Transcript Presentation Name - University of Utah

Training Needs for the
Pharmaceutical Industry in the
21st Century
Robert R. Ruffolo, Jr., Ph.D., D.Sc.(h), D.Eng.(h)
President, Research & Development
Wyeth Pharmaceuticals
Senior Vice President
Wyeth (Corporation)
Directors of Graduate Studies in Pharmacology
Salt Lake City, Utah
July 25, 2007
Brief Overview of the
Pharmaceutical Industry
What is the Pharmaceutical Industry?
It is the most technically complex, costly, risky
and regulated industry in the world

Attrition rates

Development times

R&D Investment

Costs

Risk – Consolidation

Regulation
How Can We Assess Risk In The
Pharmaceutical Industry?

Odds of Bringing a Product to
the Market

Time and Costs associated with
R&D

Required R&D Investment

Company Survival

Regulatory Burden
Some Realities of Pharmaceutical R&D

R&D costs have grown dramatically; disproportionately to R&D
budgets or output. The result is decreased R&D productivity.

R&D Inflation is >12%; R&D Budget increases have been between
3-6%

The Regulatory climate is growing more unfavorable and uncertain.

Regulatory and patient expectations for safety may be unrealistic
and approaching the unachievable.

Unrealistic safety expectations have exposed the Industry to
unprecedented levels of product liability.

Innovative new drugs will likely take longer to develop as the
Industry focuses on even higher levels of innovation.

