Rita Peters is the former editorial director of 

Pharmaceutical Technology, Pharmaceutical Technology Europe

Rita C. Peters

	Professionals involved in the development and manufacture of new drugs understand that drug development is--by design--a slow, deliberate, detailed, scientific, and technical effort. Getting a drug to market quickly is crucial to meet business objectives and provide needed patient treatments. The goal: accelerate the delivery of safe, efficacious, and cost-effective drugs to patients and to keep a steady supply of safe, efficacious, and cost-effective drugs on the market.

	While some in the pharma industry complain the drug development and manufacturing process is overregulated, others seek more direction and guidance from regulatory authorities. In recent years, FDA has been promoting a “carrot” approach to compliance oversight, encouraging drug manufacturers to implement quality measures and, in effect, self-regulate their operations. Unfortunately, due to drug shortages and ongoing quality problems, the “stick” is still needed, in the form of regulations, guidance documents, and inspections, particularly offshore. 

	The Trump administration lost no time in pushing forward on its campaign promises including the reduction of regulations perceived to be roadblocks to innovation. Executive action, however, may reduce both regulations and regulatory explanations; impact the implementation of the 21st Century Cures Act, the Prescription Drug User Fee Act (PDUFA), and the Generic Drug User Fee Act (GDUFA); and hinder FDA’s ability to approve new and generic drugs. 

	A Jan. 30, 2017 executive order, “Reducing Regulation and Controlling Regulatory Costs,” set a regulatory cap for fiscal year 2017 and stated that for every proposed new regulation, at least two existing regulations should be identified for repeal. Based on language in the order, both regulations and guidance documents issued by FDA would be included in the “one in-two out” policy. Positioned as an effort to help small businesses, President Donald Trump described the order as “the largest ever cut by far in terms of regulation” in the signing ceremony. He noted that regulation cuts for large business would “be different” but did not specify the differences. 

	A freeze on the hiring of federal employees was put in place with a Jan. 22, 2017 memorandum. As of this writing, it was unclear if hundreds of vacant positions at FDA would be deemed necessary for public safety and, therefore, exempt from the freeze. 

	Regulations are developed for many reasons, most notably to implement enacted legislation. Eliminating mandated regulations could require changes or repeals of existing laws, a lengthy process in any political environment. Guidance documents, which explain FDA’s current thinking on regulations, do not have the force of law, but are used by pharma companies for guidance in complying with regulations and are frequently cited by FDA in warning letters to facilities that do not comply.

	The process of writing federal regulations and guidance documents requires input and detailed consideration from knowledgeable professionals. FDA consults pharma industry experts when developing regulations and guidance documents, publishing drafts in the Federal Register and soliciting public comment.

	The agency planned an ambitious guidance agenda for 2017; 26 guidance documents were slated for revision and 81 new guidance documents proposed. The implementation of the Cures Act and pending reauthorizations of PDUFA and GDUFA should generate the need for even more regulations. 

	A “one in-two out” strategy could result in the elimination of vital regulations and guidance documents that prescribe practices to ensure the quality of manufactured drugs for the US population here and abroad. The executive order, designed to fulfill a campaign promise, is shortsighted. At a minimum, it creates confusion and uncertainty for a complex drug development and manufacturing system. If followed to the letter, it could create the safety threats, drug shortages, and fraudulent products FDA was established to prevent.

	When referring to this article, please cite it as R. Peters, " Regulatory Reform Is Not That Simple," 

Articles

Reducing regulatory roadblocks requires more than the stroke of a pen.

Regulatory Reform Is Not That Simple

	In 1977, an unexpected presidential winner, Jimmy Carter, was sworn into office and the first 

episode premiered in movie theaters. In that year, 

also published its first issue. As 2017 begins, the United States will inaugurate another unexpected winner of the presidential race, and heroic rebels still battle an evil force in the latest installment of the movie series.

	As we mark 40 years of publishing this year, it is easy to look back and assess factors that impacted the economy and pharma during the past decades. Predicting the next few months, yet alone the next few years, is far more difficult. Following the contentious 2016 presidential election, uncertainty was the prevailing sentiment as the Trump administration initiated the transition to the White House and federal agencies.

