Evolution And Future Of Biopharmaceuticals

Advances in genetics and genomics, including the sequencingof the human genome, have resulted in the development of newbiologic drugs to treat cancer and other serious diseases. So-calledtargeted therapeutics are the first step in creating drugs thathome in on disease without affecting healthy cells and tissues.Not surprisingly, the arrival of these drugs about a decadeago has raised lingering questions about their clinical andfinancial value, how they should be regulated, and whether changesin patent policy are necessary to promote innovation. Becausethe new biological agents are more difficult to manufacturethan traditional chemically synthesized drugs, how "follow-on"biologics should be tested, approved, and regulated continuesto be the subject of debate.

Herceptin, a genetically engineered monoclonal antibody thattargets the HER2-neu receptor on breast tumors in some patients,is the ideal example of a biopharmaceutical that is truly targeted.(Unlike many of the newer drugs, it does not affect both healthyand malignant cells.) In the first paper of this section, KathrynPhillips identifies four factors that will determine the successfuladoption of a biopharmaceutical, demonstrating how health policyneeds to simultaneously promote good science and economic returns.Louis Garrison and Finley Austin then probe the connectionsbetween gene-based diagnostic tests to identify patients whowill benefit from (or be harmed by) specific biologics, discussingthe need for more scientific knowledge as well as the financialincentives that will drive innovation toward "personalized"medicine.

Henry Grabowski and coauthors project the evolution of the marketfor follow-on biologics. They anticipate that fewer competitorswill enter the market in the short term, thereby slowing thedecline in the prices of targeted therapeutics. In the longterm, the balance between price and incentives for innovationwill depend on new policies covering intellectual property law.John Calfee and his coauthors expect a new pricing dynamic forthese drugs that "do not compete with each other..., makingthem resistant to price controls." They predict that competitionwill come from a process of "inventing around" existing agentsby designing new drugs that target a novel site along the biologicalpathway of an existing therapy.

Finally, Shelby Reed and colleagues contend that changes inthe current Food and Drug Administration requirements for pre-and postmarketing safety studies will affect venture capitalinvestment as well as companies’ decisions to go forwardwith new biologics. Their model favors more stringent postmarketingsurveillance, rather than larger Phase III studies.

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Evolution And Future Of Biopharmaceuticals