How are drugs and vaccines discovered and developed? Dr. Jeffrey L. Sturchio President & CEO, Global Health Council Journalist-to-Journalist Program National.

How are drugs and vaccines discovered How are drugs and vaccines discovered and developed?and developed?

Dr. Jeffrey L. Sturchio

President & CEO, Global Health Council

Journalist-to-Journalist Program

National Press Foundation

Cape Town, South Africa

July 18, 2009

1

2

AgendaAgenda

• 22 years of innovation in HIV/AIDS treatment

• Pharmaceutical innovation today

– How does modern drug discovery work?

– The clinical trials process

– Increasing costs and declining productivity of pharmaceutical research?

• A word on HIV vaccine research

• Emerging challenges and continuing issues

• Facts and myths about drug R&D?

• Some concluding observations

• Q&A

How HIV/AIDS is Treated

Kilby J and Eron J. N Engl J Med 2003;348:2228-2238

4

The path from compound to drugThe path from compound to drug

• Understanding of the biochemical and cellular mechanism

• Whole animal assays

• Metabolism & bioavailability

• Pharmaceutical R&D – stability; formulation strategy;

physicochemical properties

• Preliminary safety data

– initial genotoxicity; short term probe safety studies

• Ancillary pharmacology

• Chemistry– why this compound & how

was it found

• Process chemistry– scale up feasibility; cost

projections

• Clinical & regulatory plans – biochemical measure of

efficacy – dose projection – assure patient safety

• Patent

• Marketing opinion

• Competition

5

Scientific approachScientific approach

• Is there a rational scientific approach?– A genetic or biochemical insight

– A specific target or pathway

– An available “proof of concept”

• Chemically feasibility– Some targets are difficult to approach with small molecules

• Long-term perspective– Takes >12 years to discover and develop a drug

• Competitive environment

• Level of internal expertise– Externally collaborate

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Scientific disciplines and development Scientific disciplines and development capabilities neededcapabilities needed

• Biochemistry

• Molecular Biology

• Cell Biology

• Physiology

• In vitro Pharmacology

• In vivo Pharmacology

• Structural Biology

• Computational Chemistry

• Medicinal Chemistry

• Genomics

• Drug Metabolism

• Process Chemistry

• Chemical Engineering

• Pharmaceutical Chemistry

• Toxicology

• Clinical Pharmacology

• Clinical Development

• Statistics

Sources: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; CBO, Research and Development in the Pharmaceutical Industry, 2006.

Drug discovery and development is difficult and Drug discovery and development is difficult and requires significant infrastructure and resourcesrequires significant infrastructure and resources Drug discovery and development is difficult and Drug discovery and development is difficult and requires significant infrastructure and resourcesrequires significant infrastructure and resources

Developing a new medicine takes an average of 10–15 years; the Congressional Budget Office reports that “relatively few drugs survive the clinical trial process”

INDEFINITE

Drug Discovery Preclinical Clinical Trials FDA Review Scale-Up to Mfg. Post-MarketingSurveillance

ONE FDA-APPROVED

DRUG

0.5 – 2 YEARS6 – 7 YEARS3 – 6 YEARS

NUMBER OF VOLUNTEERS

PHASE 1

PHASE 2

PHASE 3

5250~ 5,000 – 10,000

COMPOUNDS

PR

E-D

ISC

OV

ER

Y

20–100 100–500 1,000–5,000

IND

SU

BM

ITT

ED

ND

A S

UB

MIT

TE

D

Definitions:

Procedures: include lab & blood work, routine exams, x-rays & imaging, questionnaire & subjective assessments, invasive procedures, heart assessment, etc.

Protocol: the clinical-trial design plan

Enrollment rate: the percentage of volunteers meeting the increasing number of protocol eligibility criteria (percentage screened who were then enrolled)

Retention rates: the percentage of volunteers enrolled who then completed the study; declining retention rates mean that firms must enroll more patients initially and/or recruit more patients during the trial.

Increasing Complexity of Clinical TrialsIncreasing Complexity of Clinical Trials

During the last decade clinical trial designs and procedures have become much more complex, demanding more staff time and effort, and discouraging patient-enrollment and retention

1999 2005 Percentage change

Unique Procedures per Trial Protocol (Median)

24 35 46%

Total Procedures per Trial Protocol (Median)

96 158 65%

Clinical-Trial Staff Work Burden (Measured in Work-effort Units)

21 35 67%

Length of Clinical Trial (Days) 460 780 70%

Clinical-Trial-Participant Enrollment Rate

75% 59% -21%

Clinical-Trial-Participant Retention Rate

69% 48% -30%

Source: Tufts Center for the Study of Drug Development, “Growing Protocol Design Complexity Stresses Investigators, Volunteers,” Impact Report, 2008.

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Years to Recover R&D Costs

($100)

($50)

$0

$50

$100

$150

$200

$250

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Pre

sent

Val

ue (

1990

$M

M)

Average R&D Investment ($202 MM) Cumulative Returns Cover

R&D investment in Year 16

Introduction

Source: Grabowski and Vernon. “Effective Patent Life in Pharmaceuticals.” Forthcoming in The Journalof International Technology Assessment, 1999.

Costs are recovered over a long period…

$701

$434

$299

$162$87

$39 $21 $6 ($1)

$1,880

$0

$500

$1,000

$1,500

$2,000

1 2 3 4 5 6 7 8 9 10

After-Tax Average R&D Costs

Note: Drug development costs represent after-tax out-of-pocket costs in 2000 dollars for drugs introduced from 1990–94. The same analysis found that the total cost of developing a new drug was $1.3 billion in 2006. Average R&D Costs include the cost of the approved medicines as well as those that fail to reach approval.

