Can lifecycle management safeguard innovation in the pharmaceutical industry?

Accepted Manuscript Title: Can lifecycle management safeguard innovation in the pharmaceutical industry? Authors: Stefanie Hering, Brigitta Loretz, Thomas Friedli, Claus-Michael Lehr, Frank Stieneker PII: DOI: Reference:

S1359-6446(18)30238-1 https://doi.org/10.1016/j.drudis.2018.10.008 DRUDIS 2336

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Please cite this article as: Hering, Stefanie, Loretz, Brigitta, Friedli, Thomas, Lehr, Claus-Michael, Stieneker, Frank, Can lifecycle management safeguard innovation in the pharmaceutical industry?.Drug Discovery Today https://doi.org/10.1016/j.drudis.2018.10.008 This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.

Can lifecycle management safeguard innovation in the pharmaceutical industry?

Corresponding author: Lehr, C-M. ([email protected]).

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Stefanie Hering1, Brigitta Loretz2, Thomas Friedli3, Claus-Michael Lehr1,2,* and Frank Stieneker4 1 Dept of Pharmacy, Saarland University, 66123 Saarbrücken, Germany 2 Helmholtz Institute for Pharmaceutical Research Saarland (HIPS), Helmholtz Centre for Infection Research (HZI), Saarland University, 66123 Saarbrücken, Germany 3 TECTEM, University of St. Gallen, 9000 St. Gallen, Switzerland 4 Free consultant and Qualified Person according to German law, 65719 Hofheim, Germany

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Teaser: This review aims to apply the concept of lifecycle management to medicinal products, name the circumstances and challenges involved, as well as discussing the upcoming management decisions at each phase for enhanced cross-functional understanding.

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Detailed investigation of R&D, approval, commercialization and market withdrawal Time-to-market must be minimized urgently Strategies for extending the lifecycle are of crucial importance Interdisciplinary summary for extensive perception

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Highlights:

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The pharmaceutical industry invests enormous amounts of resources (>€1 billion and >10 years) in the development of new products. External factors such as intensifying foreign competition and greater regulatory demands can negatively affect the profit margin, whereas the R&D productivity diminishes. To stay competitive and to maintain high R&D capabilities for developing new medicinal products, companies must make smart investment decisions to maximize their return on investment. Consequently, the entire lifecycle of a medicinal product must be effectively managed to ensure a sustained development through commercialization. This review critically assesses the current situation and the associated management strategies throughout the lifecycle of a medicinal product.

Keywords: Time-to-market; supply chain management; patent strategies; process simulation; market approval and withdrawal.

Introduction The proper use of lifecycle management (LCM) (see supplementary material online for Glossary of terms) is an inevitable factor for pharmaceutical companies to shorten time-tomarket and to delay market withdrawal of their products. However, owing to ever-increasing performance and regulatory requirements, various challenging factors jeopardizing the economic survival must be overcome to remain competitive. Professionals are commonly tempted to focus their attention on their field of interest and challenges, losing track of the overall process. Hence, the relevance of implementing appropriate LCM strategies is undisputed, although often underestimated.

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The lifecycle (LC) of a medicinal product starts with the discovery of a potential lead compound, which can be explored along the different stages of the R&D process [1]. The potential compound undergoes preclinical and clinical trials to evaluate its quality, efficacy and safety [2]. After successful clinical trials, the pharmaceutical company can submit the necessary documentation to receive the market approval from responsible regulatory agencies. If the medicinal product is approved, it can enter the market [3]. The commercialization starts with a period of fast growth until the market share reaches a maturity stage. The end of a medicinal product is characterized by a decline phase as a result of adverse side effects [4] or economic factors [5–7], leading to the market withdrawal of the product [8].

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The described LC phases can only be considered as sustainable if the underlying management decisions throughout the entire LC are made wisely. According to the management understanding built into the St Gallen management model, the efficacy of management depends on its interplay with the specific environment and the organization [9]. Therefore, the decision makers need up-to-date information that is timely and accurate regarding the LC itself but also need to be informed about possible changes in the market, regulation, engineering and supply chain. The most important issue is whether to continue or terminate the LC of a product. This question must be re-assessed as soon as any unanticipated changes appear. The second crucial question in LC management is: how can time-to-market be shortened to maximize any patent protection? Another crucial aspect is how to avoid or delay the occurrence of the decline phase and withdrawal from the market (Figure 1).

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This review focuses on discussing LCM strategies for globally active, research-intensive pharmaceutical companies that have corresponding departments for each phase of a product’s LC. Companies focusing on the production of generics or contract manufacturing organizations (CMOs) are not considered for the review, because they follow a different stream of management strategies than research-intensive pharmaceutical companies. Within this review, the entire phases of a medicinal product’s LC should be discussed. It further includes discussion on current market dynamics and challenges facing the researchintensive pharmaceutical industry. Earning potentials of pharmaceutical companies are essential to guarantee a financially sound, resistant and research-oriented industry. Thus, this review intends to explore which management strategies are available for improving LCM. Consequently, several management strategies are introduced and evaluated for improving the LCM of medicinal products.

