Can Pharma save its business model by thinking small?

Developing treatments for a debilitating disorder for which there is no existing therapy, with a genetic component and early onset in childhood that affects thousands of people in the world, but not millions–  this sounds like what Children’s Hospital Boston investigators do every day, but it may not sound like a compelling business opportunity for big companies who have made their net worth by selling large volumes of pills to millions of people. But the trend is clear- based on existing market pressures, disorders like Wiskott Aldrich SyndromeTTR amyloid polyneuropathy and Duchenne muscular dystrophy are joining the likes Type II diabetes, heart disease, hypertension and depression as indications  for which Pharma is actively developing drugs.

The cost of getting a drug on the market was at $2B in 2009, according to a January 2010 Morgan Stanley report entitled “Pharmaceuticals: Exit Research and Create Value.” A major contributor to the cost: phase III clinical trials, which must show that a new drug works better than available treatments. These are large, expensive trials, that can result in costly failures. With government and insurance companies raising the bar on what treatments and costs they will reimburse, companies are turning to indications for which there are fewer patients and no existing treatments as a surer, cheaper way to get drugs to market. The hope is that clinical trials will be smaller and therefore cheaper, the patient population can be identified in advance (for example, with some genetic marker), and the disease pathway has been well-studied, allowing for rational drug design or enzyme replacement therapy. This model has been used successfully for years by companies like Genzyme, Biomarin and Shire.

The importance of government incentive programs like the Orphan Disease Act cannot be overstated- they have led to a dramatic increase in the number of approved drugs for rare diseases, and keep companies interested in developing these treatments. The Brownback/Brown amendment to the FDA Appropriations bill that passed over the summer, a recent report out of the Institute of Medicine and  the “Improving Access to Clinical Trials Act“, signed into law in October, all provide new policies and recommendations to help streamline and incentivize orphan drug development not just by pharma companies, but also at the level of the FDA and patients who participate in the clinical trials necessary to get these treatments on the market.

All of this is good news for patients, especially for our patients. Companies can greatly speed drug development, and are necessary for manufacturing and distributing medicines to the patients who need them. Focusing on the greatest areas of unmet medical need, treatments for which there are no cures, will make a bigger impact on patients and their families than creation of the next “me-too” drug designed with the sole purpose of increasing patent life and market exclusivity. Partnerships with companies in this new landscape can help Children’s investigators in their quest for finding therapies for the neediest of patients, whether they are patients with Tuberous Sclerosis, Cystic Fibrosis, Fragile X syndrome, or any of the hundreds of disorders that are researched and treated at Children’s.

Some of our research and clinical expertise that is focused on rare diseases will be on display at Children’s Hospital Boston’s First Annual Orphan Disease Symposium November 16th 8 am-2:30 pm. More information on the event here.