Access and Benefi t Sharing - Key Points for Policy-Makers Sarah A. Laird - ABS Initiative
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Access and Benefit Sharing Key Points for Policy-Makers THE PHARMACEUTICAL INDUSTRY Sarah A. Laird November 2015
SUMMARY OF KEY POINTS MARKETS, COMPANIES AND PRODUCTS NATURAL PRODUCTS RESEARCH Revenues have increased steadily over the last 30 years, but in Although support for natural products research in large recent years growth has slowed in developed country markets companies has declined, the contribution of natural products to while in ‘pharmerging’ markets it has increased. the development of new drugs continues, and between 1981- The world’s largest pharmaceutical companies are located in 2013 an average of 31% of all new drugs annually were natural developed countries. Their earnings make them some of the products. wealthiest companies in the world. Natural products research has undergone dramatic changes The pharmaceutical industry has undergone significant in the last 50 years, with significant implications for the speed, consolidation over the last 30 years in order to increase growth scale and focus of R&D, and the design of effective ABS and acquire new technologies, expertise and novel drug measures. candidates. Traditional knowledge, once the primary lead for the discovery of Many of the industry’s top-selling drugs have gone off-patent, new medicines, is no longer a significant part of industry R&D. resulting in reduced revenues in recent years. Patent expiries on small molecule products will reduce brand spending in INDUSTRY AND ABS developed markets by $113 billion through 2017. The pharmaceutical industry is more aware of the Convention A top-selling pharmaceutical product can now generate more on Biological Diversity than many other sectors, although this is than $5 billion in sales a year. more the case with large companies than with small. However, Specific disease areas and products differ significantly between many concerns persist within industry about legal certainty and developed and pharmerging markets. the need for new measures drafted to implement the Nagoya Protocol to reflect the scientific, business and legal realities of natural products research today. TRENDS IN RESEARCH AND DEVELOPMENT Spending on R&D has increased over the last few decades but productivity has gone down. The number of new drugs coming on the market each year has held roughly steady or declined since 1981. Government contributions to pharmaceutical R&D remain high across the globe. In the US, for example, government funding contributed to 48% of all drugs approved by the FDA and 65% of drugs that received priority review between 1988-2005. Drug discovery, including that on natural products, is increasingly done in smaller start-up companies, academia and government laboratories, with large companies undertaking development and marketing. 2
MARKETS, COMPANIES AND PRODUCTS Global growth rates 1 200 7% 37% NORTH AMERICA 1 000 13% Revenues have LATIN AMERICA 800 7% increased steadily USD billion 600 2% over the last 30 years, 400 but in recent years $989 billion of 200 2% growth has slowed 29% global spending 0 in developed country ASIA / on medicines 2008 2012 2017 (F) CAGR* markets while in AUSTRALIA 2012-2017 ‘pharmerging’ markets Pharmerging markets Between 2012 and it has increased. Other emerging markets 2017, Pharmerging markets have growth rates far higher than 4% AFRICA / MIDDLE EAST Other developed markets in mature markets. 