The Connecticut Economy: Outlook and Issues for
the Pharmaceutical Industry in Connecticut
Moderator: Paul R. Pescatello, President & CEO of Connecticut United for Research Excellence (CURE)
Panelists: Michael Davis, Associate Director State Government Affairs, Boehringer Ingelheim Pharmaceuticals
Susan Froshauer, President & CEO Rib-X Pharmaceuticals, Inc.
Ricardo Orchoa, Executive Director, Pathology, Pfizer Global Pathology Leadership Team
The Connecticut Convention Center, HartfordFriday, September 9, 2005
• CURE, as an educational organization and trade association, seeks to foster connectedness among pharma companies, biotech firms, colleges & universities, and firms that help core members do business, especially R&D.– Represent the biotechnology and pharmaceutical sectors
before the state legislature and policy makers– Build a critical mass of biotech and pharmaceutical
companies– Foster relationships between academic and industry
research that lead to technology transfer– Be the “go to” source for information about bioscience in
Connecticut
CURE Mission
The Mission, distilled
• Lobbyist
• Critical mass
• Tech transfer
• Resource
Often, the same thing
At Capitol and/or with news media/opinion makers
To companies for state economic development efforts
–Build student interest in science–Relay new scientific techniques to educators
–Show how bioscience is relevant
–Show students bioscience careers other than M.D. and nursing programs
CURE
&
The
BioBus
Programs
Since 2001*:
•318 schools visited
- 75 schools this year
•1,349 experiments
•24,000 students taught
•572 teachers trained
•123 community events
•16,000 people visited
Connecticut’s BioBus Program Statistics
*includes BioConnection
Expanding the Reach: BioConnection
• Launched March 2004• Pilot year funded by
Education Dept. grant and assistance of Rosa DeLauro
• 3 equipment modules loaned to schools for 2 weeks, independent of BioBus
• 4,900 students taught
CURE as BioScience Industry Info Source
• Monthly e-newsletter– Company news– Bioscience industry trends, news and profiles– Upcoming events
• CURE monitors & evaluates best practices in other states & regions
• CURE: the source for lists of bioscience VC’s, biotech and biomedical firms in the state
• Annual Economic Report surveys health of bioscience industry in CT
Recent CURE Events
• 5/18 Capitol press conference: drugs
• 6/17 Guest on CPTV’s “On the Road”
• 6/15 Rell stem cell bill signing
• 6/19 BIO events in Philadelphia
Upcoming CURE Events
September 28
• CURE Annual Meeting at CT Convention Center– Sir Harold Evans speaking– Volunteers recognized– Part of Alliance for Technology event– CURE award to be presented to Governor Rell
• CURE bioscience supplement in CT Business
2005 Legislation Agenda
• Embryonic stem cell research safe haven• Institute rebate to biotechs for half the
amount of personal income taxes paid by any new employee added each year
• Extend same degree of benefits to partnerships, LLPs and LLCs
• Regulation and business taxes: make more rational, user-friendly, transparent & efficient
• Enhance state capital investment in biotech start-ups -- less risk averse
Bioscience Sector in CT2004 Report Card
• R&D Spending: up 7% to $4.4 billion– Up 45% over 5 years
• CT Operations Spending: up 2% to $6.2 billion– Up 178% over 5 years
• Employment: down 1% to 18,086– Up 20% over 5 years
• Lab Space: down 1% to 5.6 million square feet– Up 8% over 5 years
• BioScience Job Multiplier: 3.30 vs. 2.38 (insurance); 2.90 (aircraft); 2.40 (construction); 2.28 (telecommunications; 1.30 (restaurants)
CT Bioscience R&D Spending
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
R&
D S
pen
din
g in
$ B
illio
ns
CT Bioscience Employment
0
4000
8000
12000
16000
20000
1996 1997 1998 1999 2000 2001 2002 2003 2004
YearR&D Employees
All Employees
Connecticut Lab Space – Growth
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Year
Sq
ua
re f
ee
t
Biotech
University
Pharma
Bioscience
• Jobs Multiplier highest of any industry sector
Healthy Financing Window
2003 & 2004 CT Biotech Financings
-50
0
50
100
150
200
250
300
350
400
2003 2004
Year
$ R
ais
ed
in
mil
lio
ns
$185.4M
$433.25M
New Connecticut Biotechs
Pharmaceuticals, Inc.