The LC of a medicinal product: R&D R&D describes the first phase of the LC of a medicinal product. It starts with the identification of possibly profitable targets and molecules, followed by the selection and justification of

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potential targets and molecules and the development of a suitable formulation for the finished medicinal product. There are different ways of researching. Researchers might choose to focus on substances that can be found in nature or choose a screening method: either random or receptor-targeted HTS or virtual screens. These molecules are synthesized as targeted chemical synthesis [1]. If the molecule shows promise, in vitro tests will be performed. The first step of in vitro testing is challenging selectivity and potency of the lead structure followed by the analysis of biochemical and toxicological properties [1]. Meanwhile, pharmaceutical technologists begin to develop the formulation. Rudimentary formulations as parenteral injections or capsules are sufficient for this phase. Later, when the new chemical entity (NCE) or new biological entity (NBE) has evolved to an investigational medicinal product (IMP) and enters clinical trials, an improved and optimized formulation must be developed rapidly. At some point during R&D, usually during preclinical tests [8], the pharmaceutical companies apply for a patent. Applying too early reduces valuable patent time without profiting financially whereas applying too late benefits competitors, because parts of the clinical trial documentation are publicly available. Whenever the patent is issued, the time-to-market is of crucial importance so that the pharmaceutical company can profit from patent protection. Consequently, preclinical trials, which provide the basis of the later clinical trials, must be completed as quickly as possible. The clinical trials test quality, efficacy and harmlessness of the IMP in three different phases. If all of these activities are successful, the pharmaceutical company submits all necessary information to the regulatory bodies [10].

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Current market dynamics The pharmaceutical industry within western countries (especially in Europe), faces a challenging situation because many changes have occurred during the past 20–30 years [11]. These changes were, on the one hand, positive because advancements offered new possibilities (e.g., more virtual and HTS in R&D [1]) but, on the other hand, negative trends began. Declining growth rates and market values due to emerging countries [12] suggest that the golden age has passed. The sinking return on investment [3] in the pharmaceutical industry shows poor financial success. A lower NCE output on the market [13] endangers the leading position of western pharmaceutical companies. Despite having the highest R&D investment in percentage of sales [12] compared with other industries, the resulting output of pharma R&D fails to achieve its former success. Figure 2 shows the pressurized industry.

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It is impossible to name a single number to picture the cost and duration of R&D. There are enormous differences among the R&D processes of medicinal products, because of the indication, the application or whether the active pharmaceutical ingredient (API) is a small molecule or a biological. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), it takes an average of 12–13 years until the medicinal product enters the market [14]. The costs add up to an average of US$1.4 billion for R&D until approval [15]. The price breakdown was under examination by the Pharmaceutical Research and Manufacturers of America (PhRMA), an association of the biological pharmaceutical industry in the USA. It concluded that the cost beak-down is: preclinical 21.2%, clinical trials 48.3%, approval 5.1% and pharmacovigilance 16.6% of the total amount. Meaning, 8.9% remain uncategorized [16]. It is also stated that 1–2 out of 10 000 synthesized substances make it to the market [14] and only about five compounds out of 500 make it to clinical trials [17]. Also, more employees can now be found in R&D [14]. This might sound positive; however, it is not necessarily so because one possible reason for the increased number of employees can be the higher requirements for product testing during quality control (QC). QC employees do not contribute anything to an innovative R&D process. Because

technology and staff are expensive, the pharmaceutical industry has invested more into R&D while the output did not necessarily improve.

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Most of the research is done in the fields of oncology, the central nervous system, infections and cardiovascular diseases. Those four therapeutic areas make up >50% of current R&D effort [18]. The incentives for the pharmaceutical industry to do research on a specific field are: ‘medical need’, ‘prevalence of a disease’, ‘technical feasibility’, ‘research and development costs’ (scope of clinical trials), ‘competition’ and ‘potential market share’ [1]. Considering the reasons to invest in R&D of a specific therapeutic area, it becomes evident that the pharmaceutical industry neither wants to feel nor can be responsible for covering all therapeutic areas. The industry invests in those areas that seem to provide a safe and high return on investment.

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Problems There are many reasons why current R&D is inefficient. One evident reason is that R&D has become more and more challenging. Up until 2013, >3000 synthetic or semisynthetic drugs as well as >200 biologics had already been developed [12]. Hence, uncomplicated drug targets are already well investigated and only a few unexplored areas remain [11]. In addition, many molecules are less soluble and less permeable [19], which complicates the formulation process. High costs, long duration and strict regulatory restrictions make R&D even more unattractive [20].

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Structural issues influence R&D as well. There are significant complexities when managing the LC. Growing companies and their associated bureaucracy complicate internal knowledge management. This way, ‘information silos’ arise with a missing cross-functional exchange of information. By contrast, there is a gap between R&D and commercialization [21]. Different company departments often do not cooperate effectively. Through better cooperation, R&D could profit from production expertise and needs, whereas the production could profit from a better product understanding. Additionally, the applicable screening methods must be applied wisely. It can be found in the literature that either phenotypic screening or targetcentric screening outclasses the other one depending on the stage of development of the API [22]. Swinney showed that both factors contribute to drug discovery: phenotypic screening is more successful for first-in-class drugs and target-centric screening for the discovery of follower drugs [22]. He explains that the molecular mechanism of action must be known to apply target-centric screening. Using a method at the wrong stage of development can have an impact on the high attrition rates in R&D. Furthermore, emerging markets challenge the western R&D departments. They cause a migration of production and R&D departments toward emerging economies [14]. Regulations, which might not be considered as strict, can attract unsatisfied European and US researchers. In emerging countries, they might have more freedom and might be taken more seriously. Nevertheless, the growth of western structures ensure quality  a factor that must not be forgotten [12]. The above reasons indicate the need for improvement. Although some of the problems can be solved more easily by creating better internal structures in the companies, external stakeholders, like regulatory bodies, cause further problems. Problem solving strategies Appropriate strategies must be found to address the various issues raised by external inputs (i.e., regulatory bodies, other companies) and internal structure and functioning. Because a pharmaceutical company usually cannot address all external issues it is essential to resolve internal ones first. These include closing the gap between R&D and production by crossfunctional teams on scale-up or processing and QC documentation. Also, it is recommended

to install functions that are responsible over the entire LC [13]. Besides these structural and functional improvements, R&D should embrace new approaches like computer simulations, open-source drug discovery and medicinal products for rare diseases.

