BKK: COMMERCIALIZING A NEW DRUG

RGA6463 Regulatory Strategy for Product Development and Life-Cycle

Management
CASESTUDY 1 WRITE-UP
Shafeera Rasheed

BKK: COMMERCIALIZING A NEW DRUG

a. What is BKK? Where is its intended geographic market? What is its

intended indication for use from a clinical perspective? BKK is a unique and
proprietary formulation of nonopioid anesthetic drug . BKK is patented by
Worthington .It is a combination of three drugs Bupivacaine, Ketorolac and
Ketamine which were already approved by the US Food and Drug
Administration. Bupivacaine is a local anesthetic drug which is also used as
nerve blocker. Ketorolac is a NSAID (non-steroidal anti-inflammatory drug).
Ketamine is anesthetic drug and at subanesthetic doses the drug act as a pain
reliever after surgery. This combination has several benefits as it prevents nausea
and inflammation. BKK reduce and often eliminate the use of opioids as a pain
reliever by the patient during or after surgery.

b. Intended geographic market: The BKK is intended to be marketed in United

states.

c. Intended /indication for use: BKK is intended to be used as a local infiltrated

pain reliever at surgical site that worked for up to 40 hours which reduce or
eliminate nausea and inflammation during and after surgery

d. What are the alternative paths to market from a regulatory perspective?

There are three alternative pathways to introduce BKK in the market from
Regulatory perspective. Dr. Worthington and his friend Thurman Ballard
explored 3 ways to get BKK to market and for its commercialization,
1) To work with an institutional investor for funding a New Drug
Application for FDA approval: Dr. Worthington can work with the
institutional investor to invest the million dollars required to pursue BKK as a
new chemical entity, through NDA.
2) Build partnership with a compounding pharmacy that can
manufacture and market BKK: Dr. Worthington and Ballard in
cooperation with exacerbating drug store to produce and distribute BKK as a
combination drug which would not further require FDA approval but require
expensive analytical testing.
3) Developing and marketing Convenience kit: A box containing three drugs-
bupivacaine, ketamine and ketorolac, bottled separately in correct amounts, with
directions for admixing and administering BKK.
e. Who are the stakeholders involved in the commercialization process
forBKK?

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Stakeholders are based on Dr. Worthington's pathway to commercialization,

 If Worthington opts for the first path, they look for funding venture to
subsidize NDA stakeholders would be Worthington, Bullard, and institutional
investor, manufactures, physician and sales team.
 If he chooses the second pathway to cooperate with compounding pharmacy,
stakeholders would be Bullard, Worthington, physician, and drug store, who
will manufacture and distribute this drug,AngelHealth and Medical Leaders in
Healthcare (MLH)
 If he chooses a convenience kit pathway,Worthington, Bullard and
manufacturer of the convenience kit would be the stakeholders.

2. What is Worthington struggling with? What are the challenges he faced

to bring BKK to market?
The unique product BKK (i.e., Combination product of Bupivacaine, Ketorolac and
Ketamine) has numerous benefits as it prevents nausea and inflammation and also
eliminate/reduce the use of opioids as a pain reliever by the patient during or after
surgery. BKKis patented by Worthington and he is struggling with its
commercialization in market.

Worthington first used BKK as an anesthesia for lumbar Laminectomies for which the
hospital stay was up to 3 days in 2000. By implementing protocol with BKK, the time
is reduced to three hours from admission to discharge. Thus, BKK became a ―Game
changer‖ for surgeons for pain management and avoidance of opioids exposure.
Worthington broadened the types of surgeries offered at his hospital to include
traditional inpatient neurosurgical spine procedures, multilevel cervical and lumbar
fusions, and joint replacements—for which BKK was used exclusively. By 2018, BKK
had been used safely and effectively in over 120,000 consecutive surgeries. He had
used most of his retirement fund for BKK and spent entire decades of his professional
career pushing it forward. His goal was to bring BKK to the world and prevent the
next generation from becoming exposed to opioids.

