Policy and Medicine

White House PCAST: Rival Countries Gaining on US Medical Research Spending

The Nation once led the world in investments in research and development (R&D) as a share of gross domestic product (GDP), but more recently, the United States has been investing less in R&D than other leading and emerging nations invest.  Moreover, U.S. industry has been shifting its investments toward applied R&D, narrowing the support for basic and early-stage applied research, which is crucial to transforming innovation.  

Without adequate support for such research, the United States risks losing its leadership in invention and discovery—the driving force behind the new industries and jobs that have propelled the U.S. economy over the past century.  

President Obama’s Council of Advisors on Science and Technology (PCAST) recently released a report maintaining that if the United States wants to maintain “its lead in technology and innovation, then the federal government must be willing to spend more on basic research and encourage industry investments.” 

PCAST said that U.S. investment in research and development as a fraction of gross domestic product “has dropped from first in the world to eighth, and is fourth in the world among large economies.  The report warns that this is a significant threat to long-term research if qualified researchers left for other countries couple with a private sector that is focused primarily on near-term results. 

At the report’s announcement, John Holdren, director of the White House Office of Science and Technology Policy and PCAST co-chair, said that the United States, for now, has no equal in terms of capabilities.  “Note that I said unmatched and not unrivalled,” said Holdren, “we do have rivals.  More and more of them all the time.” 

The report argues that losing a high ranking in science and innovation would cost the US jobs in science and supporting industries as well as benefits to safety, medicine and national security.  “More than half, and perhaps as much as 85 percent of productivity growth in the United States in the first half of the 20th century” can be attributed to technical advances, says the report.  It also describes the National Science Foundation, National Institutes of Health (NIH) and the Energy Department as the “primary stewards of basic research in the United States.” 

To promote domestic research, PCAST urges the government to increase research and development expenditures from the current level of 2.9 percent of GDP to 3 percent as well as create policy incentives that will increase the private sector's investment in long-term research.  Private industry currently accounts for some two-thirds of the total R&D expenses in the U.S. 

The report also warns against instabilities in funding, such as the looming sequestration, and says the government should develop a multiyear funding approach to prevent research gaps.  It recommends using the multiyear financial plan similar to the Defense Department's future years defense program as a possible blueprint.

Taxes also come into play, with PCAST suggesting that the research and experimentation tax credit be made permanent and rise from a rate of 14 percent to 20 percent.  It says this will make it more useful to small and medium-sized enterprises that are R&D intensive. 

Among the actions that PCAST recommends, three stand out in scope and importance: 

(1)  that the President reaffirm his stated goal that U.S. total R&D expenditures (across the public and private sectors) should achieve and sustain a level of 3 percent of GDP;

(2)  that actions be taken, some achievable entirely by Executive decision, to increase the stability and predictability of Federal research funding; and

(3)  that Congress not only make the R&D tax credit permanent, but increase it to at least 17 percent, as you have already advocated. 

While the benefits from scientific advancements are evident in virtually every aspect of modern life, they are perhaps most immediate in the area of human health.  Biological discoveries have lengthened our lives; in the mid-2000s, the life expectancy in the United States reached an all-time high of 77.5 years, up from 49.2 years at the beginning of the twentieth century. 

 Advances in treatment rooted in improved understanding of biological function contribute to continual improvements in the quality of life in later years. HIV-AIDS, whose diagnosis was once a death sentence; is now treatable: In areas where HAART (highly active anti-retroviral therapy) became available, deaths related to HIV have decreased by 94 percent and transmission rates by 96 percent. 

Thanks to the development of vaccines, global incidences of diseases, including diphtheria, polio, yellow fever, and tetanus, have plummeted, and smallpox has been eradicat-ed. Sequencing of the human genome has led to the identification of genes associated with diseases such as multiple sclerosis and cystic fibrosis, bringing the promise of improved treat-ment and ultimately a cure. 

A healthier population is also an economically more productive population.  That is not, however, the only reason that Americans value the benefits of biomedical research.  We want longer, healthier lives for our elder parents, ourselves, and our children.  Further, it is an American social value to be generous in bringing healthier lives to our own neediest and to the world.  Today, Americans look to science and technology for health care that is not only more effective, but also more affordable, so that all may benefit fully.

NIH Public-Private Partnerships to Bring Therapies from Bench to Bedside

Over the past few weeks, the National Institutes of Health (NIH) has announced a number of initiatives and programs.  For example, NIH recently announced the Food and Drug Administration’s (FDA) approval of a new oral medication for the treatment of rheumatoid arthritis that represents a new class of drugs for the disease.   

The drug, tofacitinib (Xeljanz), provides a new treatment option for adults with moderately to severely active rheumatoid arthritis who have had an inadequate response to, or who are intolerant of, methotrexate, a standard therapy for the disease.  The approval represents a significant government-industry accomplishment and breakthrough.  

Affecting nearly 1.5 million adults, rheumatoid arthritis is an inflammatory disease that causes pain, swelling, stiffness, and loss of function in the joints. It occurs when the immune system, which normally defends the body from outside invaders such as bacteria and viruses, attacks the membrane that lines the joints.  

Tofacitinib is from a new class of drugs developed to target Janus kinases.  One member of this family, JAK3, was discovered in the early 1990s by a National Institutes of Health laboratory in the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS).  Subsequent studies carried out at the National Heart, Lung, and Blood Institute (NHLBI), in collaboration with the NIAMS, showed that genetic defects in JAK3 can cause severe combined immunodeficiency.  This discovery led to the idea that drugs blocking Janus kinases would suppress the immune system and might be protective against the damaging inflammation of rheumatoid arthritis and certain other autoimmune diseases.  

The approval of tofacitinib represents the first time in a decade that the FDA has approved an oral disease modifying antirheumatic drug, or DMARD, for the treatment of rheumatoid arthritis. This broad class of drugs slows or halts the progression of damage from the disease, rather than merely providing relief from symptoms. Unlike biologic treatments for rheumatoid arthritis — which are also DMARDs and target immune system proteins — tofacitinib is a pill, not an infusion or an injection. It is the first Janus kinase inhibitor to receive an FDA approval for rheumatoid arthritis 

John J. O'Shea, M.D., scientific director of the NIAMS, is the NIH researcher who discovered JAK3 and first cloned the human form of the protein.  In 1993, shortly after O’Shea and his team discovered the JAK3 protein and established its role in inflammation, O’Shea learned that scientists at Pfizer were searching for drug targets to tackle autoimmunity and transplant rejection.  Subsequent discussions led to an innovative public-private collaboration between NIH and Pfizer, through a cooperative research and development agreement.  This agreement allowed teams from both organizations to work together toward the common goal of finding a new immune-suppressing drug for this debilitating disease.  

Warren J. Leonard, M.D., director of the Immunology Center in NHLBI, is a pioneer in immune research whose group first identified the genetic mutations that are responsible for X-linked severe combined immunodeficiency (XSCID), commonly known as the “Bubble Boy Disease.”  Leonard, in collaboration with O'Shea, then demonstrated that the protein that is defective in XSCID associates with JAK3, and that humans with mutations in JAK3 have a form of immunodeficiency clinically similar to XSCID.  That discovery led to their hypothesis that JAK3 inhibitors might be potent immunosuppressive agents, as is the case for tofacitinib. 