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Computer models are of vital importance for pipeline management. They provide decision support by taking multiple aspects into account: cost, potential outcomes of clinical trials, probabilities, later commercial behavior and necessary capacities [23]. Thus, managers can be well informed beforehand and run through multiple scenarios in a time-efficient manner. Several research and case studies have been published about this field of product development pipeline management [10,23,24]. The white paper of the EFPIA MID3 working group provides an extensive overview about model-informed drug discovery and development (MID3) and addresses a broad readership. Decision makers are provided with information about the business value of MID3, a comparison of different approaches and a review of 100 case studies. Practitioners benefit from the elaboration of the implementation strategy, challenges and opportunities, as well as of the classification of the approaches’ impacts. Regulatory professionals find guidance about documentation of planning and reporting, QC and model evaluation and qualification [25].

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Even though the pharmaceutical industry is already leading in cooperating with academia compared with other science disciplines [12], a current trend toward open-source drug discovery and R&D research centers can be observed [13]. There is not only more cooperation between academia and the industry but also between different companies. The paradigm of combining internal and external ideas in R&D to stimulate innovation has become popular and is known as ‘open innovation’ [26]. It is contrary to the conventional, protective R&D activities. This trend is supported by the FDA Guidance for Industry ‘codevelopment of two or more new investigational drugs for use in combination’, which deals with combination therapies and favors collaborations [11,27]. Through collaborations, investments in basic research can be lowered because multiple parties benefit from innovations. Cooperation at a later stage do not cut costs but spread the risks between multiple stakeholders. Nevertheless, there are critics stating that these collaborations could lead to successful reprofiling and repurposing, but there are also cases described in which the new product endangered the original product [3]. Further sources of capital are crowdsourcing [28] or private foundations such as the Bill & Melinda Gates Foundation [29].

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As mentioned earlier, the prevalence of a disease is one of the important stimuli for the industry to do research. Research on rare diseases has increased, since regulatory bodies incentivized it. In 1996, ~15% of FDA novel drug approvals were for rare diseases (orphan drugs) – this figure increased to 20–25% in 2006. In 2016, 37% of the novel drug approvals were for rare diseases. As well as in common research, oncological products are of particular interest – since 2011, one-third to one-half of the products for rare diseases have been attached to the Office of Hematology and Oncology Products (OHOP) [30]. Management decisions Because business development together with R&D marks the starting point of a medicinal product, decision-making in the LC management starts as well. Strategies for capacity planning, especially for later production facilities, must be made. One must consider building new facilities or to simply refit an existing one [31]. Besides the technical progress, the intellectual progress must continue. After the first indication is found and preparations for preclinical studies have begun, it is fundamental to start directly with research about followup indications. One striking example is Humira® (adalimumab), a medicinal product by AbbVie against rheumatoid arthritis. Only 3 years after the first FDA approval, it was

approved for treating psoriatic arthritis and after one additional year it was approved for treating Crohn’s disease [6].

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Protection of intellectual property rights Patent protection guarantees the innovators market exclusivity for 20 years after application [32,33]. As mentioned earlier, it takes an average of 12–13 years to bring the medicinal product to the market. This means there are only 7–8 years remaining for commercialization. To apply for a patent, the innovator has to present a new, nonobvious finding, which must also be useful [32]. The patents cover ‘the discovery process, the products themselves and their production, formulation, delivery and indications’ [11]. Once the industry sees a chance to optimize the patent, ‘patent term restoration, patent term extension, patent term adjustment, trade-marking, enforcement of intellectual property rights through litigation and forming strategic alliances’ are common LCM strategies to profit as much as possible from a medicinal product [34]. Obviously, it is a sensible decision to find the best time to apply for a patent. If the innovator applies too early the time for commercialization is shortened. If the innovator applies too late, however, this offers competitors the chance to claim. Cevc presents an overview of initial costs for a patent application (in 2013) in Europe and the USA [32].

