Drug Innovation 3: Biopharmaceutical R&D and Innovation

* This is my article today in the online magazine, http://www.thelobbyist.biz/perspectives/less-gorvernment/1314-biopharmaceutical-rad-innovation-and-government
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As societies progress economically despite undergoing financial and economic turmoil from time to time, healthcare is becoming more and more an important aspect in the people’s lives worldwide. That is how innovations in developing new medicines and treatment, in producing new marketing strategies for generic drugs, among others, are progressing.

Recently, certain sectors in the US, the center of pharmaceutical and biotechnological R&D and innovations, have been sounding an alarm bell that many countries around the world have been aggressively moving towards more innovations in this sector.

Battelle Technology Partnership Practice recently released its report, “The Biopharmaceutical Research and Development Enterprise: Growth Platform for Economies Around the World”, May 2012. It contains a lot of data covering 18 countries from N. America, S. America, Europe and Asia, showing the various programs that the governments in these countries have started to spur more innovations in various sectors in general, and the biopharmaceutical sector in particular.

I extracted some data for the four Asian countries covered in their report – China, Japan, Singapore and South Korea – mainly to see how the Philippine government can possibly take lessons from such initiatives. Then I included comparative data for the US. I chose the table on R&D spending.

Japan and S. Korea keep their high R&D spending, 3.4 percent of their GDP, larger than that in the US. Three fourth of such spending is made by the private enterprises themselves, which speaks of the extent of competition among the private enterprises there as these are global players and brands.

The Battelle report narrated also these programs by the following governments to improve R&D and biopharmaceutical innovation.

1. Singapore. Been very aggressive in recruiting foreign researchers to come to its research institutes. Its National Research Foundation Fellowship Scheme offers newly recruited fellows grants of up to $2 million over five years (over and above salary support at the assistant professor level at one of Singapore’s universities). Singapore is also developing the 2‐million‐square‐foot Biopolis Research Park (established 2003), itself one component of the multidisciplinary One‐North research park complex. Biopolis was designed specifically to co‐locate A*STAR’s bioscience research institutes is side‐by‐side with the R&D operations of their industry partners. As of 2008, there were 30 companies with significant biomedical research interests at Biopolis, many of them well‐known multinationals.

2. South Korea. To serve as a hub for international clinical trials, the government has established a Korea National Enterprise for Clinical Trials (KoNECT), which has recently created five new regional centers to train clinical‐research personnel, bringing the total to 14 nationwide. In addition, the Research Hospital Program has selected two hospitals to become comprehensive sites for translational research institutes in partnership with industry.

3. Japan. Focused on fostering industrial collaboration with universities through the creation of “SuperZones”, which offer reductions in regulatory burdens as a way of promoting university/ industry collaborative research. The first competition specified a focus on R&D in state‐of‐the‐art medicine.

4. China. Increased its R&D investment by ten percent each year for the past ten years. At this level of investment, China’s R&D spending will reach $154 billion in 2011, the second‐highest total R&D investment of any country in the world. As a result, China’s share of global R&D investment will increase from 11 percent in 2009 to 13 percent in 2011. China currently is investing about 1.75 percent of GDP in R&D. China’s leaders have set a goal of 2.5 percent.

Among the main lessons from the various programs of the 18 countries surveyed are the following.

- Building R&D excellence and seeking to accelerate commercialization of research findings by increasing public funding of R&D; encouraging greater public/private collaborations, often with international partners; attracting the R&D operations of global companies through a range of tax and other financial incentives; adopting policies to encourage universities to commercialize research findings; investing in R&D infrastructure; and implementing a range of policies to encourage private firms to invest in R&D from flexible immigration laws to tax and other policies.

- Ensuring access to venture and other private capital for companies, particularly start‐ups and emerging companies, by using tax incentives to encourage private investment in venture capital funds and/or technology‐based companies and investing public funds directly in private venture capital funds and/or companies.

These are important lessons for the Philippines. Currently, our biopharmaceutical R&D capacity is limited to a few local pharma companies like Unilab, Pascual Lab, and those in a few local universities. But these innovations are limited to conducting bioequivalence and biosafety tests for certain drugs and other biotech products.