Bringing US & EU mid-tier and niche drugs to the untapped Chinese market
Marinus Pharmaceuticals, Inc.
Pursuing the discovery, development and in-licensing of pharmaceuticals, with an initialfocus on neuropsychiatric diseases
RainDance Technologies, Inc.
A microfluidics startup company working at the interface of biology, fluidics, and optics
In-licensing, developing & commercializing novel cancer drugs
Commercializing a proprietary automated molecular imagingtechnology for tissue and tissue microarrays
Providing preclinical drug development consulting, project management and contract research
VICUS BIOSCIENCE, LLC
Providing life science technologies with dual use for military and civilian populations
2005 Legislative Report Card
• Landmark stem cell legislation passed
• R&D Tax Credit Exchange program and NOL protected
• Pharma unfriendly legislation dies
Messages . . . Location, location, location . . .
Messages . . . The Clarity of Voice of Other Clusters
CT vs San Diego County
ConnecticutSan
Diego
State House Members 168 8
State Senate Members 36 4
U.S. House Representatives
5 5
Messages . . .
Reimportation =
Symbol for high cost of health care
Side effect worse than cure:
– Importation of price controls
– Innovation stagnation
(Current) Canadian Drug Supply Impossibly Small to Have a Real Impact in the US
Source: Year: 2001. IMS (sales, US prescriptions); Epsicom Business Intelligence (Canada prescriptions)
0%
25%
50%
75%
100%
Total Sales Total Prescriptions
U S C an ada
Canadian Market Relative to US MarketCanadian Market Relative to US Market
$170 billion
$6.5 billion
> 3 billion
280 million
Message . . .
Healthcare costs are rising.
– But share of healthcare dollar attributable to medicines has held steady at 10%
U.S. Annual NationalHealth Care Spending
$1.6 TRILLION$1.6 TRILLION
1.41.4
1.21.2
1.01.0
0.80.8
0.60.6
0.40.4
0.20.2
00‘‘6565 ‘‘7070 ‘‘7575 ‘‘8080 ‘‘8585 ‘‘9090 ‘‘9595 ‘‘0000 NOTE: 2001 AND 2002 DATA PROJECTEDNOTE: 2001 AND 2002 DATA PROJECTED
RESEARCH AND CONSTRUCTIONRESEARCH AND CONSTRUCTION PERSONAL MEDICAL EQUIPMENT PERSONAL MEDICAL EQUIPMENT AND NON-PRESCRIPTION DRUGSAND NON-PRESCRIPTION DRUGS
NURSING HOME AND HOME NURSING HOME AND HOME HEALTH CAREHEALTH CARE
PRESCRIPTION DRUGSPRESCRIPTION DRUGS
NET COST OF PRIVATE HEALTH NET COST OF PRIVATE HEALTH INSURANCE, ADMINISTRATIVE COSTS, INSURANCE, ADMINISTRATIVE COSTS, AND PUBLIC HEALTH PROGRAMSAND PUBLIC HEALTH PROGRAMS
HOSPITAL CAREHOSPITAL CARE
DOCTORS, DENTISTS, AND OTHER DOCTORS, DENTISTS, AND OTHER PROFESSIONAL SERVICESPROFESSIONAL SERVICES
Source: Health And Human Services DepartmentSource: Health And Human Services Department
Centenarians in US Population
300300
250250
200200
150150
100100
5050
0019001900 19201920 19401940 19601960 19801980 20002000
Source: Caplow, Theodore, et al. The First Measured Century, Wash DC: AEI, 2001:9; PfizerSource: Caplow, Theodore, et al. The First Measured Century, Wash DC: AEI, 2001:9; Pfizer
Number Per MillionNumber Per Million
Year 1900 Year 1900 46 Centenarians46 Centenarians
Year 2000Year 2000262 Centenarians262 Centenarians
Medicines Have Extended LivesDrop In Death Rates For Diseases 1965-1996
57%
62%
72%
74%
21%
0% 20% 40% 60% 80%
57%
62%
72%
74%
21%
0% 20% 40% 60% 80%
Statins, ACE inhibitors, beta blockers, nitratesStatins, ACE inhibitors, beta blockers, nitrates
H2 blockers, proton pump inhibitorsH2 blockers, proton pump inhibitors
ACE inhibitors, beta blockers, nitratesACE inhibitors, beta blockers, nitrates
Anti-Inflammatories, bronchodilatorsAnti-Inflammatories, bronchodilators
Anti-Hypertensives, Anti-Hypertensives, diureticsdiuretics
AtherosclerosisAtherosclerosis
Ulcer of Stomach Ulcer of Stomach and Duodenumand Duodenum
Ischemic Ischemic Heart DiseaseHeart Disease
