It’s like watching 5 year olds play soccer…

I heard this phrase a number of times while working in the pharmaceutical industry.  It was used to describe the behavior of the big pharma R&D departments when it came time to decide what were the “hot” development programs.  For example, we would go years with only a token interest in schizophrenia and then suddenly the company would label the program as “high priority”, seemingly at the same time as every other big pharma.  One couldn’t help but make the comparison to a team of 5-years who don’t play their positions in a soccer game, but rather just run after the ball.  For the more cynical types, it seemed like another example of big pharma’s inefficient R&D strategy.

For those who keep up on the industry news, you can’t help but notice a new ball that all the companies are chasing: oncology.  At the moment, nearly all the big pharma and biotech companies have substantial investments in oncology, not to mention the huge number of start-ups who are also focusing on new cures for cancer.  But are they really just mindlessly chasing the newest flavor of the month?

If we look a little closer at the oncology space, particularly in light of the research, regulatory and reimbursement issues facing the industry, the strategy starts to make a little more sense:

Research:

• There is a lot of scientific knowledge out there about cancer, be it new targets, genomic data or disease mechanisms and more coming out every day, particularly from academic labs.  If you’re going to work in a therapeutic area, it’s not a bad idea to choose one where you’re not completely in the dark (yes, I’m thinking of amyloid plaques and Alzheimer’s disease).

Regulatory:

• There are many rare cancers that affect very small patient populations.  Targetting these cancers makes it easier to justify smaller clinical trials to the FDA which translates into lower development costs.
• The high unmet medical need for many cancers can often help get fast track, accelerated approval or priority review for your application from the FDA, reducing regulatory burden and decreasing time to market.
• There is a clearly defined approval pathway (relatively speaking) with FDA-accepted clinical trial endpoints (i.e. overall survival, progression-free survival, etc) that reduce the risk associated with clinical trial design.
• If you’re developing a drug for a cancer with no currently available treatments, the FDA will often relax clinical trial requirements (i.e. single arm trials vs. a placebo or a best available treatment comparison trial).

Reimbursement:

• With respect to the more rare cancers, it’s easier to justify a therapy that costs tens of thousands of dollars when an insurance company will only have to pay for a handful of patients.
• Although personalized medicine is only in its infancy, some of the more robust biomarkers have come from oncology namely ER, PR and HER2 for breast cancer.  As comparative medicine increases in importance, being able to identify patients who are likely to respond to your drug can help with reimbursement.
• And finally, cancer affects nearly everyone, either directly or indirectly through friends and family.  That makes it a hot-button issue (just look at the row between Roche, the FDA and patient groups over Avastin for breast cancer) and less likely that an insurance company will deny reimbursement when the data isn’t 100% clear.

Going one step further, these benefits seem to translate into higher success rates.  Just look at BIO’s presentation here (slide #9).

So maybe the observation that companies are acting like a 5-years playing soccer isn’t exactly fair.  There are real reasons that certain therapeutic areas are more attractive than others and as scientific knowledge, regulatory rules and reimbursement strategies change, these differences can be substantial.  Moreover, since these reasons often relate to issues that affect the industry as a whole, it shouldn’t be surprising that companies exhibit what appears to be a herd-mentality.

However, the question remains, is it the right strategy?  Should companies be chasing diseases that provide the path of least resistance, or should they be breaking new ground in areas where the path isn’t so clearly laid out?  What should the balance be between the two?  I’m interested to hear what you think.

Update: Ernst & Young just released their “Beyond Borders: Global biotechnology report 2011” which you can find here.  If you need any further convincing of the shift towards oncology, look no further than page 95 of the report where you’ll find this graph of US companies pipelines’ by indication: