How new technologies are creating new markets

Sarah Rickwood looks at why the next frontier for pharmaceutical innovation may not be a pharmaceutical at all, and how this will affect launch

The prescription medicines industry has always been driven by innovation, and that innovation has, until very recently, focused almost exclusively on the molecules of one of two basic types – small or biologic. This is changing rapidly, as Graphic 1 shows. The future of innovative prescription launch will now include therapies made from genetic material, a patient’s own cells (or someone else’s) or even more beyond molecular innovation entirely, for example moving into the digital realm. As this happens, it will not be business as usual for launch.


Launch of the first advanced therapy medicinal products: cell and gene therapies

From 2010, with Provenge (sipuleucel-T), pharmacotherapies involving modified cells launched commercially. Subsequent launches of Kymriah, (tisagenleleucel) for acute lymphoblastic leukaemia and diffuse large B-cell lymphoma, and Yescarta (axicabtagene ciloleucel), also for large B-cell lymphoma from 2017 onwards have proven successful and laid the foundations for a sustainable commercially successful sector in cell therapies.

Gene therapies had been performed experimentally since the 1980s, with patchy and partial success, until the 2012 approval of the first gene therapy treatment by a major regulatory agency, the European Medicines Agency, with Glybera (alipogene tiparvovec). This pioneer therapy was subsequently withdrawn in the EU, and it was a subsequent gene therapy launch in 2016, Spinraza (nusinersen) for spinal muscular atrophy, which became the first truly commercially successful gene therapy launch1.

For these launches, solving manufacturing and logistics questions moves from background and support very much into the foreground.

Location of manufacturing facilities choices must be made early and carefully. The cell therapy area has many restrictions on the testing and export of human cells which means that international launch could be complicated and slowed by where manufacturing is allowed. Unsurprisingly, both Kymriah and Yescarta started with manufacturing facilities in the US, and serviced their initial European use out of those facilities, although European facilities will come online. Other countries require earlier planning – for example if they do not permit the export of human cells and cell therapies must be manufactured locally. Novartis announced in 2H 2018 it would be partnering in China with a local Chinese Biotech, Cellular BioMedicine Group.

Cost of goods is significant and cost reduction a challenge. The companies which most successfully address this challenge will also be most successful in long term launch.
Compared to the processes for manufacturing conventional biologic medicines, cell therapy manufacturing is labour intensive and, initially, unautomated. Estimates (not by IQVIA) of manufacturing cost using the original, manual processes have been in the order of $100k per patient2. Full or partial automation of cell therapy manufacturing processes will be pursued, and may successfully address the cost challenge, although as patient numbers ramp up from hundreds to thousands, other formidable challenges of consistent quality, demand management and capacity will come to the fore. What’s clear is manufacturing strategy is a key element of autologous cell therapy launch success.

Launch into markets defined by biomarker

The FDA has, as of mid-2019, approved three tissue agnostic treatments, the first being the already marketed Keytruda (pembrolizumab) for any tumour in the body which has a molecular alteration called microsatellite instability-high (MSI-H) or DNA mismatch repair deficiency (dMMR). This alteration results in a high level of DNA mutations, resulting in high levels of abnormal protein expression acting as a target for the immune system. More recently, the FDA approved larotrectinib, (Vitrakvi) to treat adults and children with solid tumours that have a gene alteration known as a neurotrophic receptor tyrosine kinase (NTRK) gene fusion, and Rozlytrek (Roche), applicable in 10 solid tumours.

Medicines launched alongside companion diagnostics which identify the patients appropriate for that pharmacotherapy have existed for decades – HER-2 diagnostics for Herceptin were a prominent early example. However, these diagnostics identify appropriate patients within an existing indication, conventionally defined. Genetic or other biomarkers can define patient segments in a completely different way, cutting across conventional diagnoses. While technologically cutting edge, this creates significant launch challenges – the patient journey must involve routine genetic testing, which must be both available and paid for. Responsibilities of diagnosing and treating healthcare professionals may be unclear, reimbursement codes may not exist or be disputed, health technology assessments and pricing/market access discussions more complex because comparators could be from multiple indications.

These types of products also face unique structural difficulties because they challenge the way healthcare systems are organised, which is by indication, and not mutation. That applies to treating oncologists (typically specialised by tumour type) and importantly payers’ budgets and the way health technology assessors compare products. Companies launching these types of products cannot assume that payers and health technology assessors will immediately adjust their structures and processes to accommodate these new approaches – early evidence is that this will be resisted, and the responsibility to adjust will be pushed back to the launching companies.

Value added medicines (VAM)

For over a decade the market for value added medicines (VAM) – that is, pharmacotherapeutics where the active agent is off patent and multi-source, but the product has had value and differentiation added by, for example, novel delivery systems – has quietly grown to become a global market worth, in total, $44 billionn.

These products can address unmet needs – for example, of convenience, better delivery, reduced side effects, and can provide real benefit to individual patients and to healthcare systems. They are therefore differentiated from generics and, as branded products, seek a value above the generic level, and need launch investment that is more significant as well.

VAM launches face significant payer and market access challenges, because it can suit healthcare systems to treat them as generics on pricing, overlooking the investment made in generating useful differentiation. Prices tend to be higher than generics but lower than new active substance launches.