EmphysemaEmphysema
HypertensionHypertension
DEATH RATEDEATH RATE
Source: Lasker/Funding First; PfizerSource: Lasker/Funding First; Pfizer
DiseaseDisease TreatmentTreatment
Growing Access
C om ponents o f O verall D rug Spending G row th , 1993-2001
Utilization Increases
77%
Price Increases23%
Key Drivers of Volume Growth,1993-2001
• Over 280 new drugs, many that address previously untreated or undiagnosed conditions • US median age increased by over 2 years, increasing demand for all health care services, including drugs• Expert and government panels recommended expanded utilization for new populations• Consumer awareness of treatment options increased dramatically as information sources became more accessible (eg Internet health sites, DTC ads)
Source: IMS, CMS; utilization increases include volume growth and new product introductions
Drug Development - A Risky and Expensive Proposition
Source: Tufts Center for the Study of Drug DevelopmentSource: Tufts Center for the Study of Drug Development
5,000–10,000Screened
5,000–10,000Screened
250Enter Preclinical
Testing
250Enter Preclinical
Testing
5Enter
Clinical Testing
5Enter
Clinical Testing
1Approved by
the FDA
1Approved by
the FDA
Compound Success Rates by Stage
Compound Success Rates by Stage
16
14
12
10
8
6
4
2
0
Phase II100–300 Patient Volunteers Used to Look for Efficacy and Side Effects
Phase II100–300 Patient Volunteers Used to Look for Efficacy and Side Effects
Phase III1,000–5,000 Patient Volunteers Used to
Monitor Adverse Reactions to Long-term Use
Phase III1,000–5,000 Patient Volunteers Used to
Monitor Adverse Reactions to Long-term Use FDA Review ApprovalFDA Review Approval
Additional Post-marketing
Testing
Additional Post-marketing
Testing
Phase I 20–80 Healthy
Volunteers Used to Determine Safety and
Dosage
Phase I 20–80 Healthy
Volunteers Used to Determine Safety and
Dosage
Preclinical TestingLaboratory and Animal Testing
Preclinical TestingLaboratory and Animal Testing
Discovery(2–10 Years)
Discovery(2–10 Years)
YearsYears
Net Cost: $802 million
invested over 15 yrs
Impact of Drugs on Spending and Mortality for HIV/AIDS
Source: Costs - Bozette et al., New England Journal of Medicine Vol. 344, No. 11, March 15, 2001; Mortality - Centers for Source: Costs - Bozette et al., New England Journal of Medicine Vol. 344, No. 11, March 15, 2001; Mortality - Centers for Disease Control; data on drug development from PhRMA and the NIH Office of Technology transfer; Pfizer.Disease Control; data on drug development from PhRMA and the NIH Office of Technology transfer; Pfizer.
HIV Mortality Declined Dramatically HIV Mortality Declined Dramatically after Introduction of First after Introduction of First
“Expensive” Antiretrovirals . . .“Expensive” Antiretrovirals . . .
0
3
6
9
12
15
18
82 86 90 94 98
Year
Dea
ths
per
100
,000
P
op
ula
tio
n
First new Drugs First new Drugs Introduced, 1995Introduced, 1995
Highly Active Highly Active Antiretroviral Antiretroviral Therapy (HAART) Therapy (HAART) introduced, introduced, 1996-971996-97
Total: $1804Total: $1804
Total: $1521Total: $1521
Drug Drug Costs Costs IncreaseIncrease by 34%by 34%
Other Other Costs Costs DecreaseDecrease by 41%by 41%
. . . While Monthly Costs for AIDS . . . While Monthly Costs for AIDS Patients Decreased by 16% after Patients Decreased by 16% after
HAART IntroducedHAART Introduced
What are we really talking about?
An international relations/trade issue.– Motivating other developed economies to pay more for
the R&D that makes up the price of prescription drugs
– Figuring out a way to spread the cost of healthcare across the entire population
Hint #1: Greatest cost components of healthcare are the 1st and last six months of lifeHint #2: The annual tab for a daily cup of Starbucks is $1,003.75