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Gates’ Way: The Bill & Melinda Gates Foundation is the force behind a global mechanism of drug supply.
Trends 2010
Middle Ground
A unique engagement is luring Big Pharma to bring its expertise to neglected diseas es—while keeping its profiteering ways at bay.
COMMENTS PRINT
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Everyone will start rolling back the largesse. Some will do it sooner.
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A steady stream of PSU stake sales will help the government buy goodwill and lay the foundation for eventual selloffs.
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MNC listing
Emerging economies like India are driving the world and it makes sense for multinationals to list on their bourses.
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Now, multinationals are using reverse innovation to drive growth in developed markets.
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In the closing days of 2009, one of the biggest bragging points of Sanofi-Aventis, the €27.6 billion French pharmaceutical company, was not the unfolding of a blockbuster drug. Rather, it was another engagement in a block-busting mien­­­—the largest ever study of an anti-malarial drug conducted by any entity to this day. The study is being conducted in Africa on artesunate and amodiaquine (ASAQ), the most effective anti-malarial developed so far and one that is beginning to be accepted by a spate of developing country governments.

The interesting thing about this study is that Sanofi, a Big Pharma firm, is not picking up most of the research tab. The majority, of $1.5 million, is being borne by its partner, Medicines for Malaria Venture—a not-for-profit, product-development partnership in the public-private domain. Medicines for Malaria Venture, in turn, is funded by grants from several firms, foundations and government bodies.

It’s a partnership that serves broader societal objectives, as well as meets individual commercial goals. The prime aim of product-development partnerships is to encourage and finance research and development on neglected diseases, and produce cheap drugs for the public good, without patent monopoly complications. That’s something Big Pharma hasn’t done a good job of as there’s more money to be made treating lifestyle diseases.

Product-development partnerships create engagements for Big Pharma to bring their expertise to neglected diseases and populace—while keeping their profiteering ways at bay. Product-development partnerships take on much of the research and development burden, while companies, armed with big and assured contracts, step in at the manufacturing and supply stage to supply drugs at reasonable prices.

Healthy Partnership

Take malaria. An anti-malarial combination therapy, based on a Chinese herbal extract called artemisinin, is addressing the problem of growing resistance to traditional anti-malarial drugs. Work in this area is being fostered by a number of global product-development partnerships, including Medicines for Malaria Venture and the Drugs for Neglected Diseases Initiative.

“We’ve designed a field monitoring programme to assess the safety and efficacy of ASAQ,” says Robert Sebbag, Vice-President, Access to Medicines, Sanofi. Over the next two years, over 15,000 patients will be given ASAQ and monitored by the partnership. Adds Chris Hentschel, President and CEO, Medicines for Malaria Venture: “The experience gained with ASAQ will help us design pharmacovigilance programmes (checking for adverse effects) for the new anti-malarials in our own pipeline.”

While it is working with Medicines for Malaria Venture in Africa, Sanofi is also partnering Drugs for Neglected Diseases Initiative in malaria. Drugs for Neglected Diseases Initiative has entrusted Sanofi with the manufacture and marketing of ASAQ for its programmes, including in India. In 2008, Sanofi sold about 5.95 million treatments across countries in 2008; for 2009, it is expected to cross 20 million.

 
 
Though kala azaar treatment lasts over a month, we have brought it down to 10 days under our initiative.Bhawna Sharma, Head, Regional Support, DNDi
 
 
Clinical trials on ASAQ, conducted by Drugs for Neglected Diseases Initiative, concluded recently in India and price negotiations with the government are on for initiating supplies in the coming year. “The efficacy of anti-malarial combination therapies is good; over 95%,” says Neena Valecha, Deputy Director of the National Institute of Malaria Research (NIMR) and a member of Medicines for Malaria Venture ’s expert scientific advisory committee. Valecha feels that it is about time India’s malaria strategy is based on anti-malarial combination therapies. The National Institute of Malaria Research recently concluded phase-III Indian trials of new anti-malarial combination therapies for two companies under the Medicines for Malaria Venture umbrella, namely Sigma Tau of the US and Shin Poong of South Korea.

More and more companies in the big league, and also smaller companies in India and elsewhere, are now beginning to engage with product-development partnerships for multiple reasons. One, it helps them burnish their reputations by focusing on neglected tropical diseases and setting right the ‘fatal imbalance’ in drug research and development. Example: globally, of the 1,400 drugs approved during 1976 to 1999, only four related to malaria.

