Access and Benefit Sharing Key Points for Policy-Makers
THE PHARMACEUTICAL INDUSTRY
Sarah A. Laird November 2015
SUMMARY OF KEY POINTS
MARKETS, COMPANIES AND PRODUCTS Revenues have increased steadily over the last 30 years, but in recent years growth has slowed in developed country markets while in ‘pharmerging’ markets it has increased. The world’s largest pharmaceutical companies are located in developed countries. Their earnings make them some of the wealthiest companies in the world. The pharmaceutical industry has undergone significant consolidation over the last 30 years in order to increase growth and acquire new technologies, expertise and novel drug candidates. Many of the industry’s top-selling drugs have gone off-patent, resulting in reduced revenues in recent years. Patent expiries on small molecule products will reduce brand spending in developed markets by $113 billion through 2017. A top-selling pharmaceutical product can now generate more than $5 billion in sales a year. Specific disease areas and products differ significantly between developed and pharmerging markets.
TRENDS IN RESEARCH AND DEVELOPMENT Spending on R&D has increased over the last few decades but productivity has gone down. The number of new drugs coming on the market each year has held roughly steady or declined since 1981. Government contributions to pharmaceutical R&D remain high across the globe. In the US, for example, government funding contributed to 48% of all drugs approved by the FDA and 65% of drugs that received priority review between 1988-2005. Drug discovery, including that on natural products, is increasingly done in smaller start-up companies, academia and government laboratories, with large companies undertaking development and marketing.
2
NATURAL PRODUCTS RESEARCH Although support for natural products research in large companies has declined, the contribution of natural products to the development of new drugs continues, and between 19812013 an average of 31% of all new drugs annually were natural products. Natural products research has undergone dramatic changes in the last 50 years, with significant implications for the speed, scale and focus of R&D, and the design of effective ABS measures. Traditional knowledge, once the primary lead for the discovery of new medicines, is no longer a significant part of industry R&D.
INDUSTRY AND ABS The pharmaceutical industry is more aware of the Convention on Biological Diversity than many other sectors, although this is more the case with large companies than with small. However, many concerns persist within industry about legal certainty and the need for new measures drafted to implement the Nagoya Protocol to reflect the scientific, business and legal realities of natural products research today.
MARKETS, COMPANIES AND PRODUCTS Global growth rates 1 200
7%
800
$989 billion of global spending on medicines
29% ASIA / AUSTRALIA
600 400
2%
200 0 2008
2012
Pharmerging markets Other emerging markets
4% 24%
Other developed markets
AFRICA / MIDDLE EAST
Top 8 mature markets
EUROPE
The world’s largest pharmaceutical companies are located in developed countries. Their earnings make them some of the wealthiest companies in the world. NORTH AMERICA
2017 (F)
CAGR* 2012-2017
Between 2012 and 2017, Pharmerging markets have growth rates far higher than in mature markets. *CAGR (Compound Annual Growth Rate)
EUROPE 2013 SALES (USD million)
2013 R&D SPENDING (USD million)
1
$46,017
$9,360
