Innovation for Chronic Conditions 
Posted by Carlos on May 09, 2011

There is an excellent editorial in the May issue of Nature Biotechnology entitled Inadequately met needs. In it, the author points out that the US is moving away from innovative, branded Rx towards older, cheaper generic medications. This movement is resulting in a decrease in the sales of newly-approved medications.

Now this is not news. What is more interesting is the potential impact on innovation for the treatment of chronic disease. As noted:

More and more, payers are embracing cheaper, older drugs or generics and de-emphasizing expensive new ones. Troublingly for innovation in key public health areas, this trend appears to be particularly prevalent for chronic treatments of common diseases (such as cardiovascular and neurodegenerative disorders). Chronic disease accounts for nearly half of all US drug spending. And yet, in 2010, two out of three patients who received chronic drug treatment started out on, or were switched to, generics.

Now there is nothing wrong with treating chronic conditions with generics. There is no reason to think that a generic cannot be effective. But, as we all know, any medication, whether branded or generic, will not work 100% of the time in 100% of the patients with a given condition. There will always be niches where unmet need exists. Or, tolerance may develop, resulting in the need to switch to a different mechanism of action. In other words, a chronic condition, seemingly well-served by a broad portfolio of branded and generic medications, will still have room for therapeutic improvements.

But, what is the incentive to do so? As the author notes, the work done to provide incentives to develop drugs to treat orphan diseases has worked quite well. Do we need a similar approach to incentivize companies to develop drugs for chronic conditions?

The article provides a few ideas, such as having governments agreeing to buy predetermined quantities of innovative medication in advance. We believe another approach may be linking drug approvals with extended patent life or longer  market exclusivity in exchange for lower prices.

In other words, extending market exclusivity beyond patent expiry would enable companies more time on the market at a branded price, so that their investment could be recovered over a longer period of time. In exchange, the innovator could come to market at a lower price. Thus, a lower price + longer time to market could satisfy a company’s need to generate a return on an innovative product for a chronic condition.

Such an approach is undoubtably complex, as it involves the FDA, the US PTO, Federal and State Payers, etc. However, chronic conditions simply cannot be ignored, due to their enormous impact on healthcare spending. We need innovation in diabetes, hypertension, and other “well-served” chronic conditions, especially as our populations continue to age and prevalence in these conditions continues to grow at an alarming rate. As noted,

Blockbuster products for chronic conditions have ruled supreme for so long in drug development that calling for increased investment in those areas seems counterintuitive. But the fact is that myriad scientific, regulatory and reimbursement challenges are now radically shifting industry’s incentives toward rare diseases. Let’s not make the mistake of neglecting innovative translational R&D on common Western diseases. In the coming years, these will represent the largest burden on healthcare not just in the West, but everywhere.


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