way of testing molecules before they go into humans."


"Equally, as a society we must acknowledge that we cannot afford to suffocate the investments made by the pharmaceutical industry in R&D; a concern that should be high on the socio-political agenda," added Arlington.


"We have to face the issue that if pharma is no longer financially capable of this, there is a question where the next new medicine will come from."


'Virtual man' could ultimately evolve from the deployment of existingtechnologies that are connected in a new way. Some companies using virtualtechnology have reduced clinical trial times by 40 percent and reduced thenumber of patients required by two-thirds. Models of the heart, organ, cellssystems and musculoskeletal architecture are already being developed byacademics around the world. Such technologies can be used to simulate thephysiological effects of interacting with specific drugs and identify whichdrugs have a bearing on the course of a disease.


Of course, virtually-modeled molecules will still have to be tested in realhuman beings. However, as a complete picture is developed of human biology andas reliable biomarkers for identifying and monitoring patients become widelyavailable, pharma companies will be able to optimize their trial designs andminimize the number of patients on whom new medicines are tested. They willdevelop treatments that have value in the eyes of patients, healthcare payersand for the companies themselves.


The necessary in-depth knowledge about the human body and the pathophysiology of disease will be generated through a collaborative research network ofpharmaceutical companies, academia, independent research houses, IT providers,industry regulators, payers and providers.


For the first time pharma will haveto consider sharing intellectual property (IP) with other research bodies andpotentially new entrants such as IT providers.


By 2020, decisions about reimbursement and licensing will fall under theauspices of regulatory bodies that are much more aligned with industry and otherstakeholders. By 2020, the cumbersome, all-or-nothing approach will be replaced by a cumulative process, based on the gradual accumulation of data.


Once there is sufficient evidence to show that a medicine genuinely works and is costeffective in the initial trial population, the regulator will be able to issue a"live license", allowing the sponsoring company to market the treatment on arestricted basis.


With each incremental increase in evidence of safety, efficacy and value, the regulator will extend the license to cover more patients, different indications or different formulations, the study predicts.


The pharmaceutical industry requires assistance in the form of better incentives to research and develop medicines that prevent or cure disease. Today the industry IP frameworks do not provide the incentives needed to alter the agenda from one of treatment to that of prevention and cure, note the authors.


"New technologies can play a major role in helping pharmaceutical companies moveforward -- enhancing its ability to produce treatments that deliver measurable improvements in safety, efficacy and ease of compliance - treatments that have value in the eyes of healthcare payers as well as those of the companies making them," said Anthony Farino, PricewaterhouseCoopers' U.S. pharmaceutical and lifesciences advisory leaders. "They will also deliver substantial savings -- they could collectively halve development times and attrition rates, thereby reducing costs per drug dramatically.


He added, "Technology is not the answer to all pharma's problems. Many companies as well as the infrastructure of regulators and vendors that support the industry will have to make significant strategic, organizational and behavioral changes.


Overhauling R&D requires a decision on whether the organization wants to produce mass-market medicines or specialty therapies[;]

where they want to be located geographically to have access to the best skills or cost base[;]


and whether they want to outsource most of their research and development or keep itin-house.


The choices they make will have a profound bearing on the business models and mix of skills they require as well as the skills of those who support them. Connectivity - technological, intellectual and social - will ultimately enable us to make sense of ourselves and the diseases from which we suffer."