Reports abound of an apparent innovation crisis in the pharmaceutical sector, with some sources citing escalating drug development costs, declining new drug approvals, and an increasingly stringent regulatory environment. Concurrently, commentators refer to the death, or at least the decline, of the blockbuster model of drug development—where large, brand-name pharmaceutical companies rely on a portfolio of drugs that gross more than U.S. $1 billion per year—which has dominated the pharmaceutical sector for decades.
In this evolving drug development environment, many pharmaceutical companies are now shifting strategies. They have traditionally shied away from smaller drug markets due to the revenue limitations presented by the reduced patient base. But many are now aggressively pursuing the rare disease market. According to the U.S. Food and Drug Administration, nearly 200 drugs for the treatment of rare diseases enter development every year and further, about one third of new drug approvals are used in the treatment of rare diseases. At the same time, rapid advances in genomic technologies and new discoveries in the field of pharmacogenomics (the study of the influence that genetic factors play in drug response) has spurred the trend toward “personalized medicine.” More and more pharmaceutical companies are now pairing drug products with companion diagnostics that can stratify populations based on an individual's genetic predisposition to respond to drug treatments. Pharmacogenomics contributes to the establishment of niche markets by targeting patient subsets with particular genetic biomarkers, thereby stratifying broader disease categories into rarer disease genotypes.
In an article entitled Why the Shift? Taking a Closer Look at the Growing Interest in Niche Markets and Personalized Medicine recently published in the journal World Medical and Health Policy and now available on SSRN, we (Shannon Gibson & Trudo Lemmens, together with Hamid Raziee) report on a Genome Canada funded study that aimed at exploring the trends that are contributing to the growing interest of the pharmaceutical industry in niche markets in general, and pharmacogenomics in particular. Drawing on both a review of relevant literature and the results of a qualitative study of 34 key Canadian stakeholders (including drug regulators, funders, scientists, policy experts, pharmaceutical industry representatives, and patient advocates), the article explores the major trends that are reportedly contributing to the growing interest of the pharmaceutical industry in niche markets. We take a closer look at some of the potential advantages to industry in these markets, but also illustrate some of the important implications and risks that arise from the increasing pursuit of niche markets and pharmacogenomics. The pharmaceutical industry typically highlights the advantages for patients of targeting drug therapies and of addressing unmet medical need in smaller patient populations. But it is also clear that industry has a significant interest in capitalizing on new opportunities for profit in these niche markets, which raises potential policy and ethical concerns, which we discuss in our paper.
This work was part of a project on Ethical and Legal Issues of Cancer Initiating Stem Cell Research, funded by Genome Canada, through the Ontario Genomics Institute.
Shannon Gibson & Trudo Lemmens
