The next 5 years: High­er R&D pro­duc­tiv­i­ty is here to stay, emerg­ing biotechs and new tech will have a big im­pact. But what about pric­ing?

Hind­sight is 20/20 vi­sion. But the drug mar­ket an­a­lysts at IQVIA be­lieve they can al­so paint a clear pic­ture of what lies ahead for all of bio­phar­ma in the next 5 years.

And it looks quite com­pelling — es­pe­cial­ly for the up-and-com­ing small­er com­pa­nies with a hard fo­cus on drug de­vel­op­ment and a taste for jump­ing in­to mar­ket­ing. Glob­al­ly, the in­dus­try can ex­pect to see over­all drug spend­ing rise from $1.2 tril­lion in 2018 to $1.5 tril­lion in 2023 — with the pres­sure on US pric­ing ris­ing.


IQVIA of­fered us a chance to get a pre­view of their new re­port, out on Tues­day. And with plen­ty of bold pre­dic­tions on of­fer for all as­pects of the in­dus­try, we’re go­ing to fo­cus on drug R&D trends, with a shot at clar­i­fy­ing the un­cer­tain pic­ture around drug pric­ing.

There’s a rel­a­tive­ly high and steady rate of new drug launch­es ex­pect­ed be­tween now and the end of 2023, says IQVIA in their new re­port on this top­sy turvy in­dus­try. Over the last 5 years, the in­dus­try av­er­aged 46 new drug launch­es per year. Over the next 5 years, that av­er­age will rise to 54. Spe­cial­ty drugs will ac­count for two thirds of those launch­es, com­pared to 61% in the last 5 years.


But R&D won’t be dom­i­nat­ed en­tire­ly by Big Phar­ma.

In­stead, the new re­port says up-and-com­ing small­er biotechs — de­fined as those with less than $500 mil­lion in rev­enue or R&D bud­gets un­der $200 mil­lion a year — have seen their per­cent­age of R&D ac­tiv­i­ty jump from 60% to 72% over the past 10 years. That’s led to 68 new drugs over the last 5 years, up from 47 from this group over the 5 years be­fore that.


The next 5 years? Look for these small­er com­pa­nies to pro­duce more than a third of the new drugs ap­proved, with a much greater like­li­hood that they’ll un­der­take the mar­ket­ing with­out a phar­ma part­ner.

As for phar­ma, the big com­pa­nies will pre­fer to do more part­ner­ing rather than shoul­der all of the com­mer­cial risk them­selves. In the near fu­ture, the em­pha­sis at the gi­ants will be on clar­i­ty and sol­id, re­li­able num­bers, and that means less like­li­hood of mak­ing ex­trav­a­gant bets on new drugs.

In this brave new world pic­tured by IQVIA, you can ex­pect play­ers to main­tain mar­gins in an un­cer­tain world or slash R&D spend­ing to com­pen­sate. Any­one who can’t ad­just will be sub­ject to a buy­out.

Here are some more snip­pets of what they’ve seen in the IQVIA crys­tal ball:

— Re­al world ev­i­dence gains trac­tion and devo­tees

The use of re­al world ev­i­dence is here to stay, with grow­ing so­phis­ti­ca­tion in gath­er RWE and us­ing it with reg­u­la­tors at the FDA — which have sig­naled their readi­ness for what lies ahead. Ran­dom­ized tri­als will re­main the gold stan­dard in R&D, but where they’re not vi­able, RWE can fill the gap. And where new tech­nol­o­gy can gen­er­ate da­ta at low­er costs, through site-less stud­ies for ex­am­ple, look for de­vel­op­ers to change as rapid­ly as pos­si­ble.

— AI is hap­pen­ing, and it’s get­ting big­ger

Ma­chine learn­ing and ar­ti­fi­cial in­tel­li­gence are gain­ing ground, and their use will grow sig­nif­i­cant­ly over the com­ing 5 years. AI and ML will have an im­pact on clin­i­cal as well as com­mer­cial set­tings, dri­ving drug man­age­ment and iden­ti­fy­ing pa­tients. And as da­ta sets con­tin­ue to grow in size, the in­for­ma­tion and analy­sis that they will pro­vide will grow in val­ue, fur­ther dri­ving adop­tion.

— Pre­scrip­tion dig­i­tal ther­a­peu­tics have a role to fill

The first pre­scrip­tion dig­i­tal ther­a­peu­tic was ap­proved last year. But look for lots more in the com­ing wave. What’s up first: “AD­HD, ma­jor de­pres­sive dis­or­der, and schiz­o­phre­nia apps are among late-stage pipelines and may be ear­ly en­trants.”

— That next-gen R&D rev­o­lu­tion? It could take awhile

You’ve like­ly read plen­ty about the next-gen cell and gene ther­a­pies that have been hit­ting the mar­ket. CRISPR-Cas9, stem cells and more gene mod­i­fi­ca­tion ap­proach­es are in the works. But the re­al­i­ty is that the first drugs of this new group — think CAR-T here — are ex­tra­or­di­nar­i­ly ex­pen­sive to make, dif­fi­cult to man­u­fac­ture and aren’t that wide­ly used. As a re­sult, IQVIA ex­pects on­ly 5 to 8 true, new next-gen ther­a­pies to make their way to an ap­proval in the next 5 years — few­er than we’ve seen in ear­li­er pre­dic­tions. The an­a­lysts ex­pect “on­ly a few com­pa­nies will end up dom­i­nat­ing here,” for all the above rea­sons.

— So what about pric­ing and mar­ket de­vel­op­ment?