	In general, big business had a positive outlook toward the new administration, as reflected in a post-election stock market surge. Other campaign promises, in particular the repeal of Obamacare, generated protests and unease for pharma companies, payers, and patients. In this issue, the editors look at some of the political, economic, and regulatory trends that may influence the business activities in 2017.

	As the nation waited for more information about the leadership and policies of the new administration, the airwaves and social media were buzzing with opinions about politics, policies, the economy, and the future. Still, bio/pharma development moves on. Prior to the election, 

 sampled opinions from those who work in pharma about the industry’s prospects.

	More than 440 bio/pharma professionals from around the world participated in the 2016 

Pharmaceutical Technology/Pharmaceutical Technology Europe

 annual employment survey (1). Respondents expressed opinions about job security, seeking new opportunities, salary levels, as well as trends in the industry, how changes impact their daily work, and future business prospects. The survey was conducted in September and October 2016.

	Almost 44% of the respondents said business at their company increased in 2015, three percentage points higher than reported in 2015 (2). More than one-quarter of the respondents (28.8%) reported that their company had been through a merger or acquisition in the past two years, up slightly from the 2015 survey. Fewer respondents reported a company downsizing or restructuring.

	Respondents were even more upbeat about the prospects of business improvements at their companies; 59.1% predicted that their company’s business would improve in 2017, compared to 54.6% predicting improvements for 2016. Only 13% predicted business would decline.

	Overall, respondents expressed a positive outlook for the bio/pharmaceutical industry as a whole for the next year; however, optimism slid a bit in recent years. Fewer respondents said business would improve (45.6% in 2016 compared with 47.8% in 2015 and 54.2% in 2014). In a reverse of sentiments in previous years, respondents based in North America (42.3%) were less optimistic that business would improve compared with respondents based in Europe (46.4%).

	When looking at the next five years, nearly two-thirds of respondents (63.3%) predicted that business will improve; however, 15.2% of the US-based respondents expect business to improve overseas, but not domestically.

	When referring to this article, please cite it as R. Peters, “Beyond Distractions, Pharma Moves On," 

Translating campaign promises to predictions for bio/pharma is difficult, but optimism prevails.

Beyond Distractions, Pharma Moves On

For an industry that relies on the stability of its products for patient safety and company success, the outlook for the bio/pharma industry itself--as well as the healthcare system, patient access to affordable medicines, speedy drug approvals, and global regulatory compliance--had a large dose of uncertainty as the calendar turned to 2017.

	The election of populist candidate Donald Trump as president of the United States shocked many and created unease in the public and private sectors, but it also boosted the financial outlook for bio/pharma companies, at least in the short term. The investment community viewed the Trump administration as more pharma-friendly compared to the stated positions of the Clinton administration to rein in drug costs. Bio/pharma stocks rallied after Election Day. Analysts noted a “sunny” weather forecast for the pharma and biotech sector, but cautioned that while “many believe that the political wind in the world’s biggest drug market is, for the time being, blowing in the right direction,” ongoing concern about drug pricing, payer pressure, and economic questions still created uncertainty (1).

	This volatility was illustrated when President-elect Trump, in a Dec. 7, 2016 interview with 

magazine, said he was going to lower drug prices, driving down biotech and pharma stocks (2).

	While patients, payers, bio/pharma companies, and the investment world await decisions about health insurance, drug prices and reimbursements, FDA leadership, and regulatory changes, instability may be the new norm for the foreseeable future.

	Healthcare was a hot-button issue during the presidential campaign, with candidate Trump and the Republican Party promising to repeal and replace the Affordable Care Act (ACA) of 2010. Republican legislators have strategized that they could “repeal” parts of the ACA through a budget reconciliation process; replacement would require cooperation from both parties and could take months or years to accomplish.

	Under ACA, bio/pharma companies benefited from the increased pool of patients seeking medicines, but also paid higher fees and made concessions on drug prices. Industry and patient groups are sure to be part of the negotiations for changes or a repeal/replacement of the legislation.

	In a Dec. 20, 2016 letter, senators representing Democratic and Independent interests sent Trump a letter that outlined areas where the different sides could cooperate, including increased transparency and incentives for innovation. Debate on ACA reform, repeal, or replacement should dominate the conversation in 2017.