The good news: There is more innovation in R&D than ever before.
Stages of R&D: A Long, Expensive and
Risky Process
Compound Success
Rates by Stage
Discovery
(2-10 years)
Pre-clinical Testing
>10,000
Screened
250
Enter Preclinical Testing
Laboratory and animal testing
Phase 1
20-80 healthy volunteers used to
determine safety and dosage
10
Enter Clinical Testing
Phase 2
100-300 patient volunteers used to look
for efficacy (POC) and side effects
Phase 3
3,000-5,000 patient volunteers used to monitor
adverse reactions to long-term use
1
Approved by the FDA
FDA Review/
Approval
Additional
Post-marketing Testing
Years
0
2
4
6
8
10
12
14
16
Source: PhRMA, based on data from Center for the Study of Drug Development, Tufts University
Clinical Development Cycle Times are
Increasing
Period to Recoup Investment
Patent
Application
Filed
Patent Issued
IND Effective
NDA/BLA
Approved
NDA/BLA
Filed
Pediatric Drug
Patent Certification
Original Patent Term – 20 years
Years
0
Phase 1
10
Phase 2
1.4
(62)
2003
3.0
(16)
1.5
(65)
2000
2.1
(28)
1.2
(64)
1999
1.1
(69)
1.7
(29)
1997
1.0
(76)
1.9
(46)
0
2
2.3
(13)
1.2
(14)
2.1
(20)
1.4
(13)
2.4
(22)
2.0
(23)
1998
Phase R
3.5
(6)
2.6
(15)
1.3
(64)
2001
Phase 3
3.8
(17)
1.6
(58)
2002
PTR*
20
1.0
(17)
2.1
(18)
2.2
(27)
1.6
(7)
0.8
(21)
0.9
(17)
2.5
(36)
0.8
(29)
4
6
Duration in years
Source: Centre for Medicines Research (CMR)
8
10
12
The Evolving Healthcare Technology Arena
Description of disease
processes
Causal molecular pathology
Empirical intervention
Rational intervention directed
to specific molecular pathology
Disease homogeneity
Disease heterogeneity and
different progression/prognosis
Uniform patient populations
Patient heterogeneity and
individual risk profiles
Reactive medicine
(post-symptoms)
Proactive disease management
based on risk assessment
(targeted care)
This is leading to more innovative drugs in company pipelines
Innovation Comes With a Price: Higher
Attrition, Longer Timelines and Higher Costs
NDA filings with FDA
IND filings with FDA
100
Less
novel
80
Less
novel
80
60
60
(%)
(%)
40
40
More
novel
20
0
19961999
Source:
100
More
novel
20
0
20002004
BCG industry compound database; BCG analysis
19961999
20002004
More Novel Drugs: Higher Attrition Rates and
Longer Development and Approval Times
Attrition Rates by Novelty Status
Development Times by Novelty Status
Current status of INDs filed 1996 – 1998
Average cycle time for NDAs
submitted 1996 – 2003 and approved
100
100
%
60
40
20
0
Failed
FDA
approved
Less novel More novel
Source: BCG industry compound database; BCG analysis
80
Months
80
Still in
Development
Approval time
60
40
Development
time
20
0
Less novel More novel
Costs of Discovering and Developing a
New Drug are Staggering
Change in Average Cost to Develop Successful Drugs Over Time
$2.0B
$1.7B
Launch
1.5
Phase III/File
$1.1B
1.0
Phase II
Phase I
Preclinical
0.5
Discovery
0.0
Historic 1995-00
Source: Bain drug economics model, 2003
2000-02 average
Pharmaceutical R&D Requires the Highest Level
of Investment in the World; A Measure of Risk
Domestic R&D
17.0%
Industrial Sector Comparison:
Computer Software & Services
10.5%
Electrical & Electronics
8.4%
Office Equipment & Services
7.8%
Telecommunications
5.3%
Leisure Time Products
4.7%
Automotive
3.9%
Aerospace & Defense
3.8%
Metals & Mining
Paper & Forest Products
All Industries
1.2%
0.73%
3.9%
Source: PhRMA, 2001, Based on Data from PhRMA Annual Survey and Standard & Poor’s Compustat,
a Division of McGraw-Hill
The Pharmaceutical Industry Outspends
the NIH on Biomedical Research
Expenditures (Billions of Dollars)
$44
PhRMA
$21.1$22.0
$19.0
$16.9
$15.2
$13.4
$11.5$12.7
$8.9
$15.6
$13.6
$12.0$12.7
$11.3
$11.0
$10.3
$39.0
$37.0
$33.0
$31.0
$30.3
$26.0
$28.9
$27.0$27.0$27.5
$20.3$20.3
$17.8
NIH
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
06
$50.0
$45.0
$40.0
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$0.0
Ref: PhRMA, “What Goes Into the Cost of Prescription Drugs?”
& AAAS, OMB Data FY2006
The Pharmaceutical Industry is the Source
for Most New Drugs
Industry,
93.3%
Academia/NonProfit, 3.5%
Government,
3.2%
Source: DiMasi et al., J Health Econ, 2003;22:151-185
Most Drugs Do Not Make Money: Only 3 in
10 Medicines Return Development Costs
1200
1000
800
600
400
Average
R&D Cost
200
0
1
2
3
4
5
6
Present Values by Decile
Journal of Health Economics, Vol. 13, 1994, pp 383-406.
7
8
9
10
Another Measure of Risk
Industry Consolidation; A
Measure of Risk
We May Look Highly Profitable,
But What Is The Reality?
Companies Merge Because They
Are In Trouble
The Outlook for our Sales and Earnings is
Not Bright
10
5 yr avg. growth
% Sales
Growth
for Big 5
Pharma
Right now, our Industry
is less profitable
than most others
0
‘03
Source: IMS, FDA, Lehman Brothers, BCG analysis
‘05
‘07
‘09
Growing Regulatory Conservatism:
Application of the “Precautionary Principle”
“The Committee’s decided to ban further research
until it can be proven your ‘wheel’ poses no
threat to the environment, society or public health”
Regulatory Burden on The Pharmaceutical
Industry is Increasing at an Alarming Rate

Increasing Review Times

Increasing Safety, cGCP and cGMP
Requirements Worldwide; to unnecessary
levels that do not increase public safety

Lack of Harmonization among Regulatory
Agencies in the US, Europe, & Japan Despite ICH

