The pharmaceutical industry is facing the challenge of change on several fronts. Companies are restructuring following a spate of mergers and acquisitions worldwide.The advent of biotechnology promises to revolutionize the treatment of disease. And in India, the year 2005 will mean compliance with international patent laws, thus redefining the way we do pharmaceutical business.

The influence of biotechnology

Advances in biotechnology will change the way we look at many diseases. An understanding of the genetic basis of disease will lead to an explosion in drug targets and to the development of novel and more efficacious drugs with greater specificity in preventing and controlling disease. As opposed to the existing trial and error method, it will be possible to plan the process of drug discovery, with agents being designed for specific targets in the body. Such smarter working can reduce development time and the cost of new drug discovery. It has been speculated that the approximately 400 drug targets known today could increase to at least 4,000 in the next 10 years. This could lead to a proliferation of drugs, and the global pharmaceutical market could grow to $3 trillion by 2020.

Gene therapy

Gene therapy involves modification of the genetic code of the cell, causing a reprogramming of the cell. In cancer, gene therapy may be employed to arrest or prevent the disease. For example, delivering tumour-supressing genes to leukemic cells could stop or reverse the malignant process. Permanent reprogramming will occur if the DNA coding is incorporated into the cells’ genetic apparatus. A virus may be used as a vector to carry the DNA code to the target cells. Incidentally, the majority of gene therapy trials in progress today are targeting cancer and products based on gene therapy are expected to be available in a few years.

Antisense therapy is one approach to regulating gene expression in cancer cells, aiming to “turn off” the genes that cause cancer. It is based on the use of short spans of DNA or RNA to disrupt the expression of disease-related genetic code. Antisense DNA binds to RNA from disease genes, preventing its expression as disease.

Genes may also be introduced into tumor cells to augment cellular function at the tumor site, helping the body to overcome immune tolerance, and to elicit an anti-tumor immune response. The approaches to such transgenic immunotherapy include tumour vaccines and adoptive immunotherapy.

Tumour vaccines

Tumour vaccines involve transfecting genes into tumour cells to render the tumour more immunogenic. This promotes recognition by cytotoxic T lymphocytes and their activation, resulting in an anti-tumour response. A vaccine for tumours initiated or promoted by viruses could be derived from inactivated viruses or from viral antigens.

Adoptive immunotherapy

Cytotoxic T lymphocytes and macrophages from a surgically-excised tumor can proliferate in the presence of interleukin-2 and can then be used for systemic adoptive immunotherapy when injected back into the patient. Administration of such cells can localize tumor sites by stimulating a population of lymphocytes that can lyse tumor cells but not normal cells.

Haemopoietic growth factors

Haemopoietic growth factors are involved in the production of blood cells from the bone marrow and are useful in reducing bone marrow toxicity associated with anticancer agents. These growth factors are cytokines that promote proliferation and differentiation of granulocytes and monocyte/macrophages.They include erythropoietin, granulocyte-macrophage stimulating factor (GM-CSF) and granulocyte stimulating factor (G-CSF). GM-CSF and G-CSF increase the neutrophil count in peripheral blood after high dose chemotherapy followed by bone-marrow transplantation, thus resulting in lesser chances of infections. Erythropoietin can help to replenish red blood cells in aplastic anemia and after cancer chemotherapy. Recently thrombopoietin has been described; this agent may alleviate thrombocytopenia due to inadequate marrow production.

A shift from the blockbuster concept

Biotech drugs will lead to a fragmentation of the market. The availability of more specific agents will mean that different patients with the same disease could benefit from differing treatments. Thus though the overall market may expand, the market for individual products will be reduced. This will mark a deviation from the current concept of blockbusters (brands with annual sales exceeding $ 1 billion) where a single drug could have many uses. Pharma companies have always preferred to get their business from big blockbuster drugs, but in the biotech era, a company having a portfolio of drugs with modest sales may do just as well as a company that continually searches for a blockbuster.

Novel drug delivery systems

Many new drugs were introduced in the 1980s and will be seeing patent expiries in the coming years. Since many blockbusters are involved, there will be a significant gap in the portfolio of the companies marketing them. Novel drug delivery systems (NDDS) could be a strategic tool for expanding markets and extending the product life cycle. For example, a NDDS form of ciprofloxacin could be administered just once a day against the standard twice-a-day dosage. Drug delivery systems could include controlled release, liposomal delivery, intranasal delivery, pulmonary delivery, taste-masking, and transdermal delivery systems.

Patents and the Indian market

In 2005, in keeping with World Trade Organisation (WTO) obligations, India will honour product patents. This will reduce the number of products available for marketing to Indian companies after 2005.
Of course, Indian pharma companies can continue to market off-patent products, which incidentally will continue to constitute the major market for some more years. However, to become truly global players, Indian companies will need to invest in new drug discovery through research and development. Other options available to Indian companies include mergers and alliances.

Research and development

For the global pharmaceutical industry to grow at 7 per cent annually, it is estimated that each of the world’s top 20 pharmaceutical companies should generate about $30 billion in new product sales in the coming years. Approximately $50 billion was spent on research and development in 2000, an indication of the pressure being built up for new products. Realizing that all new drug discovery may not be done in-house, companies are developing external relationships, establishing links with groups outside their own organizations for relevant expertise. Such relationships, for example between a traditional pharma company and a biotechnology company, can widen the company's technological capabilities and provide access to new discoveries.

In India, investment in research and development (R&D) has been low, with R&D largely involving development of new processes for known bulk drugs. However the scenario is changing with some Indian pharma companies now spending nearly 5% of their turnover on R&D. Furthermore, even for multinational companies, India could be a preferred destination for new drug research, because studies here could be done at only a fraction of the estimated $500 million for a new drug.

Mergers, acquisitions and alliances

At least some of the recent mergers of pharmaceutical companies internationally have been aimed at enhancing R&D productivity. Alliances can also be of use. A large pharmaceutical company may benefit from an alliance with a biotechnology company rather than acquiring it outright, because it can access the expertise and yet keep to the minimum the risk of investing in new technology. Of course, the large company can always acquire the smaller biotechnology company at a future date.

The global generics market

Many multibillion dollar drugs will go off patent in the US by the year 2005. These include omeprazole (2001), ciprofloxacin (2003), simvastatin (2005) and lansoprazole (2005). Patent expiries will open large markets internationally for generic products at lower prices. The USA accounts for more than 40% of the world generics market and is expected to be worth $18 billion by the year 2003. The US imports 60% of its generics, and Indian pharma companies, with their lower manufacturing costs, are well placed to enter this market. Traditionally, Indian companies have shield away from the highly regulated US market, but today Indian pharma majors armed with FDA and other approvals are getting set to make big breaks in the US and other world markets. That could be a big step for the Indian pharma industry on its way to going global.

Surely these are challenging times, posing fresh threats, but offering new opportunities as well. Indian companies are accepting the challenge and are getting set to take off in new directions. And in the midst of several uncertainties, one thing is certain -- as always, only the fittest will survive.

12 february 2001.
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