Gleevec ($4,693) Diovan ($3,524) Lucentis ($2,383)
3
$39,143
$8,294
Rituxan ($7,503) Avastin ($6,751) Herceptin ($6,562)
4
$37,701
$6,117
Lantus ($7,592) Plavix ($2,460) Lovenox ($2,262)
6
$33,055
$5,041
Seretide / Advair ($8,251) Pediarix ($1,349) Avodart ($1,341)
RANK
COMPANY
COUNTRY
2013 TOP-SELLING DRUGS (USD million)
2013 SALES (USD million)
2013 R&D SPENDING (USD million)
2
$45,011
$6,254
Lyrica (4,595) Prevnar ($3,974) Enbrel ($3,774)
5
$37,519
$7,123
Januvia ($4,004) Zetia ($2,658) Remicade ($2,271)
7
$26,475
$5,810
Remicade ($5,334) Zytiga ($1,698) Prezista ($1,673)
8
$24,523
$4,269
Crestor ($5,622) Nexium ($3,872) Symbicort ($3,483)
9
$20,119
$5,316
Cymbalta ($5,084) Alimta ($2,703) Humalog ($2,611)
13
$15,594
$2,710
Kogenate ($1,597)
10
$18,790
$2,831
Humira ($10,659) AndroGel ($1,035) Kaletra ($962)
14
$14,886
$2,090
NovoRapid ($3,001)
11
$18,192
$3,941
Enbrel ($4,551)
15
$14,468
$3,247
Spiriva ($4,719)
17
$12,306
$3,715
Reyataz ($1,551)
18
$10,804
$2,056
Atripla ($3,648)
2013 SALES (USD million)
2013 R&D SPENDING (USD million)
16
$13,591
$3,352
Biopress ($1,256)
2013 SALES (USD million)
2013 R&D SPENDING (USD million)
19
$10,431
$2,132
Prograf ($1,755)
$17,563
$1,422
20
$10,268
$1,926
Benicar ($2,116)
RANK
Top Companies
13% 7% 2%
1 000
LATIN AMERICA USD billion
Revenues have increased steadily over the last 30 years, but in recent years growth has slowed in developed country markets while in ‘pharmerging’ markets it has increased.
37% NORTH AMERICA
COMPANY
COUNTRY
2013 TOP-SELLING DRUGS (USD million)
AFRICA / MIDDLE EAST RANK
12
COMPANY
COUNTRY
2013 TOP-SELLING DRUGS (USD million)
Copaxone ($4,328)
ASIA / AUSTRALIA RANK
COMPANY
COUNTRY
2013 TOP-SELLING DRUGS (USD million)
3
The pharmaceutical industry has undergone significant consolidation over the last 30 years in order to increase growth and acquire new technologies, expertise and novel drug candidates.
Schering-Plough
Hoffman
Hoescht Roussel
Squibb
Sandoz
Glaxo
Pfizer
Genentech
Marion Merril Dow
Bristol Myers
Ciba-Geigy
Wellcome
Parke-Davis
Rhone Poulenc
DuPont Pharma
Burroughs
Warner Lambert
Sanofi
Merck DuPont
Smith Kline & French
Monsanto
Beecham
Searle
Organon
Synthelabo
Upjohn
Consolidation has been a continuing process
Pharmacia A H Robbins Lederle (AHP) Wyeth
H-LaRoche Syntex
Hoescht
Squibb
Sandoz
Genentech
Sanofi/ Synthelabo
Bristol Meyers
Ciba-Geigy
SmithKline Beecham
Pfizer
Developed markets patent expiry 2008-2017 60
$149 billion
20 0
Monsanto Searle
Marion Merril Dow
Pharmacia Upjohn
-60
Bristol-Meyers Squibb
SmithKline Beecham
Pfizer
Sanofi/ Synthelabo
BurroughsWellcome
Pharmacia
RhonePoulenc & Fisons
Glaxo
Lederle(AHP)
2013
2014
Wyeth
2015 Merck
Hoffman LaRoche
4
Roche
Sanofi-Aventis
Wyeth Pfizer
Bristol-Meyers Squibb
Novartis
Glaxo SmithKline
Pfizer
9
2010
GlaxoSmith Kline
Sanofi/ Synthelabo
Schering-Plough
Merck
Aventis
26.9
28.4
50.3
19.1
31.7
28.8
20.3
22.6
-18.5
-15.3
-21.5
-22.6
-43.6
-32.1
-17.2
-26.2
-22.5
-15.9
-$121 billion
2016
-$113 billion
Lower brand spending 2008
Protection expiry year
Wyeth
Hoescht Roussel
22.3
-40
2012
Lederle (AHP)
21.0
-20
Warner Lambert
RhonePoulenc & Fisons
$123 billion
Pre-expiry spending
40 SPENDING US BILLION
Merck
No. Companies: (including Amgen and Johnson and Johnson) 33
1980
Many of the industry’s top-selling drugs have gone off-patent, resulting in reduced revenues in recent years. Patent expiries on small molecule products will reduce brand spending in developed markets by $113 billion through 2017.
