Statistics are currently available for January–September 2011. So far, the EMA has issued 74 positive opinions on marketing authorisation applications. Overall, the agency has started 76 marketing authorisation applications and finalised a further 79. So, what kind of picture do these statistics paint? Quite a bright one, actually, particularly in comparison to the bleakness of 2010 when the EMA issued only 51 positive opinions for marketing authorisation applications.

2011’s number of finalised marketing authorisation applications (79) has overtaken 2010’s low figure of 54; indeed, the year has also beaten 2008’s 72 finalised applications. However, there’s still a long way to go to outdo 2009’s 125 finalised applications, which were partly driven by a high number of applications (51) for generic products. This year, there has once again been a considerable number of marketing authorisation applications for generic products, with 28 finalised compared with only 20 in 2008.

There has also been a noticeable increase in the number of applications for new products, which is positive considering the amount of criticism that has been directed at the pharma industry’s innovative pipeline. So far, the agency has finalised 32 applications for new drugs compared with just 21 last year. New orphan medicinal products are also on the rise: 11 applications have already been finalised this year compared with six in 2010.

For started marketing authorisation applications, it’s a little different: 76 started applications in 2011 compared with 90 in 2010. Breaking down the numbers, however, the EMA starts roughly 8 applications per month, so the total could theoretically rise to 100 or more. We’ll have to wait until the end of the year to find out. Importantly, however, the number of started applications for new products is high at 36 applications compared with 2010’s 34.

There’s still a long way to go before anyone can safely say that the innovation drought is over, but given that the US has also seen greater drug approval rates this year compared with last, perhaps 2011 marks an important step towards this goal.

Related articles

An upward trajectory for new drug approvals

Is pharma’s innovation slump over?

One technique was accelerated approval for drugs to treat serious diseases. This authority allows the agency to approve a drug based on clinical data showing that it is reasonably likely to have a clinical benefit, even if data do not demonstrate that the drug has this benefit. Almost half of the newly approved drugs received Priority Review because they had the potential to offer major advances in treatment, or because no adequate therapy existed. FDA sets a six-month target date to review such drugs.

Although these changes in procedure are well-intentioned, we may legitimately ask how they will affect patients’ safety. After all, GSK’s diabetes drug Avandia received fast-track approval, but an article published in The New England Journal of Medicine later linked the drug to an increased risk of heart attacks. The Wall Street Journal notes that a Senate Finance Committee report last year accused the company of hiding data showing Avandia’s cardiovascular risks, and GSK has just agreed to pay the US government $3 billion to settle this and other claims.

Creating a short timeline for drug approval could hurt the agency’s reviews of clinical data. FDA approved Pfizer’s smoking-cessation drug Chantix after an accelerated priority-review process. The agency concluded that the drug did not increase the risk of psychiatric problems such as depression. But researchers from Wake Forest Baptist Medical Center found that Chantix was eight times more likely to result in suicidal behavior or depression than nicotine-replacement products. One reason for the discrepancy could be that, unlike FDA, the researchers performed disproportionality analysis on the data—a technique that is increasingly being used to find links in side-effect data that normally escape detection in clinical trials.

FDA’s staff includes well-vetted and experienced scientists, but they need sufficient time to work thoughtfully and thoroughly. Even though the agency’s initiative has increased the number of new-drug approvals, it may also be increasing the risk that a company can hide negative data from regulators, or that the agency’s own analyses will not be as complete as they could be. In light of the problems with Avandia and the conflicting studies about Chantix, I think FDA should review its efforts to promote innovation to be sure that the agency maintains high standards for drug safety.

Those following us on Twitter (PharmTech.com/twitter) will already know the winner of the Innovation Awards, but for those who do not, I will enlighten you, though you will have to provide your own virtual drum roll…

The bronze prize went to Johnson Matthey for its colour-tag protein (CTP) technology, which was developed to provide an efficient way of measuring protein expression. CTP technology, as its name suggests, uses a protein tag that exhibits an intense yellow colour and allows even small amounts of protein to be quantified in a crude extract of cells, significantly speeding up the screening process.

The silver award went to Acuros for a novel device designed for the continuous delivery of small volume parenterals. Using standard primary packaging components, the device is fully disposable and requires no power supply—instead, osmotic actuation drives the device and provides a precise and stable flow rate.

