Diametrical

I have John Carroll, editor of the newsletter FierceBiotech, to thank for setting up this posting.  Last week, he ran an article on the announcement by Johnson & Johnson (JnJ) of the formation of a dedicated global health business group (FierceBiotech article).  But he also included in the story a quote that nicely illustrated the diametrical (and wrong, in my opinion) direction some big pharma companies are taking in global health.  The quote is from a Business Week article on the on-going duel between some big pharma companies and the Indian government on access to their patented drugs (for more, see my post, “Dueling Sitars”).  The CEO of Bayer AG commented on the compulsory license the government issued last year to a generic maker of a copy of Bayer’s patented drug, Nexavar:  “Is this [license] going to have a big effect on our business model?  No, because we did not develop this product for the Indian market, let’s be honest.  We developed this product for Western patients who can afford this product, quite honestly.  It is an expensive product, being an oncology product.”  If he was being honest, he should have explained why Bayer bothered to patent it in India if it had no plans to sell the drug there or in the markets where a generic copy may be sold.  Why not plan to sell a new, needed (presumably) drug globally rather than using patents solely to minimize competition?  Competition is part of business (increasingly so for big pharma companies in the “Western” markets) and to be successful Bayer should figure out how to compete globally.  Roche, one of Bayer’s competitors, apparently decided it was profitable to sell a low-cost version of its oncology drug, Herceptin, in India and licensed an Indian company to do so in 2012.  And soon that company will be competing with the Indian biotech, Biocon, and its bio-similar Herceptin, CANMab (Biocon press release).  Time for a new business model, Bayer?

At the other end of the diameter, last week JnJ publicized its Janssen Global Public Health group (JGPH) (Janssen is the pharmaceutical division of JnJ), “an important new group unifying Janssen’s commitment to research, develop, and deliver transformational medicines to address the world’s greatest unmet public health needs” (Janssen press release in FierceBiotech).  To me, JGPH is pioneering a superior business model with several laudable features.  The group will conduct research and development for new drugs for these unmet needs, not just repackaging or repurposing existing products.  It will also develop and launch both products (diagnostic and therapeutic) and services that cover a wide range of healthcare, and these will be  “… designed specifically to address the real world needs of people living with disease in underserved regions of the world,” according to Wim Parys, JGHP co-leader.  JGPH will not be a stand-alone, on-its-own division.  Since JnJ has existing global health products and efforts (e.g., in 2011 it acquired Crucell, one of the largest suppliers of childhood vaccines to UNICEF, see JnJ Caring), it will work with other divisions within JnJ as appropriate.  More important, JGPH will co-develop products with outside organizations, including the global health product development programs (PDPs) like PATH and the Drugs for Neglected Diseases initiative (DNDi) that have product pipelines but lack commercialization expertise.

JGPH is also starting with a nice portfolio of ongoing products and projects in various stages of development.  From early to late, the portfolio includes:

– a chewable form of mebendazole (Vermox®), a Janssen-developed drug for treating intestinal worms now distributed in public health programs in many countries, for younger children (in preclinical development);

– a reformulated flubendazole, a potential new treatment against parasites that cause lymphatic filariasis (elephantiasis) and onchocerciasis (river blindness), under a preclinical data sharing agreement with DNDi;

– a long-acting, injectable version of the JnJ HIV medicine, rilpivirine, to enable less frequent dosing and prophylactic treatment, under a licensing agreement with PATH to conduct planned late-stage trials;

– an anti-microbicidal vaginal ring using the investigational HIV medicine, dapivirine, for preventing sexual transmission of HIV with the International Partnership for Microbicides (in trials); and

– a global access program for Sirturo®, a newly approved drug in the US and Russia to be used in combination therapy in adults with pulmonary multi-drug resistant tuberculosis.

JGPH is also tackling the (really big) challenge of access and affordability.  It “will cultivate and help implement innovative pricing and results-based financing models that improve access to these medicines for patients in resource-limited and emerging markets, while also creating sustainable, long-term solutions based on country ownership and accountability for health services and outcomes.”  This will not be a de novo effort but will build on the experience of the company’s existing Global Access and Partnership Program (GAPP).  The GAPP was started in 2006 to provide access to its HIV drugs to people living with AIDS in low-resource countries (GAPP report).  GAPP’s works primarily through licensing of manufacturers in regions of need.  To date, Janssen has licensed several South African pharma companies, non-exclusively and without royalty, to make three of its branded anti-retrovirals for sale in low- and middle-income countries, and it has licensed these companies plus an additional three (one in the US and two in India), non-exclusively and with royalty, to make and sell generic versions of two of the anti-virals.  The latter agreements also include the right to make combination drugs, transfer technology from Janssen to the licensees, and the right to sell the active ingredient to others.  Janssen also is not enforcing its patents on unlicensed companies for one of the drugs if the drug is approved and will be used in low-income countries.  For the branded drugs it sells, Janssen has prioritized seeking registration in countries of most need and is selling these products at reduced prices that will be reduced as cost-savings from production volume or manufacturing efficiency allow.  In addition to increasing access, this approach helps build the distribution and regulatory infrastructure needed for a functioning pharmaceutical market in the regions of need.  GAPP also has medical education program to improve drug use and a sequence database for diagnostic development accessible to academic collaborators.

JGPH is a large and ambitious effort, many years in the making, and, my hope, will be a model for other companies that are building global health businesses.  My advice (which I always have) is that JGPH needs a website to advertise its approach and progress (I couldn’t find one) and a dedicated business development group to find opportunities and cut deals.  The management should also encourage JnJ’s corporate venture group (JnJ Development Corp.) and the new chain of innovation centers (e.g., the Boston Innovation Center) to find and incubate ventures that are applying new technologies to global health problems.

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