24% Top 8 mature markets EUROPE *CAGR (Compound Annual Growth Rate) EUROPE The world’s largest pharmaceutical companies are located in developed 2013 R&D countries. Their earnings make them some of the wealthiest companies RANK COMPANY COUNTRY 2013 SALES (USD million) SPENDING 2013 TOP-SELLING DRUGS (USD million) (USD million) in the world. Gleevec ($4,693) Diovan 1 $46,017 $9,360 ($3,524) Lucentis ($2,383) NORTH AMERICA 2013 R&D Rituxan ($7,503) Avastin 2013 SALES 2013 TOP-SELLING DRUGS 3 $39,143 $8,294 RANK COMPANY COUNTRY SPENDING ($6,751) Herceptin ($6,562) (USD million) (USD million) (USD million) Lantus ($7,592) Plavix 4 $37,701 $6,117 Lyrica (4,595) Prevnar ($2,460) Lovenox ($2,262) 2 $45,011 $6,254 ($3,974) Enbrel ($3,774) Top Companies Seretide / Advair ($8,251) Januvia ($4,004) Zetia 6 $33,055 $5,041 Pediarix ($1,349) 5 $37,519 $7,123 ($2,658) Remicade ($2,271) Avodart ($1,341) Remicade ($5,334) Zytiga Crestor ($5,622) Nexium 7 $26,475 $5,810 8 $24,523 $4,269 ($1,698) Prezista ($1,673) ($3,872) Symbicort ($3,483) Cymbalta ($5,084) Alimta 9 $20,119 $5,316 13 $15,594 $2,710 Kogenate ($1,597) ($2,703) Humalog ($2,611) Humira ($10,659) AndroGel 10 $18,790 $2,831 14 $14,886 $2,090 NovoRapid ($3,001) ($1,035) Kaletra ($962) 11 $18,192 $3,941 Enbrel ($4,551) 15 $14,468 $3,247 Spiriva ($4,719) 17 $12,306 $3,715 Reyataz ($1,551) ASIA / AUSTRALIA 2013 R&D 2013 SALES 2013 TOP-SELLING DRUGS RANK COMPANY COUNTRY SPENDING 18 $10,804 $2,056 Atripla ($3,648) (USD million) (USD million) (USD million) AFRICA / MIDDLE EAST 16 $13,591 $3,352 Biopress ($1,256) 2013 R&D 2013 SALES 2013 TOP-SELLING DRUGS RANK COMPANY COUNTRY SPENDING (USD million) (USD million) (USD million) 19 $10,431 $2,132 Prograf ($1,755) 12 $17,563 $1,422 Copaxone ($4,328) 20 $10,268 $1,926 Benicar ($2,116) 3
The pharmaceutical industry has undergone significant consolidation over Many of the industry’s top-selling drugs have gone the last 30 years in order to increase growth and acquire new technologies, off-patent, resulting in reduced revenues in recent expertise and novel drug candidates. years. Patent expiries on small molecule products will reduce brand spending in developed markets by $113 billion through 2017. 1980 No. Companies: (including Amgen and Johnson and Johnson) 33 Merck Hoffman Hoescht Roussel Squibb Sandoz Glaxo Pfizer Marion Merril Developed markets patent expiry 2008-2017 Schering-Plough Genentech Dow Bristol Myers Ciba-Geigy Wellcome Parke-Davis 60 Organon Rhone Poulenc DuPont Pharma Burroughs Warner Lambert $149 billion $123 billion Smith Kline & 40 Pre-expiry spending Sanofi Merck DuPont French Monsanto SPENDING US BILLION Synthelabo Beecham Searle 20 21.0 22.3 26.9 28.4 50.3 19.1 31.7 28.8 20.3 22.6 Upjohn 0 -18.5 -15.3 -21.5 -22.6 -43.6 -32.1 -17.2 -26.2 -22.5 -15.9 Pharmacia -20 Consolidation has been a continuing process A H Robbins -40 -$121 billion -$113 billion Lower brand spending Lederle (AHP) -60 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Wyeth Protection US Japan UK France Germany expiry year H-LaRoche Hoescht Squibb Sandoz SmithKline Pfizer Plavix Nu Lotan Lipitor Tahor Seroquel Syntex Beecham 2012 Seroquel Myslee Amias Singulair Atacand Sanofi/ Singulair Preminent Seroquel Pariet Atacand Plus Genentech Synthelabo Bristol Meyers Ciba-Geigy Warner Lambert Actos Haigou Aricept® Ixprim Sortis Lexapro Seroquel Singulair Aprovel Aricept RhonePoulenc & Monsanto Searle Diovan Fisons Diovan HCT® Marion Merril Pharmacia Geodon Dow Upjohn Viagra Boniva Lederle (AHP) Oxycontin® Diovan Viagra Seretide Viani 2013 Aciphex Plavix Xeloda Coaprovel Zometa Wyeth Zameta Livalo Xeloda Atmadisk Xeloda Elplat Micardis Coaprovel Opana ER Viagra Viagra Asacol Hoescht Roussel Bristol-Meyers SmithKline Pfizer Nexium® Axura Squibb Beecham Prograf Abilify Seroplex 2014 Cymbalta Glivec Cipralex Abilify Risperdal Consta