Health technology assessment and market access is structured to compare VAMs to their generic actives and price according, ignoring the often patient-centred advantages they bring. Industry level campaigning will be the best lever to persuade health technology assessors and payers to modify their policies to encompass a true valuation of VAMs. Companies launching VAMs must be extremely cost effective in managing market access and promotional investments, running lean promotional campaigns with a strong digital element.

Prescription digital therapeutics

In November 2018, Pear therapeutics’ prescription digital therapeutic reSET, was approved by the FDA for patients with substance use disorders in the US. This FDA-approved prescription treatment consists of a 12-week series of interactive treatment modules delivering cognitive behavioural therapy, to be used in conjunction with outpatient care. This launch was rapidly (January 2019) followed by the US launch of Pear’s reSET-O for opioid use disorder. Digital therapeutics are a broad and evolving group of treatments, but Pear Therapeutics’ offerings mark a new stage, where prescription digital therapeutics (PDTs) have the potential for genuine equivalence to molecular therapeutics.

The first digital therapeutic to receive FDA approval was WellDoc’s BlueStar digital support system for diabetes management. In 2010 it was approved for prescription use to track blood glucose and support patient self-management, and in January 2017 it gained further approval for non-prescription use. Proteus Digital Health’s Digital Feedback Device, a miniaturised, wearable sensor and Proteus/Otsuka’s Abilify MyCite, a drug/device combination to track ingestion of Otsuka’s atypical neuroleptic for schizophrenia, have also received multiple FDA clearances since 2012. However, what has been approved and by which pathway differs – Pear Therapeutics’ reSET is indeed the first prescribable software claiming specific therapeutic benefits, supported by clinical trial results.

Substantial barriers remain before PDTs are routinely prescribed and reimbursed. Prescription cannot automatically follow the well-established path of molecular therapeutics. The prescription element of PDT infrastructure is in its infancy. Reimbursement, the next challenge to successful launch, is also developing.

WellDoc secured reimbursed access to BlueStar for employees of several major companies, emphasising the savings that use of the programme bring to the management of diabetics. In the UK, digital therapeutics delivered via AppScript can already be funded by parts of the UK’s National Health Service (for some this is free, for others this is as a one-time fee set at the level of the prescription charge – i.e. £9, and for a third category costs are individually priced).

However, debate on appropriate price points for digital therapeutics is in its infancy. The UK’s health technology assessor, NICE, has undertaken a technology evaluation for Sleepio, a sleep improvement digital programme, and published the first evidence standard framework for digital health technologies in March 2019 – the start of a more explicit discussion on how to evaluate investment and return.

Digital therapeutics, and PDTs within them, also exemplify the challenges of creating new types of therapeutic launch. The market is not a global one – different countries are at quite different stages of development. New infrastructures for prescription, pricing, reimbursement and delivery of molecular therapeutics must be developed – existing ones may not be ideal or may not work at all. In short, creating new markets is a lengthy process, requiring activities and investments over and above the established challenges of Excellent Launch.

The future of launch: launching while creating a new market

Value-added medicines, cell and gene therapies, prescription digital therapeutics, and even biosimilars are all areas of the prescription medicine market which have one thing in common – they are, to a greater or lesser extent, creating a new market, with structural, cultural and perceptual barriers that ‘mainstream Rx’ – whether specialty, orphan or other – do not have to address.

It is worth reflecting on how long it takes to create new markets. The modern market for small molecule generic Rx medicines, for example, originates in the 1984 Hatch-Waxman Act in the US. In the US, it was not until 1998, over a decade later, that generic volume as a share of the unprotected US market exceeded 50%. A decade after that, in 2008, generic volume as a share of the unprotected market had still not reached 50% in France, Spain, Italy and Japan.

The modern biosimilar market was initiated in 2006 in the EU, with the launch of Omnitrope, a version of Human Growth Hormone, by Sandoz. A decade later, in 2016 the global market for biosimilars approved by a dedicated regulatory pathway was only $2.1 billion and had barely started in the US, the largest market (the Q1 2019 current global value is $8.5 billion so progress is finally being made). This was not for lack of major biologics losing exclusivity; the challenge of creating a new area of the market which did not fit neatly into the existing infrastructure, culture and perceptions in healthcare systems was the bigger barrier.


As outlined in figure 2, companies with novel types of launch must address incremental issues to those which launch within an established market paradigm. They will need to identify and advocate for new funding paradigms, gain healthcare system acceptance, and probably be involved in the building of new healthcare system structures for provision, as well as identifying and engaging with an expanded stakeholder audience. In the end, successfully accomplished, this expands the frontiers of pharmaceutical innovation further and faster than ever before – as such, it’s true innovation.

About the author

Sarah Rickwood has 26 years’ experience as a consultant to the pharmaceutical industry, having worked in Accenture’s pharmaceutical strategy practice prior to joining IQVIA. She has wide experience of international pharmaceutical industry issues, having worked in most of the world’s leading pharmaceutical companies on issues in the US, Europe, Japan and leading emerging markets, and is now vice president, European thought leadership at IQVIA, a team she has run for eight years.

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