Problems with Your DNA? Change it!
Painfully, the pharmaceutical industry has discovered that it is not immune to change. Blockbuster drugs are fading as generics replace the current stock of remedies, and as precision medicine shifts the focus away from drugs that address large patient populations to develop personalized therapies for smaller groups.
The Institute of Medicine defines “precision medicine” as tailoring medical treatment to individual (often genetic) characteristics of each patient. The preventative or therapeutic interventions can then be concentrated on those who will benefit, sparing expense and side effects to those who will not.
For years, the pharma business model was prosperously built around blockbuster drugs, those that treat conditions affecting large populations—high cholesterol, infectious diseases, high blood pressure and gastrointestinal maladies—where patients receive similar, if not identical, treatments. A patented drug like Lipitor contributed a record $125 billion to Pfizer during its 12-year run, making pharma very profitable even if the companies had to replace an entire book of business every 10 to 12 years.
But that world is gone. Populations are growing older; more patients are living with more complicated diseases such as cancer, rheumatoid arthritis and immune disorders. New drugs are scrutinized more closely; clinical trials are becoming more expensive. Trumping these changes are the dynamics of new regulations and requirements of the Affordable Care Act as well as the payers, Medicare and Medicaid, all asserting a larger role in how treatment is delivered.
At the same time, science continues its dazzling trajectory, tapping unprecedented computational power to slice and dice DNA genomic data to unveil the abnormalities that create illness, explain the process of aging and perhaps unravel the secret of life itself. If pharmaceutical companies intend to grow and prosper in a dramatically altered 21st century, the business environment demands reinvention.
More than 25,000 scientists and oncology professionals from around the world gathered at the American Society of Clinical Oncologists in Chicago in June to learn about new developments in cancer treatment. Accounts of clinical trials documenting exciting breakthroughs were presented alongside reports of gnawingly difficult challenges in developing therapies for treating stubborn cancers with therapies that bring relief to some and completely fail other patients. Developing drugs for rare diseases or for small subsets of common diseases is a risky business. There will be winners and losers. Companies are placing their bets.
ASCO has become the place to share groundbreaking research, scientific developments, state-of-the-art treatment modalities and new therapies, as well as a forum to discuss controversies such as how to pay for these breakthrough drugs.
Undoubtedly, the halcyon days of megadrugs hid inefficiencies from the companies themselves. The new environment is prompting pharma companies to examine expenses in research and development. Like enterprises in other sectors, pharmaceutical companies are divesting some operations to bring greater focus to their core business. They are driving cost out of their operations, becoming more agile and taking on the bigger job of building trust with a more skeptical consumer.
Bristol-Myers Squibb was one company that experienced the highs and lows of the conference—presenting stunning data from clinical trials that showed Opdivo could double survival for lung cancer patients—and then a hammering of its stock when an analyst suggested that its competitive position for Opdivo wasn’t bulletproof.
New CEO Giovanni Caforio sought to bring balance. “We have successfully transformed the company,” he said, referring to the company’s hard slog in re-engineering its business, divesting its medical-imaging group, its diabetes business, wound-care division and nutritional business to focus on the high-margin specialty drug group.
“We are pioneers in immuno-oncology,” Dr. Caforio noted. “We have a proven track record of success in partnering with biotech companies, pharma, the academic community. That will continue to be a critical part of our strategy. Remember, we are actively leading science in the area where the medical need is very high and we can bring transformative medicines to patients.”
Analysts seem to concur. According to a February 20, 2015, report by Damien Conover, who covers pharmaceuticals for Morningstar, Bristol-Myers Squibb “holds a wide economic moat … The patent protection allows the company to price its drugs at levels that translate into superior returns on invested capital compared with its cost.”
Yet the big news at the conference was the announcement of NCI-Molecular Analysis for Therapy Choice program, NCI-MATCH, a clinical trial that will analyze patients’ tumors to determine whether they contain genetic abnormalities for which a targeted drug exists and assign treatment based on the abnormality. NCI-MATCH seeks to determine whether treating cancers according to their molecular abnormalities will show evidence of effectiveness.
