The Enemies of Pharmaceutical Innovation, pt 2

Written by Mike Rea — 2023-02-28.

Continued from last week’s first two of five… This is part 2 of a 3 part piece, with the third enemy of innovation covered in some depth.

Innovation, by definition, means the creation of value from an invention: to find a commercial proposition from an asset. So the intention of this third enemy is sensible - to identify the destination profile for a drug early in development. However…

3. The TPP/ TPP testing

The industry has a well-recognised problem. There is a prevailing view that developing drugs is hard, and that attrition is natural. Most observers accept this is broadly true (despite the widely-varying rates between companies). That one in four to one in five drugs that launch do not go on to cover their own R&D costs is not, however, the statistic of a healthy industry. 

Failures in development may be unpredictable - failure to launch a successful product is less forgivable. Launching products that the market wants and will pay for can be an exercise in rational foresight and creative insight. However, despite declining numbers in registration, this figure has not changed - fewer drugs may be launching, but the proportions of successful drugs are not rising. The industry has a problem, and that problem lies in the continued reliance on things that don’t work.

Innovation is what you launch. A ‘culture of innovation’ is one that identifies and then successfully launches products that deliver value in the marketplace – that is, they uniquely meet the wants and demands of payers, patients and physicians at a price that is considered worth paying. It should therefore be a rational exercise to identify those opportunities, as part of an opportunity seeking culture.

The problem in pharma isn’t solved simply by putting more products into the top of the hopper – it is to identify system losses that can be stemmed. Ask yourself the question: out of the 9,999 drugs investigated that didn’t make it to market, what are the odds that at least one wasn’t potentially the blockbuster the other company wanted?

The Target Product Profile (TPP) is the opposite of possibility. It says ‘hit these targets and we have a viable drug.’ That is fine, if the targets are creatively derived, against a clear-cut opportunity. Two problems: TPPs are almost never creatively derived against a clear-cut opportunity 5 to 10 years hence. Instead they are (in many cases) a best guess as to what the drug will do in the clinic (so the TPP becomes self-referential). Also, failure to hit the target doesn’t necessarily make a drug a failure. It may well have just revealed a profile that aligns against another, different opportunity. Companies that do well in innovation have mechanisms to evaluate a drug for what it might be, rather than what it is not. Like the many record labels that turned down The Beatles because they weren’t ‘the right fit’, rejecting drugs that don’t hit a predefined wishlist puts an awful lot of faith in the wishlist being both exhaustive and predictive, and valid.

Many recent successful innovations have resulted from the harnessing of serendipity. Molecules have possibilities – yet from Phase I onwards, there is often little evaluation of ‘what else’, only a single-minded pursuit of a registration, along a linear path. What is not known at any point from that decision is ‘if we don’t hit this TPP, is the product still potentially of value as something else?’

Without a concept to prove, there should be no Proof of Concept. Tight, working concepts can be proven. ‘Preventing or delaying progression in RA’ is a concept, ‘blocking an immune pathway that may or may not be involved in RA’ is not a concept. Proving the latter may provide clues to the former, but it is not Proof.

When you only have one option you have no choice: Carry on, or kill. The problem of sunk cost, and path dependence, is then apparent – the greater the momentum behind the option (clinical evaluation, market analysis), the lower the likelihood that any alternative options will be considered – there is too little information, too little time, too much emphasis on delivery, rather than ‘what else?’, too little ‘maximise this option’ versus ‘is there a different way, with a higher potential?’ The desire to avoid failure of a project then makes companies lower technical hurdles, leading to lower probability of regulatory and commercial success.

The TPP’s rise in the industry has coincided with declining productivity. Coincidence? Not on the evidence so far.

I’ve written a lot about the Target Product Profile, because it is a singularly corrupting element in early phase. So, why is it a self-inflicted injury? Two reasons: one, it isn’t a ‘target’, and two, companies rely on the idea of there being ‘one’.

