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Niche work, if you can get it
"The blockbuster is dead." "I have come to bury the blockbuster, not to praise it." For more than a decade, market analysts and media specialists (me included) have cried out to the wilderness about the death of the blockbuster model on which the pharmaceutical industry has relied for its livelihood. The marketplace has loosely defined a blockbuster as any drug that generates more than $1 billion in revenue annually.
The arguments against the blockbuster model suggest that it stifles basic R&D by shifting funds from discovery to sales and marketing and thereby forcing discovery scientists to only work on drugs or drug indications with potentially huge markets. And by trying to target the widest patient population, companies are forced to cease development of compounds that might help a smaller population but have negative indications for the larger population, thereby increasing the cost of drug development because of late-stage attrition. And finally, because of these high development costs, drug companies are forced to charge prices that will allow them to recoup their costs and allow for the tidy profit that investors demand.
And so the negative feedback loop continues; a loop that cannot possibly be sustainable in the long term. (Oops, did I just say the sky is falling?)
The advent of technologies that will allow researchers to better target specific drug candidates to specific patient populations is supposed to help us break out of the blockbuster model. Call it pharmacogenomics. Call it biomarker analysis. Call it the personalized medicine paradigm. The bottom line is that many of the drug candidates that would have once been thrown in the trash bin for wide-scale negative indications might now be resuscitated for use in smaller patient populations. Lemons into lemonade.
Recently, however, I came across a sign that while our technologies are advancing to the next stage of drug discovery and development, our collective mindset may be just as stuck in the blockbuster mode as ever. The sign? The development of a new term—nichebuster—used to describe drugs that target very specific conditions experienced by very limited patient populations yet still have the capacity for large payoffs.
The poster-child nichebuster, as described in a recent Datamonitor report, is Novartis's cancer drug Gleevec. As market analyst Dr. Mark Belsey explained, the drug was initially approved in 2001 for the treatment chronic myeloid leukemia, making it a classic niche player. This would be perfectly fine, except in the next breath, Belsey derails his own argument.
"Despite the fact that this was a niche indication with a small patient population, it generated $2.2 billion in annual global sales by 2005," he says in announcing the report. "Part of its success is that it has since been approved for other oncological diseases as well, even though these are also niche indications."
First, by the simplistic revenue-based definition of a blockbuster, Gleevec is a blockbuster. Second, if the drug has been approved for use against a variety of cancers, can we not just call it an anti-cancer drug and move it into the therapeutic blockbuster category? If not, perhaps we should call aspirin a nichebuster because it treats headaches (a niche), toothaches (a niche), joint pain (a niche), and limits the impact of cardiac arrest (a niche), to name a few.
We are apparently still looking for that game-winning home-run ball. To set Gleevec as the standard for niche-targeted drugs is to doom the concept from the outset. Now, we're looking to turn lemonade into caviar.
The very concept of being a niche player is predicated on the idea that a drug will only be a "buster" to the people seeing benefit from the drug, which is why it has been such a difficult (and typically unpopular) business proposition to date. As such, until we can remove "buster" from our pharmaceutical vocabulary, we will be doomed to repeat the business models of the past.
In future editorials, we'll revisit this challenge and see if we can't come up with ways around the dilemma…reader input is very welcomed.
In the meantime: The blockbuster is not dead, it just has a new public relations firm.
[Note: In fairness to Belsey and Datamonitor, I did not read the entire report and am making these statements based on the report synopsis and press release.]
OUR READERS RESPOND
RE: Out of Order: Niche work, if you can get it; November 8, 2006, DDN Online
The blockbuster is what led to the fragmentation of the semiconductor suppliers in the late '90s. With large expectations, many worthwhile products were shelved and productive fabs running non-blockbusters were sold and mothballed. This opened the door for foundries. There seem to be many parallels.
Tom Wetteroth, Engineer, GE Healthcare
(previously at Motorola's SPS division)