NIH BrIDGs program helps overcome research roadblocks 

Finally, NIH recently announced a new program called Bridging Interventional Development Gaps (BrIDGs), which is designed to enable NIH contractors to provide pre-clinical services — such as toxicology studies — for therapeutic projects that have demonstrated efficacy in a disease model.  In other words, the program provides eligible scientists with no-cost access to National Institutes of Health therapeutic development contractor resources. 

Targets for this program include potential new treatments for a variety of cancers, spinal cord injury, and a rare disease that can lead to kidney failure.  The program is called BrIDGs “because there is a lack of private resources or [researchers] hit a roadblock and need additional expertise.  

BrIDGs, formerly known as NIH Rapid Access to Interventional Development, is supported by the NIH Common Fund. I n addition, NIH Institutes and Centers at times contribute funding to support projects relevant to their missions.  The eight-year-old program is led by the NIH’s National Center for Advancing Translational Sciences (NCATS), which we wrote about back in May. 

For the majority of projects, the goal is to enable the submission of an Investigational New Drug (IND) application to FDA.  Human clinical trials using an investigational new drug may commence within 30 days of the submission of an IND for that drug unless the FDA informs the sponsor that the IND is subject to a clinical hold.   

To date, BrIDGs has generated data to support 12 INDs submitted to the FDA, and one clinical trial application to Health Canada. Twelve of the 13 projects have been evaluated in clinical trials.  Three BrIDGs-supported therapeutic agents have gone as far as Phase II human clinical trials, in which researchers give an experimental therapy to a group of patients to evaluate the effectiveness and safety of a treatment.  Third-party investors have licensed six agents during or after their development by BrIDGs. 

“I am excited by the high success rate of this program,” said Christopher P. Austin, M.D., director of NCATS.  “As its name implies, the program bridges the gap between a basic discovery and clinical testing by providing the expertise needed to perform crucial pre-clinical studies, often breathing new life into projects that otherwise may never reach patients.”  BrIDGs selected the following new projects from its 2012 application solicitation: 

Peritoneal Cancers: Tumor Penetrating Microparticles for Peritoneal Cancers, Jessie Au, Pharm.D., Ph.D., chief scientific officer and acting chief executive officer Optimum Therapeutics, LLC, San Diego.  This project focuses on cancers that affect organs in the peritoneal cavity such as the bladder, liver and pancreas.  A drug delivery system, called tumor-penetrating microparticles, is under development to target peritoneal tumors. 

Lecithin-cholesterol acyltransferase (LCAT) deficiency syndrome: Development of Assays to Detect Anti-drug Antibodies against ACP-501 (recombinant human LCAT)
Brian Krause, Ph.D., chief scientific officer, Alphacore Pharma, LLC, Ann Arbor, Mich.
Lecithin-cholesterol acyltransferase deficiency syndrome is a rare disorder that causes a drastic reduction of high-density lipoprotein (HDL) cholesterol levels in patients.  This leads to disorders of the cornea (the transparent lens on the eye), anemia, and may cause kidney failure.  The objective of this project is to develop a treatment called recombinant human LCAT that would act as a replacement therapy to offset the deficiency caused by LCAT deficiency syndrome.  

Spinal Cord Injury: Development of Nogo Receptor Decoy for the Treatment of Spinal Cord Injury, George Maynard, Ph.D., vice president, Preclinical Development Axerion Therapeutics, Inc., New Haven, Conn.  Recovery after a spinal cord injury is limited, as nerve cell growth is virtually nonexistent in the adult spinal cord.  This project aims to develop a compound called Nogo Receptor Decoy to rewire nerve cells that promote the recovery of neurological function.  The NIH's National Institute of Neurological Disorders and Stroke is co-funding the pre-clinical studies for this project.  

“The success of BrIDGs demonstrates there is a vital need in the research community for the services offered through the program and speaks to the quality of the projects it supports,” said John McKew, Ph.D., chief of the NCATS Therapeutics Development Branch.  “While not all projects will make it as treatments, the support gained through BrIDGs provides each with a shot at success."” 

BrIDGs solicits applications once a year. The next opportunity to submit applications is from Dec. 1, 2012 to Feb. 1, 2013. The BrIDGs application process will move to the proposalCENTRAL application system, which is a streamlined application process used by some of NIH’s programs.  

New Generation of Scientists  

Finally, NIH recently announced that it is seeking to launch multiple initiatives designed to help strengthen the biomedical research enterprise and sustain the global competitiveness of the U.S. scientific community well into the future.   

Faced with significant challenges affecting the biomedical research workforce and the storage and use of large biomedical datasets, the NIH Director charged the Advisory Committee to the Director (ACD) to develop recommendations.  The ACD used three specialized committee working groups, each of which included additional outside experts on the relevant topics.  

The National Institutes of Health is “The future of biomedical research depends upon our ability to support a research ecosystem that leverages the flood of biomedical data, strengthens the research workforce through diversity, and attracts the next generation of researchers,” said NIH Director Francis S. Collins M.D., Ph.D. “I’m grateful to the experts, both inside NIH and from the broader biomedical research community, who have given these matters extensive thought and made it possible for NIH to put forward actions designed to benefit our entire research community for years to come.” 

The ACD presented its recommendations to the NIH director in June 2012.  NIH leadership further deliberated on the recommendations and presented its implementation plan at the 105th meeting of the ACD on Dec. 6 and 7.  The actions that NIH is seeking to implement are: 

Diversity in the Biomedical Research Workforce:  

• Launch a new NIH program called Building Infrastructure Leading to Diversity (BUILD) intended to provide rigorous mentored research experiences for undergraduate students at participating schools; financial support to pursue biomedical research careers; faculty support for training highly effective mentors; and innovation space to develop new approaches for increasing diversity in the Ph.D. training pathway.
• Establish a National Research Mentoring Network to connect students, postdoctoral fellows, and faculty with experienced mentors; develop standards of good mentorship in biomedical research; and provide workshops and training opportunities in grantsmanship, among other goals.
• Promote fairness in peer review through interventions including implicit bias and diversity awareness training for both scientific review officers and members of review panels, and piloting a program that would make grant applications completely anonymous.
• Increase engagement of NIH leadership by:
  • recruiting a chief diversity officer to coordinate NIH initiatives designed to enhance the diversity of the NIH-funded workforce
  • establishing an NIH steering committee working group on diversity to help ensure that diversity remains a core consideration of NIH governance 

The Future Biomedical Research Workforce:  

• Enhance training of graduate students and postdoctoral researchers:
  • through a grants program that would support innovative approaches to complement traditional research training
  • by encouraging adoption of individual development plans for all trainees

• Explore increased support for training mechanisms designed to accelerate the development of independent research careers, including NIH Pathway to Independence Awards (K99/R00) and Early Independence Awards.
• Increase emphasis on ongoing assessment of the biomedical research workforce, including a proposed follow-up study on clinician scientists.
• Identify and track more comprehensively all graduate students and postdoctoral researchers supported by NIH to provide a sound basis for assessing workforce needs and planning future training activities. More comprehensive career outcomes data also would help to inform prospective graduate students and postdoctoral researchers contemplating careers in biomedical research.  

