Pharmaceutical Companies Will Use Virtual R&D to Increase Innovation and Reduce Commercial...

Pharmaceutical Companies Will Use Virtual R&D to Increase Innovation and Reduce
Commercial Deficit, According to New PricewaterhouseCoopers Report, Pharma 2020

NEW YORK, June 20, 2008 (PRIME NEWSWIRE) -- By 2020 the pharmaceutical research
and development (R&D) process may be shortened by two-thirds, success rates may
dramatically increase and clinical trial costs could be cut substantially,
according to a report issued today by PricewaterhouseCoopers entitled Pharma
2020: Virtual R&D, which path will you take?

The report forecasts that new computer-based technologies will create a greater
understanding of the biology of disease and the evolution of 'virtual man' to
enable researchers to predict the effects of new drug candidates before they are
tested in human beings. Along with changes underway in the regulatory and
socio-political environment, this will enable the pharmaceutical industry to
overcome one of the most fundamental issues it needs to resolve over the next
decade: The lack of innovative new drugs being introduced into the market.

As outlined in PricewaterhouseCoopers' previous report Pharma 2020: The Vision,
the pharmaceutical industry is at a pivotal point in its evolution, particularly
in relation to R&D. The patents on many medicines launched in the 1990s will
expire over the next few years, leaving pharma very exposed. Only four out of
the top 10 companies have enough products in their pipelines to fill the
impending revenue gap.

"Plummeting productivity of effective novel treatments in the lab means
incremental improvements to R&D are no longer enough," said Steve Arlington,
PricewaterhouseCoopers' global pharmaceutical and life sciences industry
advisory leader. "The resulting commercial deficit in pharma has enormous
implications for the industry, society and governments as a whole. To remain at
the forefront of medical research, help patients live longer, healthier lives
and deliver the revenue returns shareholders have come to expect, pharma needs a
faster, more predictive way of testing molecules before they go into humans."

"Equally, as a society we must acknowledge that we cannot afford to suffocate
the investments made by the pharmaceutical industry in R&D; a concern that
should be high on the socio-political agenda," added Arlington. "We have to face
the issue that if pharma is no longer financially capable of this, there is a
question where the next new medicine will come from."

'Virtual man' could ultimately evolve from the deployment of existing
technologies that are connected in a new way. Some companies using virtual
technology have reduced clinical trial times by 40 percent and reduced the
number of patients required by two-thirds. Models of the heart, organ, cells
systems and musculoskeletal architecture are already being developed by
academics around the world. Such technologies can be used to simulate the
physiological effects of interacting with specific drugs and identify which
drugs have a bearing on the course of a disease.

Of course, virtually-modeled molecules will still have to be tested in real
human beings. However, as a complete picture is developed of human biology and
as reliable biomarkers for identifying and monitoring patients become widely
available, pharma companies will be able to optimize their trial designs and
minimize the number of patients on whom new medicines are tested. They will
develop treatments that have value in the eyes of patients, healthcare payers
and for the companies themselves.

The necessary in-depth knowledge about the human body and the pathophysiology of
disease will be generated through a collaborative research network of
pharmaceutical companies, academia, independent research houses, IT providers,
industry regulators, payers and providers. For the first time pharma will have
to consider sharing intellectual property (IP) with other research bodies and
potentially new entrants such as IT providers.

By 2020, decisions about reimbursement and licensing will fall under the
auspices of regulatory bodies that are much more aligned with industry and other
stakeholders. By 2020, the cumbersome, all-or-nothing approach will be replaced
by a cumulative process, based on the gradual accumulation of data. Once there
is sufficient evidence to show that a medicine genuinely works and is cost
effective in the initial trial population, the regulator will be able to issue a
"live license", allowing the sponsoring company to market the treatment on a
restricted basis. With each incremental increase in evidence of safety, efficacy
and value, the regulator will extend the license to cover more patients,
different indications or different formulations, the study predicts.

The pharmaceutical industry requires assistance in the form of better incentives
to research and develop medicines that prevent or cure disease. Today the
industry IP frameworks do not provide the incentives needed to alter the agenda
from one of treatment to that of prevention and cure, note the authors.

"New technologies can play a major role in helping pharmaceutical companies move
forward -- enhancing its ability to produce treatments that deliver measurable
improvements in safety, efficacy and ease of compliance - treatments that have
value in the eyes of healthcare payers as well as those of the companies making
them," said Anthony Farino, PricewaterhouseCoopers' U.S. pharmaceutical and life
sciences advisory leaders. "They will also deliver substantial savings -- they
could collectively halve development times and attrition rates, thereby reducing
costs per drug dramatically.

He added, "Technology is not the answer to all pharma's problems. Many companies
as well as the infrastructure of regulators and vendors that support the
industry will have to make significant strategic, organizational and behavioral
changes. Overhauling R&D requires a decision on whether the organization wants
to produce mass-market medicines or specialty therapies, where they want to be
located geographically to have access to the best skills or cost base and
whether they want to outsource most of their research and development or keep it
in-house. The choices they make will have a profound bearing on the business
models and mix of skills they require as well as the skills of those who support
them. Connectivity - technological, intellectual and social - will ultimately
enable us to make sense of ourselves and the diseases from which we suffer."

About PricewaterhouseCoopers' Health Industries Group

PricewaterhouseCoopers' Health Industries serves as a catalyst for change and
the leading advisor to organizations across the health continuum, including
payers, providers, health sciences, biotech/medical devices, pharmaceutical and
employer practices in the public, private and academic sectors. With a
distinctive approach that is collaborative, multi-disciplinary and
multi-industry, PricewaterhouseCoopers draws from its broad perspective and
capabilities across and beyond the health industries to help solve the array of
emerging complex problems health organizations face, lead cultural and clinical
transformation, and create a new sustainable model for care delivery that is
quality-driven, patient-centered and technology-enabled.

PricewaterhouseCoopers' Health Industries' clients include both 40 of the top
100 hospitals in the U.S. and 16 of the 18 best hospitals as ranked by U.S. News
& World Report; all 20 of the world's major pharmaceutical companies; all of the
top 20 commercial payers in the U.S.; municipal, state and federal government
agencies and many of the world's preeminent medical foundations and
associations.

PricewaterhouseCoopers has a network of more than 4,000 professionals worldwide
and 1,200 professionals in the U.S. dedicated to the health industries. Our
health industries professionals include a cadre of physicians, nurses, ancillary
health providers and some of the nation's leading minds in medicine, science,
information technology, operations, administration and health policy.

About PricewaterhouseCoopers

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax
and advisory services to build public trust and enhance value for its clients
and their stakeholders. More than 146,000 people in 150 countries across our
network share their thinking, experience and solutions to develop fresh
perspectives and practical advice.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP or, as the context
requires, the PricewaterhouseCoopers global network or other member firms of the
network, each of which is a separate and independent legal entity.

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CONTACT: PricewaterhouseCoopers LLP
Clare Chachere
(512) 867 8737
clare.cachare@us.pwc.com

The Hubbell Group, Inc.
Lisa Stearns
(781) 878-8882
lstearns@hubbellgroup.com