How are drugs and vaccines discovered

and developed?

Dr. Jeffrey L. Sturchio

President & CEO, Global Health Council

Journalist-to-Journalist Program
National Press Foundation
Cape Town, South Africa
July 18, 2009

1
 Agenda
• 22 years of innovation in HIV/AIDS treatment
• Pharmaceutical innovation today
– How does modern drug discovery work?
– The clinical trials process
– Increasing costs and declining productivity of pharmaceutical research?
• A word on HIV vaccine research
• Emerging challenges and continuing issues
• Facts and myths about drug R&D?
• Some concluding observations
• Q&A

2
 How HIV/AIDS is Treated

Kilby J and Eron J. N Engl J Med 2003;348:2228-2238

 The path from compound to drug
• Understanding of the biochemical • Chemistry
and cellular mechanism – why this compound & how
was it found
• Whole animal assays
• Process chemistry
• Metabolism & bioavailability – scale up feasibility; cost
• Pharmaceutical R&D projections
– stability; formulation strategy; • Clinical & regulatory plans
physicochemical properties – biochemical measure of
• Preliminary safety data efficacy
– initial genotoxicity; short term probe – dose projection
safety studies
– assure patient safety
• Ancillary pharmacology
• Patent
• Marketing opinion
• Competition
4
 Scientific approach
• Is there a rational scientific approach?
– A genetic or biochemical insight
– A specific target or pathway
– An available “proof of concept”
• Chemically feasibility
– Some targets are difficult to approach with small molecules
• Long-term perspective
– Takes >12 years to discover and develop a drug
• Competitive environment
• Level of internal expertise
– Externally collaborate
5
 Scientific disciplines and development
capabilities needed

• Biochemistry • Genomics
• Molecular Biology • Drug Metabolism

• Cell Biology • Process Chemistry

• Chemical Engineering
• Physiology
• Pharmaceutical Chemistry
• In vitro Pharmacology
• Toxicology
• In vivo Pharmacology • Clinical Pharmacology
• Structural Biology • Clinical Development
• Computational Chemistry • Statistics
• Medicinal Chemistry

6
 Drug discovery and development is difficult and
requires significant infrastructure and resources

Developing a new medicine takes an average of 10–15 years; the Congressional

Budget Office reports that “relatively few drugs survive the clinical trial process”
Post-Marketing
Drug Discovery Preclinical Clinical Trials FDA Review Scale-Up to Mfg.
Surveillance
PRE-DISCOVERY

~ 5,000 – 10,000 250 5

COMPOUNDS
ONE FDA-
APPROVED

DRUG

PHASE PHASE PHASE

NDA SUBMITTED
IND SUBMITTED

1 2 3

NUMBER OF VOLUNTEERS

20–100 100–500 1,000–5,000

3 – 6 YEARS 6 – 7 YEARS 0.5 – 2

YEARS INDEFINITE

Sources: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; CBO, Research and
Development in the Pharmaceutical Industry, 2006.
 Increasing Complexity of Clinical Trials

During the last decade clinical trial designs and procedures have become much more complex, demanding more
staff time and effort, and discouraging patient-enrollment and retention
1999 2005 Percentage change
Unique Procedures per Trial Protocol 24 35 46%
(Median)

Total Procedures per Trial Protocol 96 158 65%

(Median)
Clinical-Trial Staff Work Burden 21 35 67%
(Measured in Work-effort Units)

Length of Clinical Trial (Days) 460 780 70%

Clinical-Trial-Participant Enrollment 75% 59% -21%

Rate
Clinical-Trial-Participant Retention Rate 69% 48% -30%

Definitions:
Procedures: include lab & blood work, routine exams, x-rays & imaging, questionnaire & subjective assessments, invasive procedures, heart assessment,
etc.
Protocol: the clinical-trial design plan
Enrollment rate: the percentage of volunteers meeting the increasing number of protocol eligibility criteria (percentage screened who were then enrolled)
Retention rates: the percentage of volunteers enrolled who then completed the study; declining retention rates mean that firms must enroll more patients
initially and/or recruit more patients during the trial.
Source: Tufts Center for the Study of Drug Development, “Growing Protocol Design Complexity Stresses Investigators, Volunteers,”
Impact Report, 2008.
 Costs are recovered over a long
period…

Years to Recover R&D Costs

$250

$200
Present Value (1990 $MM)

Average R&D
Investment
$150 ($202 MM) Cumulative Returns Cover
R&D investment in Year 16

$100

$50

$0
0 Introduction
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
($50)

($100)
Source: Grabowski and Vernon. “Effective Patent Life in Pharmaceuticals.” Forthcoming in The Journal
of International Technology Assessment, 1999. 9
 …and most marketed drugs don’t recover
their costs
Lifetime Sales Compared to Average R&D Costs
$2,000 $1,880
After-Tax Present Value of Sales

$1,500
(Millions of 2000 Dollars)