Data and Informatics:  

• Maximize the value of biomedical data through a new Big Data to Knowledge (BD2K) initiative that would create:
  • improved data and software sharing policies, catalogs of research data, and data/metadata standards development to facilitate broader use of biomedical big data
  • analysis methods and software development and dissemination
  • enhanced training for biomedical big data
  • proposed new centers of excellence

Launch the NIH InfrastructurePlus adaptive environment to advance high-performance computing, agile hosting and storage approaches, and modernization of the network, among other approaches.

Research on Personalized NSAID Use to Reduce Pain May Help with Pain Crisis

 
Acccording to some reports deaths from painkiller overdoses have tripled over the last decade and led to the deaths of 14,800 Americans in 2008, exceeding those caused by heroin and cocaine combined.  More recently, a 2011 GAO report linked prescription pain killers to a 142% spike in emergency room visits between 2004 and 2009.  The increase in deaths from opioids has pushed drug poisoning ahead of automobile accidents to be the leading cause of accidental death in the United States.  Painkiller sales have increased fourfold since 1999.  Opioids, derived from the poppy plant, reduce the perception of pain by attaching to opioid receptors in the brain, spinal cord and elsewhere in the body.   

While the Food and Drug Administration (FDA) has recently taken action by finalizing its Risk Evaluation and Mitigation Strategy (REMS) for extended-release/long-acting opioids, much of which consists of a prescriber education program, much work is needed on the manufacturing side.  The Joint Commission also recently issued guidance on the use of opioids in hospitals.   

Consequently, an international research team recently launched an effort to determine “whether everyday painkillers like Celebrex and Aleve could be made safer and more effective through personalized medicine, which involves tailoring treatments to patients based on genetic traits.” 

“More than 30 types of such pain medications, known as nonsteroidal anti-inflammatory drugs, or NSAIDs, are on the market, but how well they work varies widely among patients,” reported the Wall Street Journal.  NSAIDs work by blocking two enzymes known as Cox-1 and Cox-2. While prescribing labels for all NSAIDs generally warn of both heart and bleeding risks, research suggests there are differences among them. 

“Many carry increased risk of such problems as stomach bleeding or heart attacks, and it is hard to predict who is at risk of such side effects and who is likely to benefit from the drugs.  The medicines generally are prescribed and used on a trial-and-error basis.” 

In an attempt to resolve these issues, “the National Heart Lung and Blood Institute has awarded the University of Pennsylvania an $18 million grant for the first five years of what is expected to be a 10-year project.”  Garret FitzGerald, director of the Institute for Translational Medicine & Therapeutics at Penn is heading the project.  Dr. FitzGerald, who has enlisted colleagues from institutions including Harvard, Stanford and Duke universities in the U.S. and Cambridge University in the U.K. 

The scientists plan a comprehensive look at genetic and other factors that affect how people respond to the medicines in hopes of finding biological signals that could predict efficacy or side effects. The hope is that individual patients could plug their own data into a smartphone app to help decide which medicines to take, at what doses and for how long.”  Of course these devices would be heavily regulated by FDA, as they pose significant risks of misuse or adverse events if used improperly, such as overdoses or adverse drug events.    

“Personalized medicine already is transforming cancer treatment for some patients whose tumors are fueled by genetic mutations that can be attacked with targeted treatments.  But researchers are finding that many diseases involve multiple genetic drivers and a host of other factors that makes predicting the risks and benefits of drugs especially challenging.” 

“Naproxen, an over-the-counter pill available in many generic versions as well as under the brand Aleve, marketed by Bayer AG, blocks Cox-1. It is associated with a high risk of gastrointestinal bleeding in some patients, but based on limited studies, it doesn't appear to increase risk of heart attack, Dr. FitzGerald says. Naproxen also is available through a prescription.” 

Another example the article uses is “Celebrex, marketed by Pfizer Inc., a Cox-2 inhibitor. Bleeding risk is generally low, Dr. FitzGerald says, but Celebrex is a cousin of the Cox-2 drug Vioxx, which Merck & Co. withdrew from the market in 2004 because of an increased risk of heart attack and stroke.” 

The researchers will test Celebrex and naproxen on five different biological systems: yeast, mammalian cells, mice, zebrafish and humans. They will hunt for patterns among various elements—genetic variants, metabolic processes, even bacteria known as the microbiome that affect human biology—that might be associated with risk or benefit of the medicines.  Researchers will then attempt to link any such patterns to risks or benefit in randomized trials involving Celebrex and naproxen as well as other NSAIDs. Researchers hope the process eventually will be applied to other classes of drugs such as cholesterol-lowering statins. 

Given industry’s recent support for FDA’s opioid REMS, it will be interesting to see what role they play in supporting a personalized medicine approach to opioids.  Certainly, one would expect that companies want to reduce the risk of adverse events or death caused by their drugs, but the research could be extremely expensive and the results may prove more problematic than probative, particularly because even if results are discovered, implementation in everyday practice would take years.   Nevertheless, the research represents a new approach to resolving a very real problem our country faces, and the costs of attempting to reduce such problems may eventually be outweighed.

Joint Commission Issues New Criteria for Medical Education and Clinical Research

Joint Commission-accredited academic medical centers (AMCs) will see new criteria for medical education and clinical research incorporated into the evaluation process.  The new standards for AMCs were issued on July 1, 2012 and will be effective for all eligible organizations on January 1, 2013.  

An independent, not-for-profit organization, The Joint Commission accredits and certifies more than 19,000 health care organizations and programs in the United States. Joint Commission accreditation and certification is recognized nationwide as a symbol of quality that reflects an organization’s commitment to meeting certain performance standards. 

“These standards were also developed to present a framework for including medical education and human subject research into the quality and patient safety activities of academic medical center hospitals,” Paul vanOstenberg, JCI's vice president of International Accreditation, Standards and Measurement, said today in a statement.   “These standards were also developed to present a framework for including medical education and human subject research into the quality and patient safety activities of academic medical center hospitals.  Unless deliberately included in the quality framework, education and research activities often are the unnoticed partners in patient care quality monitoring and improvement.” 

To meet the eligibility criteria, hospitals must be organizationally or administratively integrated with a medical school, serve as the principal site for the education of both medical students and medical specialty residents from the integrated medical school, and conduct academic and/or commercial human subject research involving patients of the hospital. 

Meanwhile, those considered AMCs must make sure to carefully explore mergers, acquisitions and affiliations to survive in the consolidating healthcare environment, advised Healthcare Strategies & Solutions, noted Becker's Hospital Review. 

To achieve clinical growth and fulfill their academic mission, academic medical centers need to take a proactive approach to finding the most suitable partner.  A March report from consulting firm PricewaterhouseCoopers (PwC) recommended academic medical centers team up with high-quality, low-cost providers like community hospitals. 

The new standards applicable to academic medical centers are divided into two chapters – Medical Professional Education (MPE) and Human Subject Research Programs (HRP) – as medical education and clinical research are most frequently organized and administered separately within academic medical centers. For all hospitals meeting the eligibility criteria, these two chapters will be a required addition to the Joint Commission International Accreditation Standards for Hospitals, 4th Edition.  

These new standards will be integrated into the evaluation process for the accreditation of hospitals. For example, when the on-site evaluators are reviewing patient care in a clinical unit, they will also evaluate the contribution of medical trainees to care processes in that unit, and the integration of clinical research protocols into the care provided on the unit and the quality monitoring processes. 

