Landscape Disrupters Are Becoming Part of the Pharma’s Playing Field

In recent years genetic testing has been introduced (23andme, Navigenics, deCODE and others). It has caused a bit of for and against uproar. Information from this testing could be used for changing the lifestyle that could avert diseases one might encounter with age or even could be used for personalized medicine. Better lifestyle could lower pharma sales and an unacceptable scenario by the current players. Others consider that the generated information could be abused and invade privacy and would want to block such testing.

Similarly companies like Theranos and Nanobiosym are introducing low cost, efficient and speedier diagnostic testing. This is happening due to better application of existing physical sciences and engineering principles along with advances in microchip technologies. Speed and lower costs are causing quite a bit of angst at the companies who are currently involved in this work and had thought what they do cannot be done by anyone else. 

Diagnostic test results with newer technologies offer wide range of information that may not require repeated or additional testing if the physicians want to have supplementary information. Using the existing technologies additional testing would be necessary if such information. New companies will impact the revenue base of the existing companies since their costs are lower. These technologies will lower healthcare costs and are a perturbation.

Above are few of the disruptive companies that are changing the pharmaceutical diagnostic playing field and giving people opportunity to manage their life style. The established players frown upon loosing control of large population base and revenue. Privacy and other concerns are being raised to limit wide spread use of methods. Every possible legal argument and scare tactic is and would be made against information that could improve our health and lifestyle. Different pro and con arguments and lawsuits will come through till all involved understand value of testing and privacy safeguards are put in place. After adequate safeguards these companies will eventually succeed.

Driverless car is a technology leap that is causing a perturbation in the automotive field. Google’s thrust has been formidable and is well known. Automotive companies could have fought the technology but have decided to join in. They do not want to loose the customer base. Microchips with smartphones have changed global lifestyle landscape. Origami engineered robots being explored at Harvard and MIT once commercialized could revolutionize the global industrial landscape.

Edison, Gates, Jobs, Ford, Musk and others created new landscapes. History tells us that change is possible and if the industry does not change, revolutionary and free wheeling explorers who are not part of the current landscape make the change. They create a very different business model because the current model does not serve the need they envision.

It is ironic that many see a similar change is needed in pharmaceuticals to make the drugs affordable to about additional 40% (2 to 3 billion people, my conjecture) of the global population. Existing pharma companies will like to capture this customer base on their terms of drug availability and pricing. However, their current business strategies and practices are making this extremely difficult. Families have to decide how to manage their money between food and medicines and are a roadblock to pharma’s ambitions. Alternates to achieving the goal do exist but need different business strategies.  

Additional mavericks similar to diagnostic or lifestyle changers are needed for the pharmaceuticals. I am not sure anyone has taken up that role. Its time may have come. Companies like Emerald Therapeutics could assist or be the game changer. Wouldn't it be interesting if few outlier companies (small molecule active producers and their formulators) could create a business model that will have a larger customer base for limited drugs just to show what all is possible and in turn lower drug costs and have high profits? Such an opportunity would be worth exploring.  

Girish Malhotra, PE

President

EPCOT International

Improving Global Affordability of HIV/AIDS Drugs Through Technology Innovation

Affordability of HIV/AIDS drugs is critical for the well-being and survival of patients especially in the underdeveloped countries. Companies have done an excellent job of inventing the necessary drugs. Initially the patients who were not covered under healthcare programs could not afford them. Even who were covered, food for the family and drug for an individual ⁽¹⁾ became an excruciating choice. Companies in the developing countries took upon themselves to commercialize processes that had lower their manufacturing costs i.e. the lower selling price. Thus, the availability and affordability became possible to many in the countries.

Various governments and non-profit organizations (notably US Government, Médecins Sans Frontières’, WHO, Clinton and Bill & Melinda Gates Foundations) have done an excellent job of making the necessary drugs available for the needy. However, in the slow economic environment, governments and foundations are facing funding challenges that could make availability of the necessary drugs an uphill task ^(2,3). The need for the drugs has not gone away and is not going away.

How do we make the drugs more affordable? Is there a solution?

Answer to the query posed above is “YES” and it comes from lowering the manufacturing cost. Using the best manufacturing technologies along with the best business practices e.g. supply chain rationalization, economies of scale, better chemistry and improved execution can lower the manufacturing cost of the needed drugs by 20-40% from the lowest selling prices listed at http://utw.msfaccess.org/drugs ⁽⁴⁾.

The cost reduction claim may seem to be large but are not out of the realm of possibilities. Any cost reduction i.e. lower selling price is worth the effort. Anyone who is familiar with chemical processes and cost accounting can reverse ⁽⁵⁾ calculate factory costs within +/- range of the actual costs. A thorough review of the chemistry, process equipment, current practices, economies of scale and supply chain ^(6,7) would be needed to develop better costs. Such review along with creativity and innovation can lead to the development and execution of the best and lowest cost process. Quality will be built in the process. Profits could also increase.

Above mentioned reviews and practices are a common practice in the chemical, petrochemical and other chemicals related industries but have not been practiced in the pharmaceutical manufacturing which includes the manufacture of the active ingredients and their formulation to a dose. If done right, the saving could be higher. Best technology will also facilitate and simplify regulatory compliance.

If we are able to lower the cost of the needed drugs, pressures on the funding governments and the foundations will be reduced. It is possible that lower prices will extend coverage. It will be a win-win and lessons learnt could be used to lower costs of other drugs also.

Girish Malhotra, PE

President

EPCOT International

1. Malhotra, Girish: Drug Prices: Food vs. Medicine - A Difficult Choice for Some June 16, 2011
2. MSF Report: Funding shortages threaten advances against HIV/AIDS, political promises will fall short accessed October 18, 2012
3. Malhotra, Girish: Drugs for Infectious Diseases, Funding and Opportunity December 11, 2011
4. Médecins Sans Frontières’ Untangling the Web of Antiretroviral Price Reductions: 15th Edition accessed October 18, 2012
5. Malhotra, Girish: Neglected Tropical Disease (Infectious Diseases) Drugs: What are they telling us about Innovations! March 7, 2012
6. Malhotra, Girish:  Chemical Process Simplification: Improving Productivity and Sustainability February 2011
7. Malhotra, Girish: Chapter 4 “Simplified Process Development and Commercialization” in "Quality by Design-Putting Theory into Practice" co-published by Parenteral Drug Association and DHI Publishing© February 2011