Biopharmaceuticals And Medical Devices: A General Overview IV (Intellectual Property, Regulatory Submissions, Commercialization)

Drugs Part I

Drugs Part II

Medical Devices 

Today I would like to review some processes which are across both Drugs and Medical Devices. These processes happen across multiple portions of the processes.

Intellectual Property

(Note: I  am not a lawyer.  This is not legal advice.  These are observations based on my experiences in the industry.)

The key to the entire biopharmaceutical is intellectual property (IP):  without the sole right to a particular compound or device, there is little incentive to develop it due to costs and time. 

Timing of the filing of the patent (in the U.S.) is critical.  There needs to be enough information to clearly differentiate the compound or idea from all others.  But U.S. patents run for 20 years:  do it too early and you will lose market time due to overall time lengths of development (more on that tomorrow); do it too late and the risk is that another company or individual will be first to file the patent.

As part of this process, when a compound or concept is believed to be viable, a patent search is conducted to make sure that the thing has not already been patented.  These are searches are critical and are not as bullet proof as you might think.  Sometimes development work happens and it is discovered that a patent already exists for the compound, costing time and money (and sometimes, the jobs of the people that missed it).

Once the patent is secured, IP becomes a tightly guarded secret.  Access is limited.  There are annual trainings to remind all employees about the importance of it.  Does industrial espionage happen?  Possibly, although you do not hear a lot about it.  You are more likely to read about patent infringement, where one company believes another company has used part or all of its patent (of note, this is most often with large corporations and highly profitable products.  No-one, for example, is fighting over the antacid market.).

Another way IP is used is to purchase the right to use parts of a patent.  This can help where certain things like particular device attributes are already developed by another company or where there is already an existing cell line or cell scaffold; why reinvent the wheel?  For these items there is usually an up front payment, a series of milestone payments based on advancing through the development process, and then a percentage of any profits.

Regulatory Submissions

Ultimately, the purpose of all of the development and clinical trials/clinical validation is to have an approved product. To do this, one must get the approval of the appropriate regulatory body.  For the U.S., it is the Food and Drug Administration (FDA).

To be clear, no company shows up at the end of the process and says "Here is our submission!  Approve away!"  Interactions with the FDA - often referred to in the industry as "the Agency" - start very early in the process.

The FDA encourages this sort of interaction.  It serves the primary purpose of protecting human health (by preventing bad ideas or products from moving forward) and moving products to market in an expeditious fashion (by providing guidance).

While one cannot just ring up the FDA for an ask, there are definitely defined touch points.  One has to get an identification number for the Drug or Medical Device, which will start the process.  To allow the product into clinical testing, one files an Investigational New Drug Application (IND) or Investigational Device Exemption (IDE).  After each phase of the clinical trial, the FDA is usually consulted (So called "End of Phase X" meetings).  Other interaction may occur due to need or due to specialized programs where the FDA encourages interactions to speed up the process, such as Breakthrough Therapies or Breakthrough Devices.

But hopefully, after all the work is done, a final approval submission can be made.

The submission packages, of course, are standardized (for Drugs, they are now globally standardized).  For a New Drug, one files a New Drug Application (NDA).  For a New Biologics, one files a Biologics License Application (BLA).  For a generic Drug, one files an Abbreviated New Drug Application (ANDA).  For a New Medical Device for which there is no previously existing similar device ("Predicate Device"), one files a Pre-Market Approval.  For a New Medical Device for which there is a previously existing similar device, one files a 510(k).

A short description is that everything about the Drug or Medical Device is put into the submission characteristics, mechanism of action, supporting studies,  proposed use, manufacturing process, raw materials, testing, Non-Clinical Study Data, Human Clinical Study Data, proposed documentation to be provided to the Physician and Patient, labeling and all commercial materials.  These are now submitted through a portal at the FDA; at one time these were submitted physically.  It is within my memory of copying, binding, and sealing up multiple banker's boxes of submission to be sent to the FDA (I am likely the last generation that did this).

The FDA will review the submission.  There will be questions and comments.  There may be hearings.  There may be direct interaction with the FDA. At the end of it, there are two outcomes:  an approval (either with or without modifications from the original submission), or a Complete Response Letter, which is a rejection of the application with specific items that need to be addressed (up to and including an additional clinical trial).

Commercialization

Great!  A company has received approval for its Drug or Medical Device and ready to make money!  

Well, of course it is not that easy.

Early on, a target market was identified.  That market now has to be actualized.  

What is the name of the product?  Most products end up with two names, the trade name and the original company.  In the U.S., you will see this in advertising;  For, example Ozempic® (semaglutide).  Ozempic is the trade name, semaglutide is the name it was developed and filed under.  A rather large amount of time and money is spent on this.

What is the "vibe" of the product?  All marketing materials including labeling, advertising, and provided inserts need to be designed and approved by the FDA.  They need to be different enough to distinguish them from other products and unique enough to be memorable.

How big is the market?  The company as part of its manufacturing process should have estimated the commercial launch needs and have validated the process.  Nothing more embarrassing than to launch a product and not have enough of it.

A sales force will need to be developed.  Insurance companies and Pharmacy Benefit Managers will have to be contacted to get the product on the formulary or allowed devices. If not, the company has to plan for how they will make the product available.  Distribution networks will need to be identified and activated.

Then, of course, physicians will have to prescribe the product.

Afterwards...

After all of this - all of this post and the previous three posts - the company will start to generate revenue.  Not profit - this has been a significant investment, as we will review tomorrow, but revenue.  Profitability is still a ways off.

Tomorrow we will look at some conclusions, including success rates, timing and costs, and why all of this matters.