To do that, the National Cancer Institute will work with more than 20 companies in “discovery trials” as companies provide their drugs for study on specific mutations. The government is paying for the trials, a huge incentive to the companies to participate. The drugs included in the trial have all either been approved by the U.S. Food and Drug Administration for another cancer indication or are still being tested in other clinical trials but have shown some effectiveness against tumors with particular genetic alterations.
“This is the largest and most rigorous precision oncology trial that has ever been attempted,” said Dr. James H. Doroshow, deputy director of NCI. The trials promise new insight into treating tumors that have been particularly resistant to treatment.
NCI-MATCH investigators plan to obtain tumor biopsy specimens from as many as 3,000 patients initially. The specimens will undergo DNA sequencing to identify those that have genetic abnormalities that may respond to the drugs selected for the trials. Another unique aspect of the trial is that there will be up to 2,400 clinical sites across the U.S., which means that patients will not have to travel far to enroll.
Doroshow called the program a “paradigm shift,” from treating cancer based on the organ where it originated to zeroing in on the genetic abnormality and matching it to one of the drugs being studied. Once enrolled, patients will be treated with the targeted drug for as long as their tumor shrinks or remains stable.
In a sense, the trial suggests a “pay for performance” element that could be utilized when treating cancer patients in the future. Economist Doug Holtz-Eakin (see sidebar) envisions a future of payment based on success. “If a therapy is effective, you get continued payments,” he says. “If it’s ineffective, the payments stop.”
NCI-MATCH is only possible because of the dramatic reduction in the cost of DNA sequencing. The mapping of the human genome in 2003 jump-started medical genomics. While the Human Genome Project was an immense international collaboration that took 13 years and cost $3.8 billion, Doroshow estimates that the genome mapping for NCI-MATCH is about $1,000 per patient.
What’s exciting is the chance for NCI and the drug companies to learn quickly. “The program offers the drug companies a safe harbor,” said Doroshow. “The government will not assert any intellectual property rights.” It means that the participating companies will be able to study their drug’s effect on an identified mutation and proceed independently.
“We’ll also test the expression levels of RNA, which will provide additional insight into why particular drugs are or are not found to be effective,” said Doroshow.
Exciting innovations in biopharma are not limited to major drug companies or cancer organizations. Instead, innovation is taking place at a host of smaller, greenfield companies from Cambridge to Berkeley.
Two new companies—Caribou Biosciences and Intellia Therapeutics—will develop therapeutics and solutions for new and improved products based on the breakthrough work on RNA by biochemist Jennifer Doudna.
Like DNA, RNA are nucleic acids, and, along with proteins and carbohydrates, constitute the three major macromolecules essential for all known forms of life. Doudna’s discovery and the development of CRISPR/Cas9 gene-editing technology opened a new frontier in biomedical research. Caribou forms strategic alliances with companies in the research, therapeutics, agriculture and industrial bio fields to develop new and improved products. Intellia’s goal is to develop curative medicines using CRISPR/Cas9 for gene editing and repair.
“The incredible potential of this technology for treating human genetic disease inspired a group of life science veterans to create Intellia Therapeutics,” said Erik Sontheimer, one of the scientific founders of Intellia who helped unravel the mechanism of CRISPR-mediated immunity in bacteria. His lab at the University of Massachusetts studies the roles of RNA molecules in gene regulation and genome editing.
The power of Doudna’s discovery is evident in the many awards she has received, including the 2014 Lurie Prize in Biomedical Sciences and election to the National Academy of Sciences. Time magazine named her one of the 100 most influential people in the world in 2015.
“Every scientist has the dream of using their science to treat disease or benefit society in some way,” said Luciano Marraffini. “And I think that Intellia now has the opportunity, and I have the opportunity by being part of Intellia.” He is a founder and leader of Intellia, whose laboratory at Rockefeller University investigates the underlying molecular mechanisms of CRISPR immunity and seeks to employ this natural pathway to develop new technologies.
Another founder, Rodolphe Barrangou, was part of the team that initially established the adaptive immune function of CRISPR systems. His lab at the North Carolina State University focuses on the biology and genetics of CRISPR/Cas immune systems in bacteria.
