Potential for high risks, huge rewards in drug research and development
Second installment of comprehensive genomics productivity study from The Boston Consulting Group focuses on disease genetics and pharmacogenetics
The application of genetics to biopharmaceutical research and development (R&D) holds enormous potential, but is a high-stakes game. An original research report issued today by The Boston Consulting Group (BCG) details the potential: savings, in the best case, of more than $500 million and up to two years in developing each new drug. In effect, that would more than halve the current cost of bringing a drug to market, and would transform pharmaceutical R&D and perhaps even the delivery of health care in general. But the report indicates that the application of genetics lags that of genomics technologies, and that there are many hurdles over which the approaches could stumble.
"The potential rewards from applying genetics tools to R&D are enormous. It's possible that companies could, under certain plausible assumptions, cut the costs of drug development by more than half," says Peter Tollman, a BCG vice president in the Boston office and leader of the firm's biopharmaceutical R&D practice. "This promise should be tempered by the many associated uncertainties however—significant scientific and technical problems that have yet to be solved, along with questions about market and regulatory acceptance."
Mr. Tollman continues, "If companies ignore genetics, they could falter in the face of a truly transforming technology. On the other hand, to embrace genetics involves placing high-risk bets. The future of many firms may well depend on how successfully they navigate between these currents."
The report issued today is the second of a three-part series examining the application of genomics and genetics to pharmaceutical R&D. The first installment, published last month, discussed the economic impact of genomics technologies—an impact described as significant and clearly achievable. Today's publication, A Revolution in R&D Part II: The Impact of Genetics, switches the focus to genetics applications, and concludes that the positive impact here is potentially far greater still, though considerably less certain.
The report concentrates on two genetics approaches that are applicable to pharmaceutical R&D:
- Disease genetics: the search for disease-susceptibility genes as potential drug targets, and
- Pharmacogenetics: predicting patients' drug responses by analyzing the genetic variations in their DNA.
The two genetic approaches are applied at opposite ends of the pharmaceutical R&D continuum. Disease genetics is invoked early in the drug discovery process to help identify and validate key target genes for therapeutic intervention. By contrast, pharmacogenetics is used mainly to streamline the later stages of drug development by selecting for clinical trials those patients likely to respond favorably to the candidate drug.
"Disease genetics holds the potential to change fundamentally the way drugs are discovered, whereas pharmacogenetics could radically change the way they are developed," notes Philippe Guy, senior vice president and leader of BCG's worldwide health care practice.
The Impact of Disease Genetics
Disease genetics should yield the larger share of cost savings, with the bulk being realized by improvements in the success rate of drug candidates. But the BCG report cautions that these savings might be limited by feasibility and practicability issues. For example:
- Although culprit genes have been identified for numerous rare, single- gene disorders, very few of the underlying genes have been pinpointed for common multigenic disorders. So it remains unclear whether a genetics-based approach to drug discovery will really work, and if it does, for which diseases it will be relevant.
- Currently, the cost of a comprehensive survey of disease-related genes is exorbitant. BCG is confident, however, that this cost will shrink greatly in the next few years.
- Original disease genetics studies are expected to identify only a small number of genes, and thus a small number of drug candidates, which then must struggle to progress all the way through clinical trials. There are ways to improve the odds of ultimately finding a drug, but they could add as much as two years to the R&D process.
The Potential of Pharmacogenetics
Pharmacogenetics, according to the BCG report, could fundamentally change the clinical development of drugs in two ways:
- Streamlining clinical trials: Clinical trials could be greatly reduced in size and cost by identifying and excluding in advance those patients unlikely to respond to the candidate drug. With a preselected patient population, the trials could assess a drug's positive therapeutic effects far more effectively.
- Salvaging compounds that would have otherwise failed: Genetic analyses could identify and exclude in advance those patients unlikely to respond to the drug, or likely to suffer from negative side effects. That might enable companies to continue developing drug compounds that would fail to secure regulatory approval for broad patient populations.
Such a targeted approach to drug development would make clinical trials more efficient and safer, but again the report sounds a note of caution: pharmacogenetics will not apply to all drugs. It will work only where the drug's response and/or side-effect profile is clearly linked with genetics, and where that relationship can be identified at the appropriate stage of development. Market implications will need to be considered as well: using pharmacogenetics to exclude certain patients from clinical trials will shrink the potential market for the drug. Once again, pharmaceutical executives will confront the question of risk versus reward.
In the two installments published so far, the BCG report has evaluated the new genomics by scrutinizing its technological developments and scientific findings respectively, and the ways in which they might affect R&D productivity. The third and final installment, to be published in September, will focus on the business side of things, examining the strategic options companies will need to consider, and the operational and organizational challenges they will confront, when striving to realize the promise of the genomics revolution.
The BCG Model for Examining Genetics
To assess the overall impact of genetics on pharmaceutical R&D, BCG built a detailed activity-based economic model of the entire R&D value chain, encompassing all phases of biology, chemistry, and development. That model was also used in the first installment of the report, in analyzing the impact of genomics technologies. The model is based on detailed discussions with R&D scientists and managers at nearly 50 leading companies and academic institutions.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a general management consulting firm widely regarded as the global leader in business strategy. Since 1963, BCG has worked with companies in every major industry and global market to develop and implement strategies for competitive success. BCG has 50 offices in 33 countries around the world. More information on BCG can be found on its Web site: www.bcg.com.
Source: The Boston Consulting Group