New homes for old drugs: Could repurposing offer a financial solution?

Health systems are facing the biggest challenge in their existence: financial sustainability fuelled by the costs of prescription drugs. Here, Marisa Miraldo, associate professor in health economics at Imperial College Business School, goes into more detail…

Developing a new drug can cost up to $2.558 billion.¹ The rising and unsustainable costs in drug development and the consequent drug cost inflation have been a contentious item in most political agendas and a concern for the industry that claims to have experienced an annual decrease in return on investment in the past six consecutive years.²

It is therefore essential for health systems to find ways of promoting innovation and maximising its value in disease areas of substantial public health importance, but for which there is either under-investment by the industry or where innovation is difficult. Policies must strike the right balance between promoting innovation of drugs with substantial health improvement that are affordable for health systems, and allowing sufficient rents to the industry to incentivise further R&D investment.

In this context, drug repurposing (redeveloping existing treatments for new therapeutic uses or indications) emerges as a new value proposition for the industry, patients and payers.

The policy and economic significance of repurposing drugs is considerable. It is predicted that by 2020 $1.4 trillion will be spent globally on prescription drugs.³ The drug bill across OECD countries in 2013 account for approximately 17% of total healthcare spending.⁴ Healthcare payers are, therefore, seeking to curb expenditure while safeguarding access to high quality care, including interventions that can improve value for money from drugs. Thus, there is a growing interest in repurposing as an efficient avenue to deal with attrition in drug development, cost inflation and helping to tackle the burden of disease for individuals and societies.

Drug repurposing brings forth the benefit of quickening patient access to innovative and effective treatment at lower risk and development cost for the industry.

If existing drugs that have been shown to be safe for patients could be found to work for other diseases, this can substantially decrease drug development times, decrease its associated cost and risk, enabling a greater return-on-investment and improved access to new therapeutic solutions in key areas of need. With an estimated cost of repurposing of $8.4 million,⁵ a fraction of the R&D costs for a new therapy, drug repurposing can translate into revenues either through increased sales or new IP, which is sometimes gained through repositioning.⁶

• Celgene achieved a global revenue stream of $2.8 billion by repurposing Thalomid and Revlimid.⁵
• Aspirin initially developed by Bayer for the treatment of inflammation and pain, is now commonly used as an antiplatelet drug in myocardial infarction and stroke patients⁷ as well as fertility treatments.
• Metformin (Merck & Co.) was initially launched to manage diabetes has been found to improve survival outcomes in cancer such as breast cancer⁸ as well as lung cancer.⁹

Venture capitalists have a preference for drugs that are closer to being launched on the market and are, therefore, more likely to bring a higher return-on-investment improving the prospects of raising capital for pharmaceutical firms with track record in drug repurposing.

Enablers

Data analytics & AI

Discovering new homes for old drugs requires large volumes of prescription data linked with clinical and outcomes data across individuals with different comorbidities routinely collected in many health systems.

The successful cases of drug repositioning have occurred through the observation of improvement of clinical outcomes of patients with comorbidities not officially targeted by the prescribed drugs.

However, recent technological developments on data mining, machine learning and artificial intelligence open new avenues for the development of targeted approaches to drug repositioning.

Building on the knowledge that drugs with similar chemical and molecular profiles can potentially have similar targets; and diseases with similar pathways and gene activity can be targeted by the same compound ‘repurposing analytics’ emerges as a powerful tool to optimise the identification of suitable drug candidates as well as predicting drug-disease interactions.¹⁰

• Examples

• NuMedii has invested in ‘mapping gene activity patterns frm a database of 300 diseases’ to identify genetic similarities across diseases that can potentially be targeted by the same compound;¹¹
• Bivista building on data for 23,000 diseases, 6000 adverse events, 20,000 drug targets and 95,000 drugs is deploying technology to identify patterns and make predictions on drug-disease associations that can potentiate drug repurposing;¹¹
• Pfizer, Bayer and Nvartis: have set up standalone units to develop repositioning opportunities.⁵

Collaboration

While there are 4,000 API’s approved globally many of these molecules have been strategically shelved.¹² These molecules can potentially be made available to other companies of research institutes to be further investigated for their potential use in alternative indications.