	Programs to fulfill the business-friendly campaign promises had not been revealed as 2016 ended. Still, analysts project that major bio/pharma companies can benefit from tax repatriation, which would bring more cash back to the US, and potentially leading to more R&D investment, acquisitions, or shareholder payouts (1).

	When polled prior to the election, investors were optimistic for the US drug market for 2017, but with “less exuberance” than in previous years. The results of the election may have shifted that opinion already, Evaluate Pharma suggests. Through November 2016, mergers and acquisitions totaled about half what was spent in 2015. The number of deals were down. Companies waited for the election outcome, and the valuations of some targets remained high. The initial public offering market slid in 2016 following a rally in previous years. Analysts note that the venture capital market in 2016 was “respectable” and with new funds being raised, the trend is expected to continue in 2017 (1).

	If the performance of the bio/pharma industry is measured by the number of new drug approvals, 2016 did not live up to expectations. As of mid-December 2016, only 20 new drugs received FDA approval, compared to 41 in 2014 and 45 in 2015. Fewer submissions and more complete response letters were a few reasons for the lower number of approvals, FDA noted. The number of applications received by FDA through Dec. 9, 2016, however, surpassed the average number of new molecular entity filings for the past decade (3).

	All but one of the novel drugs approved in 2016 through Dec. 9, 2016 met the Prescription Drug User Fee Act (PDUFA) goal dates for the approval review cycle; and all but one were approved on the first cycle. Approximately two-thirds of the 2016 new drug approvals were approved under Priority Review. The number of breakthrough-designated development programs held steady compared to the past two years (4).

	Amid the clamor about controlling drug prices, drug company executives are examining R&D methods and declining returns. The cost to bring a drug to market, as estimated by the Deloitte Centre for Health Solutions (5), declined slightly from $1.576 billion in 2015 to $1.539 billion in 2016, perhaps due to shorter cycle times for breakthrough designations. The study also concluded that companies with less volatility in the therapy-area focus of their late-stage development programs outperform those that continually change the focus of their drug development efforts. Company size is also a factor. The study of 12 leading biopharma companies revealed a negative correlation between company size and predicted returns, and indicated that scale is a barrier to creating value in an R&D organization.

	Companies have demonstrated greater efficiency in drug development through “nimble decision-making, empowering key decision-makers, accepting greater risk, making quick kills, and embedding a rigorous but dynamic process for funding projects,” the study authors reported (5).

	One anticipated source of gaining efficiencies--extensive outsourcing--has not delivered on expectations, the study authors report. Sub-optimal partner management by drug companies and operating models that hinder externalization contribute to less-than-expected results from outsourcing arrangements (5).

	Another campaign theme-reducing the number of federal regulations perceived as roadblocks to business-may impact FDA and its efforts to expedite the approval of innovator and generic drugs. While a new president and administration may bring some differences in philosophies at FDA’s Center for Drug Evaluation and Research (CDER), “the work of the Center goes on,” said Janet Woodcock in a Dec. 14, 2016 interview (6).

	The number of warning letters issued by FDA for adulterated APIs or drug products nearly doubled from 2015 to 2016 (7), with many letters addressing data integrity issues and citations at overseas operations. Data integrity is an ongoing initiative at FDA; in 2016, the agency issued a draft guidance document on data integrity and compliance with cGMPs (8). Its efforts to encourage drug manufacturers to self-monitor quality and manufacturing practices also continued with a revised draft guidance for technical conformance guidelines for quality metrics (9). Expect more discussion in 2017

	FDA reported progress in advancing a mutual reliance agreement for GMP inspections with regulatory authorities in Europe and beyond, part of negotiations for the Transatlantic Trade and Investment Partnership. Under the initiative, investigators and inspectors from FDA and other regulatory groups in the European Union would rely on each other’s inspections for facilities making products for multiple markets, thus avoiding duplicating inspections, lowering costs, and concentrating resources in needed areas, such as China and India (10). The initiative is part of a trade agreement, however, which may be subject to additional scrutiny under the new administration.