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Preclinical tests Preclinical tests, performed in vitro and in vivo, focus on the toxicology of the NCE. They cover ‘genotoxicity, safety pharmacology in all biological systems, single and multiple dose toxicity and toxicokinetic studies’. Additionally, reproductive toxicology studies in both genders and long-term carcinogenicity studies are performed before the pharmaceutical company can file a drug approval request [1]. To conduct preclinical tests, the pharmaceutical company must get a license; therefore, training, staff, facilities, experiments and a time period are predefined [32]. The assumed costs for preclinical trials out of the earlier named 21.2% of total costs [16] and DiMasi’s total cost of US$1.4 billion average out at almost US$ 300 million. This result is not comparable to Cevc’s extrapolated cost range of US$2.7–3.8 million [32], because Cevc only refers to one product whereas the other numbers also include the drop-outs. Additional considerations during preclinical tests must be made about new excipients. If the pharmaceutical company decides to use new excipients, it has to show physical characteristics, analytical tests, assays and data about toxicology for the drug approval test [35]. In this case, it is not only the API, which must be tested, but also each new excipient. This increases the R&D costs remarkably. An important LCM activity in the prelaunch phase is to create attention for the disease and the new treatment strategy through convincing thought leaders. Subsequently, they can exert their influence through publications and interactions [36]. These thought leaders are united to an advisory board by a physician relations manager. They also select key leaders who actually practice medicine [37]. Clinical trials After successful termination of the preclinical tests in animals, the IMP enters the clinical trials in humans to examine the interaction between the drug and the human body. The aim is to prove quality, efficacy and safety [38]. The first-in-human tests are performed during Phase I. Up to 100 healthy male probands [39] receive the IMP to gain knowledge about the pharmacokinetics (absorption, distribution, elimination) [10] and about the dose rates through an increase in the dosage. Since the first-in-human (FIH) study of the antibody TGN1412 in London 2006, probands receive the medication sequentially. TGN1412 was given to six probands in parallel and all suffered severe life-threatening conditions [40]. If the IMP is a

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cytotoxic drug, Phase I will be skipped [1]. A prevalent duration for a Phase I study is 12–18 months [39]. The subsequent Phase II trial commonly takes <24 months depending on the disease. For the first time, hundreds of patients are treated with the IMP to determine the efficacy and safety. It is also called a proof-of-concept study [1]. Also, more information about dose rates and short-term side effects are collected [39]. In Phase III studies, usually thousands of patients are included to further monitor efficacy and safety, as drug–drug interactions and human demographics. These studies take years to be completed and target randomized controlled trials in multiple countries and sites comparing the IMP to a placebo or ‘gold standard’ [10,39]. Different total times for clinical trials can be found in literature: on average between ~7–9 years [6,32,34,41] with an estimated overall clinical approval success rate of 30.2% for NBEs and 21.5% for NCEs [41]. More-detailed information about costs can be found in DiMasi’s article [15]. They additionally investigated success rates of 1442 products, which were first tested in humans between 1995 and 2007. It was revealed that 39.9% of the products were abandoned in Phase I, 34.1% in Phase II and 5.4% in Phase III. It must be mentioned that 12.6% were still active between clinical trials and marketing approval and that 7.1% succeeded in approval [15]. Besides a failure during the studies, other reasons for these high attrition rates are possible. First, the high financial risk [12] sometimes forces pharmaceutical companies to abandon IMPs to prioritize another one. Second, negative compound characteristics as inadequate half-life or a poor bioavailability can cause a stop [1]. During the clinical trials, long-term oncologic toxicological studies in animals are performed [10]. Also, market research [10] is done and further supportive Phase I studies start whenever the Phase II or III trials are reached [1]. Decisions about facility building or expansion, storage and production questions are addressed during Phase II studies [39]. Outsourcing clinical trials to CROs has become a trend. This way, pharmaceutical companies dispose of the complicated and complex organization of clinical trials [21]. A further trend concerning clinical trials is pharmacometrics. Pharmacometrics is a useful tool to describe the pharmacokinetics and pharmacodynamics of NCEs, for example for predicting different dosing regimens and patient populations. Mathematical models have the potential to ease planning and to tighten clinical trials [42].

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Within the EU, clinical trials must be conducted in accordance with Directive 2001/20/EC. This directive regulates the application of good clinical practice (GCP) and the execution of clinical trials. Article 6 addresses the ethics committee and article 9 explains that a statement of the ethics committee must be in possession in order to apply for a request for authorization. A decision about the request must be made within not more than 60 days [43]. In 2019, Clinical Trial Regulation 536/2014 will come into operation and displace the current directive. The process in the USA is similar. The innovator submits documents about preclinical data, manufacturing information, study plans, data concerning prior human research and information about the investigator. The FDA has 30 days to scrutinize the investigational new drug application (INDA) [2]. The different abbreviations in the EU and USA are listed in Table 1.

The LC of a medicinal product: approval Whenever all necessary information is available, the pharmaceutical company submits it to the regulatory bodies. Meanwhile, the actions for commercialization such as facility building, price negotiations and marketing activities start or continue [10]. The pharmaceutical company must also decide which market the new medicinal product will be introduced to. Depending on the market and the product knowledge, different drug applications are completed. Directive 2001/83/EC and its amendments are valid for the EU and Section 505 of the Food, Drug and Cosmetic Act in the USA [3]. In the EU, one can choose to submit a

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marketing authorization application for the entire EU by a centralized procedure or for selected countries by a mutual recognition procedure [1]. While scrutinizing, regulatory bodies stay in close contact to the innovator and can request more information. The innovator also provides a substantiated Phase IV study, also called a pharmacovigilance study in Europe; this proves safety, monitors side effects and provides risk management [1]. On average, it takes 322 days to receive an approval by the FDA and 366 days by the European Medicines Agency (EMA) [32]. To shorten the review time, the possibilities of electronic common technical documents, quality by design (QbD) or priority reviews are given [34]. Another option for authorization is to reach an orphan drug status for the product. The status eases R&D and guarantees a market exclusivity of 7–10 years depending on the regulatory body [44]. This advantageous fast-track way was created to increase the industry’s interest in rare diseases (<200 000 patients in the USA) [1]. The example of MabThera® (rituximab, Roche) shows that orphan drugs can become highly profitable, yielding almost US$7 billion [12], and that orphan drugs sometimes take pioneering positions [44]. Prajapati and Dureja state this as ‘the most crucial phase’ [6] because of the high dependency of the regulatory bodies. The innovator has the option to seek official guidance throughout the entire R&D phase, which can provide security in advance. The FDA offers companies support (e.g., to enhance research for the pre-IND application) in designing large Phase III studies or for assessment of the IND application. This way, the clinical trials seem to be less controllable. Once the approval has been granted, the innovator is obliged to ask for permission for any critical change [11]. This makes post-approval changes stiff and time intensive. The FDA recognized this problem and supports companies in adopting modern methods as QbD approaches or advanced production methods [45].

