At New York Pharma Forum Meeting, American and Japanese Biopharmaceutical Industry Leaders Contemplate the Future

United States of America -- Free-Press-Release.com-- Feb 4, 2010 -- December 8, 2009, New York – Gazing into the future, pharmaceutical industry leaders predicted that areas of the world that have driven industry growth for the past 20 years will not be the source of growth for the next 20. Emerging markets will be immensely more important and the industry will have to provide products at affordable prices to people in those markets, they said. And, in another 20 years, progress in life science could bring a new “Golden Age” of innovation. These were some of the conclusions reached by speakers at the 20th General Assembly of New York Pharma Forum (NYPF). The meeting, on December 4th in New York, featured a panel discussion on Biopharma in 2029: A 20th Anniversary Perspective. Senior pharmaceutical industry executives from the U.S. and Japan shared views on the industry’s future. Speakers were:
• Hatsuo Aoki, Ph.D.: former Chairman, Astellas Pharma Inc. and former President, Japan Pharmaceutical Manufacturers Association
• James Dolan: Senior Vice President, Licensing and Business Development, Purdue Pharma LLP
• Soichi Matsuno: Deputy President, Eisai Co., Ltd.
• Sapan Shah, Ph.D.: President & CEO, Shionogi U.S.A., Inc.
• Richard Van Duyne: Head of Global Business, Daiichi Sankyo Group (Japan) and Executive Vice President, Daiichi Sankyo, Inc. (U.S.A.)

As a backdrop for discussion, Dr. Shah, panel moderator, provided key trends in the pharma market over the past 20 years. He mentioned a rise in importance of the U.S. market, and a recent flattening of traditional markets with growth from new areas. One noteworthy statistic he cited was the average period of U.S. market class exclusivity for a first-in-class compound in 1970 versus 2003: over 10 years then; 2.5 years now.

Dr. Shah said there is now more reliance on external licensing for innovation. He showed figures indicating that regulatory approvals of New Molecular Entities have remained flat overall, while generic approvals have increased significantly.

More expensive, competitive and complex deals
Mr. Van Duyne commented that Japanese companies had an out-licensing model overseas 20 years ago, with only small representative offices in the U.S. “Now they have grown to ‘full capabilities’ organizations, seeking to in-license products,” he said. He added that slower growth in developed markets and an increase in generic products have led Big Pharma and Japanese companies into emerging markets to seek expansion. “A prime example is my company’s purchase of 64 percent of the large Indian generics company, Ranbaxy,” he emphasized. “It allows us to span geographies and the development spectrum between patented and generic products, and has positioned us to sell our patented products in India, and to invest in the Japanese generics market.”

Mr. Van Duyne remarked that Japanese and Big Pharma companies are turning less to each other for licensing deals and now have a common target of finding biotech opportunities. “As a result of chasing the same targets, deals are now more expensive, competitive and much more complex.”

A higher hurdle for innovation
Dr. Aoki said that “the Golden Age of pharma” started in the mid-20th century and lasted until the late 1990s. That period was “a time of high-innovation productivity,” when many blockbuster drugs were discovered to control acute and chronic diseases. He characterized the current time and near future as very difficult. By the turn of the century, he noted, many of the blockbuster drugs had gone off-patent, the drugs had become commodities and the industry faced a serious situation. “Now the low-hanging fruit (the simpler targets) has all been harvested, and there is a higher hurdle for innovation,” he said. However, he expressed optimism about the industry’s future despite many challenges. “Great leaps in life science could lead to a second Golden Age,” he said.

Dr. Aoki commented that the total infrastructure for research has become extremely important for the promotion of innovation. “A network and cooperation among the government, academia and the industry is strongly needed,” he remarked. “Government research funding is very important. The U.S. is the best country for pharmaceutical R&D because of the academic funding it receives.”

Mr. Matsuno remarked that many Japanese companies have taken advantage of U.S. pharmaceutical market growth, as evidenced by the growth of Eisai’s U.S. sales from less than $100 million to almost $4 billion in 12 years.

Industry responsibility to improve access to drugs
Mr. Matsuno pointed out that 80 percent of the industry’s sales are made to 20 percent of the world’s population, concentrated in developed markets. Emerging markets are showing rapid economic growth and will be very attractive markets in the future, he said. “If we make our products available in those markets at prices people can afford, they will buy them,” he said. “Pricing has to be appropriate so people who need them in emerging markets can buy them. But if we had to sell our products at the same price to the rest of the world, we wouldn’t be able to afford R&D.” He said people globally are waiting for new medicines. “The global issues facing the industry are our ability to satisfy those unmet needs, our responsibility to improve access to drugs and to make a greater contribution to global healthcare.”

Mr. Dolan, whose company is in the specialty pharmaceuticals niche of the industry, spoke of increasing challenges due to shorter and shorter life cycles and periods of exclusivity on drugs and intellectual property. “A high percentage of our markets is generic already,” he said. “Yet to recoup our investment in development, marketing and sales, we need long periods of exclusivity.”

Innovation will be the only answer for spec pharma
“The new proprietary medicines will emerge because biotech and spec pharma are really committed to novel, first-in-class products, but they will have to have a commercial rationale,” he stated. “We will use our understanding of patient and physician needs and translate that back up to the ‘drug hunters’ we collaborate with in biotech, And the new model for working with our biotech partners will be to leave them alone to do what they do best.”

Managed care will dictate the new proprietary products of the future, Mr. Dolan said. “We think there will be highly specific proprietary products for individual patient characteristics, geared to specific disease indications,” he stated, and said his company would need to use its commercial expertise to position the products so that insurers will understand their benefits. He said in the future innovation will be the only answer for specialty pharma companies. “That means we will be taking on more technical risk,” he said. “Only the strong are going to be able to survive.”

Prior to the symposium, NYPF held its annual meeting to elect board members and officers for the coming year. Dr. Kenji Arima, President of Asubio Pharmaceuticals Inc., was elected president. Three vice presidents were elected: Mr. Seigo Kishii, President & CEO, Astellas U.S.A.; Mr. James Self, Executive Director, Business Development, Vaccine Division, Merck & Co. Inc.; and Mr. Shah. Dr. Blaine McKee, Vice President, Business Development, Oncology, Genzyme Corporation, was elected secretary and Mr. Masayuki Kobayashi, President, Taiho Pharma U.S.A. Inc., was elected treasurer.


About New York Pharma Forum
New York Pharma Forum Inc. is a non-profit organization intended to encourage dialogue among U.S., Japanese and other international biopharmaceutical executives and business and financial professionals on global issues of common interest. Members gain access to critical information on business, policy and technology issues important to the future of the global healthcare industry. For more information about the organization, go to http://www.nypharmaforum.org.

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Lucy Siegel
http://www.nypharmaforum.org