And finally, the gold award was given to Glycotope for its GlycoExpress platform technology, designed to optimise glycosylation in antibodies and other biotherapeutics. The technology is based on an entire set of human glycoengineered cell lines that express proteins exhibiting different glycosylation patterns; bioassays then identify the pattern that provides the optimal product characteristics.

The six finalists for the Innovation Awards were judged not only on the level of innovation but also, crucially, on the commercial potential of the technology by a distinguished panel chaired by Hendrik Baumann of CU Chemie Uetikon.

Before the main awards, a Sustainability Award was presented to Solvias, a privately held company based in Basel, Switzerland that delivers customised solutions for drug development.

Congratulations to all winners!

In tomorrow’s blog, I will share news from the press room, including developments from the RX-360 consortium, an update from EXCiPACT, and the European Fine Chemical Group’s stance on the proposed Generic Drug User Fee Act (GDUFA), as well as other news from the show floor.

How has the show been for you? Let us know in our quick survey. We’ll be publishing some of the responses anonymously in our next newsletter.

As the unemployment rate hovers around 9.1%, the federal government needs to find ways to create jobs. Congress is debating whether a tax break on repatriated money would prompt companies to hire more workers, as I mentioned last week. Meanwhile, the Obama administration is eyeing another potential means of stimulating job growth: investing in biological research.

When he signed the America Invents Act in September, President Obama committed to developing a National Bioeconomy Blueprint by January 2012. The blueprint will describe ways to manage investment in biological research to improve the nation’s health and create the “jobs of the future.” Aside from identifying potentially productive investments in R&D, the blueprint will also describe regulatory reforms to reduce burdens on biopharmaceutical manufacturers.

Illustrating the maxim that great minds think alike, FDA is already seeking to identify and reform burdensome and inefficient regulations as part of its own initiative to stimulate biomedical innovation. At the same time, the agency plans to establish a common understanding among stakeholders to clear the approval pathway for exceptionally promising therapies. These goals are included in the agency’s recent report titled Driving Biomedical Innovation: Initiatives to Improve Products for Patients.

Biological research is the foundation of a significant portion of the American economy, as the White House website notes. The combined efforts of the president and FDA could help discover and develop new therapies. If they also encourage biopharmaceutical companies to hire new employees, they will help mitigate an urgent problem that has not yet been addressed sufficiently.

So does this represent the end of pharma’s innovation slump? According to a statement issued by financial services firm Burrill & Company, which is based in San Francisco (US), it’s a promising development, but there are still issues that need to be addressed.

“We’re on our way to breaking the anaemic pace of new drug approvals of recent years, but the problems underlying the relatively low rate of approvals since 2004 still need to be addressed,” said G. Steven Burrill, CEO of Burrill & Company.

Burrill explained that the FDA has a role to play in reversing the decline and that the agency must find a way to ensure the safety of new drugs without slowing the introduction of new therapies. Unfortunately, that’s a tough balance to strike. Many in the pharma industry believe there is too much red tape strangling innovation, but this tape is necessary to protect patients.

Low-drug approval rates are not just a problem in the US. In Europe, the EMA has seen a reduction in the number of overall approvals, including approvals for new products, according to figures published on the agency’s website. In 2010, the EMA issued only 51 positive opinions for marketing authorisation applications compared with 117 in 2009. Overall, the EMA only finalised 54 marketing authorisation applications, compared with 125 in 2009.

As with the FDA, however, it seems that 2011 may be a better year for the EMA. As of June 2011, the EMA has issued 38 positive opinions and finalised 42 marketing authorisation applications.

Of course, just because 2011 seems to be shaping up better than 2010 doesn’t mean we’re out of the woods yet. Burrill said: “Seven months of data is not enough to suggest a significant change at the FDA or that strategies to alter the drug development process to improve productivity are paying off. It is encouraging. But improving the pace at which new drugs reach the public will require much more work, both at the agency and in industry.”

According to Burrill & Company, the performance of the life sciences industry in 2011 is shaping up to be strong, although the debt issues in Europe and the US could disrupt the industry.

“The continuing battle over healthcare reform creates uncertainty. That hurts the industry,” said Burrill. “At a time when lawmakers should consider ways to stimulate investment in the industry and foster job growth, Congress should be careful not to erect new obstacles.”

Several developments in 2004, particularly concerns about Merck’s arthritis treatment Vioxx, led patients and lawmakers to question the safety of marketed drugs. FDA received a lot of public criticism for not being vigilant enough, and the agency responded by re-evaluating its practices.

