Vancouver March 2002 Professor Trevor M Jones Kings College
London and Director General The Association of the British
Pharmaceutical Industry
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Traditionally strong academic base Cluster of world class
expertise / facility in life sciences Pool of skilled graduates
Attracts inward investment Rapid growth in Start-up Companies
Upside potential for growth
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Pressure on prices of Branded products Price Cuts/Controls High
level of Generic dispensing Restrictive Formularies
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Britain 12/25 worlds top medicines are of British Origin $3.5bn
positive balance of trade surplus Major inward investment..e.g
Pfizer Way out in front in Start-up Biotechs Branded products Drugs
Bill grew 14.6% in 2001 Over 70,00 employees..mostly Graduates
(>200,000 secondary employment) Home to some of the worlds
largest Companies GSK AstraZeneca Freedom to set prices
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Britain Hugh pressure on prices NAPP/OFT, NICE Msdrugsdeals
Generics ( Prescribing 75%;Dispensing 54%) Restrictions on
prescribers budgets) Demand side Controls PCGs ; HAZs ; PRODIGY;
Audits/CHI Waiting lists ;Formularies ;Clinical Governance
Manufacture decline..GSK etc Rationalisation Most expensive prices
in EU Access to market ..restrictions (NICE) Slow uptake of new
products Spend on medicines at the bottom end of EU EU parallel
trade >1bn !! Animal activists
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Trade balance in pharmaceuticals, m, 2000 Trade balance m
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Increased spending on medicines as % of GDP 1995-2000
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Index of Pharmaceutical Expenditure, Health Expenditure and GDP
Per Capita in 1997 (At Market Exchange Rates) Index = UK = 0 -0.40
-0.20 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 Australia Canada
FranceGermanyJapanNetherlandsNew ZealandSwedenUSA Total Health
Expenditure Per Capita Total Pharmaceutical Expenditure Per Capita
GDP Per Capita
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YesUSA YesUK YesSwitzerland NoSweden NoSpain NoNew Zealand
NoNetherlands NoJapan NoItaly YesGermany NoFrance NoCanada
NoAustralia Companies free to set the launch prices of new
medicines (Y/N) Source: ABPI
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Medicines spend as % GDP, 2000
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Spend on medicines per person, 2000
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Spend on new medicines (less than 5 years old)
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Simvastatin (Zocor) Uptake Chart
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% (by value) of national pharmaceuticals market accounted for
by generics, 2000 Source: various trade associations, for Canada
PMRPB Generics as a % of total market (value)
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Pharmaceutical industry employment Source ABPI
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Pharmaceutical production for selected countries, m, 1999
Source ABPI
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R&D in the UK (as % of sales) Pharmaceuticals30.3 Aerospace
9.6 Electrical machinery 3.6 Chemicals 2.4 Motor vehicles 2.9 Other
manufacturing 0.2
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UK R&D is Concentrated in Pharmaceuticals % share of total
country R&D Source OECD
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National origins of leading 75 global medicines - 1992-2000
Source CMRI
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Scientific research paper citations per head Source OST
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22% 52% 59% 60% 83% 85% 91% 113% 133% 150% 176% 0% 20% 40% 60%
80% 100% 120% 140% 160% 180% CANSIFUSACHDNLEJPNUK % first patent
filing/% R&D spend Proportion of world first patents filed for
marketed NMEs/proportion of world R&D spend 1990-1999 Source
CMRI
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Proportion of NMEs, first marketed during 1991-2000, by
nationality of marketing company Source CMRI
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Source: UNESCO Statistical Yearbook 1999 Australia for
universities only Figures in bold 1997, figures in italics 1995
Notes: 316,686US 47,443UK Switzerland 7,225Sweden 20,084Spain
3,388New Zealand 10,560Netherlands 92,455Japan 20,181Italy
53,836Germany France 31,100Canada 19,948Australia 1996 Number of
new graduates with degrees in sciences relevant to the
pharmaceutical industry
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R&D Investment - 2,000 4,000 6,000 8,000 10,000 12,000
19901991199219931994199519961997 1998 Australia Canada France
Germany Japan Netherlands Sweden Switzerland UK USA m
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Opportunities Producing entirely new science Specific Platform
Technologies Partnering Big Pharma to optimise R&D spend
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Global pharmaceutical R&D expenditure (1991 - 2005p)
IO0-10028 14/08/01
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Cost of sales is rising at the same rate as cost of R&D and
we are delivering fewer and fewer entirely new products
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Trends in R&D expenditure, sales and number of NMEs Source:
CMR International Ltd.
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Number of new NMEs launched onto the world-wide market
AT1-10003 15/10/01 Source: CMR International Ltd.
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Percentage of biotech-derived NMEs Source: CMR International
Ltd.
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the R&D process,although improving, is still highly
inefficient
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440.pre/NM Phase III 19961990 Discovery researchDevelopment
research Discovery and development of a new medicine Regulations
Time (years) Phases of drug development Final patent application
Investigational new drug application Marketing application
Marketing approval product launch 19871998 Attrition rates Cost
Basic research Regulatory review Post-mktng devel Phase I Phase II
Synthesis Biological testing & pharmacological screening 50-100
voluts 200-400 patients 3000 + patients Phase IV Clinical phases
5,000 8-154-8 2-311 $450- 600M 0 Chemical development
Pharmaceutical development Long-term animal testing Toxicology and
pharmacokinetic studies DD2 1150 251197 Source: CMR
International
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Current cumulative success rates to market AT1-10003 15/10/01
Cumulative success rates to market based on NASs in development
between 1995 and 2000 and are presented as the chance of an NAS in
a given phase to reach the market. Source: CMR International
Ltd.