Different Standards of Medicine in the US,
Europe, and Japan Complicate Clinical Trials

Increasing Post Approval Commitments
Training Needs of the
Pharmaceutical Industry
Communication Skills are Paramount



Written
Publications, Publications, Publications
- It’s necessary to become an opinion leader
- Recognition in the scientific community is crucial
Feasibility Study Proposals (equivalent to NIH Grants; except
longer)
- Why should we fund your idea as opposed to somebody
else’s?
Verbal
Public Presentations
Internal Presentations
The Power of Persuasion
- Many scientists have good ideas, but we have only a limited
amount of money
Team and Leadership Skills
Scientific Breadth and Depth

Our resource needs change constantly, and our scientists
must be able to change with our needs (or we need to
replace them, a traumatic and expensive process)
Use your time in Graduate School to take as many courses
as possible; don’t avoid the physical sciences, mathematics
and statistics
 Learn as many skills as possible; avoid the temptation to
become too highly specialized; there’s time for that later

The broader a scientist’s background, and the more rounded
the skill sets, the more valuable the scientist is in the long run
 Avoid the mistake of becoming an expert in a technique or
technology; they become obsolete quickly

Be conscious of the “technology wasteland”
 Learn how to write and communicate science verbally!

Understand the Pharmaceutical Industry;
The Myths and Stereotypes May Not be True







We are not all stupid and rejects from
Academia
We do publish (and if you work for
me, it is publish or perish). If you
don’t want to publish, then stay in
academia
We don’t just do “mindless
screening”
We don’t make a “ton of money”
You CAN go to meetings/congresses
You CAN follow your own research
interests
We are not in Industry to escape
“grant writing”; we write feasibility
studies, which are worse






The science is just as good
You do receive scientific direction
But there IS scientific freedom (vs
Academia?)
You can’t get in without a post-doc
We do science for profit (and to help
humankind and to earn our salaries
and pay our bills (just like
academia; Professors don’t work for
free either, and universities charge
overhead to pay bills)
The Pharmaceutical Industry does
not live off the science of Academia;
Actually the Industry is the largest
source of funds for Biomedical
Research in the World
Understand the Pharmaceutical Industry;
The Myths and Stereotypes May Not be True







We are not all stupid and rejects from
Academia
We do publish (and if you work for
me, it is publish or perish). If you
don’t want to publish, then stay in
academia
We don’t just do “mindless
screening”
We don’t make a “ton of money”
You CAN go to meetings/congresses
You CAN follow your own research
interests
We are not in Industry to escape
“grant writing”; we write feasibility
studies, which are worse






The science is just as good
You do receive scientific direction
But there IS scientific freedom (vs
Academia?)
You can’t get in without a post-doc
We do science for profit (and to help
humankind and to earn our salaries
and pay our bills (just like
academia; Professors don’t work for
free either, and universities charge
overhead to pay bills)
The Pharmaceutical Industry does
not live off the science of Academia;
Actually the Industry is the largest
source of funds for Biomedical
Research in the World
You only have to work half-a-day, but 1 day = 24 hours!*
*Stolen from Dr. H. Wolf, Pharmacology 870, 1974
There are More Similarities Between
Academia and Industry Than Differences

Science is our foundation

Innovation is key

Work begins with the identification of a new molecular
target

Scientific credentials matter; a lot!