“The FDA’s shift in recent years to an increasingly cautious, risk-averse posture toward new drug approvals has had the unintended consequence of reducing investment in life-sciences innovation due to the significant additional time, cost, and uncertainty it has added to the drug-development process,” said Leff in written testimony to the US House of Representatives’s Energy and Commerce Committee. Medical research “is exploding with potential,” he added, but FDA’s new caution makes it hard for investors to earn returns.

But drug-approval figures seem to undercut Leff’s argument. In testimony before the same House committee, Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, cited a trend toward greater first-cycle approvals for priority new molecular entities (NMEs). The average first-cycle approval rate for priority NMEs has increased from 46% in 1992 to 68% to date, she said. First-cycle approval rates for standard NMEs have also increased from an average of 30% to 38%, according to Woodcock.

Woodcock also countered claims that FDA approves drugs more slowly than EMA. “Of the 35 cancer drugs approved by FDA or the EMA from October 2003 to December 2010, FDA approved 32—in an average time of 261 days,” she said, citing an article in Health Affairs. In contrast, “EMA approved only 26 of these products, and its average time was 373 days.”

Drugmakers’ lack of approved new drugs might have many causes. Now that the low-hanging fruit has been picked, drug discovery itself has become harder. Although FDA is a fair target for criticism, I don’t think the agency can be blamed for quashing innovation. With appropriate funding, scientific expertise, and federal help, drugmakers should be able to develop the new products that keep them and their patients healthy.

Yesterday, Eli Lilly, which has a strong presence in Germany, decided that enough was enough. Addressing the Federation of German Industries Conference, John C. Lechleiter, Eli Lilly chairman, president and CEO, called for action amid a warning that the country’s healthcare reform is “jeopardizing the country’s legacy of pharmaceutical innovation”.

“In no other place in the world has the environment for innovative pharmaceuticals changed more in the last 12 months than it has in Germany,” said Lechleiter, according to a press statement.

A lot has certainly happened in the last year. Lechleiter explained that there have been price freezes for pharmaceuticals already on the market and significant increases in the rebates that the pharma industry must pay to the health system upon sales of its products.

And then there’s AMNOG.

“No other country in the world has a set of requirements quite like those imposed by AMNOG,” said Lechleiter. “The potential effects are serious: launches of new medicines that can benefit patients delayed or withdrawn, erosion of Germany’s strength in pharmaceutical innovation, and the loss of high-paying jobs in research and development.”

Lechleiter’s main gripe with AMNOG is that it places too much short-term emphasis on reining in costs and determines the value of a medicine before any real-world experience with the new product is available. He added that AMNOG imposes “impossible standards on new treatments that some of the most effective medicines of the past never would have met”.

And, of course, there’s always the danger that a pharma company may not like the price tag that AMNOG chooses. This could lead to delayed product launches or, worse, the company may choose not to launch the product at all.

The German system, like all healthcare systems, can be quite complex, but there’s a good overview of AMNOG in English on the news site akampion. It’s a difficult situation to take sides in. On one hand, many governments need to cut costs, particularly in the expensive area of healthcare, but pharma companies need good returns on productive development in order to carry on making innovative medicines.

AMNOG isn’t going to disappear, particularly as it only came into force at the beginning of this year. Lechleiter, however, offered a few suggestions of how the system could better benefit pharma companies. “The ‘Early Assessment’ could be used not to define the potential of a new medicine as low as possible to save money, but rather to take a comprehensive view of its potential value for patients,” he said.

Lechleiter has also called for the industry and the German government to develop more constructive and collaborative relationships that enable pharmaceutical innovation to flourish.

What do you think of the situation in Germany?

Many drugmakers have taken their investors’ advice to heart. One salient example is Pfizer, whose CEO Ian Read plans to slash R&D budgets by about 25% over the next two years. Chris Viehbacher, CEO of Sanofi, told Reuters that R&D cost cutting would increase throughout the industry this year and next. Companies are likely to focus their discovery efforts on the most lucrative areas in an attempt to get more bang for their R&D buck.

But, profitable or not, don’t patients need new and better drugs? Where will they come from? Drugmakers may well outsource innovation by partnering with entities such as universities and contract research organizations, Tim van Biesen, head of Bain and Company’s healthcare practice, told Reuters. They’d be following Hollywood’s strategy of sourcing “movies and scripts from all over the place,” he said. Shire already seems to have started along this path.