Challenges faced by Worthington while bringing BKK into market.

He was facing financial and regulatory challenges
 The first and foremost was between 2012 and 2016, several events occurred that
had an impact on Worthington’s ability to bring BKK to market. The New
England Compounding Center (NECC) disaster occurred, which was
challenging situation for Worthington to bring BKK in market. Until 2012, the
compounding pharmacy business in the United States was an industry without
significant FDA regulation or oversight. In 2012, an avoidable error occurred
at NECC: a spinal injectable compound containing a fungal contaminant was
released to patients, causing fungal meningitis.The disaster was caused by use
of contaminated vials of preservative free methylprednisolone (MPA), After
this disaster, The new drug quality and security Act was enforced in
November,2013 as section 503B in FDCA. That was the first time
Worthington thought that he could identify a 503B compounding pharmacy
partner to safely manufacture BKK and had hope that he could bring BKK to
market safely with the help of that pharmacy
 In August 2016, HealthNow invited Worthington and Ballard to speak about
opioid crisis. Barely a month later Worthington returned to Angel Health to

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pitch BKK through collaboration with compounding pharmacy partner, who

would produce BKK to supply the requirements of MLH. . AngelHealth would
market and distribute the product, and manage the relationship. It would be a
great way to launch BKK into the market. On the contrary, working with
compounding pharmacy was really problematic as the pharmacy delayed
communicating a timeline for production and because of that it was not
possible for Worthington to concrete agreement with AngelHealth. They even
thought about need to identify a different compounding pharmacy or 503B
manufacturer as a manufacturing partner.

 In addition to this, in late 2017 when Worthington’s patent was set to

published, his patent firm found the term “BKK” in one of the blogs of
doctor and this resulted that BKK is the prior art. Because of this
hindrance his attorney advised him to file a patent based on experimental
exemption.

 Between 2016 and February 2018, when Worthington and Ballard worked
together to market BKK. In October 2018, after four years and at the cost
of 150,000 $ of legal fees he received final approval of patent and was the
owner of BKK. The patent protected the combination and production
methods for mixing and administering BKK, but it did not provide protection
for BKK as a new drug. An upfront investment of 2.5 $ million was
required to complete the initial FDA approval and 10 $-25 $ million to
complete the final process. And the whole process would take 18 to 24
months and require significant resources and institutional capabilities that
Worthington and Ballard, acting alone, did not have.

3. How does the opioid public health crisis related to the aforementioned
challenges, regulatory or otherwise?
Worthington had spent most of the last 18 years developing unique and proprietary
formulation of nonopioid anesthesia drug-BKK, a combination of three FDA
approved drugs ( Bupivacaine, ketorolac, ketamine).
OPIOID CRISIS- Worthington main goal was to reduce the opioids exposure and
possible dependency of opioids at affordable price in surgical practice. Worthington
notice overuse of the opioid in his daily practice. He observed that 6% of patients
taking opioids for I day continued to use it a year later, and the value nearly
doubled to 13.5% in patients who took opiods for more than 8 days after surgery,
29.9% of patients who had more than 31 days of opioid use were still doing so after one year.
Opioid users were more in more rural areas (75.2%), and 75% of opoids were
prescription drugs.
As compared to 2015 data, opioid-related fatal overdoses increased across all racial,
ethnic, socioeconomic, geographic, and gender groups, with deaths from synthetic
opioids doubling, deaths from prescription opioids increasing 10.6%, and heroin
fatalities increasing 19.5%.6 These increases continued long-term trends in opioid
use throughout the 2000s. In 2016 US reported with 60,000 fatal drug overdoses in
which major proportion was contributed by opioids.
In US annual cost related to opioid epidemic became a massive burden. It also