2009
2010
2011
2012
2013
2014
2015
2016
2017
US
Japan
UK
France
Germany
Plavix Seroquel Singulair Actos Lexapro Diovan Diovan HCT® Geodon Viagra Boniva
Nu Lotan Myslee Preminent Haigou Seroquel
Lipitor Amias Seroquel Aricept® Singulair
Tahor Singulair Pariet Ixprim Aprovel
Seroquel Atacand Atacand Plus Sortis Aricept
Oxycontin® Aciphex Zameta Xeloda Opana ER Asacol
Diovan Plavix Livalo Elplat
Viagra Xeloda
Seretide Coaprovel Xeloda Micardis Viagra
Viani Zometa Atmadisk Coaprovel Viagra
Nexium® Cymbalta Cerebrex Symbicort Lunesta Restasis Evista Sandostatin LAR Actonel
Prograf Glivec Abilify
Abilify Cipralex Risperdal Consta
Seroplex Abilify Ebixa Risperdal Consta LP
Axura Risperdal Consta Biopress Plus
Abilify Copaxone Gleevec Namenda Provigil Combivent Zyvox Prezista Avodart
Zyprexa Adoair Alimta Spiriva Symbicort
Spiriva Cymbalta Alimta
Alimta Spiriva Copaxone Protelos Cymbalta
Spiriva Copaxone Alimta Cymbalta
Crestor
Blopress Baraclude
Glivec Vfend
Glivec Cancidas Vfend
Glivec Zyvoxid Vfend
Benicar Benicar HCT Cubicin
A top-selling pharmaceutical product can now generate more than $5 billion in sales a year.
Top ten global products 2013
Specific disease areas and products differ significantly between developed and pharmerging markets.
Spending by therapy area (projected for 2017)
2013 sales (USD million)
DEVELOPED MARKETS 1
$9,851
2
$9,213
3
$8,149
4
5
6
7
8
$7,949
$7,935
$7,863
10
PHARMERGING MARKETS
Projected sales in 2017 (USD billion)
Oncology
$74-84 billion
Pain
$22-25 billion
Diabetes
$34-39 billion
Other CNS Drugs
$20-23 billion
Anti-TNFs
$32-37 billion
Antibiotics
$18-21 billion
Pain
$31-36 billion
Oncology
$17-20 billion
Asthma/COPD
$31-36 billion
Hypertension
$14-17 billion
Other CNS Drugs
$26-31 billion
Diabetes
$10-12 billion
Hypertension
$23-26 billion
Dermatology
$10-12 billion
Immunostimulants
$22-25 billion
Antiulcerants
$9-11 billion
HIV Antivirals
$22-25 billion
Cholesterol
$6-8 billion
Dermatology
$22-25 billion
Asthma/COPD
$3-5 billion
Antibiotics
$18-21 billion
Anti-Epileptics
$3-5 billion
Cholesterol
$16-19 billion
Antivirals excluding HIV
$3-5 billion
Anti-Epileptics
$15-18 billion
Immunosuppressents
$3-5 billion
Immunosuppressents
$15-18 billion
Allergy
$3-5 billion
Antipsychotics
$13-16 billion
Antidepressants
$3-5 billion
Antiulcerants
$12-14 billion
Antiplatelet
$3-5 billion
Antidepressants
$10-12 billion
Antipsychotics
$2-3 billion
Heparins
$1-2 billion
$7,832
$7,678
Antivirals excluding HIV 9
Projected sales in 2017 (USD billion)
$6,464
$8-10 billion
ADHD
$7-9 billion
Erectile Dysfunction
$1-2 billion
Interferons
$6-8 billion
Immunostimulants
$1-2 billion
$6,263
BRAND 67%
GENERIC 21%
OTHER 12%
BRAND 26%
GENERIC 63%
OTHER 11%
5
TRENDS IN RESEARCH AND DEVELOPMENT Revenues
Spending on R&D has increased over the last few decades but productivity has gone down. The number of new drugs coming on the market each year has held roughly steady or declined since 1981.