Not every hospital with students or conducting research is considered an academic medical center hospital under these new standards, according to vanOstenberg. JCI will evaluate hospitals under the academic medical center hospitals requirements when the hospital:  

• Is organizationally or administratively integrated with a medical school;
• Is the principal site for the education of both medical students and medical specialty residents from the medical school noted in the previous criterion; and
• Conducts academic and/or commercial human subject research involving patients of the hospital.

Novartis and University of Pennsylvania Announce Research Collaborative

The collaboration between academia and industry has led to some of the world’s greatest and most innovative breakthroughs in medicines and medical devices.  Frequently, life sciences companies rely on members of academia to conduct the basic research and clinical trials that may eventually lead to the research, development and approval of products that companies submit to the Food and Drug Administration (FDA).   

In addition, there has been a recent trend for companies to invest in collaborative partnerships with academic medical centers to pursue research and development of innovative new drugs and treatments.  For example, last year, a new drug research collaboration was announced between pharmaceutical giant Pfizer and the University of California San Diego, which could deliver up to $50 million to local scientists over the next five years, speed the delivery of promising therapies to patients and help refill the fast-depleting pipeline of the world’s largest pharmaceutical manufacturer.  And earlier this year, Merck announced a collaboration to create the California Institute for Biomedical Research (Calibr), an independent, not-for-profit organization--501(c)(3).  

We have also written several times about the University of California, San Francisco Chancellor Susan Desmond-Hellmann, who advocates for establishing closer relationships with industry in order to spark new ideas, fund research, access high-tech equipment and speed medical advances to patients.  

Following in the footsteps of these collaborative partnerships, drugmaker Novartis and the University of Pennsylvania recently announced a research and licensing agreement that aims to bring to market a new approach to fighting cancer that has shown promising results in early trials, reported the New York Times.  The arrangement is being announced as major pharmaceutical companies are cutting back on their deals with biotech firms and collaborating increasingly with universities instead. Agreements between pharmaceutical companies and biotech companies totaled $18.9 billion in the first seven months of this year, a decline from the $22.7 billion in deals that were done over the same period a year ago, according to a recent report by the venture capital firm Burrill & Company. 

Penn is a leading center for viral vector research, and did the first clinical trial several years ago using adenoviral vectors to replace mutant genes in patients with inborn errors of metabolism. Under the leadership of Dr James Wilson this center has pioneered the use of viral vectors. 

The alliance seeks to build on the recent results of an experimental treatment that trains a person’s immune system to kill cancer cells.  Scientists at the university announced last year significant results in several patients with advanced chronic lymphocytic leukemia who were treated using the new technique, including two who went into complete remission.  

The treatment uses a disabled form of the HIV-1 virus to carry cancer-fighting genes into the patients’ T-cells, a type of white blood cell that fights viruses and tumors. Although the study involved patients with leukemia, researchers hope to apply the approach to treat patients with a variety of cancers. Other trials are under way for lymphoma, mesothelioma, myeloma and neuroblastoma.  

Included in the deal is a commitment by Novartis to contribute $20 million to build the Center for Advanced Cellular Therapies, which will be devoted to studying the new treatments, on the campus.  Novartis and Penn say the deal will combine the intellectual resources of the university with the commercial wherewithal of the company, a major drugmaker. Penn is granting Novartis an exclusive worldwide license to the technologies, and Penn will receive royalty payments.  

“Penn’s intellectual resources, combined with a pharmaceutical industry leader like Novartis, offer a powerful symbiotic relationship in our mutual goal of finding more effective treatments for cancer,” J. Larry Jameson, dean of the Perelman School of the Medicine at the University of Pennsylvania and executive vice president for the Health System, said in a statement announcing the deal.  

The downside, said G. Steven Burrill, chief executive of Burrill, is that Novartis and other companies will be taking on more risk by getting involved in research at its earliest phases. “Now they’re going to own all of the development, both the risk and the cost,” he said.  

In addition to the New York Times article, Pharmalot posted an interview about the new partnership with Mark Fishman, who is president of the Novartis Institutes for BioMedical Research. 

Fishman explained that the deal with Penn is different than most agreements with academic entities because it is a “multi-part contract.” Novartis has “an investigational potential drug, plus the ability and the willingness to do to the work around the actual manufacturing of this, which is not part of the usual, standard relationship with a university. Plus, what’s even more exciting is the ability to keep this in new directions of research around immunotherapy, in general.”  He also added that this agreement is another way Novartis is trying to grow and expand their translational research focus.   

The rest of the interview focused on the particular drugs Novartis will be developing in collaboration with Penn.  Fishman noted that the goal of this collaborative effort is to not only make the CARt systems as effective as possible, but for other cancers as well. Other cancers Novartis is working on B-cell malignancies such as CLL (chronic lymphocytic leukemia). Novartis also wants to start studying CARt-19 for other cancers that express CD-19, such as acute lymphocytic leukemia, or diffuse large B-cell lymphomas. Then, over time, Fishman said the company would want to identify antigens on other tumors that would be amenable to this type of targeting.  

Ultimately, Penn and Novartis should be applauded for this collaboration and other academic medical centers and companies should follow in their footsteps.  The more companies can begin to work together and collaborate on finding new ways to approach diseases such as cancer, the better chances patients have for receiving timely and effective treatment.   

Harvard and Pfizer Announce Industry-Academic Partnership

The collaboration between industry and academia has produced significant improvements in science and medicine for almost a century.  From the mid 1920’s when Frederick Banting and his assistant Charles Best isolated insulin in 1921 at the University of Toronto, academic-industry collaborations has led to tremendous breakthroughs that have saved and improved the health of millions. 

A new academic-industry partnership was recently discussed in an article in Bloomberg News.  The collaboration first began when Hal Dvorak, a Harvard scientist, helped spur the advance of targeted cancer drugs.  He then sought a partner to help him develop new treatments.  His partner—Pfizer, Inc.—is spending $100 million to open a state-of-the-art laboratory in Boston. For Dvorak, teaming with Pfizer “is an ideal arrangement,” he said, providing convenience and expertise bringing research into the clinic. 

“Pfizer, Sanofi, Merck & Co. (MRK) and other drug companies are putting a new twist on the arrangement by stepping up their level of collaboration with universities.  In the case of Pfizer, the world’s largest drug company is embedding operations in Boston, San Francisco, New York and San Diego, often in the very same buildings where famed academic institutions have labs. 

“No matter how much money you have, nothing compares to the innovation going on out in the world,” said Jose Carlos Gutierrez-Ramos, the director of the Pfizer lab, in an interview. “We want to be here, integrated into this fabric.” 

This new collaboration represents Pfizer’s future, as it sees uncertain times for its blockbuster drugs Lipitor and the painkiller Lyrica.  By establishing these academic relationships, Pfizer can “buy” promising ideas later down the road.  In two to three years, Pfizer plans to have 50 drug development projects running in their centers around the country, all of which have been opened since late 2010, Gutierrez-Ramos said. 