Given the limited fiscal resources of the Philippine government, it cannot be expected to lead in raising public spending for R&D. What the government can do instead, is to encourage private biotech and pharmaceutical companies, local and multinationals, to expand their R&D and innovation capacities. One important policy to do this is to reduce the bureaucracies, reduce the taxes and fees, for these private enterprises. Allow more competition from more players, instead of heavily regulating the few existing players, which discourage the entry of more and new players.

Soon, biotech and R&D policies and enterprises from Hong Kong, Indonesia, India, Malaysia, Thailand, Taiwan, Vietnam, will be highlighted in future Battelle and other major international reports, leaving the Philippines among the non-mentioned countries. For the simple reason that while the government does not have enough fiscal resources to conduct more R&D in the health and life sciences, it also has not loosened its interventionist hands and tax-hungry policies. It will be another shameful reality for us someday.
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Here are additional data and quotes from the same Battelle Report.

“Pharmaceuticals are knowledge products. Drugs are physically small but their effects are targeted and potent and they command high value. That is how Singapore must be. Ours is a small island with no natural resources. We must therefore invest in knowledge and R&D, recruit and groom talent, and focus our efforts to excel in niche areas. Then we can transcend the limitations of physical size and punch above our weight class among the global competition.”

Lee Hsien Loong
Singapore, Prime Minister
Speech given during the opening of a
GSK Vaccine Manufacturing Plant, 2009

“With such vast market opportunities, it is little wonder that many Asian countries are developing biomedical manufacturing and R&D activities. In Singapore’s case, our plans for the development of a biomedical cluster began ten years ago. Since then over S$5 billion have been invested. With excellent connectivity to key Asian markets, a stable and skilled workforce and our well‐developed and robust Intellectual Property (IP) regime, Singapore has attracted leading global companies from the pharmaceutical and biomedical sciences industries to establish operations here.”

Lee Yi Shyan
Singapore, Minister of State for Trade, Industry and Manpower
Biospectrum Asia Pacific Life Sciences Industry Awards
March 12, 2010

Singapore provides a 400 percent deduction for R&D as well as for IP acquisition or protection, training and approved design or automation project.32 As illustrated in Table 8, a number of countries offer R&D tax incentives with the objective of inducing multinational companies to locate or to expand R&D operations in their country.

While U.S. students are underperforming, other countries are ramping up their STEM education efforts, further widening the gap between the achievement of U.S. students and their foreign counterparts. One metric that is often used to assess how well a country is succeeding in educating students is the Programme for International Student Assessment (PISA), a test administered by the OECD. In 2009, Shanghai students scored first and Hong Kong students scored third in both science and math scores among nearly 65 countries that participated. Singapore, South Korea, Japan, and Canada all scored among the top 10. U.S. students scored below nearly 30 other countries in math and more than 20 other countries in science (Table 10).
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See also:
Drug Innovation 1: On Cancer, Bioequivalence and Clinical Trials, March 28, 2012
Drug Innovation 2: Sustaining Innovation via Competition, April 14, 2012
IPR and Medicines 23: Profitability of Innovator Pharma Companies, March 16, 2012
IPR and Medicines 24: Balancing Costly Innovation and Cheaper Drugs, March 20, 2012

Drug Innovation 1: On Cancer, Bioequivalence and Clinical Trials

To distinguish discussions related to intellectual property rights (IPR) like compulsory licensing, I am starting a new thread in this blog just on "Drug Innovation". This is slightly different from the thread on "IPR and Medicines".

My elder brother who died of prostate cancer more than five years ago would have been 57 years old this week had he survived the disease. His diabetes plus emotional sadness when his wife died several months earlier due to colon cancer further aggravated his condition.

My other relatives, wedding godparents, friends, family members of friends, also died of cancer. There are different types of cancer, probably about 200, and all of them are dangerous. Perhaps all of us have cancer cells in our body, but our immune system are just strong enough to kill those cells, or at least keep them at bay and prevent them from expanding and invading other organs of our body. Our immune system is our best physicians, our best medicines, our best disease examiner, all rolled into one. It is very important therefore, that we keep our immune system strong and efficient, by not injecting too many substances that can weaken them -- like cigarettes, alcohol, fatty food and so on. A little of these substances, like when we attend parties, would be fine and our immune system should be able to repair minor damages. It is the excessive use of such substances that can create more damages in our body.