Secondly, with more than 80% of the 30,000 available drugs being ex-patent,⁷ there are substantial drug repurposing market opportunities for drug companies, university research groups and new start-ups.

New business models for innovation and intellectual property rights are required to enable collaboration of this sort that can potentiate value of therapeutic innovations.

Challenges

The regulatory landscape & incentives

The regulatory landscape is becoming more complex and stringent in public and private healthcare systems.

However, the current value assessment frameworks reimbursement schemes do not contemplate the possibility of maximising value through finding ‘new homes’ for existing drugs and as such there are currently no streamlined processes to assess the value of repurposed drugs nor to adopt them to scale in healthcare systems.

Even if a drug can be successfully repurposed and approved, it must still undergo the same pricing and reimbursement assessment, as a novel drug and price differentiation across different indications for the same drug might prove difficult.

• Example: Novartis’s Ilaris drug targeting a rare inflammatory disorder, has been found to reduce the risk reduction of complications following myocardial infarction.¹³ Originally priced at $16,000 per dose, this price would not be competitive in the cardiovascular disease market.^13,14

Other facts

• The repurposed drug market, which was valued at $24.4 billion in 2015, is expected to be worth $31.3 billion in 2020.¹⁵
• Financial potential of drug repurposing with a five-year compound annual growth rate (CAGR) of 5.1%.¹⁵ Currently 10–50% of R&D spending is on drug repurposing.¹⁶

References:

1. DiMasi, J.A., et al.,. Journal of Health Economics, 2016;47:20–33.
2. The Pharmaceutical Journal (2017). Return on investment falls for pharmaceutical industry. DOI: 10.1211/PJ.2017.20202146
3. Aitken, M., and Kleinrock, M., Global medicines use in 2020: outlook and implications. IMS Institute for healthcare informatics, 2015;1–4
4. OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing, Paris.
5. Persidis, A. (2011), The benefits of drug repositioning. Available at: http://www.ddw-online.com/business/p142737-the-benefits-of-drug-repositioning-spring-11.html
6. Ashburn, T., and Thor, K., Nature Reviews Drug Discovery, 2004;3:673–683.
7. Kollewe, J. (2012). Why finding new uses for old drugs is a growing business. [online] the Guardian. Available at: https://www.theguardian.com/business/2012/nov/27/new-uses-old-drugs-business
8. Wan, G., et al., Oncotarget, 2016;7(23):35437–35445.
9. Xu, H., et al., The Oncologist, 2015;20(11):1236–1244. doi:10.1634/theoncologist.2015-0096.
10. Li, J., et al., Briefings in Bioinformatics, 2016;17(1):2–12.
11. Scudellari, M., (2011) Teaching an old drug new tricks, The Scientist, 25(4).
12. Shim, J., and Liu, J., International Journal of Biological Sciences, 2014;10(7):654–663.
13. Roland, D. (2017). The price dilemma over a $16,000 drug. [online] Fox Business. Available at: http://www.foxbusiness.com/features/2017/07/12/price-dilemma-over-16000-drug.html
14. Herper, M. (2017). Forbes Welcome. [online] Forbes.com. Available at: https://www.forbes.com/sites/matthewherper/2017/06/22/novartis-drug-becomes-first-to-prevent-heart-attacks-and-strokes-by-targeting-inflammation/#79bf6c4c2b1a
15. Arnum, P., (2016). Drug Repurposing and Repositioning: Making New Out of Old - DCAT Connect. [online] Connect.dcat.org. Available at: http://connect.dcat.org/blogs/patricia-van-arnum/2016/07/05/drug-repurposing-and-repositioning-making-new-out-of-old
16. Novac, N., Trends in Pharmacological Sciences, 2013;34(5):267–272. Available from: doi:10.1016/j.tips.2013.03.004.