Eroom's law: why drug discovery is becoming slower and more expensive?

Goals

This report will try to explain Eroom's law, why drug discovery is becoming slower and more expensive despite improvements in technology?. The cost of developing a new drug almost doubles every nine years.

The client questions are summarized and responded below:

Early Findings

The 'better than the Beatles' problem: Which are the 10 top drugs and which, if any, are the competition to those drugs?

The top 10 selling prescription drugs (sorted by revenue):
  • 1. Humira (adalimumab) $19.9bn: Treatment of several autoimmune diseases in the US, Canada, Mexico, and Europe. Japan uses it for the treatment of intestinal Behcet’s disease, and it is also commercialized in other markets such as China, Brazil, and Australia. Two competitors, Amjevita and Cyltezo, have been approved but not yet available.
  • 2. Eliquis (apixaban) $9.8bn: An anticoagulant approved to reduce stroke and systemic embolism risk in patients with non-valvular atrial fibrillation. Its US patent expires in 2023.
  • 3. Revlimid (lenalidomide) $9.7bn: Treatment of multiple myeloma, myelodysplastic syndromes, and mantle cell lymphoma. Currently, there is no therapeutically equivalent version of Revlimid available in the U.S.
  • 4. Keytruda (pembrolizumab) $7.1bn: Treatment of different types of cancers. Patent will expire in 2028 in the US and Europe, and in 2032 in Japan.
  • 5. Enbrel (etanercept) $7.1bn: Treatment of rheumatoid arthritis, plaque psoriasis, and psoriatic arthritis. Multiple US patents will expire in 2019, 2023, 2028, and 2029.
  • 6. Herceptin (trastuzumab) $7bn: First choice drug to treat HER2-positive breast cancer, as well as metastatic breast cancer and gastric cancer. A biosimilar called Kanjinti is now available in the U.S.
  • 7. Avastin (bevacizumab) $6.9bn: Treatment of different types of cancers. The patent expired last year and will expire in Europe in 2022. The FDA has already approved a biosimilar called Zirabev.
  • 8. Eylea (aflibercept) $6.7bn: Treatment of wet macular degeneration in the US, Europe, and Australia. In Japan: Treatment of macular edema secondary to retinal vein occlusion. Patent will expire in the US this year, and in 2022 in Europe.
  • 9. Opdivo (nivolumab) $6.7bn: Treatment of different types of cancer either as monotherapy or as a combination drug. Patent will expire in Europe in 2026, and in 2027 in the US.
  • 10. Xarelto (rivaroxaban) $6.5bn: It is the only oral coagulant approved in both the US and Europe to treat coronary artery disease (CAD) and peripheral artery disease. The patent will expire in 2024.

The 'cautious regulator' problem: Is pharma R&D both costlier and harder? How has it changed in the past three administrations (Trump, Obama, Bush)?

  • Pharma has entered a cycle of negative growth, diminishing R&D productivity, and ROIs leading to a diminishing growth in sales. Reduced sales, in turn, reduces the amount of money to be invested back into R&D, thus causing sales growth to decline even further.
  • President Bush approved the budget-busting Medicare Drug Benefit without making any effort to pay for it. President Obama's plan did not work as so many incentives encouraged insurers to put more drug costs onto patients. With President Trump, things got even worst as he has campaigned against drug producers, criticizing the high drug prices, and promising to bring them down. As of today, his program has little regulations, so more strict solutions might be expected.

The 'throw money at it' tendency: Are human resources and other resources being added to R&D, leading to project overrun? How?

  • New industry dynamics are forcing the human resources (HR) departments of many pharma to restructure their operational plans to minimize risk and maximize opportunity, creating R&D partnerships with marketing, manufacturing and other departments such as HR to create collaborative approaches such as multi-functional reviews, portfolio management, and brainstorming-decisions for moving a project forward, thus leading to project overrun.

The 'basic research–brute force' bias: Why are HTS approaches less productive? Which are the roadblocks to their use? Why do researchers prefer more traditional approaches?

  • Drug discovery has changed from whole-animal testing methods to high-affinity binding proteins but often failing in clinical trials probably due to an underestimation of organism complexity. Furthermore, drug discovery has changed from small-molecule low-throughput strategies to high-throughput screening (HTS) of large compound libraries, that though it is faster and cheaper, it is also less productive, making of traditional approaches the first choice by some pharma.


Proposed next steps:

You need to be the project owner to select a next step.
Despite substantial increases in research funding by the pharmaceutical industry, drug discovery rates seem to have reached a plateau or declining. A deeper analysis of new strategies such as combinatorial drug discovery is suggested.
Further Drug Sales projections by therapy segments (size and growth for each category) will highlight the most anticipated drug treatments and therapy areas for the future of pharma.