Académique Documents
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Team 3
Sarah Guttenplan
Kah Tan Allen
Ankita Parihar
Sung-Min Kim
Yun-Hsu Wang
Chang Kun Chun
X518
February 1, 2011
Internal Strategic Risk Assessment
The risk probability is inversely related to the probability of success. A high risk will have a low
probably of success.
Strategic Partner: This is the most important step because it sets the pace and tone for the entire
process. Choosing an incapable partner will hinder the process. The clinical trials might slow
down or completely shut down if the pharmaceutical company or contract research organization
(CRO) is not properly handling them. A slow down in the schedule will also erode future profits
and decrease the time the drug is on the market before the patent expires.
To strengthen the partnership with Merck, working in conjunction with other companies that
have more knowledge and expertise in the field of Women’s Health would be beneficial. KV
Pharmaceuticals, a specialized company in Women’s Health, and Teva Pharmaceuticals, which
recently acquired a Women’s health unit, would also be great candidates as they have presence
and a great interest in the market. As an alternative, Abbott could be considered since it recently
signed a marketing agreement with Neurocrine Biosciences (NBIX) for an endometriosis-related
pain treatment, which shows interest in the Women’s health market.1,2,3
1
http://www.kvpharmaceutical.com/
2
www.tevapharm.com
3
http://www.minyanville.com/businessmarkets/articles/female-diseases-womens-health-flibanserin-
fda/6/16/2010/id/28785
Secure Licensing Partners: 24 Drug are currently in development for treating menopausal
symptoms. Many are in Phase 2 or above and this would be more attractive for companies who
are looking for new products4.
4
Ref. Women's Health Pipeline Databook - December 2010, Business Insights
Bayer Schering Pharma AG Menostar PA Menopausal Symptoms(Vasomotor Symptoms in
Postmenopausal Women)
Pfizer Inc Pristiq PA Menopausal Symptoms(Menopausal Vasomotor
Symptoms)
Enter into Legal Partnership with Merck: The legal partnership can be a very complicated
process with negotiations. Merck is the best partner of IU, because it has the DORA in Phase 3
clinical trials, has been already established in the Endocrine/Women’s Health drug industry, and
reorganized the company to put stronger emphasis on their drug development pipeline. However,
the partnership can still collapse if the risks, resources and rewards are not appropriately or fairly
shared5. Care must be ensured during this delicate stage to ensure both IU and Merck’s needs are
met.
Completion of Pre-Clinical and Phase 1 Trials: The previous group stated that the Pre-Clinical
and Phase 1 data could be used from the data obtained on the DORA and the primary indication
of insomnia. We do not think that the data is transferable considering the differences in the
clinical subjects and the timeframe that this drug would be used for. The previous published
work on side effects was for 48 hours or less, while the DORA would be used for this secondary
indication for 5-10 years6. This extended exposure of the human body, which has different
metabolic and physiologic profiles than rats, to DORA may exert contraindications serious
enough to taint the reputation of this IU patent. Along with these differences in drug biologics
comes potential side effects which must be assessed to protect public health and to earn the trust
of our stakeholders, especially doctors and patients, when it comes time to launch this plan. We
suggest conducting Pre-clinical and Phase 1 trials to obtain the proper data for this indication to
alleviate problems later in the clinical trials. It is thus crucial that Pre-Clinical and Phase 1 trials
be conducted to test proof of concept and address safety issues before further time and money are
invested in this venture. This will also facilitate use of the DORA in other countries because they
would not accept the Pre-clinical and Phase 1 data from a different indication.
5
Dave Brock, 1999, Creating Effective Strategic Partnerships
6
Nature Medicine volume 16 | number 1 | january 2010
Since we are suggesting that more Pre-Clinical and Phase 1 research is done, funding must be
obtained. Below lists some relevant grants for this drug.