The LC of a medicinal product: commercialization

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Finally, after overcoming all previous hurdles, commercialization starts. From this moment, the launched medicinal product must compensate for the invested resources at a minimum. Commercialization usually follows a well-described course. The market entrance is followed by a fast growth phase in which the market share increases. At some point, market share and return [6] reach a maturity stage with slow growth. Whenever unfavorable influences end this phase, the decline phase is heralded. Schöffski et al. visualized the LC, having time on the x-axis and sales on the y-axis. The obtained graph looks like a broad standard normal distribution with a slower growth rather than decrease [8]. The most decisive factors for commercialization are a convincing process design, a well-planned and implemented marketing strategy, appropriate pricing and an unobstructed operating supply chain. Table 2 overviews the different LC phases and the associated strategies.

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Process design Process design is essential for a successful commercial manufacturing process. Plans about the process itself, the necessary machinery and the material flow for and inside the manufacturing site become developed for production on the commercial scale [46]. Typically, the planning occurs during Phase III studies and is implemented after the successful finish [10]. The timeline is tight, especially when demands change [47]. This raises the question of an earlier start of process design. The state-of-the-art pharmaceutical production processes is a divided process. In the first step – primary production – the API is produced on one site. The API, meeting all

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specifications, is transported to another site. There, it is processed with the excipients to the final formulation. This procedure is called the secondary production [31]. When developing a manufacturing process, it has to be taken into consideration that a production plant usually serves the production of multiple products [48]. Therefore, the process must either run with little retooling on an existing plant or should be compatible with existing or future production processes. Key technologies and the according requirements were named by Behr et al. in 2004 [47], whereas Federsel listed specialist divisions [13]. The importance of a successful process design becomes evident when reviewing the total costs. In the early 2000s, 30% of the total costs were caused by the manufacturing process [47]. Additionally, there is a growing interest in sustainable, environment-friendly manufacturing [49]. Hence, pharmaceutical companies must succeed in designing greener, more-efficient processes.

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The implementation of QbD and process analytical technology (PAT) has become part of process design. These terms describe the attempt of regulatory bodies to support the pharmaceutical industry in implementing innovative manufacturing processes with better product and process understanding. QbD is a control system and the advancement of extended monitoring technologies for critical quality attributes (CQAs). So far, a product moves to the next manufacturing step whenever the quality was proven by tests in an inprocess control. It is a lengthy and regimented process. The novelty of QbD is that CQAs of the product and critical process parameters are defined. The associated knowhow is used to create a specified surrounding, called the design space, during the manufacturing process. The technical realization results from PAT: in-process testing controls it with mathematical and knowledge-based models. In case of deviations from the defined specifications, the system identifies the cause, corrects it and is able to take further steps to transfer the faulty product into a specification-meeting one [46]. QbD is an opportunity for regulatory bodies and pharmaceutical companies to produce safer products more effectively and efficiently. Nevertheless, the pharmaceutical company must initially invest more resources in product and process understanding. The current trends for manufacturing processes are process intensification (PI), modularization, ‘pull’ production and continuous manufacturing. They aim to reach goals described above: reduce production time, energy and/or costs. Process engineers can apply for one or a combination. This creates confusion and makes it difficult to distinguish between them.

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Stankiewic and Moulijn defined process intensification as ‘any chemical engineering development that leads to a substantially smaller, cleaner, and more energy-efficient technology’. According to the high citations, their point of view is well established. PI also aims to reduce the required space on the site. They further state that PI is limited to engineering methods and equipment. Any change of the inner process is not included [50].

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Modularization is an approach in which the production process is split into single parts, called modules. The modules are standardized and include specific parts of the production (e.g., the granulation process). One of the most important advantages of modularization is that the changes in the production facility can be implemented easily by exchanging, adding or removing single modules. This way, the pharmaceutical company does not need to build the production facility for the expected peak market supply. Instead, it can start with a smaller production facility and scale up whenever necessary by adding further modules [47]. This enables scaling up the production without scaling up the process. As early as 2004, Shah emphasized the importance of a ‘pull-based’ API production [51]. ‘Pull’ production is well implemented in the automobile industry. The products are produced on demand instead of for stock. The demands for supply chain and flexible manufacturing equipment are

challenging. However, ‘pull’ production offers the opportunity to reduce the cost-intensive storage times.

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The last-mentioned trend is continuous manufacturing. Commonly, medicinal products are produced in batch mode. The product evolves from one production step to the next one whenever the first step is finished completely. In a continuous production, however, there are no interruptions between the process steps (Figure 3). Those continuous processes offer the opportunity to save production time, energy and costs. It reduces batch-to-batch variations, the ecological footprint and time-to-market because it simplifies the scaling up process. Challenges, especially in process control [52] and cleaning [53], can occur. Existing processes cannot be transferred into continuous ones without process redesign and revalidation [53]. Therefore, pharmaceutical companies must consider carefully whether the high investments will pay off. Its significance was shown by a survey, which was conducted in eight of the largest pharma companies and an intermediate supplier in 2012. Except for one company, all have been working on continuous processes either in pilot plants or at production scale. Furthermore, the continuous processes were addressed to regulatory bodies by one-third of the companies [54]. It is essential that the staff working on continuous manufacturing filings in the regulatory bodies possess the expertise to evaluate and advise the pharmaceutical companies [55].

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There are promising examples of the discussed strategies. One prominent example is the collaboration between the multinational pharmaceutical company Novartis and the private research university Massachusetts Institute of Technology (MIT): the Novartis-MIT Center for Continuous Manufacturing. Their project covered an integrated end-to-end pilot plant [31]. Within one site, four continuous manufacturing processes were established to produce finished tablets from raw materials [31,56]. Much research was done by this pilot plant. The subjects covered economic analysis, process simulations, capacity planning, as well as control strategies [31,38,52,56–58]. Further examples for research centers are ‘INVITE’ of Bayer Technology Services and the TU Dortmund University [49], or the ‘F3 Factory’, a collaborative research program funded by the EU [59]. Both address the topic of modularization.

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Marketing Marketing for pharmaceutical companies is complex. It must appeal to multiple stakeholders and fulfill different requirements to expand the market share. The stakeholders involved are professionals such as physicians and nurses, health insurance providers and patients [6]. These stakeholders prioritize aspects of marketing differently. Because patients prioritize the reputation and trust in the company, companies have an increasing interest in being transparent and having high ethical standards. This can be seen in the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) code of practice. The IFPMA states, among other things, that ‘promotion must be ethical, accurate, balanced and must not be misleading. Information in promotional materials must support proper assessment of the risks and benefits of the product and its appropriate use’ [60]. Therefore, the industry implemented self-regulation [60]. Industry tries to provide professionals with confidence by the earlier mentioned thought leaders, free samples and visits. Further attempts are additional clinical trials, e-mail promotions or direct contacting [12]. It also has to be considered whether the product is an over-the-counter (OTC) drug – only OTC drugs can be advertised directly to the customer in Europe [33]. The fact that the industry spends enormous sums on marketing, according to Kleemann twice as much as on R&D [12], emphasizes the importance of marketing in LCM and raises the question of priorities. It could

also be debatable whether the ethical standards are high enough because small gifts such as labeled pens can subliminally influence physicians to prescribe products more often [61] regardless of any additional benefit to the patient. Although marketing is an integral part for any product, it remains a borderline case for medicinal products. Marketing is furthermore part of product launch strategies. Launch strategies can be divided into product strategies, market strategies and the company’s strategies dealing with the company’s culture and direction. All the above-mentioned aspects belong into the first category of product strategy in which branding and the image are focused. Competitors and market targeting for a staged launch [10] are of interest for market strategies [62].

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Supply chain management A functional supply chain constantly provides the different parts of the pharmaceutical company and its affiliates with information, maintenance and wares [37]. To do this, communication channels must be installed internally and externally, for instance to suppliers or physicians. Also, logistic flows must be planned and implemented. For multinational companies, planning of supply chain management is complex; especially in an industry in which outsourcing is of great interest. Thus, much work is done in computer modeling about this topic. The different models consider costs and timing of stocking, production and distribution of various products [48,51]. Thereby, supply chain management can be optimized and establish a basis for an unobstructed market supply.

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Pricing One further aspect of successful commercialization is pricing. The pharmaceutical company must consider multiple aspects when choosing a price strategy. On one hand, they must factor in the costs of the treatment of the disease in the market to set their price [63]. On the other hand, they must consider the prices of competitors’ own follow-up products and line extensions [33]. Also, pricing can have an impact on the attractiveness of a product for generic companies [36]. Besides these market aspects, regulatory aspects also play a part. Reimbursement agencies, such as the Institute for Quality and Efficiency in Healthcare (IQWiG) in Germany and the National Institute of Health and Clinical Excellence (NICE) in the UK do a cost–benefit analysis of the medicinal product, examine the efficiency and contrast it to the best treatment at the time. Depending on the result, the agencies can negate the price or even exclude the product completely from reimbursement [32]. Inlyta® (Pfizer), Yervoy® (BMS) and Zelboraf® (Roche) are examples of rejected medicinal products by NICE [12]. Therefore, cost effectiveness is considered to be the ‘fourth hurdle’ for the new product [64]. This and different patent expiration dates cause companies to choose different pricing strategies in different countries [36]. Moreover, pricing depends on the phase of the product’s LC. During introduction, a lower price is charged to increase sales. Afterwards, the price can be increased during the growth phase because of product improvements and decreased during the maturity phase [6]. The price strategies at the end of the LC will be described later. Patent expiry Once the patent expires, the innovator company faces two competitors: other innovative products in the same product group as well as generic versions of their own product [6]. Generic companies offer their products for as little as one-tenth of the original price. Therefore, market share and sales of the original product shrink drastically [65], as the sales reduction of 87% of Singulair® (Merck) in 2012 showed [12]. Original products containing small molecules are more affected than biologics, because manufacturing and analyzing of the latter pose higher demands. Nevertheless, first generic biologics, called biosimilars, are available. The EMA approved Remsima™ (Celltrion Helathcare) in 2013 as a biosimilar to

Remicade® (infliximab, MSD) and Truxima™ to MabThera® (rituximab, Roche) in 2017. The FDA approved Remsima™ in 2016 and MVASI™ in Autumn 2017 (Amgen) as biosimilars to Avastin® (bevacizumab, Roche).

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LC prolongation strategies To antagonize patent expiry, pharmaceutical companies seek possibilities to prolong the LC of their products. According to Kvesic, LCM in this phase is of vital importance. The companies commonly implement their LCM strategy globally and maintain internal transparency [33]. The strategy can include differentiation, an own generic product, contract settlements, divestiture, pricing strategies, switch from a prescription to an OTC product and maximizing brand loyalty. Any of these tactics can be used complementarily and at different phases of the LC [66].

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Differentiation is the development of a follow-up product based on an existing molecule. The new product offers improvements, such as lower cost, higher safety, new therapeutic areas or more patient comfort. By implementing new dosage forms, fixed drug combinations (FDCs) or addressing new indications, the innovator company optimizes its product, and could apply for a secondary patent that hinders generic products [65]. However, some companies misuse these opportunities for evergreening and patent numerous characteristics [34]. It is the least complex option of differentiation to implement a reformulation; however, it also protects the least from generics. Nevertheless, drug delivery, modified release dosage forms, new dosages or synthesis techniques are used for the reformulation. The aforementioned strategy of finding new indications is a costly, long process that protects efficiently against generics and addresses further markets. The cost:value ratio of FDCs is between reformulations and new indications [65]. An FDC provides great benefit to the patients; they can reduce the number of intakes while using synergistic therapeutic effects to lower the risks and doses. Also, the healthcare system profits from lower administrative costs and co-payments [3]. The FDA emphasizes the meaning of FDC with its Guidance for Industry about ‘new chemical entity exclusivity determinations for certain fixed-combination drug products’ [66].

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One further option is to bring an ‘own generic’ product to the market. If the company is the first one in the USA, the FDA grants 180 days of market exclusivity [67]. Because the product including production and the supply chain are well known and already established, only low investments are necessary for the innovator company. It is the main reason big research companies own generic companies to produce their expired products, for example Novartis with Sandoz [33]. The big companies are attracted by the steadily growing generic market and some believe that the big companies will take control of this market [12].

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For a lower investment, the innovator company can contract a generic company. The exchange of knowledge and payments has increased over the years, as shown in the 7th Report on the Monitoring of Patent Settlements of the European Commission. In the early 2000s, an average of 24 patent settlements were made, the number has increased since 2008 up to 183 in 2012 and 125 in 2015. Furthermore, it is stated that 40% of the originator companies entered into patent settlements [68]. Whenever the company does not have any interest in keeping the product, for example if the product does not fit the company’s portfolio, divestiture is an option. Only minimal investment is needed and divestiture is an option at the late stage of the LC [69]. Choosing the right pricing strategy is another central aspect. The strategies vary depending on the country, its reimbursement agencies and the policies. Price cutting before patent

expiry enables the originator to strengthen their own status and the relationship to all stakeholders [36]. Furthermore, it makes the product less attractive to generics. After losing patent protection, three options are available. First, the innovator can sustain the price policy while having the risk of a smaller market share. Second, they can lower the price policy to compete with generics. And third, the innovator can raise the price to earn more for a short period of time [33] and reach for price-insensitive patients [5].

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A switch from a prescription to an OTC product is possible if the product treats a selfdiagnosable illness and if the product has a low potential for abuse. This allows direct customer advertising in the EU and might therefore extend the market share. Prominent examples can be found within antacids [33] or antihistamines. The switch should occur before patent expiry to ensure that the product remains well established and known. This is even more important because patients pay for OTC products themselves. OTC products however are subject to lower prices, require great market size and are not feasible for every treatment [69].

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Throughout the protected phases of the LC, the innovator tries to maximize brand loyalty. Companies achieve this through advertising with supporting scientific data. It is more challenging for generic companies to create confidence [33]. One hurdle to creating loyalty is that advertising to the patients is not possible in each country. There the innovator must address multiple stakeholders. It was also shown that the more severe the indication is the less likely it is that patients are willing to use a generic product. Hence, the loyalty depends on indication as well [69]. One striking example for successful LC prolongation is Adalt® (nifedipin, Bayer). It was launched in 1975 with the initial patent expiring 1985. Bayer used all named categories of differentiation, patent settlements, pricing strategies and maximized brand loyalty [36]. Even 30 years after the first patent expiry, Adalt® is still on the market. Thus, this case study proves the success of strategic LCM.

The LC of a medicinal product: market withdrawal

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Whenever all the before-mentioned strategies are utilized and sales diminish, or whenever safety issues or severe side effects occur [4], the pharmaceutical company must consider market withdrawal. When this occurs, the price must increase to maximize profit and to convince patients to switch to different products. The end result is that the weakest products are withdrawn, advertising is adapted and only the main product remains [6].