Big Pharma also might take advantage of its scientific expertise and marketing muscle by creating follow-on biologics. Cheaper versions of biopharmaceutical treatments for rheumatoid arthritis and cancer are in big demand, said David Snow, CEO of Medco Health Solutions, to Reuters. Making follow-on biologics could be a way for Big Pharma to boost sales. In addition, the discount for these medicines likely will be less than that for small-molecule drugs because they’re tougher to copy—and fewer competitors will manufacture them.

While these strategies might eventually improve Big Pharma’s bottom line, they also represent a shift away from the traditional model of what a drug company is. And even if it helps the drug industry, will the emerging model serve patients’ interests?

Definitely, says the Hay Group, a management-consulting firm. Big Pharma’s executive-compensation plans reward compliance and short-term financial gains when they should be encouraging risk-taking, according to the firm’s research. About 80% of criteria that determine incentives are financial, and only 12% relate to drug development and commercialization. Although short-term incentives are common, they’re inappropriate for the pharmaceutical industry because of its long product-development processes, according to Hay Group.

In light of Hay Group’s research, the compensation package for former Pfizer CEO Jeffrey Kindler makes no sense at all. The company was facing distinct problems when its board gave Kindler the boot in December 2010. Not only had Pfizer’s share prices languished for four years, several promising drugs had failed in late testing, including a potential replacement for Lipitor. Despite these problems, Kindler got a 60% raise over his 2009 compensation. A performance-related bonus brought his compensation to $4.9 million. Kindler seems to have been rewarded for failure, which, to my mind, is even worse than being rewarded for short-term gains.

To overcome its current challenges, Big Pharma will have to change how it defines, measures, and rewards performance, according to Hay Group’s research. Fortunately, Big Pharma can use mid-sized drugmakers and biopharmaceutical firms as models. These companies “have been much more creative in weaving pipeline and R&D measurements into their incentive strategies,” said Hay Group in a press release. By learning from these firms’ compensation strategies, Big Pharma might match their level of innovation.

It’s easy to blame circumstances for our failings, and harder to admit our own missteps. If it took Hay Group’s recommendations seriously, Big Pharma might reclaim its reputation for innovation. And achieving this goal naturally would be good for the world’s patients as well as for industry.

This week, Warwick Business School (UK) released a study (sponsored by Cognizant) looking at European C-suite attitudes to outsourcing. The study encompassed 250 CIOs and CFOs across Benelux, France, Germany, Switzerland, the Nordics and the UK.

The majority of respondents (70%) say they believe that innovation achieved through outsourcing contributes to their company’s financial performance, but only 35% admit to measuring the innovation that their outsourcing partner delivers.

Companies pay significant sums for the outsourcing services they receive and, more often than not, reduce their own in-house workforce as a result. It’s a little worrying then that the majority don’t actually bother to assess how much value or innovation they got in return!  Even more worrying is that this isn’t the first time this issue has been raised. An earlier study by the Warwick Business School and Cognizant in 2009 also revealed that only a minority of CIOs and CFOs have tried to calculate the financial impact that outsourcing has on their business.

The big question is why do so few companies try to measure this? It’s clear from the survey that there is a strong recognition that outsourcing can play a big part in innovation — which is something the pharma industry has been struggling with in recent years. More than 60% of survey respondents indicated that they are spending more on outsourcing partnerships than they were three years ago, and 67% of CIOs say that they seek help from an outsourcing provider to turn ideas into new and improved processes. Half of all CIOs also added that they’d be willing to pay more for an outsourced service that enables them to formalise, repeat and maintain innovation.

In a statement, Sanjiv Gossain, SV and Head of Cognizant’s UK and Ireland operations, explained: “Businesses are increasingly placing more high-value work in the hands of their partners, but by failing to measure the financial impact of the innovation delivered, it may be difficult to make the case for further investment—and further benefits to the business. There’s a fantastic opportunity to place even more reliance on these relationships, but it seems many businesses need help in measuring this impact and communicating it to stakeholders.”

I’m already in contact with some experts about this study to find out more about how companies can reap the benefits and measure the impact of outsourcing. Expect more on this in the next issue of Pharmaceutical Technology Europe, which will be available on www.pharmtech.com in May!