Smart Money

One of the better-known US industry trade groups is the Pharmaceutical Research and Manufacturers of America (PhRMA where “disease is our enemy,” PhRMA), which since 1958 has advocated for the interests of the Big Pharma companies and their share of the $450 billion world (legal) drug market.  PhRMA’s involvement in global health is low relative to their action on more pressing issues like fighting price constraints, advertising limits, and drug importation. Their main global health project is an “initiative,” called Global Health Progress (GHP) started in 2008, which repackages information from their members on their various global health programs, ranging from lab technician training in Africa to HIV/AIDS meds access to tropical disease research institutes to joint research programs with the PDPs.  In addition, PhRMA occasionally reports on the development of drugs and vaccines for infectious disease by the industry to shine a light on its role in conquering diseases that take “a devastating toll on the lives and well-being of people around the world.”   Their “Medicines in Development for Infectious Disease” report came out this month and lists about 400 drugs and vaccines that are in clinical trials or submitted for approval (PhRMA PR and Report).  While there are several more comprehensive guides to drug development in global health (e.g., G-Finder), I used the list to see where companies are betting they will score big in the infectious disease indications to either bridge the looming patent cliff (the big companies) or primp for acquisition (small companies).  Where is the smart money?

First it is helpful to know where the infectious diseases lie on my just-invented “opportunity attractiveness scale” (OAS) relative to other indications like cancer and diabetes.  The OAS is based on the number of drugs and vaccines in clinical trial or about to be improved for a given indication.  I found “official” numbers for cancer and HIV/AIDS drugs in development, and I did do my own quick analysis using a great resource, the NIH’s database of clinical trials ( for others. lists almost 100,000 trials but requires filtering since it includes observational (non-drug) trials, those terminated/completed, and those with non-industry sponsors (about half of the trials are not sponsored by industry and do not involve new drugs).  I searched for the “interventional” trials started in the last five years and sponsored by industry.   Further, since a drug is always tested in more than one trial, I converted the number of trials into a number for drugs using the 10:1 ratio reported in a recent study on trials for approved drugs (Lee et al. 2008), but it may be an underestimate.  Here’s the OAS scores for several of major indications:

–  Cancer: 750 (2008 PhRMA PR)

–  Heart Disease:  307

–  Diabetes:  270

–  HIV/AIDS:  97 (2010 PhRMA PR and not included in the PhRMA infectious disease report without explanation)

–  Depression:  94

–  Obesity:  57.

So if one takes the PhRMA report number of 395 drugs/vaccines at face value, then the industry is rating infectious diseases highly as smart bets.  But a closer look is in order since the infectious disease category is more heterogeneous than the other indications since it has many more therapeutic targets at which the drugs are aimed.  Here’s PhRMA’s breakdown of the 395:

–       Vaccines:  145

–       Antivirals:  96

–       Antibiotics/antibacterials:  88

–       Antifungals:  20

–       Anti-parasitics:  8

–       Anti-malarials:  6 (why these are a separate category is unexplained).

Further, if one combines the drugs aimed at bacteria (the antibiotics/antibacterial and anti-infectives) and parasites and separates them by indications that occur in Major (developed world), Minor (everyone else), and Both markets, one gets:

Total Major Minor Both
Anti-bugs 132 106 141 122
Antifungals 20 20 0 0
Antivirals 96 37 0 593
Vaccines 145 68 22 554

1 5 TB, 6 malaria, 3 other parasites

2 mostly anti-diarrhea and pneumonia

3 52 anti-hepatitis C

4 40 for influenza

So with another spin of the statistics cycle, I find that, of the 395, only 36 (9%) are targeted at solely of the developing world markets (hence, the “neglected diseases”) and, of those aimed at diseases of both markets (126 or 32%), if treatments for hepatitis C and influenza are taken out, there are only 26 (6%).  So clearly, the biotech/pharmas are betting selectively in the infectious disease category, but are they betting smartly?  Fifty-two therapeutics aimed at hepatitis C seems dumb to me, especially since a few companies have drugs close to approval.  Forty treatments for influenza seems risky, too, and in the anti-infectives category, I have to assume that many of the 106 drugs aimed for major markets are aimed at the same or similar targets, also not a good bet.  If I were in business development for any of these companies, I’d reassess the competition, recalibrate the likelihood of relative efficacy, and may be advise management to realign the research program for indications where there is less competition, greater need, and a developing market.  Maybe the industry needs a new definition of smart money.


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