Medicines and vaccines help boost our immune system in killing undesirable cells like cancer. Usually, old medicines are less efficient in doing this job as human understanding of each disease improve through time. Thus drug innovation is a must. Diseases mutate and evolve, so treatment against such diseases must also evolve.

The business of medicine innovation should be depoliticized whenever possible. There are existing rules governing patent, trademark, copyright and other IPRs, all players, innovator and generic manufacturers especially, understand those rules and do their respective business plans and marketing that are compliant with those rules. That is why I question and oppose moves or proposals that governments should issue compulsory licensing (CL) and related political schemes that disrespect private property rights.

What governments should do, is encourage the entry if not proliferation, of more innovator companies. If there  will be 20 or 50 different innovator companies that develop and roll out new medicines (on top of existing, off-patent drugs) per disease, then the patients will greatly benefit. Competition among such innovator companies will bring down prices of such innovator drugs. Then another round of competition will follow once the patent expires as dozens if not hundreds of generic producers come in to produce their own branded drugs for each disease category.

I am posting below three articles by Reiner Gloor in BusinessWorld on dates indicated. Reiner is the Executive Director of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), the federation of mostly innovator pharma companies in the country. The three papers are:
1. Beating Cancer,
2. It all begins in innovation, and
3. The value of clinical trials.

The subject of bioequivalence and related tests for safety and efficacy of generic drugs before they will be introduced to the public are discussed. These are useful information that need to be shared to the public.

The most expensive drugs are those that do not work and hence, do not kill a particular disease, no matter how cheap they are. Because an ailing patient would have more complications as the disease inside his.her body is not treated and allowed to expand and inflict more damage in other internal organs of the patient.
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(1) http://www.bworldonline.com/weekender/content.php?id=46080

Posted on 06:05 PM, February 02, 2012

Medicine Cabinet -- By Reiner W. Gloor

Beating cancer

Major non-communicable diseases were among the important health issues that gained the attention of world leaders in 2010. In a United Nations summit, political leaders agreed to a plan of action that sought to address alarming trends involving four major non-communicable diseases (NCD) that have developed to become the world’s biggest killers.

The four major NCDs are cardiovascular diseases, diabetes, chronic respiratory diseases, and cancers that have altogether prematurely claimed the lives of 38 million people, representing about 63% of the total global deaths in 2008. Studies indicate that the major NCDs are affecting the developing world and lower-income populations hardest.

This is particularly true for cancer, which accounted for about 7.6 million global deaths in 2008. By 2030, cancer deaths are also expected to soar to 11 million worldwide. The World Health Organization (WHO) also disclosed that about 70% of all cancer deaths occur in low- and middle-income countries.

Cancer can affect any part of the body. A defining feature of cancer is the rapid creation of abnormal cells that grow beyond their usual boundaries, and which can then invade adjoining parts of the body and spread to other organs. This process is referred to as metastasis which is the major cause of death from cancer, the WHO said.

Locally, the Department of Health recently led the observance of the National Cancer Awareness Week in a campaign to boost public consciousness on the disease. Such an awareness drive is important specifically for the Philippine Society of Medical Oncology (PSMO), which considers information as a keystone to preventing and treating cancer.

The need to raise awareness on cancer has become more evident with the GLOBOCAN Project report, which estimated that there had been more than 51,000 cancer deaths in the Philippines in 2010.

The GLOBOCAN Project, which provides global incidence of, mortality and prevalence from major types of cancer, reported that leading new cancer deaths among Filipinos in 2010 include those involving the lung, liver, breast, colon/rectum, leukemia stomach, cervix uteri, brain, prostate and pharynx.

Among Filipino men, lung and liver cancer comprise 43% of all new cancer deaths. These top two killer cancers affected more than 12,000 Filipino men.

On the other hand, breast cancer was the number one cause of new cancer deaths among Filipino women also in 2010. It is estimated that more than 4,000 Filipino women died of breast cancer or 18% of all total deaths during the same year. Around 2,197 women and 1,984 others succumbed to lung and cervical cancers, respectively.