Part of these new collaborations come from the leadership of Pfizer Chief Executive Officer Ian Read, who has begun cutting back the size of the company, selling one non- pharmaceutical unit, planning to spin off another and trimming expenses.  He has said he wants to rebuild Pfizer into a smaller, faster-moving company that focuses on development of new drugs.  “It makes sense to outsource anything that someone else can do better than you and that you don’t consider a core competency or source of competitive advantage,” Erik Gordon, a professor of business at the University of Michigan in Ann Arbor, said in an e-mail. 

Pfizer is turning to executives like Gutierrez-Ramos, whose job is to create strong connections within one of the world’s most creative hotbeds for biotechnology innovation.  In Boston, the Pfizer lab is located in the same building as offices of renowned research centers of Boston Children’s Hospital and Beth Israel Deaconess Medical Center, which would make some potential partnerships just an elevator ride away. 

The Boston lab has reviewed 400 partnership proposals in the last year and is working on projects involving chronic kidney disease, osteoporosis and cancer, Tony Coyle, chief scientific officer for the Pfizer center, said in an interview.  Gutierrez-Ramos said he is trying to create an atmosphere at the lab where outside researchers easily come and go, and Pfizer’s scientists visit neighboring academicians on their turf. 

Pharmaceutical companies, which historically are highly secretive about their work because of competition, need to be willing to take more risks in the future, he said, creating access to its inner sanctums to develop drugs earlier. 

What Pfizer offers academic researchers are “extraordinary” resources for drug development that nearby university labs can’t match, said Harvard’s Dvorak.  Dvorak, in 1983, was one of the first scientists to demonstrate that cancer cells secreted vascular endothelial growth factor, or VEGF, the initial idea behind development of drugs, such as Roche Holding AG (ROG)’s Avastin, that cut off the blood supply to tumors to stop their spread. 

“An academic lab can only go so far,” Dvorak said in a telephone interview from Boston. “We’re good at identifying targets, but if you want to make monoclonal antibodies or take this to the clinic, we have no experience in that.  That’s not our bag.”   Coyle, of Pfizer’s center, agrees. “We’ve cured diabetes in mice so many times” in the laboratory, Coyle said. “But there’s been a very poor appreciation from the academic community” about how to develop drugs for use in the clinic. 

An example of the advantages for academics can be seen in a single machine located on the lab’s 18th floor.  Separated by a wall of glass from an open-plan suite for the group’s top managers, the machine has the ability to rapidly test thousands of compounds against Pfizer’s own chemical library to see if they match with known disease pathways or proteins that have been identified as possible targets.  Past rows of lab benches, two rooms full of complex imaging equipment are used to identify how proteins interact. 

Universities and research institutes need all the help they can get, according to a report by the Tufts Center for the Study of Drug Development released in April.  Funding from the U.S. National Institutes of Health has been unchanged for a decade, at about $31 billion for 2013.  At the same time, pharmaceutical companies have cut their early-stage research budgets in a tough economy to focus on late-stage clinical development and marketing, the report said. 

The partnership model now being pursued by Pfizer and a few other large drugmakers, “represents the most significant change in the innovative landscape we’ve seen in three decades,” said Ken Kaitin, director of the Tufts center.  “With academic centers, with the reduction in NIH support, there’s almost a desperation that they must, must find new revenue streams,” Kaitin said in an interview in Boston. “That, in most cases, means working with industry.”

Sanofi (SAN), based in Paris, has its own collaboration program, with Harvard, the University of California, San Francisco, and several others, the company said.  In March, Merck, the second-biggest U.S. drugmaker, announced it was joining the party.  The Whitehouse Station, New Jersey-based company said it will spend as much as $90 million over seven years to help fund a new California Institute for Biomedical Research it will run in San Diego. 

Ultimately, these companies and academic medical centers should be applauded for their collaboration and more partnerships such as these should be encouraged.  As the article recognizes, the tough economic times have resulted in less scientific grant money from the federal government and tighter budgets for pharmaceutical companies.  These partnerships have the promise of changing the current business structures of companies and finding new treatments and drugs that will cure chronic disease and help reduce health care costs.  Like the first collaboration that produced insulin over 90 years ago, these collaborations may be the ticket for curing diabetes and other serious illnesses.

NIH National Center for Advancing Translational Sciences Announces Partners

As we noted last month, the National Institutes of Health (NIH) unveiled a collaborative program that will match researchers with a selection of pharmaceutical industry compounds to help scientists explore new treatments for patients.  NIH's new National Center for Advancing Translational Sciences (NCATS) has partnered initially with Pfizer, AstraZeneca, and Eli Lilly and Company which have agreed to make dozens of their compounds available for this initiative's pilot phase. 

Five additional pharmaceutical companies have joined the NIH-led effort to help scientist’s research promising new treatments for patients.  Funding and molecular compound information is available now for the initial phase of the recently unveiled Discovering New Therapeutic Uses for Existing Molecules program.  This NIH-industry collaboration will match researchers with 58 compounds to test ideas for new therapeutic uses.  Since the launch of the program last month, the total number of compounds the companies are making available has more than doubled.

Abbott, Bristol-Myers Squibb Company, GlaxoSmithKline, Janssen Pharmaceutical Research & Development, L.L.C., and Sanofi have joined Pfizer, AstraZeneca, and Eli Lilly and Company in this innovative approach to research.

The NIH's new National Center for Advancing Translational Sciences (NCATS) created the Therapeutics Discovery program to help re-engineer the research pipeline.  By crowdsourcing compounds that already have cleared several key steps in the development process, including safety testing in humans, scientists nationwide have the opportunity to contribute their expertise to advancing these resources for new disease therapies.

The eight participating companies will provide their compounds and related data, which were determined by the NIH to meet specific eligibility criteria.  For example, each compound must have advanced to clinical studies but been unsuccessful in its original therapeutic indication or not pursued for business reasons.  Preliminary information about the compounds, including mechanism of action, route of administration, and any limitations in use based on safety and tolerability are on NIH’s website.

“Each company participating in this innovative collaboration has made substantial research and development investments to advance these compounds to the point where they can be used in clinical studies,” said Kathy L. Hudson, Ph.D., NCATS acting deputy director. “If researchers funded through this effort can demonstrate new uses for the compounds, they could significantly reduce the amount of time it takes to get a treatment to patients in need.”

For the pilot phase of the program, in fiscal year 2013, NCATS will provide up to $20 million to fund two- to three-year staged, cooperative agreement research grants.  If specific milestones are met, funded researchers will conduct pre-clinical validation and clinical feasibility studies in the first stage, and proof-of-concept clinical trials in the second stage, to test whether one of the compounds may be effective against a previously unexplored disease target.  The pilot phase also is intended to test the utility of the newly created template agreements by reducing the negotiation time that otherwise could delay the research.

Researchers who are interested in NCATS’ Therapeutics Discovery funding must submit a pre-application in response to the NIH Funding Opportunity Announcement at http://grants.nih.gov/grants/guide/pa-files/PAR-12-203.html by Aug. 14, 2012.

Applicants must include details about how they would explore specific hypotheses related to one of the compounds that might be useful in a specific disease area.  The pre-applications will undergo review by external experts, and while no funding will be provided at this stage, successful applicants will be notified to submit a full application for fiscal year 2013 funding.

Living Longer and the NIH Eli Lilly National Center for Advancing Translational Science (NCATS)

Over the past few years, health care reform has consistently made news headlines.  The significant costs and problems generated by the U.S. health care system, coupled with the landmark passage of the Patient Protection and Affordable Care Act (ACA), has kept journalists, bureaucrats, health officials and politicians busy. 

