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The Road More Traveled: Improving Drug Therapies for Not-So-Rare Diseases

Wed, 01/15/2014 - 9:27am
Seth Lederman, MD, CEO, Tonix Pharmaceuticals

Large and small patient populations present different challenges and opportunities for drug developers. Traditional pharmaceutical developers tackle common problems affecting the many; orphan drug and personalized medicine developers target rare problems affecting few people. The size and complexity of target patient population affects nearly every aspect of drug development and leads to different commercialization, distribution and pricing strategies. To borrow a line from Robert Frost’s famous poem, for big and small patient populations, two roads are diverging in drug development.

Traditional drug development is still the road more traveled. Epic successes in vaccines, antibiotics, cholesterol-lowering drugs, antivirals, mood stabilizers and antineoplastic drugs have transformed the human condition. Orphan and personalized medicine is the road less traveled, but has opened new treatment paradigms. For example, Vertex’s Kalydeco® (ivacaftor) significantly improves cystic fibrosis (CF) related to the G551D gene mutation, which affects approximately 4% of CF patients in the United States (about 1,200 patients).

In the past 20 years, traditional drug development in the U.S. has been buffeted by various challenges, while orphan and personalized medicine development has thrived. For traditional drugs, regulatory hurdles for demonstrating safety and efficacy are becoming more rigorous. In contrast, for orphan and personalized drugs, there are limited patients available to do the same kind of safety investigation, which makes it impossible to look for rare adverse drug reactions that can scuttle traditional drug development programs. In addition, many orphan and personalized drugs target incurable conditions, so adverse events are more acceptable in the context of the medical need. On the efficacy side, many orphan and personalized medicines have been given liberties to define outcomes more creatively than medicines for common problems. Clinical trials are thought to be less challenging for orphan drugs because in almost any setting, studying a homogeneous population is easier and more likely to produce reproducible positive results.

Seth Lederman, M.D.Over the same period, the business case for developing new traditional drugs was undermined by the widespread substitution of generic drugs and the shortening of patent life by “harmonization” in 1994. In contrast, the exclusivity of orphan drugs is provided by a pathway entirely different from patents. The Orphan Drug Act provides seven years of exclusivity, so when the traditional patents were decimated by harmonization, the orphan protection became a very valuable avenue to return money to investors. 

Various corporate models were created that showed significant revenue and earnings potential from marketing orphan and personalized drugs. Lurking behind the success of orphan and personalized medicines is the invisible hand of Adam Smith. For several reasons, drug developers have found way to profit from selling orphan drugs to smaller and smaller niches. Using relatively high prices, it is possible to recoup the cost of development. Questcor’s Acthar® (corticotropin) for infantile spasms and a few other orphan indications is reportedly $28,000 per vial. Orphan drug manufacturers can charge relatively high prices for therapy, and private insurance companies have granted them price inelasticity. Genzyme’s Cerezyme® (imiglucerase) for Gaucher’s disease is taken by about 5,000 people, which is about 50% of the world’s population of Gaucher’s patients. It costs each patient an average of $200,000 per year, which led to the acquisition of Genzyme by Sanofi for $20 billion in 2011.

While the past decade has witnessed brilliant accomplishments by orphan and personalized medicine developers, the pendulum of drug development efforts is swinging back toward traditional pharmaceutical developers. Several factors are driving this. First and foremost, the Affordable Care Act (ACA) seems designed to introduce rationalization (some say “rationing”) into a system that needs to extract value for public health broadly. Payors want value, regardless of whether the payor is private, public or some mixture (e.g., an Exchange). It is hard to predict whether Exchanges will sustain the orphan reimbursement model in which the developer must recoup development costs by charging high prices for each of the relatively few patients. In contrast, traditional drugs can recoup costs and earn profits with traditional prices, since traditional drugs can make up in volume what they sacrifice on relatively lower margins. Moreover, by improving the health of large patient populations, traditional drugs can save the healthcare system money overall.

More evidence for a resurgence of the traditional drug development approach comes from recent successes in the industry. Celgene’s Revlimid® (lenalidomide) is continuing to help multiple myeloma patients, and Celgene’s success comes from helping transform that condition from a two-year death sentence into a chronic disease for some of the approximately 70% of patients who respond to current regimens. Gilead’s new treatment for chronic hepatitis C, Sovaldi® (Sofosbuvir), has all the indications of becoming a mega-blockbuster that will change the health of the U.S. population in a substantial way. It’s perhaps not surprising that Gilead has been so successful in pursuing the traditional model with Solvadi because their HIV franchise was built solidly on a traditional drug development model.

At Tonix Pharmaceuticals, we are developing innovative new medicines for fibromyalgia, post-traumatic stress syndrome and tension headache. Similar to other traditional drug developers, we’re driven by the mission of improving public health on a large scale with the expectation that profits will follow solid achievements. Tonix has assembled a portfolio of late-stage drug programs that target common medical problems because our discovery engine is driven by repurposing and reformulation. We start the process with the knowledge that the drug works, so we skip biochemical and animal discovery.  Freed from the burden of creating a safety dossier from scratch, we can be more ambitious about taking on large and challenging disorders. Starting with known drugs, we can leverage the safety and pharmacokinetic data from the prior indication and apply it in novel ways to attacking challenging disorders. The 505(b)(2) pathway allows us to pursue a relatively faster and less expensive path towards regulatory approval with reduced risk of late-stage failure.

Drug development efforts are diverging down two roads: niche markets and large markets. Right now, the pendulum of drug development efforts seems to be shifting back to traditional drug development, which is tackling big problems and promises to deliver value to payors. In the end, the road more traveled can make all the difference.

Seth Lederman, M.D., is co-founder, CEO and chairman of Tonix Pharmaceuticals Holding Corp., a specialty pharmaceutical company developing novel treatments for challenging disorders of the central nervous system including fibromyalgia, post-traumatic stress disorder and headache. He can be reached at (212) 980-9155. Dr. Lederman was a founder of Validus Pharmaceuticals which markets Equetro. He was a founder of Targent Pharmaceuticals which sold Fusilev® to Spectrum Pharmaceuticals.

 

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