“It’s the right topic and technology with CRISPR,” said Barrangou. “It’s the right time with the CRISPR craze. It’s the right team without a doubt. It’s the right IP strategy. It’s the right strategic partnerships. It’s the right founders’ team. It’s the right staff. It’s the right leadership. It’s the right investors. And when you put all of those good ingredients together, you can expect nothing else but success.”
Yet the new and astonishing still takes time—such as the goal of developing drugs that could home in on a specific gene causing a disease, then snip it out and, if necessary, replace it with a healthy segment of DNA.
While CRISPR/Cas9 and other gene editing therapies offer tremendous potential for developing new treatments for diseases caused by a mutated gene, the drugs and trials are years away.
“We’ll know more,” concludes Doroshow, as a result of NCI-MATCH and other research efforts. “We won’t know everything. But we will build more understanding and apply that knowledge to the treatment patients get.”
COST OF THE CURE
“These drugs cost too much,” said Dr. Leonard Saltz, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center. He managed to rock the audience of 25,000 oncologists, scientists and health care experts at the plenary session of the American Society of Clinical Oncology’s annual meeting in Chicago in June.
The median monthly price for new cancer drugs in the U.S. had doubled, he said, from $4,716 in the period from 2000 to 2004 to roughly $9,900 from 2010 to 2014.
Saltz noted that price increases haven’t corresponded to increases in the drugs’ effectiveness.
Saltz had seen the elephant in the room, and named it.
“The unsustainably high prices of cancer drugs is a big problem, and it’s our problem,” Saltz said.
While Saltz called on the industry, physicians and insurers to work together with government to address cost, economist Doug Holtz-Eakin has also been thinking about price concerns. Last year, he established the Center for Health and Economy, a think tank to serve as a resource to Congress, the media and the public as the health care issue is debated.
As the former director of the nonpartisan Congressional Budget Office and the former chief economist of the President’s Council of Economic Advisers, Holtz-Eakin has a unique perspective, having been involved in policy, politics, academia and government. He is president of American Action Forum.
“I have always maintained that the Affordable Care Act is not the end of health care reform but the beginning,” said Holtz-Eakin. “The law is widely perceived as flawed. It became a political issue, which stopped the progress on health care policy.” With the recent Supreme Court decision in favor of the law, he is now hopeful of progress.
“The availability of therapy to treat conditions that were previously untreatable is literally a miracle,” said Holtz-Eakin. “Yes there is a financing issue. But we should not lose sight of the underlying health policy piece of better medicine.”
Saltz notes that one Bristol-Myers cancer drug regimen was “truly, truly remarkable for a disease that five years ago we thought was virtually untreatable.” The regimen, reported at the conference, combines the drugs Yervoy and Opdivo, helping patients live for a median of 11.5 months without their disease getting worse. Yet Saltz calculated the cost at $295,000 per patient per year and extrapolated it to $174 billion to treat all U.S. patients with metastatic cancer for just one year.
Yet Holtz-Eakin would hate to see the government impose price controls.
“As much as possible, we should let the private parties sort it out,” said Holtz-Eakin. Drug pricing undoubtedly will change. “Lesson No. 1 is always to engender competition wherever possible.”
Drug costs rose to $374 billion last year, the largest increase since 2001. But Holtz-Eakin urges perspective: “If we saw any big pharma companies consistently beating the profit rates of the rest of the world, then you would stand up and take notice. That’s not what happens—they win, they lose. Pharma stocks have not beaten the market. Pharma’s ability to generate huge profits is limited.”
There’s a bigger issue for those concerned about the spiraling cost of health care. “Drugs are only 10 percent of health care,” said Holtz-Eakin. “If you want to cut the nation’s health care bill, you have to go after the hospitals and doctors.”
At the same time he endorses the efforts of the pharmaceutical companies to improve productivity. “Health care is a really big part of the economy, and it has not been the most productive. We need to think hard about health care policy issues because it … has a big impact on people’s personal lives.” —K.K.