Big Drug Launches Have Taught Drug Companies Some Important Lessons
With the closure of another year just weeks ahead, this time of year is one that many people use to take a look behind and see what lessons were learned over the past 12 months. For the world of biopharma, it’s also important to see what lessons have been learned.
This morning, Forbes John LaMattina examined some of those lessons that pharma companies have learned from some of the biggest drug launches of all time that will shape R&D efforts in the years to come. LaMattina pointed to four major lessons that companies will definitely have to take to heart as they plot the development of pipeline assets, as well as plan commercial launches of approved products.
Drugs for the masses – We are now in the era of personalized medicine and the era of “drugs for the masses” is over. LaMattina noted that medications intended to be prescribed to millions of people is no longer the focus of drug developers. While some drugs continue to reach blockbuster status, $1 billion or more in annual sales, drugs aimed at broader disease populations are declining in favor of small market high-priced drugs. Since Pfizer’s arthritis drug Celebrex launched 20 years ago, LaMattina said there has not been a “billion dollar first-year start for a drug that is intended for broad disease populations.”
Small markets, high prices – Those words signal the future for drug development. LaMattina pointed to blockbuster drugs that have helped define companies like Gilead’s hepatitis drugs Harvoni and Sovaldi. Those drugs served a smaller market and came with significant price tags that generated tens of billions of dollars in annual revenue for the Foster City, Calif.-based company. Revenue for those drugs has fallen significantly in recent years due to the fact that the drugs are virtual cures for the disease. The efficacy of the two drugs significantly shrunk the patient population. In addition to the hep C drugs, LaMattina pointed to the success of drugs for multiple sclerosis and the various subpopulations of cancers that are generating significant cash flow for companies, all while serving smaller patient populations.
Success is fleeting – As Gilead learned, success can be fleeting for drug revenues. The company has seen a downturn in what Harvoni and Sovaldi have brought in. Other drug manufacturers have learned similar lessons. LaMattina noted that three of the top-10 drugs on the most successful launch list are no longer on the market due to competition or safety concerns. Before Gilead launched Harvoni and Sovaldi, Vertex and Johnson & Johnson had blockbuster drugs for hepatitis C. But once a new generation of HCV treatments hit the market, like Gilead’s drugs, as well as AbbVie’s Mavyret, Vertex and J&J discontinued their medications.
In 2004, Merck was also forced to pull its arthritis relief Vioxx off the market due to an increased risk of heart attack or stroke. In its first year, Vioxx brought in more than $1.4 billion. But the health risks caused a reversal of fortune for that medication and its revenue stream. LaMattina noted that the concerns over Vioxx also impacted sales of Celebrex, which has the same mechanism of action.
R&D Investments – The last lesson learned that LaMattina points to is that successful launches of drugs that are aimed at smaller patient populations have influenced the direction of R&D investments. He noted that clinical trials for rare diseases are smaller in nature than those for heart disease or diabetes, which have large patient pools. As drugs for smaller patient populations are launched, LaMattina noted that smaller sales forces are needed by drug companies. LaMattina pointed to the pharma giant Pfizer as an example. At one point, the company had its “roots in antibiotics, cardiovascular diseases, and neurosciences.” Now though, the company’s focus is in oncology, immunology, liver disease, rare disease and vaccines. These are all areas of major medical need and are also areas “where an effective drug can command high pricing,” LaMattina said.