Pharmaceutical pricing and market access
Lecture 1: Life cycle management (LCM) of drugs
Case example
Trastuzumab (Herceptin®) is an effective immunotherapy for patients with HER2 + early and metastatic
breast cancer.
o Authorized for intravenous administration (IV) in 2000.
Roche had patent protection until 2014, and they knew biosimilars would enter once the patent expired.
So, they launched subcutaneous (SC) (new formulation) → evergreening = extending product life through
innovation.
o SC (approved 2013) had patent protection for the delivery method until 2030.
Biosimilars entered in 2018: IV Herceptin was replaced by cheaper biosimilars. However, SC Herceptin was
protected and retained demand (20% market share, peaked at 50%).
History of drug discovery
Life cycle of a drug
,Aim of Life Cycle Management (LCM):
Lifecycle: development phase
, 1) Define lead indication (= main disease) based on early trial results
o Gather disease burden data: incidence (= number of new cases), prevalence (= total
number of existing cases), complications, quality of life impairment, unmet need.
o Decide: small high-need group (limited indication) or large population (wider indication)
o Use biomarkers to:
▪ Identify patients who respond (companion diagnostic)
▪ Identify patients likely to have side effects
o Possibly expand to other indications (follow-up indications before or after approval)
→ Goal: pick best starting market
2) Design clinical trial program
o Decide which trials are needed for approval
o Choose active comparators
o Select endpoints
o Show: superiority (= better) or non-inferiority (similar but maybe safer/easier)
o Choose where to run trials
o After approval: extra studies can expand use
→ Goal: design trials that maximize approval + market success
The success rate is very low overall: only 13.8% of drugs go from Phase 1 to approval
Some companies are better at selecting and developing drugs (differences in approval chances)
Drugs have a long development phase, but a short profitable window because of patent expiry.
Patents:
• Innovation has high fixed costs, low constant marginal costs (better to follow than be a leader)
• So temporary monopolies through patents: make profit to regain costs of R&D, manufacturing
and distribution.
• Profit maximization to attract investors: invest in innovation.
However, because of barriers to enter they have more profits in long-term, profits for pharma.
Lifecycle: Introduction phase
Market authorization = regulatory approval before being placed on the market, to protect public health
and ensure the availability of medicines with focus on quality, safety, efficacy.
• EMA: guidance on methods and study designs
• The relative effectiveness assessment of national HTA agents builds on the outcome of regulatory
assessment.
Label claim = format and content of labels, regulated by regulatory bodies. Summary of essential
information on the safe and effective use of the product (e.g. ingredients, dosing, route of administration,
storage, target population, effects, side effects).
• Must be accurate, not false and misleading.
• Based on evidence of safety and efficacy
, Centralized procedure
Benefits:
Conditional marketing approval: tool for fast-track approval
Lecture 1: Life cycle management (LCM) of drugs
Case example
Trastuzumab (Herceptin®) is an effective immunotherapy for patients with HER2 + early and metastatic
breast cancer.
o Authorized for intravenous administration (IV) in 2000.
Roche had patent protection until 2014, and they knew biosimilars would enter once the patent expired.
So, they launched subcutaneous (SC) (new formulation) → evergreening = extending product life through
innovation.
o SC (approved 2013) had patent protection for the delivery method until 2030.
Biosimilars entered in 2018: IV Herceptin was replaced by cheaper biosimilars. However, SC Herceptin was
protected and retained demand (20% market share, peaked at 50%).
History of drug discovery
Life cycle of a drug
,Aim of Life Cycle Management (LCM):
Lifecycle: development phase
, 1) Define lead indication (= main disease) based on early trial results
o Gather disease burden data: incidence (= number of new cases), prevalence (= total
number of existing cases), complications, quality of life impairment, unmet need.
o Decide: small high-need group (limited indication) or large population (wider indication)
o Use biomarkers to:
▪ Identify patients who respond (companion diagnostic)
▪ Identify patients likely to have side effects
o Possibly expand to other indications (follow-up indications before or after approval)
→ Goal: pick best starting market
2) Design clinical trial program
o Decide which trials are needed for approval
o Choose active comparators
o Select endpoints
o Show: superiority (= better) or non-inferiority (similar but maybe safer/easier)
o Choose where to run trials
o After approval: extra studies can expand use
→ Goal: design trials that maximize approval + market success
The success rate is very low overall: only 13.8% of drugs go from Phase 1 to approval
Some companies are better at selecting and developing drugs (differences in approval chances)
Drugs have a long development phase, but a short profitable window because of patent expiry.
Patents:
• Innovation has high fixed costs, low constant marginal costs (better to follow than be a leader)
• So temporary monopolies through patents: make profit to regain costs of R&D, manufacturing
and distribution.
• Profit maximization to attract investors: invest in innovation.
However, because of barriers to enter they have more profits in long-term, profits for pharma.
Lifecycle: Introduction phase
Market authorization = regulatory approval before being placed on the market, to protect public health
and ensure the availability of medicines with focus on quality, safety, efficacy.
• EMA: guidance on methods and study designs
• The relative effectiveness assessment of national HTA agents builds on the outcome of regulatory
assessment.
Label claim = format and content of labels, regulated by regulatory bodies. Summary of essential
information on the safe and effective use of the product (e.g. ingredients, dosing, route of administration,
storage, target population, effects, side effects).
• Must be accurate, not false and misleading.
• Based on evidence of safety and efficacy
, Centralized procedure
Benefits:
Conditional marketing approval: tool for fast-track approval
