Recognition for value added medicines, real-world evidence and Chinese innovation are pharma’s key themes of the moment, Pharmanovia boss says

When James Burt (pictured below), the chief executive of lifecycle management healthcare company Pharmanovia, looks back at the mood in the pharma industry in 2023, he is happy to say that he is already experiencing a greater sense of optimism in 2024.

Dr Burt does so having started his year at January’s JP Morgan Healthcare Conference in San Francisco, California, a high-profile event that is often seen as a bellwether for the current state of the industry, where he has been a regular attendee for around 15 years. 

“Last year, the tone was pretty moribund,” he told The Pharma Letter. “This year, it felt like green shoots were emerging, partnership deals were being done, and there was a bit more energy around the conference. 

“For me, it’s a good sign that 2024 should be a more positive year for the industry than 2023.”

The spike in inflation and the pressure that it caused for pharma’s supply chains made last year a bit of a “grind,” Dr Burt admitted. “Pharma is a bit of an unusual industry because, in most countries, you can’t really flex your price as inflation hits. So, It hurts the supply side, and leaves less room for essential research and development, unless you can drive offsetting efficiencies in your operation,” he said. “So, I think everyone has been pressured by this raise in cost base.”

Crucial legislation on the way?

Dr Burt is able to make wider predictions of what might lie ahead by looking at trends from the figures on the Organization for Economic Cooperation and Development (OECD) countries’ healthcare spending as a proportion of GDP since 2000 - from the increasing percentage up to 2009 and the post-credit crunch plateau, to the brief pandemic-induced rise and the recent drop in healthcare expenditure, which he attributes to the loss of patent exclusivity impacting early biologics as they are replaced by more affordable biosimilars. 

“My prediction is that we’re going to see a bit of easing on healthcare spend with this patent cliff,” he said. “I hope that will translate through to a greater appetite for very cost-effective value-added medicines, and the big theme in Europe you’re going to see is the discussions on the revision of the pharmaceutical legislation.

“This is a once-in-a-decade event - Europe looks at the framework around medicines, and this year, a whole new package of legislation is being put through EU institutions.”

Eyes on politicians

So what does Dr Burt believe will be the key drivers of change over the year?

“The legislation I mentioned above. In reality, it’s with the politicians right now,” he said. “We’re at this point where draft legislation has been put towards the European Parliament and Member States, there’s various amendments being tabled.

Dr Burt picked out a particularly important aspect of this as the introduction of a sort of European equivalent of the USA’s 505(b)(2) pathway. Brought in by the Hatch-Waxman Amendments of 1984, it lies part-way between the route of approvals for regular new drugs and generic products.

Dr Burt explained: “You can take very well known, very efficacious medicines, and you can innovate them, creating new formats, repositioning them, and as a result, improving the medicine being delivered to patients, while often delivering cost savings to health systems and adding some additional level of protection for that investment.  

“In the currently proposed legislation, Article 84 is the key area in support of the value-added medicines pathway and the debate is around what the package of incentives looks like to encourage incremental innovation around medicines. My prediction is that this important new regulatory route for value added medicines will gain support and catalyze increased recognition of the importance this valuable type of innovation in medicine.” 

Such innovation might be incremental, but it can be both important - sometimes making a more widespread difference on national health than the introduction of a new blockbuster medicine - and also less expensive than the big breakthroughs.  

Instead of having a dichotomy of either cheap generics or very costly, blockbuster first-in-class medicines, there must be appreciation of the whole class in between.

In Pharmanovia’s case, an example is what the company is seeking to do with an established medication and reformulated it, is in offering a new delivery method for people with epilepsy, providing a potentially significant new delivery option to caregivers and patients in times of critical need and enabling the organization to optimise an existing medicine to better meet the needs of patients, healthcare professionals and payors.  

“But developing that costs money. I’ve just signed off four clinical trials on this alone. We need to see that it’s not a generic, while it’s not a whole new chemical in itself, it’s an incremental innovation in how to get that molecule into the body that is going to help fix problems for patients, and that should be encouraged. I think that payers and policymakers need to recognize that.

“All we are asking payers to do is apply their well-established health economic appraisal processes to these products, versus lumping them in with generic pricing approaches. Early feedback I’m getting from payer representatives is actually very positive, especially as we can often demonstrate that such medicines can reduce healthcare spend and improve outcomes.”

Fix the ‘break in the feedback loop’

As further evidence of the issue Dr Burt cited the pediatric-use marketing authorization (PUMA) scheme, in many ways an analogue for, and subset of, value-added medicines.  

“For many years the European Medicines Agency and policy makers have been heavily encouraging pharma companies to make medicines more suitable for children, and there’s been various sticks and carrots introduced to that effect,” he said. 

