In an article published on Forbes.com, contributor Peter Cohan offers readers advice on investing in transdermal drug delivery. Specifically, he advises readers that an investment in transdermal drug delivery companies is something to avoid, although perhaps a private company could make for a good PE investment.
This article was not written to counter Cohan’s investment advice. However, we’d like to dissect the reasoning behind his advice and offer drug developers better insights on how to invest successfully in transdermal patch treatments.
BETTING ON THE TRANSDERMAL DRUG DELIVERY SYSTEM
In the article “Should You Bet on Transdermal Drug Delivery?” Cohan explains, “After all, the market is getting smaller, the cost of developing new drug/patch combinations is high, competition in the business of delivering generics by patch is intense, and insurance companies would rather pay for cheaper pills.”
Those are some substantial claims that deserve much closer examination. As a leading transdermal patch pioneer that has launched 82 commercial products in the last 20 years, and has 22 pharmaceutical products that have already been launched or are expected to be approved soon, Tapemark is uniquely positioned to further explore Mr. Cohan’s pronouncements in detail.
To that end, I’ll address each claim individually and provide key insights into this highly complex, potentially highly lucrative market.
WHAT’S THE SIZE OF THE TRANSDERMAL THERAPY MARKET? IS IT GETTING SMALLER?
The market for transdermal patches in the U.S. is untapped. Compared to other parts of the world like Southeast Asia and Japan, where transdermal medication maintains a significant market share, the U.S. has yet to adopt transdermal drug delivery into the mainstream.
Currently, the U.S. market contains a mere fraction of patches on the market in developed eastern countries. Therefore, there is significant potential in the U.S. for pharmaceuticals and over-the-counter active ingredients delivered by transdermals.
In fact, the market is already starting to bear this out. Transdermal patches first became widely accepted after the introduction of nicotine patches. Since then, multiple transdermal patches have been introduced that carry pharmaceutical ingredients to treat a variety of conditions.
Transdermal patches can deliver hormones and other nutritional supplements; currently, they’re also being used to treat the following conditions:
- Migraine headaches
- Neurological diseases
- Parkinson’s disease
- Dermatological issues
- High blood pressure
- Alzheimer’s disease
The simplicity of administration and sustained drug release activity over time have made transdermal patches popular worldwide, which is why the number of active pharmaceutical ingredients delivered through skin patches is expected to grow significantly in the next five years.
Transdermal patches that have already entered the U.S. market have shown high adoption rates and robust sales. Therefore, it’s not surprising that major U.S. companies are increasingly opting for acquisitions and collaborations to enhance and expand their footprint in the transdermal skin patches market. The global transdermal skin patches market has been valued at $7.22 billion. Experts predict the market will reach $9.57 billion by 2027.
IS THE COST OF DEVELOPING NEW TRANSDERMAL SOLUTIONS HIGH?
Not exactly, and it depends on who you partner with.
The FDA is currently moving to lower the cost and time needed for the approval of either ANDA (generic) complex systems, or drugs that can be approved through the 505(b)(2) pathway, where a previously approved drug can be reformulated for transdermal delivery using existing clinical data.
Additionally, on the research and development side, the cost of developing a new patch formulation depends on a few variables, like transdermal expertise and access to the specialized equipment and facilities needed for producing transdermal patches. Therefore, the CDMO you partner with could make a significant difference in overall drug development cost.
Tapemark’s research and development team has gained unrivaled expertise in the challenges and key pitfalls to avoid during the development process. Furthermore, our 150,000 square-foot facility in St. Paul, MN, features 13 class 100k clean rooms, a full onsite analytical lab, a full-service formulation lab, and 175 employees who manage a flexible shift structure to ensure 24/7 production capabilities.
Tapemark also has significant experience launching NDA, ANDA, and 505(b)(2) drugs and has been involved in the FDA submission process for multiple transdermal products. We take any and all feedback for FDA submissions seriously and create cross-functional teams to address any issues. In doing so, we have become much more knowledgeable about the current state of FDA requirements for transdermal systems, and we are happy to share this knowledge with our current and future customers.
Is the Competition in the Business of Delivering Generics by Patch Intense?
Not exactly, and it depends on who you partner with.
Very few CDMOs specialize in patches. Within the market, there is far less generic, or 505(b)(2) competition overall for patches vs. oral solids, and the return on investment is usually far greater than generic oral solids. As 505(b)(2) drugs are one of our areas of unique expertise, a partnership with a full-service CDMO like Tapemark offers unique advantages to drug developers.
WOULD INSURANCE COMPANIES RATHER PAY FOR CHEAPER PILLS OVER TRANSDERMAL DRUG ADMINISTRATION?
Perhaps…but transdermal drugs can lower costs and improve outcomes in other ways.
While acquisition cost is king for pharmacy departments and insurers, the overall cost of treatment is heavily considered as well. As the saying goes, “the most expensive medicine is the one that is never taken.” Outcomes are always worse and more expensive with non-compliance in patients, and when it comes to improving patient compliance, transdermal drug delivery yields fantastic results.
Tapemark’s proprietary platforms can also offer unique solutions that have the potential to boost compliance even further. For example, the MicroDerm patch uses microneedle technology to deliver a much wider variety of drugs to patients. In the future, MicroDerm patches will be able to provide safe, effective alternatives to needles and shots relating to vaccines, diabetes management, large molecule delivery, protein and peptide delivery, and biologics.
HOW TO WIN WITH TRANSDERMAL SOLUTIONS
Cohan's view seems reasonable from an outsider’s perspective. But unfortunately, he is commenting on a highly complex market with much more potential and nuance than his recommendations take into account.
Transdermal patches vary widely, and it is no simple task to develop one. Speaking from the CDMO perspective, there is a high entry barrier when developing and manufacturing transdermal patches. Developing a successful transdermal patch requires experts in the field, high-quality specialty equipment, exceptional science, and significant facilities. Given the nature of materials often used in transdermal production, it also takes a high level of skill and artistry. It’s therefore not surprising that some transdermal patches aren’t successful.
Further, perseverance and determination are always required to bring any drug to approval in the U.S. market. Nonetheless, pharmaceutical companies who recognize the benefits and significant potential of patch drug delivery systems have an opportunity to stake their claim on a vast, untapped market.
So, how do you win with transdermal drug delivery? You do it by partnering with a CDMO that can reduce your risk due to their unrivaled experience and expertise in transdermal drug delivery systems.