	FDA has worked to clear the backlog of generic-drug applications, but has been hindered by ongoing staff shortages. The 21st Century Cures Act should help FDA with some of its hiring issues, including a new pay scale for scientists, Woodcock said (6). As of September 2016, CDER had 700 job openings and was struggling to compete with drug companies to hire and retain talent. A lengthy hiring process, lower salaries, and federal requirements to divest of holdings in food or drug company stocks can deter quality candidates, agency spokespeople reported. Filling the vacancies is vital to the agency’s ability to review and approve generic drugs and accommodate expedited applications (11).

	Two key regulatory deadlines loom for drug manufacturers. The US Pharmacopeial Convention (USP) revisions to elemental impurities chapters-General Chapters <232> Elemental Impurities-Limits and <2232> Elemental Contaminants in Dietary Supplements-take effect on Jan. 1, 2018. The second phase of the Federal Drug Supply Chain Security Act (DSCSA) drug traceability requirements take effect beginning in November 2017, and require that pharmaceutical products are marked with a national drug code, serial number, lot number, and expiration date in machine-readable and human-readable form.

	In addition, the reauthorizations of PDUFA and the Generic Drug User Fee Act are pending for Congressional action in 2017.

	The Cures Act, signed into law by President Barack Obama in December 2016, was a hopeful sign that progress can be made on the healthcare agenda. The legislation was passed with strong bipartisan support; however, some funding for the National Institutes for Health and FDA is authorized, but still must be appropriated.

	The legislation includes support for research on regenerative medicine and development of antibiotics and treatments for rare conditions. Other provisions are designed to streamline the drug approval process using novel clinical trials designs and study modeling and permit drug companies to use real-world evidence to support approval of added indications for marketed medicines. One impact of the Cures Act will be elevating the role of the patient in the development of drugs, Woodcock said, giving patients a bigger voice developing treatments for their diseases.

, Report, Evaluate Pharma (December 2016).
	2. M. Egan, “Trump Warns Wall Street: I’m Going to Cut Drug Prices,” 

, Dec. 7, 2016, accessed Dec. 20, 2016.
	3. C.A. Challener, 

 41 (1) 26-29 (January 2017).
	4. J. Jenkins, CDER New Drug Review: 2016 Update, Presentation, FDA/CMS Summit, Dec. 14, 2016.
	5. K. Taylor, M. Stockbridge, and S. Shah. Balancing the R&D Equation, Measuring the Return from Pharmaceutical Innovation 2016, Report, Deloitte Centre for Health Solutions (London, 2016).
	6. M. Tirrell, “

FDA’s Woodcock Speaks About One of the Agency’s Most Controversial Decisions

, Dec. 14, 2016, accessed Dec. 20, 2016.
	7. FDA, 

Inspections, Compliance, Enforcement, and Criminal Investigations

Data Integrity and Compliance with CGMP Guidance for Industry

, Draft Guidance (Silver Spring, MD, April 2016).
	9. FDA, 

Submission of Quality Metrics Data, Guidance for Industry

, Draft Guidance, Rev. 1. (Silver Spring, MD, November 2016).
	10. D. Corrigan, “

The Mutual Reliance Initiative: A New Path for Pharmaceutical Inspections in Europe and Beyond

, Dec. 7, 2016, accessed
	Dec. 20, 2016.
	11. S. Lupkin and S.J. Tribble, “FDA’s Drug Approval Team Copes With 700 Unfilled Jobs as Industry Lures Staff,” 

	When referring to this article, please cite it as R. Peters, “Bio/Pharma’s 2017 Agenda," 

Healthcare policies, R&D investments, and drug approvals will test bio/pharma.

Bio/Pharma’s 2017 Agenda

	The QuintilesIMS Institute, in its annual projections for global drug sales (1), estimates that global medicine spending will reach nearly $1.5 trillion on an invoice price basis by 2021; the total volume of medicines consumed globally will increase 3%. The types of therapies and use of innovator versus generic drugs, however, will vary depending on where patients live.

	Consumption of newer drugs in developed markets, more generic drug use in pharmerging markets, plus patent expiries, discounts, and rebates will result in a 4-7% compound annual growth rate (CAGR) to 2021, slower than the nearly 9% CAGR in 2014 and 2015 when expensive new hepatitis drugs distorted the annual growth rates, but similar to the 5.9% growth during the past five years. Future growth will be generated by autoimmune, oncology, and diabetes treatments.