Sanofi/ Burroughs- Pharmacia Cerebrex Abilify Risperdal Consta Ebixa Biopress Plus Synthelabo Wellcome Symbicort Risperdal Lunesta Consta LP RhonePoulenc & Glaxo Lederle(AHP) Fisons Restasis Evista Sandostatin LAR Wyeth Actonel Abilify Zyprexa Spiriva Alimta Spiriva 2015 Copaxone Adoair Cymbalta Spiriva Copaxone Merck Hoffman Aventis GlaxoSmith Kline Wyeth Gleevec Alimta Alimta Copaxone Alimta LaRoche Namenda Spiriva Protelos Cymbalta Sanofi/ Provigil Symbicort Cymbalta Schering-Plough Synthelabo Pfizer Combivent Zyvox Prezista Avodart Merck Roche Sanofi-Aventis Bristol-Meyers Novartis Glaxo Pfizer Squibb SmithKline Crestor Blopress Glivec Glivec Glivec 2016 9 Benicar Baraclude Vfend Cancidas Zyvoxid 2010 Benicar HCT Vfend Vfend Cubicin 4
A top-selling pharmaceutical product can now generate Specific disease areas and products differ more than $5 billion in sales significantly between developed and a year. pharmerging markets. Top ten global products 2013 Spending by therapy area (projected for 2017) 2013 sales (USD million) DEVELOPED MARKETS Projected sales in 2017 PHARMERGING MARKETS Projected sales in 2017 (USD billion) (USD billion) 1 $9,851 Oncology $74-84 billion Pain $22-25 billion Diabetes $34-39 billion Other CNS Drugs $20-23 billion 2 $9,213 Anti-TNFs $32-37 billion Antibiotics $18-21 billion Pain $31-36 billion Oncology $17-20 billion Asthma/COPD $31-36 billion Hypertension $14-17 billion 3 $8,149 Other CNS Drugs $26-31 billion Diabetes $10-12 billion Hypertension $23-26 billion Dermatology $10-12 billion 4 $7,949 Immunostimulants $22-25 billion Antiulcerants $9-11 billion HIV Antivirals $22-25 billion Cholesterol $6-8 billion 5 $7,935 Dermatology $22-25 billion Asthma/COPD $3-5 billion Antibiotics $18-21 billion Anti-Epileptics $3-5 billion 6 $7,863 Cholesterol $16-19 billion Antivirals excluding HIV $3-5 billion Anti-Epileptics $15-18 billion Immunosuppressents $3-5 billion Immunosuppressents $15-18 billion Allergy $3-5 billion 7 $7,832 Antipsychotics $13-16 billion Antidepressants $3-5 billion Antiulcerants $12-14 billion Antiplatelet $3-5 billion 8 $7,678 Antidepressants $10-12 billion Antipsychotics $2-3 billion Antivirals excluding HIV $8-10 billion Heparins $1-2 billion 9 $6,464 ADHD $7-9 billion Erectile Dysfunction $1-2 billion Interferons $6-8 billion Immunostimulants $1-2 billion 10 $6,263 BRAND 67% GENERIC 21% OTHER 12% BRAND 26% GENERIC 63% OTHER 11% 5
TRENDS IN RESEARCH AND DEVELOPMENT Revenues Spending on R&D has increased over the last few decades but productivity has gone down. The number of new drugs coming on the market each year has held roughly steady or declined since 1981. 2013 R&D expenditures, industry revenues 2010 and new chemical entities R&D Expenditures 2000 1990 1980 R&D Productivity 1985 1995 2005 39 45 39 38 37 33 20 31 New Chemical NCEs NCEs NCEs NCEs NCEs NCEs NCEs NCEs Entities (NCEs) 10 21 11 11 13 13 10 5 Natural Natural Natural Natural Natural Natural Natural Natural Products Products Products Products Products Products Products Products $119.3 $81.7 Public and industry biomedical Government contributions to R&D expenditures, 2012 $37.1 pharmaceutical R&D remain high across the globe. In the (USD billion) $8.3 $48.9 US, for example, government funding contributed to 48% $5.3 $6.1 $28.1 of all drugs approved by the $9.5 FDA and 65% of drugs that $2.0 $70.4 received priority review $53.6 $27.6 between 1988-2005. $3.3 $4.7 $6.3 $2.0 $1.4 Public USA Industry CANADA AUSTRALIA CHINA JAPAN EUROPE 6