It is a stubbornly resistant enemy, however. Despite its relatively recent (management consultancy-generated) entrance to pharma, a mini industry has emerged around its creation, testing and more. Even though it doesn't withstand scrutiny, once it is there, it is hard to shift, like any anchor.

Development should be focused on three main goals: is the drug approvable, is it likely to get to market, and will the market want and pay for it? Each is necessary but insufficient.

Whatever the fundamental problems of the TPP (see the links below for more), one reason that it fails its intended task is that it is rarely a target - more often it is a projected profile, an expected profile based on an already-decided, probably achievable, path to market, rather than a validated target opportunity profile. Were it to be a target profile, one might expect that profile to have been provided by those who understand the commercial opportunity best - that is the ultimate target, surely?

Shooting short of a commercial target may well suit internal incentives, but the problem that we see in many pharma companies can be traced to this undershoot - even if it creates an approval, the lack of value in the product means that is a false positive.

It can be argued back that Commercial do get an input, but let’s consider why that is insufficient: that input is already bounded by a TPP. ‘TPP testing’ or forecasting starts with that document. They should start with a range of very different profiles, but the anchoring effect of the starting document remains pervasive.

I have seen ‘pricing research’ (expensive pricing research) await the TPP, which is then hastily assembled. Here’s the obvious statement: the derived price is entirely dependent on the target profile. A higher effect size, a different comparator, can alter the ‘price’ by orders of magnitude. So the people who decide the TPP decide everything that comes afterwards.

Thinking outside of the TPP box starts by seeing it as a box, as a sealed package from one department. Agreeing on its contents should be a whole company exercise.

The moving target

So, there is the construction, and the ownership problem. As well as that, there is the non-contractual nature of whatever is produced. Typically, if you ask a team for ‘the’ TPP, they will go looking for the ‘latest’ one. It is regarded as fluid, not fixed. It is adjusted on the fly, to suit circumstances. That says two things: it is not taken seriously - it is a box that was ticked, rather than a contract between the key parts of a company; its ownership is usually accorded to the Clinical/ Development department, with some Regulatory thrown in. It need not be said - a target that moves to suit the shooter is not a target that feeds the village.

Given that the ultimate goal of a development path is the creation of a label, it is reasonable to ask that a draft label be used instead. The advantage of a draft label is that the label is the document that will be used in future to market the product, or to negotiate with payers. Its claims can be evaluated - it is not rare that the TPP hides, for a long time, that a clinical development plan (CDP) hides studies underpowered to generate useful real world claims. A draft label process reveals those trade-offs, and can form the basis for negotiations internally, well before the CDP is set.

TPP Testing

“Skate to where the puck is going, not where it has been.”

If the best candidate is not on the ballot, they can’t be voted in. One way that the TPP is given validity is that it often is subjected to research, or ‘TPP testing’. In that process, a range of easily-achieved TPPs is shown to physicians who are largely bounded by the present, or the past, and, like a game of Top Trumps, the one that promises the highest traditional measure of efficacy is chosen.

Pharmaceutical market research has a lot of methodology problems, but one that stands out is any use of ‘forced ranking’. A list of features is shown, and then the interviewee is asked to rank elements as blunt as ‘efficacy’ and ‘mechanism of action’ in terms of which one matters more. Their rather obvious answers are provided in an ordinal ranking, rather than a cardinal ranking (‘this one came top, so is the best’, rather than ‘this one came top, but only got 26 points out of 100 possible, and only by one point from another’). And then, forever more, everyone is told that physicians ‘don’t care’ about mechanism, and only want to see ‘efficacy’, whatever that means. Of course, to a physician, if presented with an ‘either/ or’, they will choose the one that sounds like it matters, rationally. This, therefore, is not a useful question - in the real world, features such as these don’t come at us this way. They come as ‘ands’, not ‘ors’. In the real world, a physician might choose ‘a BTKi’ or ‘an NSAID’, or they may choose on safety for higher risk patients. This methodological error, however, gets lost in time - we are told repeatedly that physicians prefer, or choose on, ‘efficacy’, whatever that means.