	The report predicts that specialty drugs to treat chronic, rare, or genetic diseases will be more widely used, particularly the US and European markets, thanks to the approval of breakthrough medicines and a greater focus by payers on drug value and performance. Spending on such therapies, which was 20% of all medicines spending 10 years ago, will rise to 30% in 2016 and to 35% by 2021 and will represent half of the medicine purchases in the United States, Germany, United Kingdom, Italy, France, and Spain.

	The US remains the top spender on drugs ($461.7 billion), followed by China ($116.7 billion), Japan ($90.1 billion), Germany ($43.1 billion), France ($32.1 billion), Italy ($28.8 billion), UK ($27.0 billion), Brazil ($26.9 billion), Spain ($20.7 billion), and Canada ($19.3 billion).

	More than one-quarter of therapies in the late-stage pipeline are focused on oncologic drugs, thanks to recent successes in cancer therapeutics and opportunities created by breakthrough therapy designations. Therapies for central nervous system disorders make up 12% of the pipeline, followed by anti-infectives and antivirals (8%), cardiovascular (6%), arthritis/pain (6%), immune system (5%), and genito-urinary and hormones (5%), according to IMS data.

	An improved understanding of the underlying mechanisms of diseases, and maturity in the development of immunotherapies and targeted therapies, will drive innovation, the authors report. Regenerative cell therapies, blood components, the human microbiome, and gene editing will be emerging research areas.

	A mix of large, mid-size, and small companies have molecules in the oncology drug development arena. QuintilesIMS reports that while large companies are familiar with regulatory and logistical challenges, smaller companies have specific expertise with a specific mechanism of action or drug development platform that provides a research edge. Strategies moving forward include sale of assets, partnerships, or working independently. Outsourcing may also play a role.

	The QuintilesIMS report estimates that the 12% US market growth in 2015 will be only 6-7% for 2016, and is forecast to average 6-9% through 2021. Factors for the decline include more patent expiries, historically high price increases for innovator and generic drugs before off-invoice discounts and rebates in 2014 and 2015, and the newly introduced hepatitis C drugs. When accounting for price concessions, spending growth is estimated to grow at 4-7% CAGR.

	1. M. Aitken, M. Kleinrock, and D. Nass, 

Outlook for Global Medicines through 2021, Balancing Cost and Value

, QuintilesIMS Institute, Parsippany, NJ, December 2016).

	When referring to this article, please cite it as R. Peters, “Global Drug Spending: A Look Ahead," 

Estimates that global medicine spending will reach nearly $1.5 trillion by 2021 and the types of therapies and use of innovator versus generic drugs, will vary by region.

Global Drug Spending: A Look Ahead

Editor’s note: This article was published in 

The United Kingdom’s ‘Brexit’ vote to separate from the European Union took the world by surprise and has left policymakers, business leaders, and bio/pharma companies with the task of piecing together a way forward for a range of business, political, and social issues, including affordable drugs, research and development funding, and a regulatory approval pathway.

	While the business relationships between UK and EU companies and the status of EU nationals working in the UK are top issues for all industries, pharma faces fundamental industry issues, including the potential relocation of the London-based European Medicines Agency (EMA). Other challenges include establishing agreements between the UK and EU on the licensing and approval of new medicines; movement of drugs and active ingredients between countries; continued participation by the UK in the Innovative Medicines Initiative and the Unified Patent Court; funding for academic research; and access to capital for investment in drug development projects (1).

	While EU regulations have defined how drugs for the UK market are developed, the future regulatory approval pathway for medicines in the UK may change. A “hard Brexit” could sever the UK from EU regulations and may require companies to file separate marketing applications for the UK and EU. Regulatory experts, however, argue that patients, payers, and drug companies would benefit if the UK remained a part of the European regulatory drug approval process (1).