Drug discovery, including that on natural products, is increasingly done in smaller start-up companies, academia and government laboratories, with large companies undertaking development and marketing. The ecosystem of life sciences R&D Start-Ups Venture Capital Genetic resources Nonprofits sourced from: Academic Research • existing collections and libraries Institutions Government • electronic data/internet Regulators • limited field collections Large (mainly domestic) Biopharma Clinical Trial Government Research Sites Research Companies Institutes Clinical Research Drugs Organisations Pharmacists, Providers and Health Systems “ “ We can work here, and collect microorganisms from marine water and soil in our Collaborations provide a biotechnology company with money and local environment. In any microenvironment the vast majority of bacteria are for resources while providing the pharmaceutical company access to cutting- the most part unknown. This wouldn’t apply to extreme environments that tend to edge technologies. In addition, by collaborating with multiple partners, select for very specific types of bacteria. When I worked at Lederle, anyone who pharmaceutical companies today decentralise parts of their R&D activities. went on a trip was given a plastic bag to collect soil samples. But now we know we This decentralisation provides a mechanism by which companies can (1) can find spectacular microbial diversity here. This wouldn’t be true for plants, but it evaluate multiple new platform or product opportunities without increasing is definitely true for microorganisms. It would take us lifetimes to sort through what the size and cost of their own operations and (2) effectively increase the we can get our hands on from this region, so there is no need to collect overseas. bandwidth of their operations. – Chief Scientific Officer, – Phil Kearney, Director of Licensing and External Research, small biotech company in the US Merck Sharp and Dohme 7
NATURAL PRODUCTS RESEARCH 70 The contribution of natural products to total drugs 60 Although support for natural Drugs approved world-wide 50 products research in large Natural products companies has declined, the 40 contribution of natural products to the development of new drugs continues, and between 30 1981-2013 an average of 31% of all new drugs annually were 20 natural products. 10 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 58 Number of approved drugs 44 world-wide (1981-2013) KEY S Totally synthetic drug, often found by random screening/modification of an existing agent 30 S/NM Totally synthetic drug/Natural Product mimic 27 S* Made by total synthesis, but the pharmacophore is/was from a Natural Product 19 21 S*/NM Made by total synthesis, but the pharmacophore is/was 17 from a Natural Product/Natural Product mimic V Vaccine B Biological; usually a large (>45 residues) peptide or protein either isolated from an organism/cell line or 5 produced by biotechnological means in a surrogate host 1 N Natural Product NB Natural Product ‘Botanical’ (in general these have been recently approved) ND Derived from a Natural Product and is usually a S S/NM S* S*/NM V B N NB ND semisynthetic modification 20% 9% 9% 8% 2% 12% 14% 0% 26% Source: Newman and Cragg, 2012 NATURAL PRODUCTS 8
TRENDS IN NATURAL PRODUCT RESEARCH AND DRUG DISCOVERY Natural products research has undergone dramatic changes in the last 50 years, with significant 1965 1990 2015 implications for the speed, scale and focus of R&D, and the design of effective ABS measures. TECHNOLOGIES • Automated Natural products biochemical screening Genomics-driven chemistry • Modern analytical drug-discovery chemistry MATERIALS STUDIED “ The approach we are using more and more, and now predominantly, is to leverage the biosynthetic pathways in microorganisms to address chemical problems in terms of drug discovery, and to find new