David Homer, Merial, takes us through the process.
New products are the lifeline of pharmaceutical companies. Without them, sales eventually drop, profits go down and companies go out of business. This process can take some time if the products that you start with are both unique and highly desirable or needed, and if you are able to effectively create a strong brand reputation and communicate product attributes. However, without new products the sales and profits achievable will eventually be insufficient to support reasonable business objectives or even to support the maintenance of a viable company. For companies to continue to provide innovative high quality products to the market, they need to be able to operate in an environment that encourages and facilitates new product development (NPD).
However, NPD is not a simple and low risk exercise. Even if you are given a proven new product concept tomorrow, there are no guarantees that the concept can be registered or that it will be successful in the marketplace. Guarantees aside, companies wishing to undertake the process of NPD need to balance many factors and engage in a complicated risk management exercise.
Companies need to manage their financial and human resources over a number of projects as NPD is very expensive and no individual project is guaranteed to succeed. Also, much of the data generated to support registration needs to be generated with the final product that is to be registered but the market and technology can change during development so “tweaking” product attributes along the way is sometimes required (making registration review more complicated). Companies also need to balance how much of NPD comes from internal R&D (large and small) against the buying in of technology from other research groups and companies. Timelines can be shorter, costs better managed and risks reduced when buying in but excessive focus on this area of NPD can reduce a company’s internal capability in areas such as R&D and the management of projects and product launches.
Each company approaches these balancing acts differently. However, when it comes to NPD the most complicated and problematic component is the risk management part.
NPD projects can take many years, with 10 years not being unusual or even long for difficult projects and novel products. Even relatively simple projects can take a number of years. This means that most projects involve taking a punt on what the market will look like in the future. Key markets don’t tend to disappear over such periods but they change direction, become more competitive and better serviced with other products, get influenced by technical developments (e.g. resistance development) and are subject to the impact of policy changes (government, trade, regulatory, community sensitivities etc).
One of the biggest risks to NPD is that markets can also change after you complete your registration, including being influenced by your registration. If you successfully meet a need in the market then other companies take note of that and consider moving into the same space, e.g. with generic versions. For products containing new molecules, the ability of other companies to move into the same space is severely limited for a period of time by patents. Other periods of freedom from copycats, often shorter, can be achieved through other areas of innovation such as novel formulations. These periods do help the management of NPD risks but as development and registration timelines get longer and longer, and with the costs of development getting larger, there can often be relatively short periods of freedom left once you get to market to recoup the larger costs involved. The legal process of defending patents is also often costly and complicated.
The other big risk area is the regulatory environment itself. Products have to meet ever increasing standards for quality, safety and supportive proof. R&D development programs also have to deal with relatively regular changes to the risk management framework within regulatory policy (local and global). The volume of data required today is greater, covering more areas of review and must be suitable for more intense scientific and community scrutiny than was the case even 10 years ago. The theoretical risks that now have to be addressed within product dossiers are comprehensive, especially in the areas of user safety, food quality, environmental impact and trade relevance. Regulatory scrutiny does not stop once a product is registered with routine usage response monitoring, product reviews, re-registration provisions and routine upkeep of manufacturing bona fides ensuring that regulatory personnel spend a large percentage of their time maintaining registrations rather than pursuing new registrations.
Modern society has an interest in knowing more and more about products as well as demanding more and more safeguards being built into the product safety profiles. Also, technology brings us new product opportunities but also brings us more ways to analyse and study products. We can now measure chemicals in tissues at much, much lower levels than we could 10 years ago. The end result is a more demanding process for NPD which equates to more cost, longer development and registration timelines and greater risks with each project undertaken.
NPD is pivotal for the economic success of pharmaceutical companies. It is also pivotal for an animal health industry that needs to be more efficient at food production and that wishes to continue to provide domestic and production animals with the medicinal and supportive options that an ever-changing world demands. It is understandable that the process that governs product release to market has to be thorough in review and disciplined in development. However, the governing process and the marketplace also has to understand that the harder it is to manage the risks and balance the factors, the longer will be the period between significant innovations and the more expensive modern pharmaceuticals will become.