A sizeable portion of the attention surrounding the health care system and health care reform has involved the role of the healthcare industry: insurance companies, pharmaceutical and medical device manufacturers, managed care organizations, etc.  While much of the press coverage has focused on the problems that these stakeholders have allegedly created or failed to address, there has been little attention regarding the positive health outcomes and benefits our country has seen over the past few decades.  

Consequently, a recent article that looked at statistics “stretching from 1935 to 2010 found significant improvements in Americans' expected lifespans, mainly due to factors such as better medical care and declines in smoking rates.”  Specifically, the average American's overall risk of dying at a given point in time dropped 60 percent since 1935, the study found.  This increased American lifespan is directly attributable to the advances of medical device and pharmaceutical manufacturers who have pushed the envelope and invested billions of dollars to improve the quality and health of us all. 

A combination of lifestyle changes and medical advances fueled the dramatic drop in death rates, according to the U.S. Centers for Disease Control and Prevention (CDC) report published in the March NCHS Data Brief.  Highlights of the report include: 

• In each year, heart disease, cancer and stroke were among the five leading causes of death.
• The risk of dying dropped in all age groups but was strongest among children aged 1 to 4 years, where the rate dropped 94 percent.
• For those aged 85 and older, the risk of dying dropped 38 percent.
• Death rates were higher among men, although they decreased for both genders during the 75-year study period. From 1975 to 1981, the risk of dying was 65 percent higher for men than women, while it was only 40 percent higher for men than women in 2010.
• The decline in deaths was seen in all racial and ethnic groups. However, there are still disparities, with the biggest gap found between 1988 and 1996, when one white person died for every four blacks. 

"Overall, the improvement in mortality has been significant over the last 75 years," said report author Donna Hoyert, a health scientist at CDC's National Center for Health Statistics.  To compile the statistics for the report, Hoyert used data from the National Vital Statistics System for the 75 years covered, including preliminary data for 2010. 

The reasons for this trend are varied, Hoyert said.  “The way we live now is much different than in the [1930s]. In the medical field, there have been advances and changes in behavior over time,” she said.  Among the most significant changes have been the decrease in smoking rates and more aggressive treatment of heart disease, she noted. 

In addition, the introduction of antibiotics in the 1940s made a huge impact. "There were some easily treatable potentially fatal diseases, such as pneumonia, that all of a sudden we got antibiotics for," said Dr. Laurence Gardner, executive dean for education and policy at the University of Miami Miller School of Medicine. 

A more aggressive approach to treating cardiovascular disease also evolved in the past 20 years, Gardner said.  “Even more important, the use of cholesterol-lowering drugs [statins] in such a large proportion of the population has contributed to decreased death rates,” he said. 

The advances in treatment were really only seen in one area -- cardiovascular disease, Gardner said.  “The folks in the cancer world are still pulling their hair out, because while there may be increases in survival, the cure rates have not improved very much despite the enormous efforts,” he said, although he added that he believes there will be advances in cancer treatment in the future that will help lower mortality rates. 

Despite the positive benefits in cardiovascular disease, Garndner pointed to the obesity epidemic, which is fueling a diabetes epidemic.  “If we don't effectively address the obesity/diabetes issue, we may lose some of the benefit we have gained,” he stressed.  “We haven't seen the effect of the epidemic of obesity and diabetes reflected in the death rate [yet].” 

Another issue is the growing cost of expensive medical interventions.  The United States spends more on health care than any other nation, and there is a point of diminishing returns where the costs outweigh the benefits, Gardner said.  He noted how the U.S. does not “manage the end-of-life care very well and we do spend unnecessary funds and cause some unnecessary hardship.” 

Discussion 

While the statistics of this report offer hopeful insight into medical progress in America, there are some troubling trends that may create obstacles and hurdles for continued success in cardiovascular disease and other chronic illnesses such as cancer.  In particular, the current regulatory environment at the Food and Drug Administration (FDA) as well as the push for transparency (i.e. Physician Payment Sunshine Act) in the Obama Administration has the potential to cause a chilling effect on innovation and scientific progress in America.  

Transparency and accountability are certainly important goals, which we agree with.  However, the cost of increased regulations and economic burdens, as well as a misinformed public can stigmatize an already difficult and uncertain regulatory and research environment in the life sciences.  

Although we have seen advances in the last 75 years, the regulatory landscape has changed dramatically, as has science, medicine, and humans in general.  In order to continue the success we have seen in the past, the government, academia, and industry must continue working together, in a way that encourages collaboration, instead of attacking it.  

One example of the kind of collaboration that will lead to further scientific and medical advances is a new partnership announced between the National Institutes of Health (NIH) and Eli Lilly.  The partnership, announced earlier this month, “will generate a publicly available resource to profile the effects of thousands of approved and investigational medicines in a variety of sophisticated disease-relevant testing systems, NIH announced today.” 

NIH recognized that, “Comprehensive knowledge of the biological profiles of these medicines and molecules may enable biomedical researchers to better predict treatment outcomes, improve drug development, and lead to more specific and effective approaches.” 

Through the collaboration, the NIH's newly established National Center for Advancing Translational Sciences (NCATS) and Lilly Research Laboratories have agreed that NCATS’ Pharmaceutical Collection of 3,800 approved and investigational medicines will be screened using Lilly’s state-of-the-art Phenotypic Drug Discovery (PD2) panel. This panel features assays (i.e. tests) that are designed to reveal novel mechanisms or pathways of potential medicines and, as part of this collaboration, approved medicines as well. As such, the panel may provide new insights for drug discovery. 

“This innovative collaboration with Lilly is exactly the type of partnership that NCATS is eager to foster with many other groups from industry, government and academia,” said NCATS Acting Director Thomas R. Insel, M.D.  “Working together, we can make drug development pipelines more productive.  The key is precompetitive collaboration to benefit all partners, ensuring broad access to the results.” 

The NCATS Pharmaceutical Collection (NPC) is a comprehensive publicly available database (http://tripod.nih.gov/npc) and is a physical sample collection.  The PD2 assay panel, part of Lilly's Open Innovation Drug Discovery platform, consists of sophisticated human disease pathway-related assays relevant to cardiovascular diseases, cancer and endocrine disorders, among others.  These testing systems are designed to reveal novel mechanisms or pathway activities of drugs. 

“This profiling, broad in terms of the therapeutics tested and the range and complexity of the biological readouts, will leverage the NPC in just the way I envisioned when we assembled the pharmaceutical collection,” said Christopher P. Austin, M.D., director of the NCATS Division of Preclinical Innovation.  “The combination of the power of the PD2 component of Lilly's Open Innovation Drug Discovery platform and the NPC will benefit of the entire scientific community.”

The screening will take place over the next 12 to 18 months, and results will be made freely available at http://tripod.nih.gov/npc/.  For example, if an approved medicine is found to be a possible treatment candidate for a new disease indication, a partnership with the organization that owns the chemical compound could be formed to pursue additional studies.  These might include clinical trials required for marketing approval by FDA.  Alternatively, medicines with activity in the PD2 assays might serve as starting points for additional chemistry research efforts to produce new medicines. 