	On the other side of the Atlantic Ocean, the unexpected election of Donald Trump has created uncertainty for the bio/pharma industry and presents potential roadblocks to regional regulatory cooperation. A proposed mutual reliance agreement for GMP inspections between the US Food and Drug Administration (FDA) and regulatory authorities in Europe-part of negotiations for the Transatlantic Trade and Investment Partnership-made progress in 2016. Under the initiative, investigators and inspectors from FDA and other regulatory groups in the EU would rely on each other’s inspections for facilities making products for multiple markets, thus avoiding duplicating inspections, lowering costs, and concentrating resources in needed areas, such as China and India (2).

	The initiative, however, is part of a trade agreement and may be subject to additional scrutiny under the Trump administration, which campaigned for closer examination of such agreements.

	Beyond the Brexit changes, the bio/pharma industry has other crucial productivity, financial, development, and regulatory challenges on its agenda. Drug approvals were down in 2016 in the EU, mirroring a drop of approvals in the US (3). In total, EMA’s Committee for Medicinal Products for Human Use (CHMP) recommended 81 drugs for marketing authorization in 2016, compared with 97 in 2015. Of this total, only 29 new, non-orphan drugs were recommended for marketing authorization in 2016 compared with 41 in 2015. The number of orphan drugs approved declined to 16 from 20 in 2015; and the number of approvals for generic drugs slipped in 2016 to 22 from 25 in 2015. Similar-biologic product approvals did increase, from two in 2015 to seven in 2016 (4-5).

	While drug approvals were down, the global demand for medicines continued to increase. The QuintilesIMS Institute, in its annual projections for global drug sales (6), estimates that global medicine spending will reach nearly US$1.5 trillion on an invoice price basis by 2021; the total volume of medicines consumed globally will increase 3%. The types of therapies and use of innovator versus generic drugs, however, will vary depending on where patients live.

	The report predicts that specialty drugs to treat chronic, rare, or genetic diseases will be more widely used, particularly in the US and European markets, thanks to the approval of breakthrough medicines and a greater focus by payers on drug value and performance. Spending on such therapies, which was 20% of all medicines spending 10 years ago, will rise to 30% in 2016 and to 35% by 2021 and will represent half of the medicine purchases in the United States, Germany, United Kingdom, Italy, France, and Spain.

	The US remains the top spender on drugs (US$461.7 billion), followed by China (US$116.7 billion), Japan (US$90.1 billion), Germany (US$43.1 billion), France (US$32.1 billion), Italy (US$28.8 billion), UK (US$27 billion), Brazil (US$26.9 billion), Spain (US$20.7 billion), and Canada (US$19.3 billion), QuintilesIMS reports.

	Price controls will contribute to limit drug sales growth in Europe to 1-4% to 2021, the report states. Estimated growth rates are 4-7% in the UK, 1-4% in Italy and Spain, 2-5% in Germany, and -1-2% in France. The impact of Brexit on the UK pharma market is expected to be “modest at worst with a 1.5% slower growth rate in the downside scenario” (6). Weak economic growth, unexpectedly high drug costs for innovator drugs in 2014 and 2015, and a desire to control costs will encourage Europe-based policymakers to be more cautious in adopting new medicines in the future.

	Amid the clamor about controlling drug prices, drug company executives are examining R&D methods and declining returns. The cost to bring a drug to market, as estimated by the Deloitte Centre for Health Solutions (7), declined slightly from US$1.576 billion in 2015 to US$1.539 billion in 2016, perhaps due to shorter cycle times for breakthrough designations. The study also concluded that companies with less volatility in the therapy-area focus of their late-stage development programmes outperform those that continually change the focus of their drug-development efforts. Company size is also a factor. The study of 12 leading biopharma companies revealed a negative correlation between company size and predicted returns, and indicated that scale is a barrier to creating value in an R&D organization.

	Companies have demonstrated greater efficiency in drug development through “nimble decision-making, empowering key decision-makers, accepting greater risk, making quick kills, and embedding a rigorous but dynamic process for funding projects,” the study authors reported (7).

	One anticipated source of gaining efficiencies-extensive outsourcing-has not delivered on expectations, the study authors report. Sub-optimal partner management by drug companies and operating models that hinder externalization contribute to less-than-expected results from outsourcing arrangements (7).

 annual employment survey (8)-which was conducted after the Brexit vote, but prior to US presidential elections--respondents from around the globe shared similar perspectives about employment-related prospects, but also expressed varying opinions about business prospects for bio/pharma.