The complexity of the real world means people make choices, in the real world, that are complex. The process of TPP ‘testing’ reduces an almost irreducible complexity to a choice of three TPPs, in an abstract setting, throwing out all the rough edges in the pursuit of a set of questions that can be asked in 30 minutes. The people who take part in such research are an almost literal definition of ‘where the puck is’ - judging against how they’d see the product today, rather than the (unknown to them) competitive landscape of the future. In reality, it is even worse - whoever wrote the TPPs had already decided on the therapeutic area, and the indications, and therefore the choice of respondent for the research. If your product could have worked in rheumatoid arthritis, and you only invited cardiologists to your ‘testing’, your path dependence problem is amplified.

So bad, there should be more

For all of the above problems, the last issue (testing) reveals a potential solution. While the TPP itself is problematic (much better that a draft label is created), one of the obvious takeaways from the testing process is that there can be more than one TPP.

Here’s the solution. Instead of being produced in a narrow channel – versions of a similar profile (call them ‘upside cases’ or ‘downside cases’ all you want, but it is still one TPP) – it is possible to generate 50 or 100 different target profiles from any molecule. If done early enough (ideally before the phase I is designed), 100 target opportunity profiles can present deep positionings/ market positions, across all therapeutic areas. Even 100 can’t be exhaustive, but it is a much better sampling than the 1 or 3 that are used everywhere today.

‘Wait’, I can hear you say. ‘Who on earth has the time to evaluate 100 TPPs?’ Well, rather than going deep on a probably wrong profile, if you do a good but shallow dive on 100, you will have generated remarkable insights. In addition, both the creation and the evaluation of 100 profiles can be done easily in 2023, without the manual labour of the 1990s (when the TPP became templated).

Think about what you need to know. You want options that might be faster to market, or more likely to reach market, or have higher market potential. You want to know potential launch sequences. You need to know if you can develop indications in parallel, or in sequence (especially in the age of the Inflation Reduction Act). You need to see options that cost less to develop. Perhaps you could also come right up to date and investigate options with devices, biomarkers, digital partners, or novel endpoints. Maybe you don’t assume you have to start with IV, but go straight to subcutaneous. You might state that 100 profiles is a lot to review, but the alternative is to knowingly ignore opportunity.

Then, think about who needs to choose. Having options generated by people who don’t choose the options is critical - to save progression bias. Teams will optimise for teams - portfolio managers can optimise for the portfolio, if the options are on the table. If the teams have already narrowed the option set, this choice is denied to the portfolio.

The consideration of risk in pharma is seen in this paradox. The opposite of risk is safety, not opportunity. Risk mitigation is not the same as opportunity seeking, so the way that ‘risks’ are assessed in pharma does not optimise for opportunistic development. The opposite of opportunity is obstacle, or hindrance. Targeting the things that stand in the way of opportunity, with a Plan To Learn, would be a better approach.

The opportunity

The good news is that the TPP may well be a building brick of the productivity problem, but it is not inevitable, or even hard to overcome. It, and its friend the eNPV, have been so much a part of the fabric of pharma that many cannot imagine replacing the process - so many have been trained as if it is the only way to do things. That is good news for those who want to gain competitive advantage from a better process - use your opponent’s weight against them. Let companies who can’t reconsider their approaches stick with them - mostly the reasons are those of inconvenience, or misunderstanding. Some companies have introduced some complexity to their TPP process - a kind of 1.01, not even a 1.1, never mind a 2.0 - to give the impression of having updated their process, but this remains a self-inflicted injury, an infection that became an epidemic.

For reference, there are some older pieces, on the fundamental logic problem of the TPP process: 

or this article, on the reasons it should not be part of strategic planning: TPP: The Perennial Problem.

To drive the TPP forward, and make it more useful for innovation processes, this piece, on how, if you correctly see a TPP as a prototype, you should be doing a lot more: How many TPPs? How about 1000?

You may prefer a video: The Target Product Profile - an enemy of innovation

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