It is very difficult to get funding since it is very competitive and sometimes can be difficult to
use them for Pre-clinical expenses.7,8
Completion of Phase 2 or 3: The chances of a drug completing each phase of a clinical trial and
eventually receiving FDA approval is very low. When a drug fails the Phase 2 or 3 clinical
trials, all of the money invested by the pharmaceutical company is lost. The farther along in the
clinical trials the drug is, the more money is lost. The approximate cost of ending a Phase 2 trial
is $23.4 million while a Phase 3 clinical trial is $80 million CITATION. In 2007 only 19 drugs
were passed by the FDA, the lowest number of drugs passed in 23 years9. The FDA claims not
to have increased standards for approval, rather, that testing has improved over the years and it is
easier to identify problems with drugs, particularly thoseused for long term treatment. Since the
failure rate in clinical trials is so high, the FDA in 2004 formed the Critical Path Initiative (CPI)
to study why the failure rate is so high for new drugs10. The CPI released a report in 2006 with
recommendations on what needs to be improved in the clinical trial process while also listing
specific examples where scientific discoveries could improve the developmental process11.
Relevant recommendation from this report for the DORA includes using biomarkers to identify
the patients most likely to benefit from the treatment as well as using in silico clinical trial
modeling to predict outcomes of the clinical trials.
7
http://www.cchrint.org/psycho-pharmaceutical-front-groups/narsad/
8
http://www.educationmoney.com/prgm_93.242_sci.html
9
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2MOCNVDHucs
10
http://www.fda.gov/ScienceResearch/SpecialTopics/CriticalPathInitiative/ucm076689.htm
11
Critical Path Opportunities List. U.S. Department of Health and Human Services, Food and Drug Administration,
2006.
Validation of Market Potential: Risk is low, but should have been addressed much earlier in the
process. We know that the potential patient population is large, but it is not in the best interest of
IU and Merck to wait this far in the process to look at this.
Successful Integration: If physicians do not have confidence in the product it will not be
prescribed and profits will be eroded.
Internal Risk Metric for the Legal Partnership: We must determine when and how to start the
legal partnership to ensure the best outcome. Determining when to license a compound involves
the consideration of many factors such as how much risk and financial burden the company is
able to bear as well as how equipped that company is to continue further development of a
compound alone. Deciding how to out-license a compound is often subject to the decision over
when to out-license. In our case, licensing at an early stage of clinical development may involve
some element of co-development, but is unlikely to include the co-commercialization of the
compound once it reaches the market12. The questions to ask and consider are:
Can we protect our IP?
When can we license the product?
Is the product likely to be made available for licensing?
Are we likely to be considered to be an attractive partner for this product?
Internal Risk Metric for the Phase 1 and 2 clinical trials: To determine if the clinical trials are
progressing along the projected timeline, it is extremely important for IU, Merck, and whoever is
conducting the clinical trial to be in constant communication. We recommend a weekly status
report to be sent directly from the scientists and physicians working on the clinical trial to the
project managers at IU and Merck. This will allow constant monitoring of the trials, and if
problems occur, they will be immediately addressed and solved or terminated early to reduce
waste of financial reserve if the data do not support further investment in this endeavor.
12
Pharmaceutical Licensing Strategies, Business Insights
External Strategic Risk Assessment
1. The economy and health care reform changes. The Health Care Reform Bill expands the
number of low-income people under the age of 65 that are eligible for Medicaid13. This age
bracket covers women who transition into menopause, a stakeholder in the launching phase of
DORA, and a plus for the proposed plan. The American Recovery and Reinvestment Act
(ARRA), enacted to reverse the recession caused by the housing and financial crisis, increased
the Federal government contribution to Medicaid via Federal Medical Assistance Percentage
(FMAP) by $15 billion14. While this ARRA fund contribution will increase doctor
reimbursement now, by the time DORA is ready for launching, this fund would be unavailable
for physician reimbursement. Since the individual state government determines what services are
covered under Medicaid, and their reimbursement rates12, it is imperative that Merck-IU employs
a lobby group in each state to influence fund appropriation and favorable reimbursement rate for
DORA/menopause treatment. While vasomotor flushes pose no serious life threats for its
victims, its economic costs for reduced productivity at the workplace is a sound argument for
DORA’s inclusion as a Medicaid drug reimbursement and doctor visits.