Concluding remarks and future perspectives

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The pharmaceutical industry is under immense pressure. External stakeholders like regulatory bodies enforce high investments in R&D, QC and quality assurance, whereas competitors of emerging countries increase pricing pressure. Meanwhile, personalized medicine and distributors requesting more-frequent but fewer quantity deliveries cause decreasing batch sizes. This endangers the profitability of manufacturing because of high fixed costs. However, pharmaceutical companies cannot control any of these factors. Therefore, the remaining factors must be scrutinized even more carefully. Figure 4 shows the timeline of the LC with typical challenges. The factors the industry has an impact on can be found in the colored square in the figure – only during the R&D phase. This phase is too costly and time-intensive, having little success. Reducing costs is difficult to execute, because growing regulatory requirements is the main cost driver. Requirements grow because of incidents, such as the FIH study of TGN1412 [40], causing an extended study time and higher expenses on staff and logistics. Because the industry cannot influence regulatory demands it must focus on reducing the time. The earlier mentioned LCM

strategies compensate isolated issues rather than address the topic of a shorter time-tomarket holistically. Hence, the question is: what could a holistic attempt look like? One possible approach could be the expansion of simulations from R&D and supply chain management to a simulation of the entire LC. The more data available the better management strategies can be chosen. The aforementioned management strategies aim to bring a medicinal product to the market as fast as possible and to expand the time-to-market withdrawal. This way, pharmaceutical companies can optimize the LCM while taking internal and external influences into consideration.

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Conflicts of interest The authors have no conflicts of interest to declare.

Acknow ledgments

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Stefanie Hering gratefully acknowledges the financial support of the Topmedicare GmbH, Saarbrücken Germany.

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Biography Stefanie Hering

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Stefanie Hering is an external PhD candidate at the Department of Pharmacy at Saarland University and works for the contract manufacturer Topmedicare GmbH in research and development. She graduated in pharmacy at GoetheUniversity Frankfurt (2015) after absolving internships at Roche Diagnostics Deutschland and in quality assurance at AbbVie Deutschland.

Frank Stieneker

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Frank Stieneker is a pharmacist and received his PhD in pharmaceutical technology. He has >30 years professional experience within the pharmaceutical industry, authority and consultancy organizations. Focusing on pharmaceutical development, manufacturing and implementation of quality systems worldwide. He is an expert in the fields of vaccines, ATMP and aseptic processing.

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Claus-Michael Lehr

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Claus-Michael Lehr is Professor at Saarland University as well as cofounder and head of the Department of Drug Delivery at the Helmholtz Institute for Pharmaceutical Research Saarland (HIPS). He has also been cofounder of Across Barriers and acts as CEO of PharmBioTec, a not-forprofit contract research subsidiary of Saarland University. The research theme of Prof. Lehr’s team is noninvasive, often nanotechnology based, drug delivery across biological barriers, in particular the epithelia of the gastrointestinal tract, the skin and the lungs. Prof. Lehr is (co)author >350 papers with >12 000 citations (h-index = 67). He is co-editor of European Journal of Pharmaceutics and Biopharmaceutics and has been the initiator of the International Conference and Workshop series ‘Biological Barriers’ at Saarland University. The British magazine The Medicine Maker rates him, for the fourth time, as one of the top 100 most influencing drug researchers in the world.

Figure legends Figure 1. Targets of lifecycle management. The lifecycle (LC) of a medicinal product can be divided into four main phases (blue boxes) and partly further (white boxes). The red arrows illustrate the time in the LC that needs to be minimized whereas the green arrows illustrate

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the one to maximize.

Figure 2. Pressure on the pharmaceutical industry. (a) As a result of reimbursement

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agencies [12] market prices decrease. (b) By enabling optimal therapy for patients, individual medicine causes smaller patient groups for companies [70]. Hence, smaller batch sizes can

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Figure 3. Batch vs continuous production. A production of ten items (circles) consisting of

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one item per process step. Top: the items are processed in a traditional batch production. Before entering the next process, all items must be finished in the previous one. Bottom: the

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Figure 4. Typical challenges faced during lifecycle. The horizontal direction indicates the

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lifecycle of a medicinal product and the exclamation marks assign the associated challenge of each phase. The red square points out the challenges on which the industry has an impact

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Table 1. Abbreviations in preregulatory approval EU and US documents Refs

US

Clinical trials

Investigational [64] medicinal product (IMP)

Investigational [66] new drug (IND)

Approval for clinical trials

Investigational [64] medicinal product dossier (IMPD)

Investigational [66] new drug application (INDA)

Approval for marketing

Marketing authorization application (MAA)

New drug application (NDA)

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Phase

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according to the EMA [71,72] in the EU and the FDA [73] in the USA.

Table 2. Lifecycle management strategies Phase

LCM strategy

LCM goal

R&D

Simulations for pipeline management [6]

Shorten time-to-market

Rare disease or orphan drug status [7]

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Open source drug discovery [8] Pharmacometrics [44]

Commercialization

Process design 

Shorten time-to-market and extend time-to-market withdrawal

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QbD and PAT [10,47]  Process intensification [[48]  Modularization [11]  Pull production [49]  Continuous manufacturing [35] Simulations in supply chain management [14,49]

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Approval

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Pricing [37,40,58]

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Differentiation [62]   

New formulations Indication expansion Fixed-dose combinations Own generic product [61]

Extend time-to-market withdrawal

Patent settlements [18] Divestiture [62] Pricing strategies [40] Rx-to-OTC switch [62] Maximizing brand loyalty [17] Market withdrawal

The LCM strategies are summarized and assigned to the LC phase and LC goal.

Abbreviations: LC, lifecycle; LCM, lifecycle management; OTC, over the counter; PAT,

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process analytical technology; QbD, quality by design.