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Where is the greatest investment needed in pharma?

26 July 2016

As businesses first and foremost, pharma companies need to carefully consider where to invest their funds but, when you’re in the healthcare market, decisions like these can have a big impact. Reinvestment of profits is necessary if the cures of tomorrow are to be discovered and the lives of patients are to be improved, but where should this investment be and are some areas more deserving than others?

New treatment options
With costs for developing a new medicine estimated at $2.6 billion US1, it is understandable that pharma carefully considers the focus of their drug development and research. Medicines that are prescribed as a one off course of treatment are generally less financially rewarding than longer term treatments for chronic conditions.

Gilead’s new treatment for Hepatitis C, Sovaldi, is a notable exception. Cure from hepatitis C saves healthcare systems the ongoing costs associated with the virus, and with over 90% efficacy in most patient types from just one pill a day, Sovaldi is a convenient and effective option.2 Despite its $1,000 a pill price tag it has become a huge blockbuster for the company,3,4 proving that shorter treatment duration doesn’t necessarily mean low profits if you have something new to offer the market. But how do you drive investment in areas where the disease is not so common?

Rare diseases
Rare diseases, defined in the EU as affecting less than 5 in 10,000 people,5 provide little incentive for pharma investment. So what can be done to ensure rare disease patients aren’t left without treatment options?

Incentives by the EU Regulation on Orphan Medicines give pharma companies ten years’ exclusivity for new medicines to treat rare diseases.6 The US offers a similar scheme and a possible five years extended exclusivity through the Generating Antibiotic Incentives Now (GAIN) act, which also covers treatment development for rare diseases. These initiatives seem to be working and a 2013 report details more than 450 new rare disease medicines being developed in America alone.7 However, to enable the people they were created for to benefit, they need to be sold at prices health services can afford.

Antibiotic development
Much like rare diseases, the field of antibiotic development is slow in providing new treatment options. Financial returns for antibiotics are low relative to other classes of drugs, making big pharma reluctant to commit; but the need to has never been greater.

Antibiotic resistance is a growing phenomenon that has big implications for our ability to control infection. By 2050 it’s predicted that if the rise in antibiotic resistance continues, it will be the cause of an estimated 10 million annual deaths worldwide.8

New antibiotic compounds are being readily identified through smaller initiatives but, for most, investment from big pharma is needed to develop them and drive them to market. But with resistance to new antibiotics being reported as early as a few months after launch, this investment in new treatment options needs to be an ongoing process.

Patient centricity
Over the last decade, patient centricity has risen sharply in the list of priorities for pharma and it is having a big effect for both patients and doctors, with a plethora of beyond the pill initiatives now available. These don’t necessarily come cheaply, but they can make a very real difference to outcomes.

So where should pharma be investing?
To be completely patient centric, should pharma be investing in treatment areas where there is currently little funding? Or, should funds be focused on more common diseases where they can benefit many more people? Deciding if one area is more deserving of finance than another is not a decision I’m qualified to make. That’s why I’m grateful there are experts who identify priority areas and promote incentives to try and ensure everyone gets a fair deal, no matter how low the projected returns or rare the condition. But what do you think? Where would you invest pharma funds and why?


References

1. Avorn A. N Engl J Med 2015; 372: 1877–1879.

2. Sovaldi Summary of Product Characteristics.

3. [Link]

4. [Link]

5. [Link]

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7. [Link]

8. [Link]