The Multiplier Effect Of Drug-Device Convergence
by Dr. Barry Heavey, Head of Life Sciences, IDA Ireland
“The future is combining devices and drugs,” pronounced Ralph Larson, former chairman and CEO of Johnson & Johnson, over a decade ago. At the time, his pre-convergence prophecy carried a ring of audacity. But in fact, it was a legitimately safe statement, even then.
Drug-device products are merely mid-century modern, with the first metered-dose inhaler developed in 1956. By the 1990s, cardiologists were trialling drug-eluting stents to improve treatment of cardiovascular disease.
In subsequent years, the nascent drug-delivery pipeline has been flooded with every manner of combination product, from pre-filled syringes to transdermal patches and implantable pumps.
Transforming Markets — And Quality Of Life
First-generation drug-device pioneers could not have envisioned today’s landscape. The growing convergence between medical devices, pharmaceuticals, and biologics is transforming these once-separate market sectors, not to mention the state of health care and our quality of life.
The global market for drug-device combinations is on track to generate $115 billion in market value by 2019. Its projected growth rate of nearly 8 percent between 2013 and 2019, according to Transparency Market Research (TMR), will surpass the growth of both the pharmaceutical and the medical device markets.
Thus, opportunity — and demand — abounds for effective treatments combined with innovative drug delivery methods. Patients and healthcare professionals welcome new drug delivery methods that are less invasive, but more targeted and more effective. And the world has more patients every day, due in part to the global greying of the population and the preponderance of chronic illnesses.
Convergence Revitalizes Mature Sectors
A burgeoning drug-device market is timely for pharmaceutical companies, too, considering the current state of the industry. Pharma players face growing cost-cutting pressures from governmental and health care entities, as well as increased competition from generic manufacturers as a string of patents expire.
Pharma companies also face ever-increasing costs in getting new drugs approved. While recent years have seen an uptick in new drug approvals, many recent high-profile approvals are in the biologics space: Improved device technology is required to deliver these drugs and to differentiate new products from incumbent products.
At the same time, the rapid innovation cycle in medtech means that medical device manufacturers are constantly facing commoditization and competitive threats, along with changing reimbursement models.
According to a 2014 Ernst & Young annual medical technology report, many medtech products will be evaluated on price alone, unless their makers find a way to differentiate themselves. That being said, the future looks decidedly rosier for makers of drug-device combination products.
New Frontiers In Medicine
The cross-pollination between devices, biologics, and pharmaceutical companies is seeding a new generation of innovative products through the R&D pipeline. Many of these products will plant a flag on the new frontiers of medicine in areas such as chronic disease management, regenerative and individualized medicine.
From gene delivery systems to continuous glucose monitors linked to micro-electrical mechanical systems (MEMS) that deliver insulin, novel combination products are harbingers of a brave new healthcare world that will advance medicine beyond the traditional diagnosis and treatment, toward disease prediction and prevention.
Still, the future will have to compete with tradition. For example, companies like Regeneron/Sanofi, Amgen, Pfizer, Roche, and others are developing new biologic drugs that appear to have a dual function in the treatment of cardiovascular disease, lowering “bad” cholesterol and increasing “good” cholesterol in patients. These biologics, if approved, would compete against traditional cholesterol-lowering drugs, known as statins, which are taken in pill form. The new biologic drugs will need to be injected, so combining these drugs with user-friendly injection devices will be a key factor in their successful adoption by patients.
To realize this convergence, device, biologic, and pharmaceutical companies are scouting globally, not just for new plant locations, but for symbiotic partnerships and business environments. Leveraging such partnerships gives companies a business advantage in reaching new markets, adds to their disease expertise, and enriches the value of their current product portfolio.
Wanted: Innovation Hubs With Deep Talent
Whether businesses set their sights on San Francisco, Geneva, or Dublin, companies seeking to capitalize on combination products look for locations with an open and competitive business environment, a sound regulatory structure, favorable taxes, and an existing base of educated workers.
For manufacturers who need to fuel R&D activities and speed time to market, it’s important to look beyond simple market logistics and operating costs, finding locations that support technology research and innovation through government initiatives and private/public partnerships.
Drug-device manufacturers also prioritize locations with a deep pipeline of skilled talent, from entrepreneurs and technology innovators to operational experts and medical researchers.
In fact, when Ethicon Biosurgery, a Johnson & Johnson subsidiary, decided to build a state-of-the-art manufacturing plant for its new biologic product in Limerick, Ireland, finding a convergence of talent was paramount. According to its worldwide president, Dan Wildman, the company’s strategy was driven by “the unique clustering of medical device manufacturing, automation and biomanufacturing skill sets” already at work there — Ireland hosts 15 of the world’s top 20 medtech companies and nine of the top 10 global pharmaceutical companies.
The global momentum of drug-device convergence is undeniable — all the world’s patients welcome the promise of more effective treatments, earlier detection and reliable prevention. The companies behind that momentum will gain from the multiplier effect, too — just the medicine these market sectors need to bolster their value, remain competitive, and achieve sustainable success.
About Dr. Barry Heavey, Head of Life Sciences, IDA Ireland
Dr. Barry Heavey has been a member of IDA Ireland’s executive leadership team since 2012. Heavey also is Head of Life Sciences for IDA Ireland, responsible for attracting foreign direct investment to Ireland in the biopharma, pharma, medical devices, food and healthcare services sectors. Heavey sits on the Board of Directors of Ireland’s National Institute for Bioprocess Research and Training (NIBRT), a center dedicated to the support of the growing biopharmaceutical manufacturing sector in Ireland. His various roles in IDA Ireland have included Head of R&D Policy as well as three years based in the U.S. as SVP Life Sciences (R&D). Barry joined IDA in 2006 from the U.K. company Stem Cell Sciences Ltd., where he was Business Development Officer. Barry was the recipient of a BBSRC (Biotechnology & Biological Sciences Research Council) fellowship for postdoctoral research at Edinburgh University and also completed an MBA at the University of Edinburgh Management School. Heavey’s PhD is in Genetics and was awarded by the Institute for Molecular Pathology in Vienna. For more information, please visit www.idaireland.com