Breast cancer also topped the list of new cancer cases in 2010 followed by lung, liver, colon/rectum, cervix, leukemia, stomach, prostate, brain and ovarian cancer. The top 10 leading sites comprise 68% of all new cases.

Despite the threats posed by cancer, the disease can be reduced and controlled by implementing strategies for prevention, early detection and care for patients with cancer. These include modifying key behavioral and dietary risk factors as well as early detection and screening tests which are important in the diagnosis and treatment before cancer becomes advanced. Vaccination against human papilloma virus (HPV) and hepatitis B virus also help in cancer prevention.

PSMO President Dr. Felycette Gay Martinez-Lapus explained that the fight against cancer requires a collaborative effort among the physician or physicians, the patient, the patient’s family and friends.

She added that treating cancer is a delicate balancing process. The general aim is to reduce tumor growth while ensuring that any potential side effects do not compromise the patient’s quality of life to the extent that the treatment does more harm than good.

Dr. Martinez-Lapus acknowledged that in recent years, there has been a surge of innovative drugs which has forever changed the landscape of cancer treatment.

She said that as opposed to about 40 years ago, life expectancy have increased with new medicines that target the cancer cells directly. Today, targeted therapy is more precise in that it is formulated to act against a specific type of cancer unlike previous treatments.

At the moment, researchers are working on more than 800 innovative medicines that are either undergoing clinical trials or regulatory review. Due to these developments, cancer can now be better managed and even beaten.

Huge drug firms laying off research staff

There was this news report last Thursday from Nature magazine.

http://www.nature.com/naturejobs/2009/091119/full/nj7271-375e.html

Published in Nature 462, 375 (18 November 2009) | 10.1038/nj7271-375e

Huge cuts by drug firms

R&D closure is the latest in a series of hits to drug companies.
Pfizer is closing 35% of its global research and development space, according to a 9 November announcement. The New York-based drug company, which employs 14,500 people in research and development worldwide, has said that R&D personnel cuts associated with the closures will make up a significant percentage of the 15% company-wide job cuts planned. Pfizer, which last month acquired US drugmaker Wyeth, has disclosed no further information and did not return phone calls by press time. In early November, US drugmaker Johnson & Johnson announced plans to lay off about 8,000, but did not reveal how the cuts would affect its R&D personnel.
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I asked guys in our local health coalition here in Manila, including those who favor bigger government intervention in healthcare, "Is this a good or bad development?"

No comment so far from any of them. For some people who dislike global capitalism in general, and big multinational pharmaceutical companies in particular, this should be seen as a positive development. New tools or policy schemes like compulsory licensing (CL) and drug price control are meant mainly to hurt the big multinational pharmas, not the local pharma. For instance, in the current drug price control policy, not a single product by United Laboratories (Unilab) was included, although Unilab is the biggest pharma company in the country, with sales equivalent perhaps to the combined sales of 2nd-3rd and 4th biggest pharma firms (GSK, Pfizer, Wyeth).

So if the big pharma multinationals are hurting, like even their patented drugs in the country are covered by price control, and the laying off of more than 1/3 of their R&D staff, in the case of Pfizer, then those who oppose big multi pharma should rejoice. Their goal is to publicly hurt, if not obliterate from the global economy -- using various government restrictions and regulations -- the big pharmas that they accuse of making huge profit at the expense of poor patients.

But those people do not realize, or at least they do not recognize, that those big pharma are the ones that invest huge money in high risk medicine innovation. The often glorified local, generic pharma companies do not risk their money and resources on medicine innovation, despite the fact that people around the world are demanding more innovative, more revolutionary medicines and vaccines.


Meanwhile, the US Healthcare Bill is 2,074 Pages Long...

I was surprised to read this update from Grover Norquist's facebook status, regarding the US healthcare bill. He noted,

"A word search of Sen. Harry Reid’s 2,074-page Senate healthcare bill (H.R. 3590) reveals that the term “tax” is used 183 times, “taxable” is used 164 times."

2,074 pages for a single bill? I doubt if even 10 percent of all US legislators will have the patience to read all pages of that bill.

Well, I'm not American, and I don't know most of the nuances of that bill. It's just the 2,000+ pages length of that bill that confounds me.