	More respondents from Europe worked at generic-drug bio/pharmaceutical companies (28% in Europe vs. 14.5% in North American) than innovator companies (19.5% in Europe vs. 31.1% in North America). The respondents from Europe also worked for smaller companies, were slightly younger, and held more advanced degrees.

	Business activity was up slightly 2016; 42.3% of the EU-based respondents reported an increase in business at their company over the previous year, similar to 2015 when 40% of EU-based respondents said business at their company increased (9).

	More than one-quarter of the respondents (26.7%) reported that their company had been through a merger or acquisition in the past two years, nearly the same percentage as in 2015 and up from the 19.7% reporting in the 2014 survey. A similar number of respondents reported a company downsizing or restructuring (24.8% in 2016 vs. 28.2% in 2015).

	Respondents based in Europe were more optimistic about the 2017 prospects for their company; more than 60% the respondents predicted that their company’s business will improve this year, up from 50.4% last year. In contrast, only 54.8% of the respondents from North America said business at their companies would improve and 16.6% predicted business would decline.

	The EU-based audience also was more positive in their outlook for the bio/pharma industry in general for 2017: 46.4% said business would improve in 2017, up from 39.5% in 2016. while the numbers were up for two consecutive years, the numbers are still down from the 55.3% who expected improvement for 2015.

	Predictions for business growth in the bio/pharma industry as a whole over the next five years were more optimistic than for individual companies. Nearly two-thirds (62.9%) of the EU-based respondents predicted that business will improve; however, 14.4% expect business to improve overseas, but not domestically.

	The election of populist candidate Donald Trump as president of the United States shocked many and created unease in the public and private sectors, but it also boosted the financial outlook for bio/pharma companies, at least in the short term. The investment community initially viewed a Trump administration as more pharma-friendly compared to a potential Clinton administration. Bio/pharma stocks rallied after Election Day; however, ongoing concern about drug pricing, payer pressure, and economic questions still created uncertainty (10).

	During the presidential campaign, candidate Trump and the Republican Party promised to repeal and replace the Affordable Care Act (ACA) of 2010, which extended healthcare to millions of Americans. Bio/pharma companies benefited from the increased pool of patients requiring medicines, but also paid higher fees and made concessions on drug prices.

	Drug approvals did not live up to expectations in 2016. Only 22 new drugs received US Food and Drug Administration (FDA) approval, compared to 41 in 2014 and 45 in 2015. Fewer submissions and more complete response letters contributed the lower number of approvals, FDA noted. The number of applications received by FDA through 9 Dec., 2016, however, surpassed the average number of new molecular entity filings for the past decade (11) suggesting a steady pipeline of new applications for 2017.

	Another campaign theme-reducing the number of federal regulations perceived as roadblocks to business-may impact FDA and its efforts to expedite the approval of innovator and generic drugs. The number of warning letters issued by FDA for adulterated APIs or drug products nearly doubled from 2015 to 2016 (12), with many letters addressing data integrity issues and citations at overseas operations. The agency also worked to clear the backlog of generic-drug applications, but has been hindered by ongoing staff shortages.

	The 21st Century Cures Act, signed into law by President Barack Obama in December 2016, includes support for research on regenerative medicine and development of antibiotics and treatments for rare conditions. Other provisions are designed to streamline the drug approval process using novel clinical trials designs and study modeling and permit drug companies to use real-world evidence to support approval of added indications for marketed medicines.

Brexit: Laying Out a Path for UK Healthcare

, Report, (London, 2016).
	2. D. Corrigan, “

, 7 Dec., 2016 accessed 20 Dec., 2016.
	3. C.A. Challener, 

 41 (1) 26-29 (January 2017).
	4. European Medicines Agency, 

,  accessed 10 Jan., 2017.
	5. European Medicines Agency, Meeting Highlights from the Committee for Medicinal Products for Human Use (CHMP) 12-15 December 2016, Press Release, (16 Dec., 2016).
	6. M. Aitken, M. Kleinrock, and D. Nass, 

, Report, QuintilesIMS Institute, (Parsippany, NJ, December 2016).
	7. K. Taylor, M. Stockbridge, and S. Shah. 