compounds, or even old compounds, and then to use genetic engineering to change those compounds to make them better drug NUMBERS OF COMPOUNDS ISOLATED AND STUDIED FROM A SAMPLE candidates. This is really the trend in natural product science… The days of going out and collecting things – whether sponges, plants, or =1–2 = 10 – 15 = 50 – 100 soil samples for microorganisms – and searching for new chemicals for drug leads on a mass scale by turning the crank a lot, those days are behind us. There is still value there, but we need to be smarter about how we do this. Over the SIZE OF SAMPLES last 10-15 years the scientific community has come to realise that the real value in organisms Milligrams is the genes that enable organisms to make the Kilograms Grams or less compounds that they do. Bioprospecting in the 1990s emphasised the organism, but it really isn’t the organism anymore, it is the genes, and we need to incorporate this into our models for benefit-sharing. TIME TO TEST A SAMPLE – Head of Natural Products Unit, large pharmaceutical company Months/years Days Hours 9
Traditional knowledge, once the primary lead for the discovery of new medicines, is no longer a significant part of industry R&D. Use of traditional knowledge in drug development Ethnobotanical collections 1900 Sources of traditional Internet / databases knowledge HIGH TECH Literature 1960 ry cove dis TK- DERIVED DRUGS rug • Aspirin 1990 e nd • Morphine s- driv • Quinine nomic • Digitoxin Ge • Pilocarpine TK- DERIVED DRUGS • Vincristine 2000 • Vinblastine • Galantamine ng reeni a l sc hemic ioc TK- DERIVED DRUGS tedb ma • Artemisin 2015 to Au • Crofelemer (approved in 2012) LOW TECH 10
INDUSTRY AND ABS The pharmaceutical industry is more aware of SOURCES the Convention on Biological Diversity than many other sectors, although this is more the case with IMS Health, 2013. Pharmerging Markets: Picking a Pathway to Success; larger companies than with smaller. However, many IMS, 2014. Global Outlook for Medicines through 2018; Pharmaceutical Executive, 2014. Pharma 50 Insight: The Accelerating Growth of concerns persist within industry about legal certainty Specialty Markets; Van Arnum, P. 2014. IMS Offers a Subdued Outlook and the need for new measures drafted to implement Page 3 for Global Pharmaceutical Industry at DCAT Week ’14. DCAT Connect, the Nagoya Protocol to reflect the scientific, business March 25; Datamonitor, 2009. Big Pharma Mega-Mergers 1995-2014; and legal realities of natural products research today. Baum, R. 2011. Changing Pharmaceutical Paradigms. Chemical and Engineering News, October 4; Kearney, P. 2011. What is the Future for the Big Pharma Model? AFG Venture Group Dispatches. Newman, D.J. 2015. pers. com.; IMS Health, 2013. Thought Leadership, September; IMS Health, 2014. Top 20 Global Products 2013; IMS Health, 2014. Global Outlook for Medicines through 2018; “ The CBD has had a cooling effect on natural products Kearney, P. 2011. What is the Future for the Big Pharma Model? AFG Page 4 Venture Group Dispatches; Noor, W. 2014. The Long Tail. PharmExec. research, but it will not stop a company from going forward. com; Pharma Voice, 2014. Specialty Drugs: An Evolving Commercial There are ways to work with the treaty, the best being Model; Van Arnum, P. 2014. IMS Offers a Subdued Outlook for Global working directly with academic and other partners… Our Pharmaceutical Industry at DCAT Week ’14. DCAT Connect, March 25. collaborators do the work to get the agreements in place and so it isn’t too cumbersome and we came up with a good IMS Institute for Healthcare Informatics, 2013; www.drug.com, 2014; agreement. The real test of the agreement didn’t happen