Health Breakthroughs Demand Regulatory Revolution
Executive Summary:
The transformation of the automotive world has many lessons for biopharma, especially on the regulatory front, believes Viren Mehta of Mehta Partners.
Driving an
electric car since June of this year is not only a true joy, it has also
prompted me to consider the lessons for the pharma industry.
The
consumer is free to adopt an electric car, and Tesla and other electric car
makers have navigated a web of regulations to be able to offer this consumer
access. In contrast, the biopharma consumer faces an additional barrier to
accessing innovations, a barrier of payers and regulators, who are trying to
adapt but face many challenges of their own. Biopharma managers have an
opportunity to catalyze the regulatory and reimbursement shift into the 21st
century, or risk the consumer taking charge of their own healthcare.
The
automotive industry consists of countless stakeholders, including the powerful
petroleum producers, auto manufacturers, dealers, and all the secondary and
tertiary offshoots, not to mention the governments with their dependence on tax
revenues. Any chance of successful disruption calls for effective innovation at
every step, from making battery power practical, to on-the-air software updates
that offer unprecedented performance and safety from fully integrated data, to
a charging network that rivals petrol station access, to transparency in all
transactions – all at an increasingly affordable price. The impact of the
electric car on many walks of our daily life far beyond just the transportation
industry is accelerating, especially as the regulators recognize its merits.
The biopharma industry faces an equally momentous mix of
innovations. Being much more regulated than the auto industry, all our
stakeholders have multiple, often conflicting, objectives. The regulatory
barriers extend to how the providers may interact with patients even as new
drugs and online apps justify a closer dialog. But patients are becoming true
consumers with these tools. They are gaining confidence that they have lacked
to date, and are asking for the same value that they feel entitled to when they
buy a car. The incentives among biopharma stakeholders are being reshaped. The
pace of this transformation – or electronization – of biopharma, will
depend on payers and regulators keeping pace with innovation. A handful of
examples can illustrate the magnitude of what is afoot.
Take the CRISPR-Cas system, which has evolved over a very short
span. The 1987 discovery of repeating sequences remained grossly
underappreciated until experimental molecular biologists began to deploy more
sophisticated sequencing tools. It was clear by 2009 that we could eradicate
diseases and improve crop quality with this quick, precise, and cheap
gene-editing tool that came into full view around 2012. It was only six years
later that clinical studies began. Today, CRISPR-Cas and its improved
follow-ons have begun to enhance almost every part of life. Its power of
customization is redefining personalized medicine. For example, one patient in
California with an albino gene defect is asking CRISPR researchers to treat his
illness so that he can lead a normal life, and not be confined to working only
during the night shift. The maturation of these tools will enable more patients
to custom order their treatments, diminishing the role of regulators.
AI, or artificial intelligence, meanwhile, promises to redefine
human intelligence. Its reach is unlikely to spare many walks of life, though
the intense debate about many of the AI claims befits the hype phase this
science is presently going through. At one end of this debate, the European
Patent Office prognosticated just last February that AI was unlikely to
progress fast enough that its patent forms would need any change for at least
another 50 years. Yet, only a few months later patent applications were
submitted by a team of legal experts for two designs by a machine dubbed DABUS
(device for the autonomous bootstrapping of unified sentience). The designs – a
plastic food container and a flashing light – represent a landmark challenge to
the international patents regime. Although the products in question are
unrelated to healthcare, many IT companies are accelerating the pace of their
AI-based innovation, from drug discovery to patient-focused healthcare apps.
One AI-focused drug discovery startup claims to already have the first such
drug. The US FDA has approved over two dozen online patient apps for a wide
range of illnesses in 2019 alone, forming the basis for CVS and other major
payer/providers to roll such apps out to hundreds of millions of consumers in
the US. Much of the AI frontier addresses specific needs of the patients, again
bringing the longer-term role of regulators into question.
A third example of the quickening pace of innovation is equally striking
– the deployment of mRNA to enable our own cells to make the necessary antigens
to protect against a range of infectious and inflammatory assaults – which
could turn prophylactic and therapeutic vaccine paradigms on their head.