“This initiative is a great example of how we can collectively leverage unique capabilities from the public and private sectors toward our shared goal of advancing science and improving patients' lives,” said Alan D. Palkowitz, Ph.D., vice president of discovery chemistry research and technologies at Lilly.  “It also attests to the importance of collaborative research because, despite major advances in biomedical science, much work remains to be done.” 

Conclusion 

NIH and Lilly’s partnership should be applauded and encouraged to ensure that Americans continue to have the best health care treatments available.  Moreover, NIH, life science companies, and other research institutions should pursue similar partnerships and arrangements.  With continued collaboration such as this, Americans may live to see a cure for cancer. 

Pharmaceutical Companies Need Longer Patents to Fund Innovation

Pharmaceuticals have improved and extended the lives of millions of people. But the many advances over the past couple of decades haven't come without controversy, much of it centering on the massive profits the industry makes on blockbuster drugs. 

The drug makers say those profits fund the research that produces breakthrough treatments. They warn that with patents expiring on several big-money drugs, their ability to develop new drugs will be severely hampered. Longer-lasting patents, they say, would protect the profits that they need to keep innovative products moving through the pipeline. 

Critics, however, question this assumption, and say there is no proof of a link between patent life and innovation. In their view, “drug companies focus on developing the most marketable drugs instead of the most urgently needed medications. So extending patents would serve mainly to boost drug companies' profits, not to encourage the innovation needed to address the world's unmet medical needs.” 

Shedding further light on this discussion, a recent article in the Wall Street Journal included a debate over why drug companies should have longer patents.  Taking the side that drugs should have longer patents was Dr. Bloom, director of chemical and pharmaceutical sciences at the American Council on Science and Health, a health-care education and advocacy group based in New York.  Arguing against longer patents was Dr. Torreele, director of the Access to Essential Medicines Initiative of the Open Society Foundation's Public Health Program, based in New York. 

Drug’s Need Longer Patents 

The American pharmaceutical industry is seriously ill. And extended patent protection is just the medicine the drug companies need,” Dr. Bloom argued. 

Although “Pharmaceutical companies have long been demonized by many politicians and others as heartless behemoths that place profit ahead of people's well-being,” Dr. Bloom asserted that this perception “couldn’t be more wrong.”  He explained that the “profits these companies make on blockbuster medications support the research that produces such breakthroughs. And the scientists working in the labs are fervently committed to finding useful new medicines.” 

One problem, however, is that “there are far fewer of those scientists at work than there were 10 years ago, and their companies are in trouble.”  Dr. Bloom explained that a “confluence of events in recent years has made drug discovery more difficult, expensive and time consuming. Most important, it has become less profitable, largely because longer development times mean companies have less time left under patents to exclusively market their discoveries.” 

Now, the industry faces a financial crisis because of the recent or imminent expiration of the patents on many of its most profitable drugs. “Without extended patent protection for new discoveries,” Dr. Bloom argued that, “the industry won't be able to fund the current level of research. And the consequences are profound: decreased innovation, fewer new drugs and more job losses.” 

While critics and media focus on blockbuster drugs making billions of dollars, Dr. Bloom told people to consider the following: Currently, bringing one new drug to market takes roughly 14 years, at a cost of about $1.3 billion.  For every drug that makes it to market, more than 50 other research programs fail.  After all that, only two of every 10 newly approved drugs will be profitable. Those profits must fund not only all the research programs that failed, but also all the drugs that are launched but lose money.

When the industry was producing a steady stream of blockbuster drugs, as it did beginning in the 1990s (for example, all the AIDS drugs), the math worked in its favor. But in recent years the numbers have turned against the drug industry, for several reasons. 

One reason is that the Food and Drug Administration (FDA) has become more risk-averse in the wake of the 2004 Vioxx debacle. Drug makers are now required to conduct more studies with many more subjects. That adds to costs and stretches out development times. And every year spent in clinical trials equals one year of lost patent coverage. 

In 1968, when development time was much shorter than today, most drugs had an effective patent life of about 17 years. Now companies usually have only about 11 years of market exclusivity for their drugs. And this number is expected to continue dropping as development times grow even longer—approaching a point where the costs and risks of development outweigh the rewards and research will stop. 

Many of the diseases addressed in the 1990s were simply easier to tackle. Since then, despite increased research spending, fewer breakthrough drugs have been discovered. Difficult conditions such as cancer, Alzheimer's, Parkinson's and obesity remain problematic. 

Amid all these challenges, the drug industry is losing its financial cushion as patents from the 1990s expire. Since 2006, brand drugs have lost an estimated $60 billion in sales because of patent expirations; by 2015, this figure is projected to rise to $160 billion. This is the so-called patent cliff. 

It shouldn't be surprising, then, that the industry is showing signs of stress.  The share prices of the major drug makers have fallen sharply in the past decade, and weakened companies have succumbed to mergers and acquisitions, causing the elimination of 300,000 jobs during this time. 

As a result, Dr. Bloom argued that, “Extension of patent life for the most innovative drugs would, at the very least, postpone the rush toward the patent cliff, providing drug companies with extra time to discover the next cycle of new, innovative therapies.”

With U.S.-based drug companies scaling back their research, there will be fewer discoveries to fill the gap and keep new treatments coming to market.  Academic researchers are very good at studying the basic biology of a disease, but this is just the very beginning of the discovery process. The lion's share of the work—progressing from basic biology to an actual drug—requires the expertise and resources that academic and government labs simply don't have. 

While “longer patents would mean that important drugs would remain relatively expensive for a longer time,” Dr. Bloom asserted that, “the expense of new drugs is preferable to not having them at all.”  Moreover, the success of patents for drug companies in the past is irrelevant because companies did not face the regulatory and competitive environment of today, especially since generic competition was minimal until the 1980s. 

Importantly, Dr. Bloom recognized that, manufacturers of generic drugs contribute nothing to innovation—they are just copycats. Yet they take up to 90% of sales away from the comparable brand-name drugs whose makers risked the time and money to bring breakthrough treatments to market. 

Realistically, Dr. Bloom noted that some drugs deserve less patent protection, such as “line extensions—where companies simply tweak existing drugs enough to earn a new patent. Virtually identical to the original compound, these provide little real innovation. When companies are under economic stress, line extensions may become an attractive way to keep revenue flowing, drawing resources away from innovative, more important work.” 

To discourage that and to keep drug companies focused instead on innovative treatments, Dr. Bloom asserted that “patents for line extensions should be shortened, perhaps by three years or so, while patents for high-risk, first-in-class drugs and those that address unmet medical needs should be extended significantly—five more years could be a starting point for discussion. (Most drugs now get 20 years of protection from the time a patent application is filed, which is effectively about 11 years after accounting for development time.)” 

One alternative that has been suggested is that in order to gain FDA approval, new drugs should have to demonstrate superiority to existing ones. However, Dr. Bloom maintained that “This would be unrealistic because that standard could hardly ever be met in clinical trials—in nearly all cases you can't tell the real differences between two drugs until they are in the marketplace and being taken by millions of people.” 

Ultimately, Dr. Bloom asserted that “A well-planned extension of patent protection, especially for innovative drugs, is both reasonable and necessary to keep what is left of the American pharmaceutical industry healthy enough to continue its crucial work.” In the absence of a remedial measure like patent-life extension, “the industry will continue its decline, resulting in incalculable losses to the U.S. economy and poorer medical care for its citizens. This would be a national disgrace.” 

