“Despite its outward strength, the [pharma]industry is ailing. The ‘pipelines’ of forthcomingdrugs on which its future health depends havebeen drying up for some time.”
The drug pipeline is drying up
Source: The Economist, March 13, 2004.
The R&D process:
long, complex, and costly
Source: Pharmaceutical Research and Manufacturers of America, Drug Discovery and Development Brochure, 2007.
070297928782777267
50
40
30
20
10
0
50
40
30
20
10
0
US$ billions Number
Rising R&D spending andnew drug approvals 1963-2007
Source: Tufts CSDD Approved NCE Database, PhRMA, 2008.
New drug approvals (R)
R&D spending (L)
Top five U.S. pharma vs. biotechmarket cap 2000-2007
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007
To
tal M
ark
et
Cap
($ b
illio
n)
Top Five US Pharma*
Total Biotech
* Pfizer, Merck, Lilly, Wyeth and Schering Plough.Source: Bloomberg.
Time to develop a drug 1991-2007
Source: Pharmaceutical Research and Manufacturers of America, PhRMA Annual Membership Survey, 2007.
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1991
35
30
25
20
15
10
Months
Transition probabilities By clinical phases
Source: DiMasi and Grabowski, Managerial and Dec Econ 2007, in press.
Phase I-ApprovalPhase III-Approval
Phase II-IIIPhase I-II
90
80
70
60
50
40
30
20
10
Percent
Biotech Pharma
NeuropharmacologicAntineoplastic Analgesic
AntiinfectivesEndocrine
AIDS AntiviralsGastrointestinal
Anesthetic/AnalgesicCardiovascular
14
12
10
8
6
4
2
0
Years
Clinical and approval times varyacross therapeutic classes 2002-2004
Source: Tufts CSDD, 2006.
Clinical phaseApproval phase
Number of biotech-big pharmacollaborations 1993-2005
Source: Hu, et al. The Innovation Gap in Pharmaceutical Drug Discovery & New Models for R&D Success, 2007.
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
600
500
400
300
200
100
0
Number
20062004200220001998199619941992199019801970
60
50
40
30
20
10
0
20
15
10
5
0
US$ billions Percent
R&D expenditures and R&D asa percentage of sales 1970-2007
Source: Pharmaceutical Research and Manufacturers of America, PhRMA Annual Membership Survey, 2007.
R&D as a percentage
of sales (R)
R&D expenditures (L)
Approval success ratesfor new chemical entities (NCE) By therapeutic class
Source: Tufts CSDD Impact Report, 8(3): May/June 2006.
AntiinfectiveOncology/Immunology
RespiratoryCardiovascular
CNSGI/Metabolism
45
40
35
30
25
20
15
10
5
Percent
Cost to develop a drug 1975-2006
Source: Pharmaceutical Research and Manufacturers of America, PhRMA Annual Membership Survey, 2007.
2006200119871975
1400
1200
1000
800
600
400
200
0
US$ millions
Change in mix of studycomplexity U.S., 2000 and 2005
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2005
High
Medium
Low
Source: Fast track systems, Inc. – TrialSpace Grant Manager (PICAS Database) 2006.
Clinical Trial Complexity Index(Phases I-III) 1991-2000
90
100
110
120
130
140
150
1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: DataEdge, 2002.
Occurrence of the most expensiveunique procedures (Phases II and III) 2000-2005
2005
2004
2003
2002
2001
2000
100
80
60
40
20
0
Percent
Source: Fast track systems, Inc. – TrialSpace Grant Manager (PICAS Database) 2006.
1-4 procedures5 or more
procedures
Number of new drug approvals 1980-2007
Source: Tufts CSDD Database.
07
06
05
04
03
02
01
00
99
98
97
96
95
94
93
92
91
90
89
88
87
86
85
84
83
82
81
80
50
40
30
20
10
0
Small Molecule Drug (SMDs)
Recombinant protein (rDNA)/
Monoclonal Antibody (mAbs)
Number
Ultimately approved drugs for sale
Source: Regulatory Trends Affecting Product Approvals and Reimbursement of Drugs and Biologics, Morgan Lewis 2007.
