Despite the unpredictability of biopharma, key forces promise to shape the market over the next few years
When it comes to predictions, I agree with physicist Niels Bohr. They’re difficult, especially about the future. Even when forecasting a very small number of inter-related factors, the uncertainty due to error can be very high. We see this every day, whether in daily stock price forecasts in the Wall Street Journal, or as the prediction intervals of a hurricane’s path.
In biopharma, even the best of intentions or clinical interventions can fail to excite the market or make a splash, due to lukewarm consumer perception, lack of marketing finesse, or inadequate DTC advertising.
The effect of ‘cumulative advantage’
The unpredictability of biopharma forecasts stems, in large part, from the enormous number of external forces that have an impact on the market. Often, “cumulative advantage” plays a role, as it did when JVC’s VHS beat out Sony’s Betamax as a video format, or Apple’s LISA failed to gain traction.
In the cumulative advantage bias, small fluctuations in popularity and word-of-mouth can lead to instances of heightened success. At just the right moment, these successes could be subject to future cumulative impact and specific drugs can wildly spike in popularity and public perception. In the context of pharma, the diseases that the public is most concerned about and the treatments that people seek, are not independent decisions. They are often made in the context of what others in social ingroups are doing.
In mathematical models of parallel universes of music listeners, results depend overwhelmingly on what people see their other peers listening to, rather than any objective measures of the quality of the music. A study at Columbia University that was published in Science (1), for instance, found that the success of various songs was due to social influence; what became a ‘hit’ was different in different experimental setups, and social influence made success more difficult to predict.
Similarly, some great therapies and technologies do not get traction, for reasons unrelated to their actual efficacy, because customer word-of-mouth failed to ignite interest.
Clearly, the ceiling has not been reached with biologics, and more improvements continue to be made to basic building-block therapies. Will biopharma experience its own type of ‘Moore’s Law’, where it becomes harder and harder to achieve the same dramatic improvements on an every-couple-of-years basis? Clearly, from a basic physico-architectural perspective, monoclonal antibodies can only get so big or so complex before they lose clinical efficacy. But certainly the more precisely-controlled the molecules are and the receptor-targeting is, the more finely-tuned the treatment effect can be, along with the potential for fewer adverse events.
Leaving external factors out of the picture, the following are proving to be the most important in biopharm today, and will shape the industry’s future:
Across the globe, drug affordability is one of the biggest concerns impinging upon drug development and future market growth. Given the enormous attrition rate for new drug candidates in the pipeline, strategic pricing of new drugs is the only way to recoup astronomical research and development costs. The price of a drug therapy is also somewhat correlated with the patients’ compliance in taking it, with more expensive drugs being taken more vigilantly – perhaps owing to the financial commitment.
A recent controversy in the small-molecule-drug arena escalated with patients, healthcare providers, and the pharma industry when the market price of the anti-protozoan medication Daraprim (pyrimethamine) was raised from $13.50 to $750 per pill (a 5,560% rise). CEO of Turing Pharmaceuticals Martin Shkreli bought the drug (available for about six decades) from Impax Laboratories for $55 million and soon after raised the price, allegedly to funnel the money back into Turing Pharmaceutical’s R&D for new treatments, including improved versions of anti-parasitics.
Unfortunately, this story is an acute example fresh in the public consciousness of the intersection between free market capitalism and altruistic healthcare. Developing drug therapies is a risky, time-consuming, complicated, and expensive business; This has a lot to do with the strategic pricing of pharmaceuticals. But the appearance of being able to profit to such a degree at the expense of public welfare seems to have struck a chord.
Precision medicine: Cell and gene therapy
As cell therapy continues to advance, there are more opportunities for expanded treatment and precise disease-targeting. Isolation and administration of stem cells, more precise use of effector cells, and inducement of pluripotency in mature cells are likely to increase the armorarium of treatment options for cancer and other targeted immunological concerns.
There will be continued work within gene therapy to see exactly how the accuracy of targeting precise genotypes pays out in terms of treatment benefits. As gene therapy pushes forward, it has amassed some significant successes, including recent favorable results in small samples of patients for cystic fibrosis.
Balanced with the successes in gene therapy is more work that needs to be done to ensure its immunologic safety profile. Clearly, genetic testing to determine the molecular basis for diseases and disorders will allow certain groups in the population to have access to therapies that are designed to influence genes and the expression of proteins. It’s likely that we’ll see resistance mount in this arena, given how new it is in concept to the general public, and the questions surrounding the security of personal data in the form of genetic information. More robust measures will need to be advanced to get the public to support the notion of widespread genetic sequencing for the benefit of better medicines.
As contentious an issue as vaccination has been, there will be continued development and refinement of the technologies for immunization, including more work within viral vector vaccines, broader virus serotypes within multivalent vaccines, antigen-sparing developments which continue to refine the science of adjuvant technologies, and ultimately more public education that needs to happen to bring the under-immunized populations to minimum-acceptable levels; Recent outbreaks of measles have been largely attributed to unvaccinated populations and lack of herd immunity, the data for which is visualized below (CDC, 2015).
As an exemplar of positive public response to vaccination, a nationally-financed vaccination program in Australia has led to dramatic reductions in transmission of human papillomavirus (HPV). In women under 21, for example, the number of cases of genital warts dropped 93 percent between 2007 and 2011. The presence of HPV is also an antecedent to such systemic health hazards as mouth and throat cancers, cervical cancers, and squamous cell carcinoma (skin cancer). The fact that anti-vaccination is even a social faction (a Google search of the term ‘anti-vaccination’ returned 6,340,000 results) shouldn’t make you shake your head in disbelief so much as make you more clearly realize that human behavior is much more messy than simple models portend it to be. Consumer drives word-of-mouth, patient-physician interaction (PPI), and sales. As patently irrational as human behavior can be, the effects it has on market revenue are real.
Ongoing changes within the regulatory landscape worldwide are designed to improve the average overall quality of the medicinal products available to consumers. Because many countries’ regulatory bodies don’t fully share expertise and inspection findings, their opinions and priorities may differ. They also bring a certain set of heuristics based on what concepts are considered most critical within their regulatory regions.
However, all regulators today profess commitment to contemporary concepts such as CAPA trending, data integrity, employee training, risk-based methods, and quality by design (QbD), the average bar for the industry continues to advance.
Some regions or sites may remain in the shadows of the regulatory spotlight, but these spaces get smaller every year. It’s a difficult balancing act for the regulatory agencies themselves, because they act on behalf of society. The pendulum always cycles between a state where new drugs get to market faster but with additional risks of less safety data and surveillance information to guide decision-making, and a more conservative state in which approvals are delayed, slowing the release of important new therapies to the market.
Patient responses also cycle between complaining and litigating, based on insufficient regulatory oversight and adverse events, and complaining about lack of access to new therapies. Often, patients say that they are willing to tolerate more side effects and adverse events as long as they have the opportunity to try or continue their therapy of choice. It’s up to this industry to see to it that those choices become more effective, and more precisely targeted, every year.
Ariely, D. (2010) Predictably Irrational: The Hidden Forces that Shape our Decisions. New York, NY:Harper Collins, N.Y., N.Y. 2010.
U.S. Centers for Disease Control and Prevention, Measles Cases and Outbreaks. http://www.cdc.gov/measles/cases-outbreaks.html, 2015
Salganik, M. J., Dodds, P.S., and Watts, D.J.. Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market. Science 311:854–6, 2006.
Ali, H., Donovan, B., et al, Genital warts in young Australians five years into national human papillomavirus vaccination programme: national surveillance data. The British Medical Journal, 346, 2006.