IMS Health, 2014; Staton, T. 2014. The Top 10 Patent Losses of 2015, because we didn’t get a drug out of it…But we could FiercePharma, www.fiercepharma.com, December 17; Krishnan, A. operate, the research could continue. Page 5 2011, Drug Patents Expiration in 2011 and 2012 – A Bumpy Ride Ahead for Big Pharma as Big Drugs Lose Patent Protection. IHS Healthcare, – Head of Natural Products, pharma blog; Alazraki, M. 2011. The 10 Biggest-Selling Drugs that Are large pharmaceutical company About to Lose Their Patent, February, www.dailyfinance.com. PhRMA, 2015, www.phrma.org; Chakma, J., Sun, G.H., Steinberg, “ I’ve always maintained that natural product drug discovery J.D., Sammut, S.M. and Jagsi, R. 2014. Asia’s Ascent – Global Trends and development is an international collaborative effort – no in Biomedical R&D Expenditures. The New England Journal of Medicine one country is dominant. That is why I think if source countries 370(1):3–6; EFPIA, 2014. www.efpia.eu; Shah, A. 2014. Pfizer and Page 6 AstraZeneca: Innovation Will Not Follow Acquisition. Seeking Alpha, May; can develop viable and not too restrictive policies this can be Newman, D.J. and Cragg, G.M. 2012. Natural Products as Sources of a win-win situation for everyone. If policies are too restrictive, New Drugs over the 30 Years from 1981 to 2010. Journal of Natural particularly with microbes as a source of new chemistry and Products. www.pubs.acs.org/jnp. potential new drugs, companies will just study the microbial resources they have in their libraries or their own backyards. The microbial area makes protecting countries’ rights very PhRMA, 2015. www.phrma.org; Kearney, P. 2011. What is the Future for tricky, since companies can find compounds discovered in Page 7 the Big Pharma Model? AFG Venture Group Dispatches; Noor, W. 2014. microorganisms from one country in another – much more Pharm Exec’s Pharma 50 in 2014. PharmExec.com, June 9. so than for plants. This is why NCI’s policy has always been that the place where the original collection and discovery was made is the one that should benefit, and this is even more Newman, D.J. and Cragg, G.M. 2012. Natural Products as Sources of New important today. Page 8 Drugs over the 30 Years from 1981 to 2010. Journal of Natural Products. – Gordon Cragg, retired from Natural Products Branch, www.pubs.acs.org/jnp; Newman, D.J. and Cragg, G.M. in press. US National Cancer Institute 11
www.abs-initiative.info www.bio-economy.org.za www.peopleandplants.org The Access and Benefit-Sharing Key Points for Policy-Makers series has been produced Acknowledgements: Sincere thanks are due to the many to provide governments, companies, researchers, communities and others with background individuals who contributed comments and insights to the information to assist with the development of access and benefit-sharing measures to pharmaceutical industry brief. In particular, we would like implement the Nagoya Protocol. The briefs are organised around central, key points on trends to thank Bruno David, Gordon Cragg, Frank Koehn, David and practices in markets, research and development, and ABS. More detailed information on Newman and Sheo Singh. Thanks are also due to Paula these sectors can be found at: www.bio-economy.org.za; www.abs-initiative.info; Wood for her design and Jaci van Niekerk for her support www.peopleandplants.org; CBD Bioscience at a Crossroads policy briefs: and assistance in this process. https://www.cbd.int/abs/policy-brief/default.shtml/; and in the upcoming book: For further information please contact: http://www.routledge.com/books/details/9781138779099/ abs-initiative@giz.de
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