Is the Pharmaceutical PipelineDrying Out?
FDA Perspective
Milken Institute Conference
April 28, 2008
Declines in NME submissions result in asubsequent decline in NME approvals
CDER New Molecular Filings and Approvals (1996 - 2006)
0
10
20
30
40
50
60
1996 1997 1998 1999 2000 2001 2002 2003 2004* 2005* 2006*
Calendar Year
New Molecular Entity Approvals New Molecular Entity Filings
*beginning in 2004 these f igures include BLAs for therapuetic biologics
Source: CDER Facts and Figures, August 8, 2007 http://www.fda.gov/cder/reports/CDERDataBriefing1996-2006.pdf
“Next in Class” account for much of the decline:“First in Class” (Ca,Neuro) are increasing
NME Approvals in 5-Year Intervals by "Innovation Category"
0
20
40
60
80
100
Approval Years
# N
ME
s A
ppro
ved
First in class - Priority Review First in class - Standard Review
Therapeutic Advance in class Next in class
1988 - 1992 1993 - 1997 1998 - 2002 2003 - 2007
Investigational New Drugs (INDs)Under Active Development
Commercial INDs with Activity*
38824090
4227 41644321
45324732
4836
5123 52095380
5598
5963
6369 6426
0
1000
2000
3000
4000
5000
6000
7000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Nu
mb
er
*CDER and CBER INDs
Pipeline Is Not EmptyEnd-of-Phase 2 / Pre-Phase 3 Meetings by CDER Review Division
NME & New BLA products with meetings Scheduled 2003 – 2007
7Special Pathogens and Transplant
12Pulmonary and Allergy
14Psychiatry
14Dermatology and Dental
20Reproductive and Urologic
20Gastroenterology
20Antiviral
23Anti-Infective and Ophthalmology
28Medical Imaging and Hematology
29Anesthesia, Analgesia, and Rheumatology
34Cardiovascular and Renal
40Neurology
48Metabolism and Endocrinology
90Oncology (drugs and biologics)
Total Meetings
ScheduledCDER Division
• Application quality is critical to shorter approval times
• Early consultation / End-of-Phase 2 Meetings with FDAimproves quality
– 2006 Booz Allen Hamilton study of delays in approval / multipleFDA review cycles--Retrospective analysis of 77 NDAs/BLAs forNMEs submitted FY2002 - FY2004
• End-of-Phase 2 Meetings
– 52% of products with EOP2 meetings received first-cycleapproval vs. 29% of products without EOP2 meeting [approval
rate 80% higher]
• Poor quality is costly– On average, each additional review cycle delays approval by 11
months (Based on drug development costs by DiMasi et al., that delaytranslates to about $30M in capitalized R&D costs)
Impacting on FDA approval timeline
How to Improve Quality and Productivity of DrugDevelopment? Rethinking the Business
• Earlier consultation:
– End-of-Phase 2A meetings
• Biomarker Qualification
– Pharmacogenomic markers
– Advanced imaging
• Modernize Clinical trials
– E-clinical trials (CDISC)
– New guidance on Innovative trialdesigns (Adaptive, Non-inferiority,Multiple endpoints, Enriched trialdesigns, Imaging standards asendpoint in clinical trials, etc.)
• Bioinformatics
– Quantitative disease models
– Clinical trial simulation
– In-silico device models
– Biomarker databases
• Implement Good Review
Management Principles
• Phase 4 Studies
• Postmarket Active Surveillance
– Safety Pattern recognition
• Forensic genomics
Preclinical
NDAfiling/
FDAreview
Phase 4 Studies
SafetySurveillance
Discovery Phase 1
(safety)
Phase 2
(efficacy)
Phase 3
(side effects)
Clinical Development
Drug Development: Rethinking the Business
We won’t get there by
simply tuning up the
old and familiar
approaches…
…We need to move on to
new science, new
technologies, new pathways
and partnerships
FDA is designing the
racetrack: