Reducing Pharmaceutical Risk
The major non-technical reasons for discontinuations (of drugs in development) are marketing re-assessments or management discontent. Most occur before sufficient data are available to make informed judgments. Often, a project simply becomes low priority. Since “resources are scarce” something has to go. Formal prioritization is today a management obsession to remove appearances of doubt in decision-making. Priority lists are sacrosanct, infrequently revised and followed religiously. It is not important whether or not two or more compounds are competing for the same resource in a rate-limiting way. This can lead to bad decisions … The same reasons that lead to project discontinuations also discourage the resolve to work out a new technical problem, which then serves as a convenient excuse for cutting a project for which management has lost interest… AZT, acyclovir, bupropion, gabapentin, troglitazone, fluoxetine, captopril, cimetidine, propranolol, lovastatin, omeprazole, as well as virtually all other breakthrough drugs ever marketed, encountered serious technical problems that jeopardized development. Most problems were so severe that the compounds would have been discarded under our current well-managed and efficient “go-no-go” systems. The problems faced by each of these drugs were different and difficult to solve.
–Pedro Cuatrecasas. From The Journal of Clinical Investigation (2006).
If we knew what it was we were doing it would not be called research, would it?
–Albert Einstein
The pharmaceutical industry is one of the riskiest industries in which to compete. While substantial risk will always be present, companies and managers desire to reduce most of the risk they face. This chapter describes several types of risk encountered in the functional areas of drug discovery, development, and marketing, as well as the overall business risks in the pharmaceutical industry. Approaches used to decrease these risks are also indicated.
MINIMIZING RISK IN SELECTED FUNCTIONAL AREAS
A common technique across all functional areas within the pharmaceutical industry to reduce risk is to educate all staff about risk. This includes people from all levels in each of the functional hierarchies. Secretaries and administrative assistants who understand the goals of their company can avoid errors and make
suggestions to facilitate the efficient conduct of virtually all types of activities within the company. This reduces the risk of problems occurring and even will help prevent failures on various projects. The methods to educate staff vary widely from those that are simple and relatively inexpensive (e.g., in-house or guest lectures, providing manuals or textbooks) to extremely expensive ones (e.g., sending senior managers to a week-long program or even a longer term course in another city or country).
suggestions to facilitate the efficient conduct of virtually all types of activities within the company. This reduces the risk of problems occurring and even will help prevent failures on various projects. The methods to educate staff vary widely from those that are simple and relatively inexpensive (e.g., in-house or guest lectures, providing manuals or textbooks) to extremely expensive ones (e.g., sending senior managers to a week-long program or even a longer term course in another city or country).
Discovery Risk
Discovery risk refers to the risk companies face if they are partly or totally dependent on discovering new drugs. This means that a sufficient number of new drugs of commercial value must be discovered that can be developed, licensed out, or sold to financially support the company in the future. Alternatively, drugs must be discovered by partners or affiliates where the company has the rights to the drug or can license them on an exclusive basis. The potentially serious consequences of a failure to discover drugs of sufficient commercial value are obvious for employees, shareholders, and others.
Many avenues exist for companies to pursue in order to decrease discovery risk. These include:
Have sunset provisions in place that terminate a research project at a predetermined time (e.g., one, two, or three years) if substantial progress or predetermined objectives are not achieved. The goal of this approach is to force current discovery projects to compete with new ideas for resources. This helps ensure that the best ideas are being worked on and that the effect of internal politics is minimized in this area.
Contract or form alliances with other companies, research institutes, and/or academic departments to obtain exclusive rights to any compounds of pharmaceutical value they discover. This could cover certain chemical series, certain therapeutic areas, specific technologies, or other types of discovery activities.
Focus on the number of different projects being researched. An argument may be advanced to focus on fewer projects and to devote more resources to each. This approach is designed to increase the chance of finding an important and valuable compound by focusing research in a narrower area. The antithesis, or opposite argument, may also be posed, namely, to focus on more research projects and devote fewer resources to each project. This approach is designed to increase the chance of finding an important and valuable compound by covering a wider research area. The opposite nature of this and the above point shows that a research professional or manager can (and will) argue whichever way he or she believes appropriate. Each company will decide where its own balance lies in this regard, and that balance would differ greatly among companies depending on several factors such as resources, opportunities, and personalities of the senior decision makers.
Encourage friendly competition among discovery professionals and/or groups: (a) within the same research group, (b) in different research groups of the company in different countries, or (c) in different subsidiaries of the parent company.
Hire the most creative staff from academia or from other pharmaceutical companies. This latter approach has not been pursued very aggressively in the pharmaceutical industry as compared with academia, where entire departments are sometimes recruited from one university to another.
Have an external consultant or internal staff expert from the development division audit the status of discoveries on an annual or other basis. This is intended to prevent scientists (or managers) from keeping projects in the discovery phase too long and not advancing them to development in order to answer scientific questions that could be addressed while the compound advances toward human testing and even when it is being tested in the clinic. Advancing compounds at the appropriate rate also allows additional discovery projects to be initiated and progressed.
Establish minimally acceptable criteria to advance all compounds into lead compounds and progress all lead compounds toward and into development. Write down the path that each compound must take through the maze of tests used in discovery research. This should decrease the tangents that may be inadvertently (or purposely) taken by scientists, as well as minimizing the possibility of their failing to identify important and valuable compounds. This topic is discussed in Chapter 50.
The minimally acceptable criteria are also used to terminate progress on a new compound, lead compound, or drug when predetermined minimal efficacy, safety, pharmacokinetic, or other criteria of major importance to the viability of the project are not achieved in experiments.
Become a development-focused company and give up discovery research altogether. It is understood that this approach is neither desirable nor acceptable for the majority of companies trying to find new drugs within their own laboratories. Nonetheless, products (i.e., discoveries) can be purchased, licensed-in, or otherwise obtained.
Development Risk
Development risk is defined as the risk that drug discoveries that enter development will not reach the market and become commercially viable drugs. This period lasts from the time a compound is first put into development until the drug is launched onto the market. The development period continues when new indications or dosage forms are being developed, while the product is also being sold.
Industry data suggest that only about 10% of drugs entering development eventually are approved for marketing. The remaining 90% do not reach the market, primarily because of lack of adequate efficacy or because of problems relating to human safety or animal safety (i.e., toxicology). Additional reasons for project termination relate to competition and new and even better products reaching the market, changes in medical practice, patent issues, and production problems (e.g., inability to scaleup the product’s manufacture). Others fail, however, due to the incompetence of staff who design or conduct inappropriate studies or make other blunders.
To decrease development risk, it is possible to pursue a variety of approaches. None can be endorsed as an overall principle for all situations. For a specific company and product, it is possible that multiple approaches will be used. These include:
License-in drugs that are in early-stage development (i.e., up through Phase 1 of human trials), rather than relying on discovering drugs that will hopefully progress into development.
Develop drugs where the probability of efficacy is extremely high, rather than those whose clinical activity is based on a hypothesis. A major commercial success from a breakthrough
drug usually involves higher risks, and this often means accepting a hypothesis as the basis of undertaking clinical trials. Therefore, most companies seeking huge commercial profits on a specific project would not seek to reduce risk by using this approach of avoiding hypothesis testing.Stay updated, free articles. Join our Telegram channel
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