Life Sciences

Biopharmaceuticals: New Hope for Patients

A new age has dawned in the pharmaceutical sector. A large number of biological medical products are being developed to market readiness. They have the potential to treat nearly every illness, and offer hope to patients who have conditions previously considered non-treatable or ones that are very rare. For these innovations to benefit everyone, their development processes need to be improved and their remuneration models reassessed. That is the conclusion of our author, Dr. Roman Hipp, a Senior Partner at Porsche Consulting.

07/2024

Biopharmaceuticals make highly individualized therapies possible. Manufacture of these compounds is more complex than for traditional chemical agents. And the pharmaceutical industry has to take setbacks into account when developing new treatments.Porsche Consulting/Clara Nabi

Metachro­mat­ic leukody­s­tro­phy (MLD) is a rare, genet­ic meta­bol­ic dis­or­der whose diag­no­sis used to be tan­ta­mount to a death sen­tence. A mutat­ed gene leads to the pro­gres­sive destruc­tion of the insu­lat­ing layer around nerve fibers in the brain, which means they can no longer trans­mit sig­nals. Affect­ed indi­vid­u­als grad­u­al­ly lose motor skills such as the abil­i­ty to move, talk, speak, and swal­low. In the absence of treat­ment, life expectan­cy is low. 

Medications “know” patients

How­ev­er, a treat­ment — or more pre­cise­ly, a gene ther­a­py — for this dis­ease has recent­ly been devel­oped. A patient’s stem cells are removed and altered in a lab to give them a func­tion­al, intact copy of the defec­tive gene. The stem cells are then infused back into the body, where they can repro­duce in bone mar­row. The results are astound­ing. So too are the costs, cur­rent­ly with a price tag of 3.91 mil­lion euros for a sin­gle treat­ment, as report­ed by Orchard Pharmaceuticals. 

This exam­ple high­lights the inno­va­tion that bio­phar­ma­ceu­ti­cals can bring, as well as the cost chal­lenges. Tra­di­tion­al phar­ma­ceu­ti­cals are often effec­tive for large num­bers of peo­ple and, if their patents have expired and gener­ics come to mar­ket, often cost very lit­tle to relieve a headache or sup­press a cough, for instance. Bio­phar­ma­ceu­ti­cals, on the other hand, are noted for their tar­get­ed abil­i­ty to treat or elim­i­nate what are often rare con­di­tions. Exam­ples of these devel­op­ments include bis­pe­cif­ic anti­bod­ies for can­cer immunother­a­py, using the body’s own immune cells to com­bat tumors, and cel­lu­lar scis­sors to repair defec­tive genes such as the above-men­tioned cause of MLD. In each case, the strength lies in its more per­son­al­ized approach. Each patient receives treat­ment that is tai­lored pre­cise­ly to his or her con­di­tion. Esti­mates by Porsche Con­sult­ing sug­gest that the mar­ket for bio­phar­ma­ceu­ti­cals will near­ly dou­ble by 2030. 

From big phar­ma to start-ups, every­one wants a piece of the pie. But there are enor­mous hur­dles on the road to suc­cess in the bio­phar­ma­ceu­ti­cal busi­ness. Man­u­fac­tur­ing process­es are more com­plex than those for tra­di­tion­al chem­i­cal agents. And the new treat­ments are already fac­ing a series of set­backs in their development. 

Research-based pharmaceutical companies must undergo a strict, complex authorization process over the course of several years in order to put a newly developed drug on the market. This is a multi-stage, three-phase process. Porsche Consulting analyzed the biopharmaceutical industry and their results show that of 1,000 molecules considered promising candidates for new medications, only half of them survive the first phase of clinical studies. Ultimately, only around 10 of the original 1,000 developments will make it through the approval process as therapies and become available to patients.Porsche Consulting/Clara Nabi, Source: Calculations by Porsche Consulting

A real urgency

An analy­sis by Porsche Con­sult­ing clear­ly shows that of 1,000 mol­e­cules con­sid­ered promis­ing can­di­dates for new med­ica­tions, only around half of them sur­vive the first phase of clin­i­cal stud­ies. All the oth­ers are reject­ed, usu­al­ly because of major side effects. In the sec­ond phase, which tests the dosage and effi­cien­cy of active sub­stances, the cohort loses around anoth­er three-quar­ters of its mem­bers. And in the third phase, with tri­als on thou­sands of peo­ple, anoth­er 40 per­cent of the can­di­dates do not pass muster. Ulti­mate­ly only around ten of the ini­tial 1,000 agents will make it through the approval process, ready for use as ther­a­pies. This often takes a decade or more, and can devour bil­lions of euros. 

These fig­ures are not spe­cif­ic to bio­phar­ma­ceu­ti­cals, but also reflect devel­op­ment chal­lenges faced by drug com­pa­nies that make med­ica­tions based on chem­i­cal mol­e­cules. But they indi­cate the mag­ni­tude of devel­op­ment costs in the sec­tor. How can the process­es become cheap­er and faster? One pos­si­bil­i­ty is to make greater use of arti­fi­cial intel­li­gence (AI). An analy­sis from the jour­nal Drug Dis­cov­ery Today has shown that 80 to 90 per­cent of can­di­dates select­ed by AI make it through the first phase of clin­i­cal stud­ies. That is an enor­mous increase over the num­ber select­ed “man­u­al­ly” by research per­son­nel. Tar­get­ed invest­ments in AI there­fore make sense for phar­ma­ceu­ti­cal com­pa­nies. Anoth­er pos­si­bil­i­ty lies in the phase before human tri­als and con­sists of replac­ing the oblig­a­tory, albeit error-prone, tests on ani­mals with organ-on-a-chip exper­i­ments. For this, human cells are cul­ti­vat­ed in a lab to make small amounts of tis­sue suit­able for drug tests — an approach that will depend on favor­able reg­u­la­to­ry frame­works in the future. 

It is also impor­tant to entrust the devel­op­ment of new med­ica­tions to diverse teams. Not only R&D spe­cial­ists should be involved right from the start but also rep­re­sen­ta­tives from man­u­fac­tur­ing, mar­ket­ing, reg­u­la­to­ry affairs, and qual­i­ty man­age­ment. The com­bined per­spec­tive helps to save time and costs because it ensures that only the most promis­ing can­di­dates are admit­ted to clin­i­cal stud­ies in the first place. 

Look­ing at this from a glob­al per­spec­tive, there is poten­tial for speed­ing up the pace of these process­es. Inter­na­tion­al com­pa­nies often reach phase 3 or beyond in advanced bio­log­ics, while Ger­man play­ers are still in phase 1 or 2. 

That being said, Ger­man com­pa­nies can learn from other com­pa­nies’ best prac­tices — par­tic­u­lar­ly of U.S.-based enter­pris­es — and quick­ly catch up. For this, they need to place a high­er pri­or­i­ty on inno­v­a­tive tech­nolo­gies in their R&D depart­ments, ide­al­ly in mar­ket sec­tors where they are already com­pet­i­tive. Strate­gic out­sourc­ing of indi­vid­ual activ­i­ties can fur­ther accel­er­ate progress.

Dr. Roman Hipp, Senior Partner and Global Head Life Sciences & Chemicals at Porsche Consulting, reports as a specialist author for the international management consultancy’s digital customer magazine.Porsche Consulting

Paid for success

Every larg­er com­pa­ny also has to explore whether it wish­es to pur­chase exter­nal inno­va­tions and inte­grate them into its exist­ing orga­ni­za­tion­al model, for exam­ple in the form of col­lab­o­ra­tive projects with spin-offs from uni­ver­si­ties or research insti­tu­tions, or whether it should build up the req­ui­site exper­tise inter­nal­ly. The experts at Porsche Con­sult­ing can pro­vide valu­able assis­tance in select­ing the right targets,and estab­lish­ing new value pools. 

Inno­va­tions are also need­ed in financ­ing. If a treat­ment costs mil­lions of euros, it will not be avail­able to every­one — it is sim­ply too expen­sive. And the solu­tion? We need to reassess remu­ner­a­tion mod­els and break free of tra­di­tion. Cur­rent­ly, the sales vol­ume of a drug is what is reward­ed. Anoth­er pos­si­bil­i­ty would be to com­pen­sate pure­ly on the basis of out­come — and pay pro­duc­ers not for every drug sold but for every treat­ment that succeeds. 

With­out a doubt, patients will ben­e­fit from bio­phar­ma­ceu­ti­cal inno­va­tions. And the faster these med­ica­tions can go onto the mar­ket and the more favor­able their prices, the more human lives they will be able to save. 

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Are Paramount”