Mix and Match

In my posting of last week on one of few new drugs in development for treating tuberculosis (“Drug of Choice”), I gave short shrift to a major complication for TB drug developers, the complexity of the market.  For the “first world” drug markets, companies can and do spend lots of money early in the development process to identify and quantify the important factors, like patient populations, doctors’ prescribing habits, insurers’ and government reimbursement policies, and trends among the medical “thought leaders” in the target indication.  For a global disease like TB, not only is the information sparse, the stakeholder/participants are myriad and contentious.

For example, as I mentioned last week, the developer of the new drug, Otsuka Pharmaceutical of Japan, wants to (needs to) assure that the drug will be used sparingly to avoid creating another drug-resistant strain of TB and plans to sell the drug to those physicians who know when and how to use it.  But how to identify and qualify these physicians?  Should Otsuka go through the national, government-run, TB control plans, their own established distributors, or set up new channels?  And, as was brought to my attention by a colleague at another TB drug development company (Sequella) more than a year ago (!), there are signs that the professional TB treatment community sees the new drugs as too important to be sold and used outside of government-run programs, which has the possibility of eliminating even the small profit margins the drug developers expect.  Since I hold the belief (as amateur) that TB will be the next global disease where companies can and will contribute successfully and profitably to diagnosis and treatment (I think HIV/AIDS is the first), I tried to learn more about the TB drug market.  Fortunately, the primary non-profit TB drug developer, the Global Alliance for TB Drug Development (TB Alliance) recognized the need to understand the market for both itself and for its possible for-profit partners and has conducted a series of studies over the past five-plus years.

Here’s my quick summary of the salient points of three of these that are described and available in full elsewhere (Access to Markets).  To start, a 2007 study (Pathway to Patients) found:

  • the total market for first-line drugs is more than $300 million per year;
  • the four first-line drugs are provided through a “multiplicity” of suppliers;
  • most (90-100%) of the first-line treatments in the ten high-burden countries (“HBC”) that were studied, accounting for 50% of all cases, are given through public sector (government-run programs);
  • but in two HBCs, India and the Philippines, 70 and 90%, respectively, of the treatments are administered through private sector; and
  • for second-line treatments of multiple drug resistant TB (MDRTB), the total world market was about $54 million, all sold through the public market and mostly in Brazil (an HBC), France, the UK, and the US.

A 2009 study of the public sector stakeholders in five countries, e.g., government officials, public health providers, and NGO representatives, assessed their interest in new drug and drug combinations (New TB Regimes).  In general, the study found the stakeholders held widely variable and divergent perceptions of their needs, but, in general, they:

  • wanted drugs that shorten treatment duration at least from 6 months to four;
  • were willing to pay more for faster-acting drugs because drugs represent a relatively small portion of current program costs (less than 12%) and, if they increase adherence, may reduce the need and higher costs of treating drug-resistant TB; and
  • likely will require or prefer data from trials in their own countries and data that demonstrated non-interaction with anti-viral (HIV) treatments.

A study on the private TB market in ten HBC was published last year by TB Alliance researchers (Wells et al. 2011) and added new details to the 2007 study:

  • TB drugs and dosages are sold in more than 100 variations, many more than the WHO-recommended 14;
  • nearly equal amounts of TB drugs are dispensed in the public and private sectors;
  • the total amount of drugs dispensed is about 130% of the amount needed to treat estimated number of cases;
  • four of the biggest high-burden countries (India, Indonesia, Pakistan, and Philippines) had particularly large private sectors accounting for treating almost all the incident TB patients;
  • although there are many small, local manufacturers (54), ten accounted for more than 60% of the drugs sold; and
  • drugs in the public sector are priced and sold at half the amount in the private sector ($25 for course of first line drugs vs. $50).

Wells et al. conclude that the private market, although complicated, is necessary to reach the large numbers of TB-infected, but that the types of drugs and dosages and the way they are used (that is, with supervision over the long treatment period) need to be similar to the public sector where international guidelines are enforced.  The authors advocate for “bold action” to engage the private sector, but offer no specifics.  The authors do not advocate for an approach in which all TB treatment is controlled by the government as in Brazil, noting that effective control needs the private sector for referring patients.  They do advocate for expansion of a model called a public-private mix (PPM) which uses private providers (pharmacists and doctors) to refer and treat patients and attracts their participation with subsidized drugs, essentially supporting the private providers’ profit margin, and certification which enhances their visibility and credibility.  A WHO committee has been working on expansion of PPM but progress has been slow (see Seventh PPM Report 2011).   But noticeably absent in the PPM discussion are the manufacturers existing drugs and the developers new  drugs.  Could the WHO and its Stop TB Partnership and the TB Alliance figure out a way to provide incentives to them to be the exclusive distributors of their products in the public programs?  Could the PPM and national programs offer guaranteed purchases of new drugs that met or exceeded their specifications?  Or incentives for drugs with companion diagnostics?  Looks to me like another one of those opportunities in global health for some creative business development work.

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