Industry Leaders Call for New Paradigm in Drug Development

A new collaborative business model that better integrates the respective interestsof drug manufacturers, patients, government, and insurance payers is needed toreduce costs in drug development. That was a major theme urged by an industrypanel composed of Peter Loescher, CEO of GE Healthcare BioSciences (Little Chalfont,UK, www.gehealthcare.com), Patrick Y. Yang, executive vice-president, productoperations of Genentech Inc. (South San Francisco, CA, www.gene.com), and RichardSiegel, vice-president of pharmaceutical operations, Centocor Inc. (Horsham PA,www.centocor.com), all of whom spoke at Interphex in New York City this week.

“We need to develop a more cooperative approach between drug manufacturers, patients,government, and insurance payers, so there is a common understanding of the costsof drug development and manufacturing,” said Yang. “The current modelis not sustainable.”

“The payee has to be involved earlier in the process,” said Loescher, pointing to a need to optimize the risks and benefits in drug development. This is particularly important given that “it is getting tougher to innovate,” he said, offering as an example the pharmaceutical industry’s efforts to meet demand for certain key therapeutic areas such as treatments for Alzheimer’s disease, Parkinson’s disease, and cancer. Loescher stressed the value in using technology to accelerate early-stage attrition to reduce drug development costs and improve overall health economics.

The panel also pointed to the relative higher success rates in developing biologic-based drugs. “We see a higher success rate in large molecules rather than small molecules,” said Siegel.

Differences between large and small molecules are not just apparent in innovation, but also in manufacturing. “On the biologics side, we see plants running at or over capacity,” said Yang. “In contrast, on the small molecule side, overcapacity is an issue. It is easier to outsource.”

The large capital investment needed for biologics manufacture, for example, further underscores the need to optimize the drug innovation process as well as manufacturing economics. “The cost can be significant,” said Yang. “So here again, the manufacturing costs need to be taken into consideration when pricing drugs, which is important for constituent groups to recognize.”