2013 2010
R&D expenditures, industry revenues and new chemical entities
R&D Expenditures
2000 1990 1980
R&D Productivity 1985
39 NCEs 10
Natural Products
45 NCEs 21
Natural Products
1995
39 NCEs 11
Natural Products
2005
38 NCEs
37 NCEs
11
33 NCEs
13
Natural Products
13
Natural Products
Natural Products
20 NCEs
New Chemical Entities (NCEs)
31 NCEs
10
5
Natural Products
Natural Products
$119.3
Government contributions to pharmaceutical R&D remain high across the globe. In the US, for example, government funding contributed to 48% of all drugs approved by the FDA and 65% of drugs that received priority review between 1988-2005.
6
Public and industry biomedical R&D expenditures, 2012 (USD billion)
$81.7 $37.1
$8.3 $5.3
$48.9
$6.1
$28.1 $9.5 $2.0
$3.3
$4.7
$2.0
$1.4
CANADA
AUSTRALIA
$6.3
$27.6
$53.6
$70.4
Public CHINA
JAPAN
EUROPE
USA
Industry
Drug discovery, including that on natural products, is increasingly done in smaller start-up companies, academia and government laboratories, with large companies undertaking development and marketing.
The ecosystem of life sciences R&D
Start-Ups
Genetic resources sourced from:
Venture Capital Nonprofits
Academic Research Institutions
• existing collections and libraries • electronic data/internet • limited field collections (mainly domestic)
Government Regulators
Government Research Institutes
Large Biopharma Research Companies
Clinical Research Organisations
Clinical Trial Sites
Drugs
Pharmacists, Providers and Health Systems
“
We can work here, and collect microorganisms from marine water and soil in our local environment. In any microenvironment the vast majority of bacteria are for the most part unknown. This wouldn’t apply to extreme environments that tend to select for very specific types of bacteria. When I worked at Lederle, anyone who went on a trip was given a plastic bag to collect soil samples. But now we know we can find spectacular microbial diversity here. This wouldn’t be true for plants, but it is definitely true for microorganisms. It would take us lifetimes to sort through what we can get our hands on from this region, so there is no need to collect overseas. – Chief Scientific Officer, small biotech company in the US
“
Collaborations provide a biotechnology company with money and resources while providing the pharmaceutical company access to cuttingedge technologies. In addition, by collaborating with multiple partners, pharmaceutical companies today decentralise parts of their R&D activities. This decentralisation provides a mechanism by which companies can (1) evaluate multiple new platform or product opportunities without increasing the size and cost of their own operations and (2) effectively increase the bandwidth of their operations. – Phil Kearney, Director of Licensing and External Research, Merck Sharp and Dohme
7
NATURAL PRODUCTS RESEARCH 70
The contribution of natural products to total drugs 60
Although support for natural products research in large companies has declined, the contribution of natural products to the development of new drugs continues, and between 1981-2013 an average of 31% of all new drugs annually were natural products.
Drugs approved world-wide
50
Natural products
40 30 20 10
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
0
58
44
Number of approved drugs world-wide (1981-2013)
KEY
27 19
21
30
17
5
S 20%
S/NM 9%
S* 9%
S*/NM 8%
V 2%
1
B 12%
N 14%
NB 0%
ND 26%
NATURAL PRODUCTS
8
S
Totally synthetic drug, often found by random screening/modification of an existing agent
S/NM
Totally synthetic drug/Natural Product mimic
S*
Made by total synthesis, but the pharmacophore is/was from a Natural Product
S*/NM
Made by total synthesis, but the pharmacophore is/was from a Natural Product/Natural Product mimic
V
Vaccine
B
Biological; usually a large (>45 residues) peptide or protein either isolated from an organism/cell line or produced by biotechnological means in a surrogate host
N
Natural Product
NB
Natural Product ‘Botanical’ (in general these have been recently approved)
ND
Derived from a Natural Product and is usually a semisynthetic modification
Source: Newman and Cragg, 2012
TRENDS IN NATURAL PRODUCT RESEARCH AND DRUG DISCOVERY
1965
1990
Natural products research has undergone dramatic changes in the last 50 years, with significant implications for the speed, scale and focus of R&D, and the design of effective ABS measures.
