New Business Models for Personalized Medicine: Look to the Stars?

Rare diseases have often been the starting point for breakthroughs in medicine and biology: Oliver Sachs, for one, has made a career out of writing about rare neurological conditions as a window to a deeper understanding of how the human brain works.

Can business models built around rare diseases similarly serve as a starting point for a breakthrough in understanding or even reinventing the biopharmaceutical industry business model?

If a thought provoking forum hosted by the Institute of Medicine June 23 is any indication, the answer may be yes.

Entitled "Breakthrough Business Models: Drug Development for Rare and Neglected Diseases and Individualized Therapies," the workshop took an in-depth look at creative approaches to drug development. We were fascinated by approaches like the sustainable non-profit vision of the Institute for OneWorld Health, the patient advocate-driven research agenda crafted by the Cystic Fibrosis Foundation, Peter Corr's new venture with Celtic Therapeutics, and the orphan-drug as blockbuster model created and maybe perfected by Genzyme. And that was just the first panel!

Rare and neglected diseases may not sound like a promising opening for pharma execs struggling to make up for looming losses of blockbuster brands. But a little perspective is useful. Most in industry would agree that the future will bring many more specialty products focusing on relatively smaller patient populations, for a whole host of reasons--scientific advances in understanding the basis of disease, regulatory concerns about safety, payor insistence of value versus standard therapy, etc. etc.

In other words, the question may not be whether Big Pharma needs to focus more on rare diseases, but rather how Big Pharma can best prepare for a world in which, in effect, every disease is rare.

That, at least, is the argument that Tim Cote, head of the Food & Drug Administration's Office of Orphan Products Development, is making. He made it in person during the Pharmaceutical Research & Manufacturers of America trade meeting earlier this year, and repeated some of the points during the IoM forum. Cote wants Big Pharma to take more interest in the orphan drug program, since, as he points out, it has been largely the province of biotech companies.

Cote also highlighted some earlier work by IoM in the area that may now be a must-read for everyone in drug development: a 2001 report on "Small Clinical Trials."

Talk about a problem most Big Pharma R&D heads haven't had to think about! In an era where the central question has been how to keep the cost of Phase III trials below the billion dollar mark, most executives probably haven't spent a lot of time wrestling with the challenges of generating a robust data package from a study involving dozens--or even fewer--patients.

But that just might be the central regulatory challenge for the personalized medicine era.

It may feel like we've gone to another world here, but that is only appropriate. As Cote pointed out, the 2001 IoM report was commissioned by the National Air & Space Administration, which wanted to understand as much as possible about the effects of zero gravity on human health. NASA, as Cote points out, has "a lot of data, but very few astronauts."

One small step....