Second, it allows companies to lessen the risk associated with drug research and development, as product-development partnerships bring in dollops of philanthropic money from the likes of Bill Gates, into the process. In 2007, 23% of donor funding in healthcare was routed through product-development partnerships, who farmed it out to partners from industry and academia. Fund raising has been substantial. The 2004-14 business plan for Drugs for Neglected Diseases Initiative focuses on three diseases: visceral leishmaniasis or kala azaar, human African trypanosomiasis or sleeping sickness, and Chagas disease. It envisages an expenditure on research and development of €274 million.

Third, product-development tie-ups help companies with strategies like differential pricing and help evolve new business models in tandem with developing country governments. The reliance of Big Pharma on these alternative avenues is increasing, as its existing business model, based on blockbuster drugs, is proving to be wobbly.

Product-development partnerships of recent vintage are truly coming into their own. Medicines for Malaria Venture was established in 1999, Drugs for Neglected Diseases Initiative in 2003. There are several others like the Global Alliance for TB Drug Development, the International Aids Vaccine Initiative, the Institute for One World Health (iOWH) and the Foundation for Innovative Diagnostics (FIND) who are taking strides.

Drug Managers

Product-development partnerships are ‘virtual’ research & development organisations. They don’t employ researchers and build infrastructure; what they do is outsource each function in the drug development process—discovery, pre-clinical development, clinical trials, registration and manufacture—to various partner entities. They merely manage efficient progress through the pipeline. For instance, Medicines for Malaria Venture, with a team of just 30 professionals, managed a portfolio of 39 projects and a budget of $36.5 million last year.

Product-development partnerships adopt numerous methods to achieve their goals. Take the case of ASAQ. Drugs for Neglected Diseases Initiative took the basic work done at the University of Bordeaux in France to Sanofi, and asked the company whether it could formulate artesunate and amodiaquine as a ‘combination’ (which is more effective than a single compound). Sanofi was already working on its own combination drug. It, therefore, willingly slipped into the partnership, which has brought the drug to many countries, including India.

 
 
Outcomes are key. We need to show impact in terms of lives saved, not mere statistics of treatments delivered.Raj Shankar Ghosh, Regional Director-South Asia, iOWH
 
 
Malaria is not the only focus. Considerable work has been done on kala azaar. Drugs for Neglected Diseases Initiative has conducted trials on a unique combination drug (ambisome, paromomycin, miltefosine) in Patna and Muzaffarpur in Bihar. Today, kala azaar treatment lasts over a month. “We have brought it down to 10 days under our initiative called the treatment regimen development process,” says Bhawna Sharma, Head, Regional Support, Drugs for Neglected Diseases Initiative. This short-term, easy-to-use treatment will improve compliance.

Reformulations, new combinations, or new ways of administering a drug are constantly being explored by product-development partnerships. Even as these partnerships tinker with existing drugs or take an existing drug to a new country by undertaking the regulatory process, they also involve themselves with the discovery stage.

The partnerships normally screen promising chemical compounds lying in the libraries of Big Pharma or universities, and see whether they can be processed into a drug. The Drugs for Neglected Diseases Initiative, for instance, mined and screened over 700 nitromidazoles, a well-known class of anti-infective compounds, lying with universities and institutions in UK, Italy, Brazil, Iran, Poland and Japan. The companies involved were Novartis, Roche, Sanofi and India’s Alkem. It led to the discovery of fexinidazole as a promising development candidate for sleeping sickness.

Drugs for Neglected Diseases Initiative then moved the ‘rediscovered’ fexinidazole to a new set of global partners. In 2007, a full pre-clinical programme was developed to enable first-in-human studies. By June 2008, a review indicated it was ready for progression to clinical development.

On occasions, the possibility of therapeutic switching—new applications for existing medicines—is examined. Drugs for Neglected Diseases Initiative has been working with the Pune-based Advinus Therapeutics on buparvaquone (BPQ), a drug usually used for protozoan infection. The drug now exhibits considerable activity against kala azaar.

The flexibility of a product-development partnership and its innate ability to apportion pieces of the drug-delivery process to various players is its strength. It can also kill a project without much ado and save money when it doesn’t progress the way it should. Unfortunately, India’s Ranbaxy was at the receiving end in this regard.