“However, what’s evident is a misalignment has developed between the center and the nation states - price setting is a national competence, and payors are not always recognising the different investment for these products and needs of specific pediatric populations, despite pharma companies being asked to develop them by regulators. This creates a broken cycle and a big disincentive to investment, and that is evident in the very limited number of PUMA applications submitted.

Pharmanovia leading the way

IQVIA estimates that while around 65% of the world’s value-added medicine sales are in the USA, the fastest growth of the class is in economies like China, South Korea, Brazil, and South Africa, where there is a more direct interplay between payers and regulators, leading to encouragement and incentivization. Ultimately, they are doing it to improve the health outcomes with a strong eye on the economics. The main European countries are currently lagging behind.   

Fast-growing Pharmanovia is very much at the vanguard of this value-added medicine activity. Its approach is to take older, well-established, well-known medicines, consider their limitations - learnt through talking to prescribers, payors, and patients - and apply the latest pharmaceutical technology to address them. The company has a multitude of such projects at all stages of development.  

“We take something old, beautiful but limited, and we upgrade it to make it fit for tomorrow,” Dr Burt said. “I often say we’ve got a garage of vintage cars, and our technician will take out the leaded petrol engine and put in an electric motor so that beautiful old car will meet the emission standards of tomorrow. That’s what we do with pharmaceuticals.” 

“By doing that, you get a lot of bang for buck. We can stop people having to migrate onto much more expensive, brand new, breakthrough medicines, by upgrading an old one and making it better fit for purpose.”

“So, watch out for that this year. We’re deploying our lifecycle management approach to launch various therapeutic solutions around the world. Additionally, we have now started to use our platform to bring novel products to patients as well, offering even more options for addressing unmet patient needs.  

“We have got some breakthrough first-in-class medicines that we are launching particularly around Europe now. We’re evolving and utilizing our platform to bring brilliant developments to even more patients.”

RWE and digital advances

All players in healthcare ecosystems are increasingly having to demonstrate the value of their contributions, and Dr Burt believes that a key part of this will be further use of real-world evidence.  

“More and more payers want to see evidence in a real-world setting,” he said. “That helps us build our health economic case. We can see outside the clinic how these medicines improve health outcomes.”

The digital impact on healthcare is also becoming more visible, Dr Burt notes, including through the use of Artificial Intelligence in trials, facilitating more sophisticated interrogation and interpretation of clinical data.  

There are other benefits of new digital approaches. For example, being able to ‘decentralize’ trials to avoid patients all having to come to a trial centre, makes them faster, easier for patients to take part and more economic to run. In treatment paradigms, more personalized dose ranging could identify more idiosyncratic ‘Goldilocks points,’ maximizing outcomes while minimising side-effects and so engendering better compliance, Dr Burt said.

“We’re working in one particular therapeutic area to look at how we can rapidly dose modify in a setting where there’s often big step-changes in prescribed dose, and you’ve always got this balancing between the desired therapeutic effect andside effects,” he explained. “As you take big steps, you can often get people becoming non-compliant - quite often patients will make a judgement that they don’t want the downside and so risk not having the beneficial effect. This is exacerbated by the fact people’s response medicines differ, so everyone has a slightly different optimum dose, often varying with time and circumstances.  

“A big challenge in a lot of western countries is limitations in access to primary care, and you often read about how long it takes to get a GP appointment it in the press. We’re looking at how you can potentially automate dose modification, where patients are guided to adapt the dose to balance between best therapeutic outcome and least side effects, without having to directly involve a prescriber each time. I think that is where some new digital approaches could have a big positive impact to health without putting a heavy load on the primary healthcare system”

Chinese opportunities

Another exciting advance that Dr Burt sees in 2024 is growing innovation in pharmaceuticals from China. “What you have suddenly seen is big pharma now recognizing China’s move from being a manufacturing base for recombinant proteins for biosimilars and so on, to generating truly innovative cell and gene therapy activity. It has really caught fire in the last year, and suddenly you’re seeing top 20 pharma licensing technology from Chinese biotechs, to bring it to the West”.  

“We have a sizeable footprint in China, and we’re very excited about our China team, that’s put me in touch with a lot of innovative biotech out there. That’s a theme I’m seeing all over the place, and I think people are catching on to this; there’s a lot of biotech innovation in the East that we’d like to bring West.”

Open for business

So, in conclusion, what is Dr Burt’s message for potential partners in the year ahead?

“We’re open for business,” he said. “We in-licensed three novel first-in-class medicines last year from developers looking for a commercial, regulatory, and back-office partner. We’re there helping with clinical trials, with filing, with market access, and we are there helping with the supply chain and commercialization of these products.  

“I talked about China as a source of development, and let’s not forget other geographies, one of our products originated from South Korea, we are bringing that to European patients now. We are in late-stage discussions with several US developers. Companies might be looking for a partner with global reach to bring that advance in medicine to more patients, so we’re very much open to business in that regard. We’re looking for things that complement what we’re already bringing to physicians and that new technology from a developer to a patient.”

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