Pharma Trends

The Role of the Emerging Markets

  • from left: Dr. Ron Fitzmartin, PhD, MBA, Vice President, Informatics and Knowledge Management, Daiichi Sankyo; John Wise, MA, Senior Director, Informatics and Operations, Daiichi Sankyo Developmentfrom left: Dr. Ron Fitzmartin, PhD, MBA, Vice President, Informatics and Knowledge Management, Daiichi Sankyo; John Wise, MA, Senior Director, Informatics and Operations, Daiichi Sankyo Development

The current model of pharmaceutical R&D is broken. This article examines some of the trends in global clinical R&D caused by the rapidly changing and increasingly challenging environment of the pharmaceutical industry (Pharma). Components of this change include science, regulation, technology, sociology, economics and the law as well as the impact of the emerging markets. Such profound change demands a revolution rather than an evolution of how global Pharma responds to its mission to provide new medical products.

Where Are We Today?

Pharma is performing poorly. In the period 2000-2007, the FTSE Global Pharma Index rose by +1.3% whereas the DJ World Index rose +35%. Society increasingly expresses its poor opinion of Pharma. In 2007, it was rated 2nd in the list of the 10 most crisis-prone industries [1]. Furthermore, it found itself in 9th position out of 11 industrial sectors [2] rated for public confidence. Sadly, only the energy and tobacco sectors were viewed more dimly.

And what is the pharmaceutical industry's response?

1. Layoffs: tens of thousands of jobs were shed in 2007 [3] and 2008 with thousands more in 2009.
2. Consolidation: continuing mergers & acquisitions between pharma and/ or biotech companies.
3. In-licensing: searching the market for new compounds to bolster pipe-lines.
4. Business and Knowledge Process Outsourcing: moving work to cheaper skilled labor sources in the East and Latin America.

And what is the regulators' response?
1. Risk minimization: Regulators are becoming more risk averse and taking longer to reach decisions.
2. More Regulations: emanating from more regulatory agencies with sub-optimal global co-ordination.
3. Initiatives: promulgating or participating in new and joint initiatives such as:

  • ICH (but has this prestigious forum lost its energy?)
  • the NIH "Roadmap for Medical Research",
  • the "Innovative Medicines Initiative" from EFPIA and the EU,
  • "Innovation / Stagnation: the Critical Path Initiative from the FDA", and
  • the "The European Medicines Agency Road Map to 2010" from the EMEA

Innovative NMEs are proving increasingly difficult to discover and develop.

Regulators require more information per patient than ever. The availability of patients to participate in clinical studies is increasingly challenging. In Europe the costs of insuring clinical studies has risen by almost an order of magnitude since 2003. [4] The duration of development programs is still six to seven years [5]. Marketing application approval times are still many months, despite initiatives such as the PDUFA legislation in the USA and the investment in more reviewers in Japan by the PMDA. And what will this foretell for BRIC (Brazil, Russia India and China) and the other emerging countries?
In the past western-based pharma realized that arbitrage was the reason to operate in the East and Latin America. The future will reveal other reasons too. Data published by Fabio A. Thiers et al. [6] shows that BRIC countries, Korea and Mexico are developing their clinical trial capabilities much faster than countries such as Canada, Germany, Japan, UK and USA.

Pharma Trends: Change Drivers

Deloitte Life Sciences and Healthcare recently stated that "A Fundamental Shift in the Industry's Operating Environment is Under Way" [7]. No longer are modest organizational changes and / or downsizing solutions in themselves adequate, but rather a fundamental change in the core of what it means to develop and market medical products is well underway. Some of the drivers are:

World-Wide-Web Informed Patients(e.g. WebMD [8], medicdirect [9], PatientUK [10]) are now better informed, have higher expectations and are taking more responsibility for their own care. This trend creates significant challenges for both healthcare providers and payers

Aging Populations will increasingly impose a major burden on healthcare systems. By 2050, ~21% of the population (> 2B people) will be over 60. This will bring an associated rise in the major chronic diseases.