Medicines for Malaria Venture brought arterolane—a synthetic (produced in the lab which showed artemisinin like qualities), malaria drug, discovered at the University of Nebraska in the US—to Ranbaxy for further development. “We made incremental improvements, but Medicines for Malaria Venture’s expectations were much higher,” says Nilanjan Saha, Head, Medical Affairs and Clinical Research, Ranbaxy. Differences cropped up, and Medicines for Malaria Venture parted ways after the drug was taken through phase II clinical trials.

Ranbaxy, however, pursued the drug. It invested Rs 5.5 crore on its own. The Indian government pitched in with an equal amount. The effort has borne fruit, as the drug is undergoing phase-III trials. “Once the trials are through, we will manufacture the drug,” says Saha. “Not only do we have firm purchase commitments from the Indian government, but several south-east Asian countries are also keen.”

Cost Warriors

The Medicines for Malaria Venture-Ranbaxy partnership also bares one of the biggest advantages of a product-development partnership in action. Medicines for Malaria Venture provides funding to research and development projects. And partners like Ranbaxy bring a host of ‘in-kind’ contributions to the effort in terms of expertise, access to facilities, thus compressing research and development costs a great deal. Reducing research costs, around $1 billion for a single drug, has been one of the biggest challenges in the pharma sector.

Based on historic costs, timelines and attrition statistics, Medicines for Malaria Venture has developed a model to cost a new combination malaria drug based on two new chemical entities. Medicines for Malaria Venture insists it can do this for $400-440 million: $220-240 million for discovery research and $180-200 million for clinical trials.

The discovery expenditure of around $220 million over five years is expected to yield seven compounds that can be taken into phase-I trials. That means a discovery spending of around $30 million per phase-I candidate, lower than the industry norm of $50 million. Product-development partnerships have proved to be cost warriors.

The low-cost research and development process reflects in low prices of the drugs that emerge out of these partnerships. The Institute for One World Health is introducing an injectable version of paramomycin for treating kala azaar in India. The technology has been transferred to Hyderabad’s Gland Pharma. Treatment cost is expected to be around Rs 1,000 for a 21-day regimen. “It’s the lowest cost treatment available for kala azaar,” says Raj Shankar Ghosh, Regional Director-South Asia, Institute for One World Health.

Institute for One World Health is working with the Indian Council of Medical Research (ICMR) and other institutions to devise an efficient delivery mechanism in the endemic areas. “We need to show impact, in terms of lives saved,” says Ghosh. “Outcomes are key. It has to be on disability-adjusted life years, not mere statistics of treatments delivered.”

Disability-adjusted life years, developed by the WHO, is a measure of overall disease burden. It is the sum of years of potential life lost due to premature mortality and the years of productive life lost due to disability. One disability-adjusted life year is, therefore, one year of healthy life lost. Truly, PDPs are lending a whole new dimension to how developing
countries conduct and manage public health programmes.

COMMENTS PRINT
Trends
Ten trends that could shape our world in 2010.
Team Outlook Business
exiting the stimulus
Everyone will start rolling back the largesse. Some will do it sooner.
Ashish Gupta
capital inflows
The chase for returns and growth may bring a deluge of dollars. Maybe more than India can handle.
Rajiv Bhuva
disinvestment
A steady stream of PSU stake sales will help the government buy goodwill and lay the foundation for eventual selloffs.
Ashish Gupta
MNC listing
Emerging economies like India are driving the world and it makes sense for multinationals to list on their bourses.
Mahesh Nayak
Trends 2010
Now, multinationals are using reverse innovation to drive growth in developed markets.
Sriram Srinivasan
Trends 2010
Sriram Srinivasan
Trends 2010
Outcome-based contracting will be a game changer for Indian IT services firms. But only the tough ones will make the cut.
Nandita Datta
Trends 2010
The SKS IPO will set new benchmarks for fund-raising by microfinance companies. It will also pose some deep existential questions about the business.
Naren Karunakaran, Rajiv Bhuva
social businesses
The NGO way of working doesn’t allow big impact. So, some NGOs are turning promising ventures into for-profit social businesses. But the transition is not easy.
Ahona Ghosh, Kunal N Talgeri
Supplier diversity
India Inc has much to gain by including people from marginalised sections in its supply chain.
Ahona Ghosh
CEOs to watch
2010 may well be the year when these eight CEOs etch their names indelibly in India Inc’s hall of fame.
Anurag Prasad, Sudipto Dey, Rajiv Bhuva, Kunal N Talgeri, Mahesh Nayak, Naren Karunakaran
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