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increased healthcare cost at individual level. Consequently, the United States

spends a major part of its expenditure on health care, substance abuse treatment,
and criminal justice costs. In general, patients' recovery times after taking opioids
were longer and more expensive, and they were more likely to be readmitted. As a
result, the overall amount of documentation gets accelerated. According to studies,
nearly 40,000 patients experienced physical and mental health issues in 2010,
through opioid exposure in the healthcare setting, which resulted in a new hospital-
acquired condition.
Opioid public health crisis relates with economic and regulatory challenges. Dr.
Worthington had to find a way to go to commercialize BKK in such a way that it
reaches every patient who needs it even in the rural market.
Hence, Dr. Worthington was supposed to overcome all those challenges and need to
make BKK available to the public by commercializing it in such a way that it
reaches the masses easily.

4. How would you evaluate the risk and benefit associated with alternative
pathway for bringing BKK to market?
Worthington and Ballard researched and assessed three commercialization options:
taking on investors and pursing an NDA, locating a new compounding pharmacy
partner, or manufacturing a convenience kit. Each option possess its own pros and
cons.

1. Risk benefits evaluation for 1st pathway : To work with an institutional

investor for funding a New Drug Application for FDA approval
 BENEFITS
 Grant additional patent protection
 Provide institutional support for production and marketing
 Worthington does not requirefunds for NDA
 RISK
 Exposed hh to greater potential litigation costs
 May worthington loss his control over lifelong work
 NDA may not succeed
 New partners had their own priorities and would make their own
decisions
 Expected to qualify for an expedited NDA process, the 18- to
24-month lead time would also delay their path to market.19
Here the evaluation of risk and benefit revealed that the probability of accepting this
pathway may be 60% .

2. Risk benefits evaluation for 2nd pathway: To find a compounding

pharmacy partner that can manufacture and distribute the drug
wholesale;
 BENEFITS
 Pathway was direct from the manufacturer to the facility, with no
middle distribution or storage
 High product benefit

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 Would not require regulatory approval

 RISK
 Encountered delays in setting up the production line.
 Laws governing compounding drugs had changed,
compounding pharmacies were limited in how they could market
their products.
 Traditional pharmaceutical sales were not allowed that might
delay marketing of BKK
The expected annual growth would be less than 10 % with annual revenues of
10$-15 $ million within 5 years. Thus, the overall benefit of revenue
outweighs the slightly higher risk of possible delay in the production. Thus,
the overall success with this path would be above 80%.

3. Risk benefits evaluation for 3rd pathway: Developing and marketing

Convenience kit
 BENEFITS
 This type of packaging had the benefit of a longer shelf life,
because once BKK was mixed, it needed to be used within a
certain period, while the individual drugs were more stable when
stored separately.
 Marketing could be possible with traditional sales model
 No up-front costs for Dr. Worthington
 RISKS
 Most expensive method as it costs for designing packaging
material, testing. Production of all drugs. Assemble the kit, use
of in-house sale model & distribution
 More Time required to conduct clinical trials, packaging
testing and production line
 Worthington would not be able to protect his patent
Considering all above risk and benefits, the overall success for the 3rd path
would be 75%.

5. ShouldWorthingtonbeconcernedwiththecompetitivelandscapeforproductstha
tmay servethe same clinicalmarketthatBKKpurportstoserve?
Worthington should certainly be concerned about the competitive non-opioid
products that serve the purpose of post-surgery pain relief for patients, the same
purpose for which BKK was invented. Ever since he started to formulate BKK,
his sole aim was to provide significant patient care by avoiding opioid exposure
and reduce the expenses associated with opioid use complications/dependence.
The sole product available commercially was Exparel, marketed by Pacira
pharmaceuticals, which was a long-acting liposomal bupivacaine product
infiltrated locally, and it claimed to provide 72 hours duration of action with
regard to pain relief. But there was some evidence showing the variability in
effectiveness of the product, and a notable factor was its cost which was around
300$ per dose.
On comparison, BKK had a therapeutic window of only 40 hours, but it was so

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productive that it reduced the requirement of additional opioids, and also claimed
consistent multimodal analgesic action. Additionally, it only costed one-third of
competitor products price, which was a huge-plus in patient’s perspective.
Practically, Worthington was able to find out how efficiently BKK worked, and
he was impressed by its ability to reduce opioid use despite its shorter duration of
action when compared to Exparel. Surgeons who treated with BKK and Exparel
was also convinced that BKK patients required less use of opioids later, which in
turn highlights the glimpse of its acceptance.