2. The aging baby boomer population. Baby boomers were born between 1946 and 1964,
placing the female baby boomer population at ages 46-64, when menopause occurs1516. Because
such a large part of the population is in this age bracket, the aging baby boomer population is
greatly beneficial towards the development of the DORA. The number of potential patients for
this drug is much higher than if this drug had been developed 10 years earlier.
The strategic milestones affected by the baby boomer generation are the clinical trials. A large
population makes it much easier to recruit clinical subjects for trials and also gives a large group
of subjects to choose from. This will increase the chance of success in clinical trials since the
subjects with the highest chance of having positive results from the DORA will be included.
A metric to monitor the baby boomer population and their interest in the DORA would be
creating focus groups of baby boomer generation women and surveying them in their interest in
the drug. Once a baseline for interest in the drug was determined, focus groups would be
13
http://www.politifact.com/truth-o-meter/statements/2010/mar/01/lamar-alexander/health-care-reform-expand-
Medicaid-doctors/
14
http://www.hhs.gov/recovery/programs/medicaidfmap.html
15
http://www.bbhq.com/whatsabm.htm
16
http://www.womenshealth.gov/menopause/basics/index.cfm
continued at twice yearly intervals. If interest started to decline, the reason why would be
determined and addressed.
3. Low adoption rates by Physicians. In the United States last year, formulations of estrogen and
progestin hormones helped more than 6 million women who had symptoms of menopause. The
latest findings from Stanford researchers show that as of 2009, physicians practices were not
keeping up with the clinical evidence showing side effects about lower hormone doses, which
the U.S. Food and Drug Administration recommends. It can be seen that "clinical inertia" led
them to maintain their prescribing practices since that time. One of the major reasons is that
doctors who are familiar with the immediate benefits of higher-dose hormone therapy in
relieving menopausal symptoms are reluctant to change. Therefore, physicians may be slow to
embrace use of the DORA.17,18
4. Patient awareness and consumer behavior. Patients have more knowledge of medication and
healthcare nowadays; and the way they obtain this information is from the internet,
digitalization, and the media. They not only already have a better understanding of vasomotor
flushes, but it is also easier to raise awareness of a drug that can treat vasomotor flushes, which
positively affects the market potential of DORA. Based on surveys and observations, most of the
targeted female patients are aware of the vasomotor flushes but choose not to use a “science-
proved treatment” as a method because of three points. One, the effectiveness of some
prescription drugs hasn’t been proved, nor have the side effects. Secondly, although hormone
replacement therapy has been proved very effective, it also has highest possibility of side effect
occurred. And lastly, women do not link vasomotor flushes with “disease”; they prefer using
herbal therapy and exercises to deal with the problem. Of women of menopausal age, 40% of the
women go for HRT and 21% of women say they use complementary or alternative therapies
only, and another 25% say they use both conventional and alternative methods19.
These insights behind the trend affect the market potential of DORA, and mainly influence Phase
3 clinical trials and launch of the drug. 20,21
Metric: Conducting focus groups among physicians and women suffering from vasomotor
flushes to determine the knowledge about symptoms and the preferred corresponding treating
behavior.
In conclusion, one of the two most significant environmental factors is the economy/health care.
The health care reform will increase the age bracket covered by Medicaid, including the women
in transition into menopause, which will help commercialization of DORA. The new health care
law will also increase Medicaid spending by 12 percent or about $100 billion annually, boosting
the overall health care industry. However, if the US economy goes further into a recession,
provisions for drug and physician reimbursement might not be as widely available, calling for
state-level solutions.22
17
http://www.estrogen-replacement-side-effects.com/
18
http://www.cmaj.ca/cgi/content/full/161/6/695
19
http://www.sciencedaily.com/releases/2010/12/101202161927.htm
20
http://www.womenshealth.gov/menopause/basics/index.cfm
21
http://dermatology.about.com/od/facialflushing/a/ffmenopause.htm http://www.menopausetohealth.com/
Another most significant factor is the low adoption rate. Potential side-effects must be assessed
through clinical trials to protect and earn the trust of doctors and patients, in order to tackle the
low adoption rate issue.
22
http://blog.heritage.org/2011/01/26/message-to-the-president-expanding-medicaid-will-not-reduce-federal-
spending/