2015
TECHNOLOGIES
Natural products chemistry
• Automated biochemical screening • Modern analytical chemistry
Genomics-driven drug-discovery
MATERIALS STUDIED
“ NUMBERS OF COMPOUNDS ISOLATED AND STUDIED FROM A SAMPLE
=1–2
= 10 – 15
= 50 – 100
SIZE OF SAMPLES
Kilograms
Grams
Milligrams or less
TIME TO TEST A SAMPLE Months/years
Days
Hours
The approach we are using more and more, and now predominantly, is to leverage the biosynthetic pathways in microorganisms to address chemical problems in terms of drug discovery, and to find new compounds, or even old compounds, and then to use genetic engineering to change those compounds to make them better drug candidates. This is really the trend in natural product science… The days of going out and collecting things – whether sponges, plants, or soil samples for microorganisms – and searching for new chemicals for drug leads on a mass scale by turning the crank a lot, those days are behind us. There is still value there, but we need to be smarter about how we do this. Over the last 10-15 years the scientific community has come to realise that the real value in organisms is the genes that enable organisms to make the compounds that they do. Bioprospecting in the 1990s emphasised the organism, but it really isn’t the organism anymore, it is the genes, and we need to incorporate this into our models for benefit-sharing. – Head of Natural Products Unit, large pharmaceutical company
9
Traditional knowledge, once the primary lead for the discovery of new medicines, is no longer a significant part of industry R&D.
Use of traditional knowledge in drug development
1900
Ethnobotanical collections
Sources of traditional knowledge
Internet / databases
HIGH TECH
Literature
1960
TK- DERIVED DRUGS • Aspirin • Morphine • Quinine • Digitoxin • Pilocarpine
1990
TK- DERIVED DRUGS • Vincristine • Vinblastine • Galantamine
db
he ioc
to
te ma
Au
10
2000 ng
eni
re l sc
a
mic
LOW TECH
s-
mic
no Ge
rug
nd
e driv
ry
ove
c dis
TK- DERIVED DRUGS • Artemisin • Crofelemer (approved in 2012)
2015
INDUSTRY AND ABS
The pharmaceutical industry is more aware of the Convention on Biological Diversity than many other sectors, although this is more the case with larger companies than with smaller. However, many concerns persist within industry about legal certainty and the need for new measures drafted to implement the Nagoya Protocol to reflect the scientific, business and legal realities of natural products research today.
“
The CBD has had a cooling effect on natural products research, but it will not stop a company from going forward. There are ways to work with the treaty, the best being working directly with academic and other partners… Our collaborators do the work to get the agreements in place and so it isn’t too cumbersome and we came up with a good agreement. The real test of the agreement didn’t happen because we didn’t get a drug out of it…But we could operate, the research could continue.
SOURCES
Page 3
IMS Health, 2013. Pharmerging Markets: Picking a Pathway to Success; IMS, 2014. Global Outlook for Medicines through 2018; Pharmaceutical Executive, 2014. Pharma 50 Insight: The Accelerating Growth of Specialty Markets; Van Arnum, P. 2014. IMS Offers a Subdued Outlook for Global Pharmaceutical Industry at DCAT Week ’14. DCAT Connect, March 25; Datamonitor, 2009. Big Pharma Mega-Mergers 1995-2014; Baum, R. 2011. Changing Pharmaceutical Paradigms. Chemical and Engineering News, October 4; Kearney, P. 2011. What is the Future for the Big Pharma Model? AFG Venture Group Dispatches.
Page 4
Newman, D.J. 2015. pers. com.; IMS Health, 2013. Thought Leadership, September; IMS Health, 2014. Top 20 Global Products 2013; IMS Health, 2014. Global Outlook for Medicines through 2018; Kearney, P. 2011. What is the Future for the Big Pharma Model? AFG Venture Group Dispatches; Noor, W. 2014. The Long Tail. PharmExec. com; Pharma Voice, 2014. Specialty Drugs: An Evolving Commercial Model; Van Arnum, P. 2014. IMS Offers a Subdued Outlook for Global Pharmaceutical Industry at DCAT Week ’14. DCAT Connect, March 25.
Page 5
IMS Institute for Healthcare Informatics, 2013; www.drug.com, 2014; IMS Health, 2014; Staton, T. 2014. The Top 10 Patent Losses of 2015, FiercePharma, www.fiercepharma.com, December 17; Krishnan, A. 2011, Drug Patents Expiration in 2011 and 2012 – A Bumpy Ride Ahead for Big Pharma as Big Drugs Lose Patent Protection. IHS Healthcare, pharma blog; Alazraki, M. 2011. The 10 Biggest-Selling Drugs that Are About to Lose Their Patent, February, www.dailyfinance.com.
Page 6
PhRMA, 2015, www.phrma.org; Chakma, J., Sun, G.H., Steinberg, J.D., Sammut, S.M. and Jagsi, R. 2014. Asia’s Ascent – Global Trends in Biomedical R&D Expenditures. The New England Journal of Medicine 370(1):3–6; EFPIA, 2014. www.efpia.eu; Shah, A. 2014. Pfizer and AstraZeneca: Innovation Will Not Follow Acquisition. Seeking Alpha, May; Newman, D.J. and Cragg, G.M. 2012. Natural Products as Sources of New Drugs over the 30 Years from 1981 to 2010. Journal of Natural Products. www.pubs.acs.org/jnp.
Page 7
PhRMA, 2015. www.phrma.org; Kearney, P. 2011. What is the Future for the Big Pharma Model? AFG Venture Group Dispatches; Noor, W. 2014. Pharm Exec’s Pharma 50 in 2014. PharmExec.com, June 9.
Page 8
Newman, D.J. and Cragg, G.M. 2012. Natural Products as Sources of New Drugs over the 30 Years from 1981 to 2010. Journal of Natural Products. www.pubs.acs.org/jnp; Newman, D.J. and Cragg, G.M. in press.
– Head of Natural Products, large pharmaceutical company
“
I’ve always maintained that natural product drug discovery and development is an international collaborative effort – no one country is dominant. That is why I think if source countries can develop viable and not too restrictive policies this can be a win-win situation for everyone. If policies are too restrictive, particularly with microbes as a source of new chemistry and potential new drugs, companies will just study the microbial resources they have in their libraries or their own backyards. The microbial area makes protecting countries’ rights very tricky, since companies can find compounds discovered in microorganisms from one country in another – much more so than for plants. This is why NCI’s policy has always been that the place where the original collection and discovery was made is the one that should benefit, and this is even more important today. – Gordon Cragg, retired from Natural Products Branch, US National Cancer Institute
11
www.abs-initiative.info
www.bio-economy.org.za
The Access and Benefit-Sharing Key Points for Policy-Makers series has been produced to provide governments, companies, researchers, communities and others with background information to assist with the development of access and benefit-sharing measures to implement the Nagoya Protocol. The briefs are organised around central, key points on trends and practices in markets, research and development, and ABS. More detailed information on these sectors can be found at: www.bio-economy.org.za; www.abs-initiative.info; www.peopleandplants.org; CBD Bioscience at a Crossroads policy briefs: https://www.cbd.int/abs/policy-brief/default.shtml/; and in the upcoming book: http://www.routledge.com/books/details/9781138779099/
www.peopleandplants.org
Acknowledgements: Sincere thanks are due to the many individuals who contributed comments and insights to the pharmaceutical industry brief. In particular, we would like to thank Bruno David, Gordon Cragg, Frank Koehn, David Newman and Sheo Singh. Thanks are also due to Paula Wood for her design and Jaci van Niekerk for her support and assistance in this process. For further information please contact:
[email protected]