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1.7 5.4 15 7.2 701997 2.4 6.2 15 9.4 661998 4.3 9.4 19 10.0
561999 3.1 8.3 17 9.1 612000 3.4 5.0 27 11.0 532001
Pre-Registration Phase III Phase II Phase I PreclinicalYear
Percentage of drugs dropped at each stage of development, 1997-2001
Source : SCRIP February 2002
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Despite all the re-engineering or R&D and the harmonisation
of regulatory requirements its taking LONGER to get ideas into
practice
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Figure 3 Development time for NMEs launched onto their first
world market (1994-1999) Mean Development time (years) 3 year
moving average IO4 1040 31/7/00
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Major spends are in developmentparticularly clinical
development
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Breakdown of aggregated R&D expenditure by activity in 2000
IO0-10034 14/08/01 Source: CMR International Ltd.
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Contemporary clinical development times are decreasing
Composite development profile of means for each interval completed
by NASs in each year. (n)= number of NASs analysed to calculate the
value for each interval Each interval represents a different cohort
of NASs BUT a common cohort of companies for all years. Source: CMR
International Ltd.
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Trend in breakdown of R&D expenditure on clinical
activities 1997-1999 for 15 companies Total clinical
activitiesPremarketing activitiesPostmarketing activities IO2 1270
31/7/00
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Estimated number of NASs in development in 2000 reaching the
market over the next six years Phase I 20% success to market 321
NASs currently in Pipeline* for 15 Major companies 114 NASs
reaching market Phase II 29 % success to market Phase III 62%
success to market Presubmission & submitted 90% success to
market IO0-10014 14/08/01 `
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IO0-10013 14/08/01 Estimated number of NASs in development in
2000 reaching the market over the next six years
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Change is not a Choice
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Exploratory Research Target identification Target validation
Screening Lead identification Lead generation Lead optimisation
Candidate selection:
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BC is Canadas 3rd largest biotech community according to
revenue, and the 16th largest in North America BCs biotechnology
sector includes over 90 private-sector biotech companies, employing
about 3,300 people 70% of companies are the result of spin-offs
from BC universities Total market capitalization of public biotech
companies exceeded $6 billion in December 2000 R&D expenditures
are expected to total approximately $120 million in 2001 (18% of
Canadas total R&D expenditures) BC firms forecast R&D
employment growth at 76% between 1998 and 2001 BC Biotech
represents more than 200 member companies, which includes 206
Corporate Members, 59 Individual Members, and 15 Student Members
Over 60% of BC biotech companies are involved primarily in health
care, generating approximately $310 million in annual revenues.
Growth in Number of Biotech Companies in BC 1993 41 1994 53 1997 70
2000 82 2001 90+
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British Columbia Collaborations in Pharmaceuticals and
Biopharmaceuticals Big Pharma and Start-ups (SMEs) Drug Hunting
Drug Development Clinical Evaluation and Trial Population Genomics
and Health Care Bioinformatics New Manufacture
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PICTF.PICTF.PICTF.PICTF.PICTF.PICTF.PICTF
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Why was it formed ? For a major SUCCESSFUL industry why so many
problems Market Access... Relenza..NICE..the last straw Single
Market issues not favourable to UK PPRS Price cut UK track record
on Clinical trials (comparative costs v Europe and delay to start
due to bureaucracy) and Animal Procedure licence delays Animal
activism rampant and affecting businesses Poor Biotech Manufacture
capability whilst rapid growth in start-ups
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Features High Level (Ministers / CEOs ) Clear Brief Time Limited
Commitment..particularly..Prime Minister
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
High Level Government* Health (chair) Industry Treasury Education
and Science * Note Various Departments Industry British(GSK and
AZ)..CEOs Euro (Novartis..President ABPI) USA (Merck..Chair APG)
ABPI D-G Richard Sykes Tom McKillop Bill Fullagar Vincent Lawton
Trevor Jones
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Clear Brief To identify the steps that may need to be taken to
retain and strengthen the competitiveness of the UK business
environment for the innovative pharmaceutical industry
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P.I.C.T.F COMPETITIVENESS Access Parallel Trade Clinical
Research Infrastructure Biopharmaceutical R&D / Manufacture EU
Licensing Economic Climate
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Commitment..particularly..Prime Minister (perhaps seen as a useful
support to Government from a major industry Balance of Trade
contribution > 3.5 bn !!
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Prime Ministers Statements The UKs pharmaceutical industry has an
outstanding tradition..etc We must work together to ensure that the
future of the UK pharmaceutical industry is even brighter. I am
committed to ensure that the UK retains the features that have made
it an attractive location..etc I look forward to future
partnership..
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Quotable Compliments !!!! The UK based pharmaceutical industry is
world class and a jewel in the crown of the UK economy
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P.I.C.T.F (Pharmaceutical Industry Competitiveness Task Force)
Follow up Agreed Benchmarks e.g Competitiveness and Performance
indicators in Science and Technology
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British Columbia Collaborations in Pharmaceuticals and
Biopharmaceuticals Big Pharma and Start-ups (SMEs) Drug Hunting
Drug Development Clinical Evaluation and Trial Population Genomics
and Health Care Bioinformatics New Manufacture
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BENCHMARKING
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Business perceptions of labour market regulations Source: DTI
competitiveness Indicators 2001
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Total hourly labour costs in UK versus comparator countries
Source Economist Intelligence Unit
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average time elapsed between first world application in any
market and launch in particular market
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% marginal rate of corporation tax Headline marginal rate of
corporation tax Netherlands: from Jan 200 30% rate applies to first
50k guilders. For 1999 and 2000 German rate applies to retained
profits Source KPMG