Balancing the R&D Equation, Measuring the Return from Pharmaceutical Innovation 2016

, Report, Deloitte Centre for Health Solutions
	(London, 2016).
	8. 2016 

Pharmaceutical Technology/Pharmaceutical Technology Eu

 Annual Employment Survey.
	10. A. Brown, 

, Report, Evaluate Pharma (December 2016).
	11. C.A. Challener, 

 41 (1) 26-29 (January 2017).
	12. FDA, I

nspections, Compliance, Enforcement, and Criminal Investigations

	When referring to this article, please cite it as R. Peters, “Solving Pharma’s Post-Brexit Puzzle," Pharmace

As Europe’s bio/pharma market learns that breaking up is hard to do, it also must address productivity, regulatory, and drug pricing challenges.

Solving Pharma’s Post-Brexit Puzzle

	In the sports arena, fans should be wary of the underdog. Some unknown team--understaffed, underequipped, and inexperienced--may lurk out there to threaten the record, reputation, or championship hopes of an established sports club. Losing to an underdog provides a lesson in humility for the favored team and often leads to a shakeup in the lineup, approach to the game, or even the coaching staff. ‘We will learn from this experience,’ is a popular sentiment from the embarrassed team.

	How does this relate to bio/pharma? A group of 17-year-old students in Australia just pulled off an upset of sorts on Turing Pharmaceuticals (1-2), and the pharma industry in general.

	When Martin Shkreli, CEO of Turing Pharmaceuticals, increased the price of the generic drug daraprim by 5000% from $13.50 to $750 last year, the ‘Pharma Bro’ came under fire and Congressional scrutiny for price gouging. Investigations into drug price inflation at other companies continues today.

	Motivated by the inflated drug prices, the students worked with scientists at the University of Sydney to replicate the active ingredient for the anti-parasitic drug in their chemistry lab for an estimated cost of $20 per pill. The project was named “Breaking Good” a twist on the name of the 

 television series in which a high-school chemistry teacher ran a crystal methamphetamine lab to support his family. The students worked extra hours, before and after school, to overcome issues with developing the API.

	Obviously, the “drug” developed by the students does not have regulatory approval, was not manufactured under good manufacturing practices, and has no quality control documentation. It does send a message, however, that if teenagers in a school chemistry lab can create life-saving drugs cheaply, pharma companies deserve to be called out when they charge exorbitant prices for generic drugs that are inexpensive to make. In this competition, the underdog students taught pharma a big lesson. The taunts from the crowd are not “over-rated” but “over-priced.”

	Next generation of drug development pros?

	The students in Sydney gained valuable experience in this API formulation experiment; some may decide to move on to the big time with professional careers in drug development and manufacturing. At this point, conditions are favorable, although they can expect to work hard for pay that may be below their expectations. Results from the annual 

 employment survey (3) suggest that industry professionals are generally satisfied with the work environment, but somewhat dissatisfied with compensation.

	Nearly three-quarters of the respondents felt secure in their jobs; however, workloads increased year to year, they work longer hours, and do not get to use their full allotment of paid time off.
	Most respondents said their work is fully valued by their employer, they do not experience discrimination in their work, and gender was not a factor in determining or limiting professional advancement at their current company. In addition, the most felt their skills and training are used to the fullest level; however, the sentiments for career advancement and professional development were less optimistic. Read more in “Building a Better Bio/Pharma Career” on pages 14-17 of this issue.

	1. E. Roberts, “‘Pharma Bro’ Martin Shkreli Meets His Match in a Group of Australian Schoolboys,” 

, www.cnn.com/2016/12/01/health/daraprim-oz, accessed Dec. 1, 2016.
	2. R. Hunjan, “Daraprim drug’s key ingredient recreated by high school students in Sydney for just $20,” 

, www.abc.net.au/news/2016-11-30/daraprim-nsw-students-create-drug-martin-shkreli-sold/8078892, accessed Dec. 1, 2016.
	3. R. Peters, “Building a Better Bio/Pharma Career,” 

	When referring to this article, please cite it as R. Peters, “Students Teach Pharma a Lesson," 

Rookie API developers beat pharma at its own game.