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.

 

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

Fresh off Fer­Gene's melt­down, David Meek takes over at Mi­rati with lead KRAS drug rac­ing to an ap­proval

In the insular world of biotech, a spectacular failure can sometimes stay on any executive’s record for a long time. But for David Meek, the man at the helm of FerGene’s recent implosion, two questionable exits made way for what could be an excellent rebound.

Meek, most recently FerGene’s CEO and a past head at Ipsen, has become CEO at Mirati Therapeutics, taking the reins from founding CEO Charles Baum, who will step over into the role of president and head of R&D, according to a release.

Jacob Van Naarden (Eli Lilly)

Ex­clu­sives: Eli Lil­ly out to crash the megablock­buster PD-(L)1 par­ty with 'dis­rup­tive' pric­ing; re­veals can­cer biotech buy­out

It’s taken 7 years, but Eli Lilly is promising to finally start hammering the small and affluent PD-(L)1 club with a “disruptive” pricing strategy for their checkpoint therapy allied with China’s Innovent.

Lilly in-licensed global rights to sintilimab a year ago, building on the China alliance they have with Innovent. That cost the pharma giant $200 million in cash upfront, which they plan to capitalize on now with a long-awaited plan to bust up the high-price market in lung cancer and other cancers that have created a market worth tens of billions of dollars.

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Div­ing deep­er in­to in­her­it­ed reti­nal dis­or­ders, No­var­tis gob­bles up an­oth­er bite-sized op­to­ge­net­ics biotech

Right about a year ago, a Novartis team led by Jay Bradner and Cynthia Grosskreutz at NIBR swooped in to scoop up a Cambridge, MA-based opthalmology gene therapy company called Vedere. Their focus was on a rather narrow market niche: inherited retinal dystrophies that include a wide range of genetic retinal disorders marked by the loss of photoreceptor cells and progressive vision loss.

But that was just the first deal that whet their appetite.

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Volker Wagner (L) and Jeff Legos

As Bay­er, No­var­tis stack up their ra­dio­phar­ma­ceu­ti­cal da­ta at #ES­MO21, a key de­bate takes shape

Ten years ago, a small Norwegian biotech by the name of Algeta showed up at ESMO — then the European Multidisciplinary Cancer Conference 2011 — and declared that its Bayer-partnered targeted radionuclide therapy, radium-223 chloride, boosted the overall survival of castration-resistant prostate cancer patients with symptomatic bone metastases.

In a Phase III study dubbed ALSYMPCA, patients who were treated with radium-223 chloride lived a median of 14 months compared to 11.2 months. The FDA would stamp an approval on it based on those data two years later, after Bayer snapped up Algeta and christened the drug Xofigo.

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Mi­rati tri­umphs again in KRAS-mu­tat­ed lung can­cer with a close­ly watched FDA fil­ing now in the cards

After a busy weekend at #ESMO21, which included a big readout for its KRAS drug adagrasib in colon cancer, Mirati Therapeutics is ready to keep the pressure on competitor Amgen with lung cancer data that will undergird an upcoming filing.

In topline results from a Phase II cohort of its KRYSTAL-1 study, adagrasib posted a response rate of 43% in second-line-or-later patients with metastatic non-small cell lung cancer containing a KRAS-G12C mutation, Mirati said Monday.

FDA hands ac­cel­er­at­ed nod to Seagen, Gen­mab's so­lo ADC in cer­vi­cal can­cer, but com­bo stud­ies look even more promis­ing

Biopharma’s resident antibody-drug conjugate expert Seagen has scored a clutch of oncology approvals in recent years, finding gold in what are known as “third-gen” ADCs. Now, another of their partnered conjugates is ready for prime time.

The FDA on Monday handed an accelerated approval to Seagen and Genmab’s Tivdak (tisotumab vedotin-tftv, or “TV”) in second-line patients with recurrent or metastatic cervical cancer who previously progressed after chemotherapy rather than PD-(L)1 systemic therapy, the companies said in a release.

Mi­rati's KRAS drug looks like the ear­ly fa­vorite in colon can­cer with new da­ta, putting the pres­sure square on Am­gen

With Amgen already providing proof-of-concept for KRAS inhibitors with its sotorasib, Mirati Therapeutics is piecing together a follow-up effort in lung cancer with data it thinks are superior. But in colon cancer, where solo sotorasib has turned in a dud, Mirati may now have a strong case for superiority.

Mirati’s adagrasib, dosed solo or in combination with chemotherapy cetuximab, showed numerically higher response rates than sotorasib solo and as part of a combination study in a similar patient population also revealed this week at #ESMO21. Mirati’s data were presented as part of a cohort update from the Phase II KRYSTAL-1 study testing adagrasib in a range of solid tumors harboring the KRAS-G12C mutation.

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Ex­elix­is pulls a sur­prise win in thy­roid can­cer just days ahead of fi­nal Cabome­tyx read­out

Exelixis added a thyroid cancer indication to its super-seller Cabometyx’s label on Friday — months before the FDA was expected to make a decision, and days before the company was set to unveil the final data at #ESMO21.

At a median follow-up of 10.1 months, differentiated thyroid cancer patients treated with Cabometyx (cabozantinib) lived a median of 11 months without their disease worsening, compared to just 1.9 months for patients given a placebo, Exelixis said on Monday.