$1,000

$701 After-Tax Average R&D Costs

$500 $434
$299
$162
$87by Tenths, by Lifetime Sales
New Rx Drugs Introduced Between 1990 and 1994, Grouped $39 $21 $6 ($1)
$0
Note: Drug development costs represent after-tax out-of-pocket costs in 2000 dollars for drugs introduced from 1990–94. The same analysis found that the total
cost of developing a new drug was $1.3 billion1in 2006. Average
2 R&D3Costs include4 the cost of
5 the approved
6 medicines7 as well as8 those that 9fail to reach10
approval.
Sources: J. Vernon et al., “Drug Development Costs when Financial Risk is Measured Using the Fama-French Three Factor
Model,” Unpublished Working Paper, 2008; J. DiMasi and H. Grabowski, “The Cost of Biopharmaceutical R&D: Is Biotech
Different?,” Managerial and Decision Economics, 2007.
The pace of discovery is fast …….
• Human Genome Project complete
• Advances in structural biology
• Rapid generation of monoclonal antibodies
• RNA profiling
• Proteomics
• Pharmacogenomics
• Engineering sciences, informatics

11
 …..But as R&D spending increases, NME
approvals have not.
60

50

Approvals

$ Billions R&D Spend

40 R&D Spending
No. of NMEs
Approved

30

20

10

0
*NME (new molecular entity) total is through August 22, 2001. R&D spend for 2000
94

99

00
90

91

92

93

95

96

97

98

*
01
12
19

19

20
19

19

19

19

19

19

19

and 2001 are estimates. Source: Washington Analysis, LLC and PhRMA 19

20
So why is R&D productivity down?
• Tackling diseases with complex etiologies?
• Demands for safety and tolerability are much higher?
• Proliferation of targets is diluting focus?
• Genomics has been slow to influence day-to-day drug
discovery?
• Impact of mergers?
• Big Pharma model no longer valid?

13
Why do drugs fail?
• Toxicity
– Long term safety is still totally unpredictable
• Bioavailability and half life
– Cannot be predicted, only guessed
• Metabolism
– Drug/drug interactions; parent or metabolite
• Man
– Understanding of pathophysiology is faulty
Dealing with stochastic failures is one of the primary drivers in escalating
costs of R&D to the current estimate of ~ US$1 BB to bring a drug to
market

14
 Roadmap for Developing an
AIDS Vaccine

Solving the Solving the

Neutralizing Problem of
Antibody How to Control
Problem HIV Infection
 Emerging challenges and
continuing issues

• Dealing with chronic therapy

– Simplification, convenience and adherence
– Tolerability and reducing toxicities
– Managing resistance
– Combination treatments
• New targets
– HIV entry inhibitors
– HIV integrase inhibitors
– Maturation inhibitors
• The quest for a safe and effective HIV vaccine

16
 Facts & myths about drug R&D?

• Industry spends more on advertising than on R&D?

• Industry is more interested in “me-too” drugs than in
innovation?
• Drugs are discovered by academe?
• Patents are a barrier to access?
• Industry does not care about diseases of the developing
world?

17
Trends in resource allocation to SG&A, COGS
and R&D
in the pharmaceutical industry, 1975-2007
 Federal and Industry Roles in
Research and Development
Government and biopharmaceutical industry research are complementary
Private Sector – $65.2B1

Clinical Research

“
Clinical
There is an ecosystem of
Research
science and biotechnology.
Public organizations,
Translational
Research
Translational patient organizations,
Research universities, Congress,
“
FDA, all of this is an
ecosystem that is envied in
Basic the rest of the world.
Basic Research Research

– E. Zerhouni,
Director of NIH
NIH3 – $29.4B total
– $20.1B research
Sources: 1Burrill & Company, analysis for PhRMA, 2005–2009 (Includes PhRMA research associates and nonmembers)
in PhRMA, “Profile 2008, Pharmaceutical Industry;” PhRMA, “PhRMA Annual Membership Survey,” 1996-2009; 2Adapted
from E. Zerhouni, Presentation at Transforming Health: Fulfilling the Promise of Research, 2007; 3NIH Office of the
Budget, “FY 2009 President’s Budget Request Tabular Data”, http://officeofbudget.od.nih.gov/ui/2008/tabular%20data.pdf
Speed, focus and collaboration will drive
future success
• Knowledge explosion is still driving demand for new technology
investments to support future innovation (genomics, etc.)
– Focus must be in making these investments pay
• Shift from ‘blockbuster’ strategies to therapeutic areas of focus
– Pharmas addressing unmet medical needs are most likely to survive
• Greater pharma reliance on external research and biotech innovation
– Vast majority of early research occurs outside of large pharmaceutical
companies
– Tools of drug discovery have been “democratized”; Biotechs are getting
much better at producing “drug-like” molecules
– However, development occurs in the major pharma companies – which is
where the real costs lie

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For further information
• www.innovation.org
• www.keionline.org
• www.msfaccess.org
• www.dndi.org
• www.phrma.org
• www.ifpma.org
• www.clinicaltrials.gov
• www.who.int/intellectualproperty/en
• www.who.int/phi/en
• www.iavi.org

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BACK-UP

22
Progression of HIV Infection and
AIDS
Acute Infection Symptom-free AIDS
 Drug discovery and development is difficult and
requires significant infrastructure and resources

15 Introduction
Product
Registration Phase IV
Surveillance
1
Phase III
2
Clinical Tests
Phase II
2-5 (Human)
Years

Development
5 Phase I

5,000 Preclinical Tests

Substances (Animal)
Synthesis
Basic ????? Examination
Research & Screening
Substances
0 Source: PhRMA
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