We started the year off in January by reviewing three of the major trends of 2015 and reflecting on where we saw events headed in 2016. In part 2 of this post, which follows yesterday’s celebration of Rare Disease Day, we’d like to discuss two further areas where we expect to see increasing focus and activity over the year: a growing move by pharmaceutical companies toward customer-centric marketing strategies and continued interest in deal-making around orphan drugs.
The Growth in Patient Services and Customer-Centric Marketing Strategies
Over the past year, we have seen an increasing number of companies develop new support services directed toward patients with chronic diseases as well as new patient-centric initiatives related to cancer. Efforts have moved beyond traditional areas for patient support such as multiple sclerosis and rheumatoid arthritis, with new efforts addressing individuals facing a variety of additional health issues including other inflammatory diseases, eye diseases and others. AstraZeneca, for example, made a notable launch of one such initiative in the oncology arena focused on lung cancer patients — “LVNG with Lung Cancer”, which includes patient stories, coaching, regional events, and other means for social interaction and support from other patients. We see this move toward more patient-focused resources and services closely mirroring the increasing desire amongst patients themselves for greater control over their lives and treatment.
While this development is still in its early days, we expect more companies to take a patient-centric approach that enables drug developers to gain better understanding of who their patients are and what those individuals most need and want in regard to living with their disease. Patients are increasingly taking a more active role in their own therapy as well as educating companies on their priorities and how they want their treatments to take into consideration things like their budget and desired quality of life. We expect such considerations to increasingly drive not only post-marketing patient support, but also clinical studies and even earlier decisions about what drugs are developed, and how they are developed. Such patient-centric initiatives are especially important for companies engaged in developing and commercializing drugs for rare diseases, as we discuss in detail in our recent In Vivo publication, “Orphans Should Live Alone.”
Continued High Interest in Orphan Drugs
Orphan drugs may be intended for relatively small numbers of patients, but in recent years they have become big business. This interest has been spurred by various regulatory incentives as well as the very high prices that companies have often been able to charge with relatively little resistance due to the lack of existing options for patients. According to the Tufts Center for the Study of Drug Development, effective treatments are currently available for only about 10 percent of the roughly 7,000 rare diseases known, making this a very fruitful area for drug discovery and development.
Big and small companies alike have taken notice of this opportunity. While small companies often have an advantage, as we discuss in our orphan drug paper noted above, a number of larger pharmaceutical firms have jumped into the area, as illustrated by Shire PLC. That firm bought rare disease specialist, NPS Pharmaceuticals for $5.2 billion in January 2015 and then proceeded to acquire Dyax Corporation, ViroPharma and ultimately, Baxalta in a $32 billion takeover of that firm in January 2016. When the Baxalta deal closes later this year, this transaction will make Shire the world’s largest rare disease drug company.
But how effective will that company be? Can programs that by their nature are targeted to small populations and require a high level of flexibility and personal involvement by management maintain their identity and integrity within a large company structure? Shire has had a degree of success since its earlier acquisition of Transkaryotic Therapies, Inc. in 2005, which brought Shire into the field of lysosomal storage disease. And they have claimed synergies by adding multiple programs across a single disease focus, which has enabled the application of common competencies and commercialization pathways across multiple rare disease products.
But in general, we find the culture of big pharma companies (which, with size, comes a degree of rigidity, standardization of practices, and slower decision-making) potentially at odds with the culture required for success in the field of rare diseases (where flexibility, creativity and engagement at the highest levels with thought leaders, physicians and the patient community is imperative to success). It may be easiest for rare disease firms to live alone, rather than within large pharma — at least until they reach a level of maturity that enables them to withstand organizational pressures.