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Revolutionary medicine: Eye on Cuba's pharma industry development following plans to normalise US-Cuba diplomatic relations

17 February 2015 Angelica Kershaw

Former Cuban leader Fidel Castro recently gave his approval for talks between the US and Cuba aimed at restoring diplomatic relations following a long embargo - an embargo which has also had implications on the pharmaceutical industry by, for example, impeding the global development of TK inhibitor nimotuzumab. An improvement in relations offers the potential to open a new era in the Cuban pharma industry. In the short term, talks are unlikely to make any noticeable difference to the industry, but over the medium term, should the talks be successful, new markets and opportunities could open up for Cuban pharmaceutical companies.

Cuba already has the largest pharma market in the Caribbean, and is located relatively close to three strong pharma markets - the US, Mexico and Canada. However, the embargo has pushed Cuba to trade and partner with countries located far away and often without similar epidemiological profiles and health needs, such as Russia.

Although the terms of the embargo allow export of some medicines and medical devices produced in Cuba, there are several requirements that have deterred both Cuban and US producers from building business relations.

Lost opportunity of US businesses resulting from the embargo have been assessed at between USD1.2 billion per year and more than USD4 billion per year. For Cuba, the negative economic and socio-political effects have been considerable, taking for example the case of the oncology industry, where last year the Cuban government estimated cost inefficiencies of around USD10 million in oncology expenditure over the last two years since some of the medicines, medical devices, and radiology products that would be cost-effectively sourced from the US must be sourced from elsewhere, often incurring additional transportation costs.

Despite the negative effects that the embargo has had on Cuba, ironically this same restriction has pushed the country to research, develop and produce pharmaceutical products of its own. During the last five decades, the country has managed to develop a strong pharmaceutical industry focused on biotechnology products, generics and alternative medicines. Although it would be premature to consider some of these biotechnology developments as "blockbuster medicines", some of them have reached considerable international recognition and have secured marketing authorisation in both developed and developing markets.

Cuba biotechnology developments
One of Cuba's star biotechnology developments is the recombinant growth factor Heberprot-P used in the treatment of diabetic foot ulcer, produced by Cuba's Centre for Genetic Engineering and Biotechnology (ICGEB). Heberprot-P recently achieved marketing authorisation in Turkey and has been patented in 18 countries. Even the US Congress has been studying a proposal to do clinical trials that could make this medicine available in the US market.

Similarly, the oncology pipeline of the Cuban industry shines internationally with two main products: the first, CimaVax-EGT, is a vaccine which was developed entirely in Cuba and licensed in Cuba for use in adult patients in advanced stages of non-small cell lung cancer. This vaccine was patented in 2012 as the first therapeutic cancer vaccine. The second, Theraloc (nimotuzumab), is a recombinant humanised monoclonal antibody targeting epidermal growth factor receptor (EGFR) as a treatment for lung cancer and gastric cancer, developed by the Cuban research institute CIMAB. Theraloc has already been approved for head and neck cancer, glioma, and oesophageal cancer in China, India, Ukraine, and some Latin American countries and is the focus of a number of joint ventures and development collaborations in various countries such as Japan.

Furthermore, Cuba is well known for its autonomy in the production of vaccines. Recently, the assistant director of the Cuban industry group BioCubaFarma, Gustavo Sierra, announced that they have finished Phase II trials for cholera and pneumococcal vaccines. BioCubaFarma has already introduced 14 medicines during the last few years and it has a pipeline of 15 more for the coming years.

Win win
Although the US and Cuba have health systems and pharma industries based on different principles and that are at different stages of development, relaxation of the embargo policy could bring an interchange of experience in the pharma industry, with the potential to benefit both nations. From the US perspective, in the medium-to-long term it provides an opportunity for US companies to access the Cuban pharma market, that could reduce both development and production costs since Cuba has a surplus of healthcare professionals and low raw material prices.

Meanwhile for Cuba, opportunities exist to strengthen investment in R&D and enhance the introduction of products to market, for example by facilitating improved clinical trials in line with international standards in order to secure marketing authorisation in developed markets such as the US and Europe. Additionally, opening access to US innovative medicines would improve the range of innovative medicines used in the Cuban health system. Finally, the end of the US embargo would enhance Cuba's potential for general economic development and foreign investment that in turn could result in investment to modernise the hospital infrastructure.

Is Cuba ready?
Despite the prize of opportunity and investment, the manner in which these are pursued will be critical to long term success. Opening Cuba up to trade with the highly evolved capitalist markets of the US and a pharma industry based on disciplined production and profits principles would be quite a contrast to the philosophy that the Cuban government has followed for the domestic pharma industry.

Cuba has recently brought in some important changes in its economic model such as the introduction of international investment law, and allowing more non-governmental employment and entrepreneurship. However, the Cuban government would be wise to review the lessons learned in the pharma industries of other Latin American countries in the recent past. A gradual approach is likely to be in the island's best interests, giving the local industry time to adapt its system and infrastructure for the big changes ahead.

Angelica Kershaw is a life sciences analyst for IHS
Posted 17 February 2015

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