Slow, Slow…Fast
It took 25 years for cellphones to become virtually universal,
but only five years for the application of these phones to call a car service
to become widespread. Now, rapid adoption of ever more powerful mobile health
apps is beginning to change how we use healthcare, and even what we think
healthcare should be all about and what role the traditional stakeholders ought
to play. The science underpinning CRISPR, AI, and mRNA has been evolving over
the past 25 years, but their application will change our lives in a matter of a
few years.
“Regulators recognize the potential value of these rapid-fire advances, but their hands seem tied”
One of my recent columns discussed the potential implications of
curative therapies on healthcare systems globally. (Also see “Mehta Analysis:
Welcome to BioPharma 2.0” – Scrip, 29 May, 2019.)
The exciting challenge for all the stakeholders in our
healthcare system is obvious when one considers the multiple scientific
breakthroughs, including the personalization prospects of gene sequencing; stem
cell banks accumulating curative matched cells; the tools of CRISPR-Cas that
can diagnose and define a path to cure; AI that can streamline these processes
for timely and successful delivery of care while also accelerating
cost-effective innovation; and online healthcare apps that ensure that every
patient as a consumer is not only aware but is well educated to reach out for
the best treatment option at a fair price.
Today the consumer lacks direct access to these innovations,
unlike an electric car or a mobile phone. Payers and regulators remain
formidable gatekeepers who control how swiftly these new life changing therapies
and tools may reach the consumers. Many payers are beginning to take steps,
from including companion diagnostics in covering a disease to value-based
payments by installment for ultra-costly therapies. Some have implicitly laid
the groundwork for biosimilar substitution with preferred formulary placement
agreements with biosimilar manufacturers, thereby opening up budgetary savings
for newer therapies while enabling access to biologics for many more priced-out
patients – all without waiting for the regulators to act.
Revolution Or Bottleneck?
Regulators recognize the potential value of these rapid-fire
advances, but their hands seem tied, in part because of a lack of resources,
and also because the legislature so far has been unable to refresh their
mandate for the 21st century. Our society will lose out if we do not take
action to untie those regulatory hands. As things stand, we are heading for a
suffocating bottleneck that will throttle the pace at which breakthroughs can
mature and reach consumers.
We need a fresh regulatory framework that is adapted to cope
with the dramatic progression of life science innovation. Without forgetting
the catalysts that ushered in efficacy and safety regulations in the 1930s and
the 1960s, the time has come to put the patient at the center of the regulatory
world, supporting her with all the tools that will enable her to make pragmatic
decisions. Let the resulting crowd choices lead us iteratively towards a
rational healthcare model that achieves much better and more cost-effective
outcomes, with balanced regulatory processes as a healthy by-product.
China and Singapore with their monolithic systems are incubating
many of the healthcare breakthroughs to adopt them in a holistic framework.
China has many steps underway to harmonize its regulatory system with the west
without losing its pragmatic focus on optimal outcomes at a fair value.
Singapore has the additional advantage of being a relatively homogeneous
city-state that can quickly iterate and adapt.
If successful, the west will follow, but most healthcare
stakeholders, especially the biopharma companies, would struggle to adapt as
their ethos aims to satisfy the present regulatory demands, no matter how dated
they may be. Their challenge will come into sharper focus with the advance of
the 140 gene therapy clinical studies under way, a quarter of which are for
much larger populations with more than one gene malfunction, as opposed to
simply targeting the more easily tractable single-gene rare diseases or cancers.
Of course, the list of exciting innovations goes far beyond just the gene
therapy pathways, but curative treatments call the very business model of
biopharma industry into question.
These global healthcare companies understandably are torn
between the great regulatory barrier that keeps their competitors at bay while
enabling them to play the market forces to their advantage, and seeking the
freedom to break loose, with every patient guiding the industry toward timely
and cost-effective outcomes. Would they choose the right course for the longer
term, or will the onslaught of breakthroughs choose for them?
This column originally appeared on Scrip
Biopharma Intelligence, Oct 04th, 2019.