Patents Should Not Be Extended

Dr. Torreele argued that extending patents on pharmaceuticals will “do nothing to increase medical innovation.” To support her claim, she asserted that despite increases in patent duration since the 1980s and an increase in R&D, the number of "new molecular entities"—or totally new drugs—reaching the U.S. market slid from around 45 per year in the late 1990s to only 30 last year, according to FDA.  She also asserted that “scientific reviews of new drugs released between 1996 and 2006 show that very few represented therapeutic innovation; most were no better than existing products or were actually inferior.” 

The problem, Dr. Torreele maintained, “is that drug companies are more focused on developing the drugs with the greatest market potential than they are on developing truly innovative treatments that address critical health needs. And the patent system encourages that approach.”  Dr. Torreele pointed to the line extension patents as an example of how real innovations in patents has decreased and that “companies can secure a 20-year monopoly by either making minor changes to an existing drug or inventing a totally new drug—so why take the risk of failure associated with the latter?” 

Dr. Torreele argued that, “It's perfectly possible to achieve a major medical breakthrough with a product that isn't patented, while the fact of obtaining a patent doesn't say anything about a compound's actual medical value.”  Moreover, the patent office isn't equipped to judge therapeutic benefit. 

Instead, she argued that FDA require “new medicines to show a therapeutic benefit over existing treatments before giving market approval.”  Without such a prerequisite, she argued that companies will continue to focus on pharmaceuticals with the highest market potential, rather than innovating to address medical need. 

Dr. Torreele also maintained that extending patent protection on “high-priced drugs” would only worsen costs and would be contrary to the purpose of the patent system—to benefit society through innovation. Dr. Torreele argued noted that, “while patent monopolies are powerful tools to maximize return on investment, they fail to provide effective incentives to encourage innovation that addresses priority health needs. Extending patents in this broken innovation model will merely increase sales of those same market-friendly drugs.” 

Dr. Torreele also maintained that tougher FDA requirements does not justify extending patents because “the FDA is fulfilling its primary mandate by requiring more rigorous studies to document the safety of new medicines in the wake of cases like the Vioxx disaster.” 

Instead of patent extension, Dr. Torreele said America should institute a regulatory environment that prioritizes health innovation instead of market opportunities, by making approval of new drugs contingent on therapeutic advances that address unmet health needs. In parallel, “we should mobilize public and private resources to finance research and development independently of patents, so that we can stop relying on pharmaceutical sales as the primary source of funding for research.  A pharmaceutical business model based on these premises would ensure that research on critical health needs is prioritized, and that medicines resulting from this research are affordable.”

 

Marrying Earlier Life Science Research with Financing

Sanofi CEO Chris Viehbacher recently spoke with journalists during the recent CED Life Sciences Conference in Raleigh, North Carolina. He discussed his thoughts “about how to marry life science ideas with the financing that is the life blood for that innovation.” The pharmaceutical giant earlier this year partnered with venture capital firm Third Rock Ventures to launch biotechnology company Warp Drive Bio. 

Supporting biotech company launches is not a typical activity of Big Pharma. But Viehbacher said that “business and financing models are changing, and investors and pharmaceutical companies must change as well.” 

Warp Drive’s proprietary genomic technology was incubated within Third Rock. What the partnership offers is a pathway to develop the science and a partner in Sanofi, who could vet the research and perhaps commercialize it. To start, the partnership provides Warp Drive with $125 million in initial funding, including $75 million in equity investment, to support development of the biotech’s technology. 

But just as important, the agreement provides an exit for Warp Drive’s investors. The partnership is structured in a way that allows Third Rock to force Sanofi to buy the company if certain performance criteria are met, Viehbacher explained. Sanofi can also force the venture capitalists to sell under certain conditions. Viehbacher said other venture capitalists are interested in pursuing similar deals. 

“Every venture capitalist I’ve ever talked to is interested in this model because they clearly see opportunities,” Viehbacher said. “The science is fabulous today. But if you don’t have an exit strategy, you can’t really afford to get into it.” 

How is the financing model changing?  

The Sanofi CEO noted that the financing model is changing because there is uncertainty in the regulatory process: can you get a drug approved?  How much return will that product have?  “And the fact that the IPO window is closed means that the time now for a biotech company to get all the way to the marketplace exceeds the time frame that a venture capitalist is willing to stay (invested).” 

As a result of the current trend, “you either have a problem of startup companies finding funding, or you have a problem where a lot of companies are forced to sell just because nobody is going to fund development beyond a certain time frame.”

However, Viehbacher predicted that “Big Pharma,” will begin to fund much earlier-stage research.  As long as there is a “clear exit” for companies investing in startups, about five years, he predicts this happening in the near future.  

One of the things he said “Sanofi is doing is reducing its own internal research capacity.”  He said the company will do less of their own research.  They are not going to get out of research entirely. Sanofi will continue doing research it does well, but the company also wants to work with more outside companies, startup biotechs, with universities.  Why?  Because it’s cheaper. 

But research and development is either a huge waste of money or too, too valuable. It’s not really anything in between. “You don’t really do things because it’s cheaper,” Viehbacher said.  The reality is the best people who have great ideas in science don’t want to work for a big company. They want to create their own company.  So, in other words, if you want to work with the best people, you’re going to have go outside your own company and work with those people. 

In the past, these smaller companies typically did not want to work with Big Pharma, but because of funding gaps and more onerous regulatory, approval, and marketing requirements, “there’s a much greater willingness of earlier-stage companies to work with Big Pharma. We’re looking earlier and people who are early need help.” 

Viehbacher pointed to two reasons why he likes capital venture firms.  First, “they can sometimes bring competencies we don’t have, like for instance in how to help a startup company.”  The second thing is to give you a second opinion. “Somebody in your company is going to love the science and be championing this internally. But you want to have a second opinion. If you have a venture capital company that’s willing to put money in, that kind of gives a little validation of that.” 

The Sanofi CEO gave further details about this new “model,” using Warp Drive as an example.  To explain the new model, he first distinguished it from the old model.  Previously, Big Pharma would look for a product, pay some sort of up-front payment to take into account all of the risk and research already invested, and either fund research or take over the research. If the product goes further, you get milestones. One day, if it makes it to the market, you get royalties. 

In contrast, the new model, capitalizes on Big Pharma competencies in validation. So, if a Big Pharma company does a deal with a smaller company, the smaller company’s share price goes up because people believe that Big Pharma has depth of competencies to judge whether this science is any good or not.  He also noted that Big Pharma should work with big companies as well because they have an element of “disruptive thinking that helps bring about innovation and bring Big Pharma Competencies together.  

Conclusion 

Ultimately, Viehbacher noted that companies will “never get any innovation if they are not prepared to take the risk.”  He noted that the risky money doesn’t come in the beginning phases, but rather, in phase 3 clinical trials, where costs begin to enter the billions.  He noted that it’s a whole lot more risky going into a phase 3 billion-dollar program than investing probably $10 million in an early stage asset.  Accordingly, the Sanofi CEO said moving forward, he wants to be more risk averse going into development, and that he probably is going to be much more willing to take the risk at an early stage.