Consistent productivity is essential (and a requirement of
continued employment; the equivalent of tenure)


Industry doesn’t have enough money either to fund all of
the research it wants or needs either
We work on mostly the same molecular targets as in
academia
What’s Life Like in the Pharmaceutical
Industry?
It’s a hard life
 The hours are long; it’s not 9 to 5
 Science is more directed
 Scientists are held accountable
 Greater reliance on a “team approach” to science; but individual
research matters a great deal
 Industry is not where you go “to retire”
 Failure is the norm; one needs to be able to cope with failure
 Change is the norm; one must become comfortable with change
 Competition is keen for research money and jobs
 The most common complaint I hear from scientists who move
from Academia to Industry is “I never knew how hard the work
was, and I never had to work THIS hard before”
 HOWEVER, very few scientists who move from Academia to
Industry ever move back

Personality Matters Too!
But Many Scientists Do Not Inherently Have The
Traits Necessary To Work In A More Structured
Environment Than Academia
Key Findings from “Managing the
Innovator” by ISR - Scientists:

Typically like their immediate supervisors

Suspicious of “upper management”

Feel un-empowered

Uncomfortable in taking direction

Criticize their performance appraisals

Are highly dissatisfied with their compensation

Feel less secure in their jobs

Believe that they cannot challenge Company norms

They identify themselves as scientists; not as company employees

Feel limited opportunities for career development

Have a very high degree of stress on the job

Are typically the most dissatisfied employees in any company
Personality Matters Too! What We Look For

Ambitious

Team payer

Driven

Ability to work independently AND with others

Risk-taker

Comfort with change and uncertainty

Ability to deal with stress

Ability to cope with failure

Managing conflict

Looks for ways to make things work, and not for reasons why
things will not work

Ability to take direction

Motivation (science vs money)
Post-Docs: You Need One (or More) To Get In
The Door

One Post-Doc is OK, two is better, and beginning to
become the norm

Take advantage of your post-doctoral fellowship(s) and
explore your new environment, not just your own
project

Collaborate with others; try to develop team skills

Develop additional scientific and people skills

Work hard; you should have nothing else to worry
about during a post-doc

Have fun; it’s the last real freedom you’ll ever have
whether you work in Academia or Industry
What Can You Expect When You Enter
Industry At The PhD “Entry Level”

A comparable salary to academia (sorry)

A laboratory with one or two “associate staff” (technicians)

A boss (who you might or might not like; but they can change
quickly)

Somebody like me who spends approximately $2 million/year
on you (so you need produce consistently)

Some new equipment; equivalent of “seed money”

Some freedom to work on your own ideas, and on some
existing programs; DO BOTH!

Budget problems

A unique opportunity to combine basic and applied research
What Kind of Research Will I Do in Industry?
If you work in Discovery, basically the same kind of
research you would do in Academia
 Basic research in areas of your own interests and
collaboration on research projects of others
 Do I publish on “My Research” and do “Company
Research” separately?; No, they are one and the same
thing
 Make sure you publish enough to “get tenure”. If you
can’t make it in Academia, then people like me won’t
want you either
 But, unlike Academia, there are many other
opportunities if you find that research is not you true
calling (Clinical, Operations, Project Management,
Corporate, Marketing, etc)

Can I Get Fired From Industry?










You bet you can; and much easier than from Academia
There have been massive lay-offs in R&D throughout the
Pharmaceutical Industry as a result of consolidation and decreasing
sales
Some R&D groups set “tenure requirements” that are similar to
Academia. If you’re not good enough to get tenure in Academia, why
would we want you?
One of the main reasons that I have let people go is because of the
failure to publish or failure to align with the direction of R&D
Abuse of research animals
Falsification of data
Violation of company policies
Sexual, gender, race etc harassment/bias/discrimination
Willful misconduct
Insubordination; Industry is a little bit more like the military, and rules
and appropriate behavior/conduct matter
Summary
The Pharmaceutical Industry is not for everyone; but I love it
 It’s a hard place to work, and becoming harder every day
 Our risks, costs and degree of regulation are extremely high
 The work is challenging, and often frustrating, but sometimes
highly rewarding
 Communication is key
 Breadth and depth in training are critical
 We depend on the motivation and innovation of our scientists,
and their individual as well as team approachs to research
 We have the resources and scale to do things that cannot be
done by Academia or Government
 And we make new medicines; there’s no better feeling than to
be part of the discovery and/or development of a new drug