Pub­lic per­cep­tion of the in­dus­try and drug pric­ing has been shaped by high­ly pub­li­cized in­ci­dents of price goug­ing — what I choose to call the Shkre­li Ef­fect. With drug pric­ing a hot po­lit­i­cal is­sue, there will be lots of ef­forts built around cap­ping prices. But the re­al­i­ty of the po­lit­i­cal sit­u­a­tion in DC will like­ly leave re­al change in the hands of the ex­ec­u­tive branch, says IQVIA, which can in­flu­ence pric­ing through new rules and reg­u­la­tions.

The shift in R&D in­no­va­tion over the last few years has tilt­ed the mar­ket to spe­cial­ty, or­phan and on­col­o­gy drugs, with new ther­a­pies of­ten win­ning 6-fig­ure list prices. That trend will con­tin­ue, says IQVIA, push­ing list prices on new drugs past the $200,000 mar­ket. But look for lots of pres­sure to rein in fu­ture price in­creas­es, with few­er re­al break­throughs like check­point in­hibitors, more back­lash from in­de­pen­dent pric­ing re­view or­ga­ni­za­tions like ICER and more com­pe­ti­tion in new class­es of drugs.

All of this will play out as some of the world’s biggest drug fran­chis­es are hit with biosim­i­lar ri­vals, capped by Hu­mi­ra, which los­es patent pro­tec­tion (most like­ly) in 2023, at the end of the 5-year win­dow. Biosim­i­lar de­vel­op­ment, which has lagged in the US, will ex­pand sig­nif­i­cant­ly over the next 5 years, with more com­peti­tors bring­ing more com­pet­i­tive pric­ing.


Fast growth through greater in­sur­ance ac­cess, mean­while, has made Chi­na the world’s sec­ond largest phar­ma mar­ket. Growth will con­tin­ue, but at a slow­er pace, de­clin­ing to 3-6% through 2023. That com­pares to an av­er­age of 11% per year for orig­i­nal brands over the past 5 years. Chi­na will re­main big, but the ex­plo­sive ex­pan­sion ap­pears to be be­hind us.

 

BiTE® Plat­form and the Evo­lu­tion To­ward Off-The-Shelf Im­muno-On­col­o­gy Ap­proach­es

Despite rapid advances in the field of immuno-oncology that have transformed the cancer treatment landscape, many cancer patients are still left behind.1,2 Not every person has access to innovative therapies designed specifically to treat his or her disease. Many currently available immuno-oncology-based approaches and chemotherapies have brought long-term benefits to some patients — but many patients still need other therapeutic options.3

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

President Donald Trump (left) and Moncef Slaoui, head of Operation Warp Speed (Alex Brandon, AP Images)

UP­DAT­ED: White House names fi­nal­ists for Op­er­a­tion Warp Speed — with 5 ex­pect­ed names and one no­table omis­sion

A month after word first broke of the Trump Administration’s plan to rapidly accelerate the development and production of a Covid-19 vaccine, the White House has selected the five vaccine candidates they consider most likely to succeed, The New York Times reported.

Most of the names in the plan, known as Operation Warp Speed, will come as little surprise to those who have watched the last four months of vaccine developments: Moderna, which was the first vaccine to reach humans and is now the furthest along of any US effort; J&J, which has not gone into trials but received around $500 million in funding from BARDA earlier this year; the joint AstraZeneca-Oxford venture which was granted $1.2 billion from BARDA two weeks ago; Pfizer, which has been working with the mRNA biotech BioNTech; and Merck, which just entered the race and expects to put their two vaccine candidates into humans later this year.

Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.

UP­DAT­ED: Es­ti­mat­ing a US price tag of $5K per course, remde­sivir is set to make bil­lions for Gilead, says key an­a­lyst

Data on remdesivir — the first drug shown to benefit Covid-19 patients in a randomized, controlled trial setting — may be murky, but its maker Gilead could reap billions from the sales of the failed Ebola therapy, according to an estimate by a prominent Wall Street analyst. However, the forecast, which is based on a $5,000-per-course US price tag, triggered the ire of one top drug price expert.

FDA de­lays de­ci­sion on No­var­tis’ po­ten­tial block­buster MS drug, wip­ing away pri­or­i­ty re­view

So much for a speedy review.

In February, Novartis announced that an application for their much-touted multiple sclerosis drug ofatumumab had been accepted and, with the drug company cashing in on one of their priority review vouchers, the agency was due for a decision by June.

But with June less than 48 hours old, Novartis announced the agency has extended their review, pushing back the timeline for approval or rejection to September. The Swiss pharma filed the application in December, meaning their new schedule will be nearly in line with the standard 10-month window period had they not used the priority voucher.

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Gilead bol­sters its case for block­buster hope­ful fil­go­tinib as FDA pon­ders its de­ci­sion

Before remdesivir soaked up the spotlight amid the coronavirus crisis, Gilead’s filgotinib was the star experimental drug tapped to rake in billions competing with other JAK inhibitors made by rivals including AbbVie and Eli Lilly.

Now, long term data on the drug — discovered by Gilead’s partners at Galapagos and posted as part of a virtual medical conference — have solidified the durability and safety of filgotinib in patients with rheumatoid arthritis, spanning data from three late-stage trials. An FDA decision on the drug is expected this year.

Covid-19 roundup: Mod­er­na read­ies to en­ter PhI­II in Ju­ly, As­traZeneca not far be­hind; EU ready to ne­go­ti­ate vac­cine ac­cess with $2.7B fund

Moderna may soon add another first to the Covid-19 vaccine race.

In March, the mRNA biotech was the first company to put a Covid-19 vaccine into humans. Next month, they may become the first company to put their vaccine into the large, late-stage trials that are needed to prove whether the vaccine is effective.

In an interview with JAMA editor Howard Bauchner, NIAID chief Anthony Fauci said that a 30,000-person, Phase III trial for Moderna’s vaccine could start in July. The news comes a week after Moderna began a Phase II study that will enroll several hundred people.

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