Lifetime Sales Compared to Average R&D Costs

New Rx Drugs Introduced Between 1990 and 1994, Grouped by Tenths, by Lifetime Sales

Aft

er-

Ta

x P

res

en

t V

alu

e o

f S

ale

s

(Mil

lio

ns

of

20

00

Do

lla

rs)

…and most marketed drugs don’t recover their costs…and most marketed drugs don’t recover their costs

Sources: J. Vernon et al., “Drug Development Costs when Financial Risk is Measured Using the Fama-French Three Factor Model,” Unpublished Working Paper, 2008; J. DiMasi and H. Grabowski, “The Cost of Biopharmaceutical R&D: Is Biotech Different?,” Managerial and Decision Economics, 2007.

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The pace of discovery is fast …….The pace of discovery is fast …….

• Human Genome Project complete

• Advances in structural biology

• Rapid generation of monoclonal antibodies

• RNA profiling

• Proteomics

• Pharmacogenomics

• Engineering sciences, informatics

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0

10

20

30

40

50

60

0

5

10

15

20

25

30

35

Approvals

R&D Spending

No.

of

NM

Es

Ap

pro

ved

$

Billio

ns R

&D

Sp

en

d

*NME (new molecular entity) total is through August 22, 2001. R&D spend for 2000

and 2001 are estimates. Source: Washington Analysis, LLC and PhRMA

……..But as R&D spending increases, NME ..But as R&D spending increases, NME approvals have not.approvals have not.

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So why is R&D productivity down?So why is R&D productivity down?

• Tackling diseases with complex etiologies?

• Demands for safety and tolerability are much higher?

• Proliferation of targets is diluting focus?

• Genomics has been slow to influence day-to-day drug discovery?

• Impact of mergers?

• Big Pharma model no longer valid?

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Why do drugs fail?Why do drugs fail?

• Toxicity

– Long term safety is still totally unpredictable

• Bioavailability and half life

– Cannot be predicted, only guessed

• Metabolism

– Drug/drug interactions; parent or metabolite

• Man

– Understanding of pathophysiology is faulty

Dealing with stochastic failures is one of the primary drivers in escalating costs of R&D to the current estimate of ~ US$1 BB

to bring a drug to market

Roadmap for Developing an AIDS Vaccine

Solving theNeutralizingAntibody Problem

Solving theProblem of

How to ControlHIV Infection

Emerging challenges and Emerging challenges and continuing issuescontinuing issues

• Dealing with chronic therapy – Simplification, convenience and adherence– Tolerability and reducing toxicities – Managing resistance– Combination treatments

• New targets – HIV entry inhibitors – HIV integrase inhibitors – Maturation inhibitors

• The quest for a safe and effective HIV vaccine

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Facts & myths about drug R&D?Facts & myths about drug R&D?

• Industry spends more on advertising than on R&D?

• Industry is more interested in “me-too” drugs than in innovation?

• Drugs are discovered by academe?

• Patents are a barrier to access?

• Industry does not care about diseases of the developing world?

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Trends in resource allocation to SG&A, COGS and R&D in the pharmaceutical industry, 1975-2007

Sources: 1Burrill & Company, analysis for PhRMA, 2005–2009 (Includes PhRMA research associates and nonmembers) in PhRMA, “Profile 2008, Pharmaceutical Industry;” PhRMA, “PhRMA Annual Membership Survey,” 1996-2009; 2Adapted from E. Zerhouni, Presentation at Transforming Health: Fulfilling the Promise of Research, 2007; 3NIH Office of the Budget, “FY 2009 President’s Budget Request Tabular Data”, http://officeofbudget.od.nih.gov/ui/2008/tabular%20data.pdf

Federal and Industry Roles in Research and DevelopmentFederal and Industry Roles in Research and Development

There is an ecosystem of science and biotechnology. Public organizations, patient organizations, universities, Congress, FDA, all of this is an ecosystem that is envied in the rest of the world.

– E. Zerhouni, Director of NIH

Private Sector – $65.2B1

Clinical Research

Basic Research

Translational Research

Clinical Research

Basic Research

Translational Research

NIH3 – $29.4B total – $20.1B research

Government and biopharmaceutical industry research are complementary

““

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Speed, focus and collaboration will drive Speed, focus and collaboration will drive future successfuture success

• Knowledge explosion is still driving demand for new technology investments to support future innovation (genomics, etc.)

– Focus must be in making these investments pay

• Shift from ‘blockbuster’ strategies to therapeutic areas of focus

– Pharmas addressing unmet medical needs are most likely to survive

• Greater pharma reliance on external research and biotech innovation

– Vast majority of early research occurs outside of large pharmaceutical companies

– Tools of drug discovery have been “democratized”; Biotechs are getting much better at producing “drug-like” molecules

– However, development occurs in the major pharma companies – which is where the real costs lie

For further information For further information

• www.innovation.org

• www.keionline.org

• www.msfaccess.org

• www.dndi.org

• www.phrma.org

• www.ifpma.org

• www.clinicaltrials.gov

• www.who.int/intellectualproperty/en

• www.who.int/phi/en

• www.iavi.org

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BACK-UP BACK-UP

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Progression of HIV Infection and AIDS

AIDSAcute Infection Symptom-free

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Drug discovery and development is difficult and Drug discovery and development is difficult and requires significant infrastructure and resourcesrequires significant infrastructure and resources

0

15 IntroductionRegistration

Development

BasicResearch

1

2

2-5

5

5,000 Substances

????? Substances

Product Surveillance

Clinical Tests(Human)

Preclinical Tests(Animal)

Synthesis Examination & Screening

Phase IV

Phase III

Phase II

Phase I

Source: PhRMA

Ye

ars