Science and Technology
today is delivering miniaturization, in the forms of micro and nanotechnology. Nano devices for drug analysis, delivery and non-invasive procedures are emerging [11] and some becoming commonplace. Web-based collaboration and knowledge management (KM) platforms now allow us to break down previous barriers to global full-function, inter-enterprise connectivity & communication.

is the study of how variations in the human genome affect the response to medications [12]. An FDA guidance on this topic states that "the promise of pharmacogenomics lies in its potential to help identify sources of inter-individual variability in drug response". This is one example of many that demonstrates the increasingly important role of this discipline to the potential of personalized (cohort-based) medicine.

has two distinct activities: mandatory reporting of adverse events and signal detection. The former is a regulatory required transactional activity; the latter is strategic; allowing early warning of unexpected adverse events and also the potential for differentiating the drug from the competition. Now, regulators are demanding Risk Management Plans (EU-RMPs) [13] in the EU and Risk Evaluation and Mitigation Strategies (REMS) in USA.

Electronic health records (eHRs)
demanded by societal pressures, including mobile patient populations and legal requirements (FDAAA), will become ubiquitous and change the way healthcare is delivered world-wide. Pharma needs access to eHRs to identify candidates for inclusion in Clinical Trails (CT) and to expedite the capture and quality of CT data.

PharmaTrends: New Pharma Business Ecosystem

No boundaries, interconnected, interdependent and flexible; such a pharma business ecosystem is key to the industry's survival. Pharma has undergone much change, but it has been slow. The change to the new pharma business ecosystem needs to be rapid and profound. The emerging global Pharma ecosystem appears modeled on the interdependence of the three following domains:

R & D Networks and Partnerships

Pharma's revolution to an integrated, networked ecosystem of agile partners will deliver benefit to patients and financial stakeholders. Consortia are becoming important in leveraging talent and resources at companies while sharing costs., e.g. Lilly, Merck and Pfizer collaborated to create the Boston-based Enlight Biosciences LLC.
Non-profit research organizations are forming partnerships with Pharma, CROs, academia and government bodies to drive the research required for their unaddressed diseases. CollabRX provides an example of an outsourced KM platform that can transform these partnerships into "virtual" biopharmaceutical companies.
A novel approach from some larger CROs is to develop risk-sharing, strategic relationships with Pharma including financial investment in the development of late-stage drug candidates. [14]

Virtual R & D Processes

Tufts stated there is a "...trend towards outsourcing and outside partnering"... which is the "strategy being heralded as the way of the future." As Pharma metamorphoses its R&D paradigm to the "ecosystem" the demand for CRO services is expected to grow by 16% / year.
Pharma will retrench into smaller, strategic, core management organizations buying their functional operations from carefully selected and qualified partners.

Knowledge Management

The industry wastes too much time in developing and / or installing non-discretionary transactional information systems. They are too time-consuming and too expensive to install, validate and operate.
Pharma needs KM expertise to facilitate access to outsourced KM platforms that as well as delivering traditional services to support clinical R&D, allow inter alia integration of phenotypic with genotypic data, provide modeling and simulation capabilities, and use Bayesian algorithms to provide decision support for clinical programs. Specialist companies will provide this regulatory-compliant, computer-based functionality to mid-tier and smaller biopharmaceutical companies in the form of internet-enabled, software as a service (SaaS).


  • Global society demands a revolution in how drugs are developed
  • Pharma's revolution will create an integrated, networked and collaborative ecosystem of agile partners delivering benefit to patients and financial stakeholders
  • Regulators will continue on their path of risk aversion; demanding more information both before and after licensing.
  • Pharma must get out of the IT business and pay for access to outsourced, internet-enabled, regulatory-compliant KM platforms.
  • Emerging markets will enjoy an expanding role in the global Pharma revolution: their talent pools, centers of excellence, patient populations and their demand for medicines combine to create an enormous opportunity.

References are available from the author.




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