Considering the other rival products like HTX-011(Heron therapeutics),

meloxicam (Mylan N.V), posimir (Durect Corporation), BKK was certainly the
best one considering its potential to provide analgesic action and reduce opioid
use in patients along with an effective price. All these products were claimed to
have 72 hours duration of action, but still they were waiting for FDA approval, or
in fact some were only starting to submit NDA application. Oliceridine (Trevena
Inc) was a vital opponent to BKK, considering its potential to relieve pain without
the respiratory and gastrointestinal side effects. Hence BKK’s unique action of
analgesia without causing nausea was at stake. Therefore, Worthington should
try to make maximum use of the situation, and commercialize BKK immediately,
so that the market will be able to focus directly on BKK before the launch of
competitor products, and thereby contributing to maximal patient care and the
rival products will be on the back foot, given the efficiency of BKK. Most
importantly, patients will be benefited significantly since the rival products
cannot match BKK in patient adherence with regard to cost-effectiveness and
efficiency.
Considering the enormous number and type of surgeries taking place daily, and
the hard work and time that was invested on BKK, Worthington should try to
commercialize it without wasting anytime, so that BKK will strike the market in a
timely way, thereby fulfilling his utmost aim of patient care and reaping well for
all his hard work.

6. In your opinion is it a good idea to bring BKK to market? What do you think
is the best pathway to the US market for BKK?
In my opinion it is a good idea to bring BKK to the market as this will reduce the
opioids exposure and possible dependency in as many people as possible at an
affordable price. At that time most of the hospitals were using Exparel as a locally
injected analgesic with the intention to reduce the need for postsurgical opioids, but
its effectiveness was variable. The cost for Exparel was three times the price of
$300 a dose that Brad Worthington and Thurman Ballard planned for BKK.
Potential competitors for BBK were Mylan Pharmaceuticals, Heron Therapeutics,
and Durect Corporation. They are in process for FDA approval for their own
bupivacaine-based acting infiltrative analgesics and were targeting to replace
Experel and were anticipated to offer a 72-hour therapeutic window, but Ballard
received a report from an industry consultant that intended price point into the $300
per dose range.
As BKK is effective than Exparel, was far less expensive to manufacture, and
showed more consistent multimodal analgesic results. Whereas competitor products
in FDA approval process were expected to last for 72 hours and BKK lasted for

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only 40 hours, in Worthington's experience, BKK is so effective that it negated the

need for additional opioid pain medication.

I believe the Convenience Kit option would be the best option to commercialize
BKK, which was suggested in summer 2016 to Worthington by a potential investor.
All three component drugs – bupivacaine, ketorolac, and ketamine would be
separately bottled in the correct amounts, along with directions to the surgeon for
mixing and administering BKK. As the individual drug was more stable when
stored separately, therefore, this type of packaging had the benefit for longer shelf
life. Convenience kit has potential upsides in terms of cost and risk as compared to
New drug approval and finds a compounding pharmacy partner.

The convenience kit option had the benefits of no up-front costs and per dose, cost
contained within it a portion of the manufacture’s up-front cost to design the
packaging, perform all necessary testing, produce the drugs and packaging. The
convenience kit had no upfront cost which gives an advantage to Worthington to
control the sale price which is ultimately a challenge for BKK competition.
Furthermore, not more than four months are needed for the convenience kit
manufacturer to conduct the necessary clinical and packaging testing and bring up
the production line. Considering the benefits and risk associated with this option,
Worthington and Ballard would expect more than 75% success rate.

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