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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Pfizer's Prospects: Just Ducky | Main | How's The New Boss Doing? »

July 8, 2008

Glaxo Asks the Eurocrats

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Posted by Derek

There was a story yesterday about GlaxoSmithKline taking what’s being called an unusual step to prioritize their clinical candidates. According to the Wall Street Journal, they invited officials from the national health care plans of several European countries to a presentation on the company’s pipeline and asked them which ones they’d be more likely to pay for (and what they’d need to see in the clinic to convince them to do that).

Actually, I think the unusual thing here is that they made a formal meeting out of the whole process. I believe that this sort of thing goes on already – after all, drug companies spend a lot of time trying to figure out the size of potential markets and what the eventual purchasers will be willing to pay. In Europe, those are the national health care systems, and if they’re not willing to pay, your drug will go nowhere. In the US, you’re going to want to sound out the big health insurance companies for the same kind of reality check.

And I don’t see how GSK showed these officials anything that you wouldn’t see (or haven’t seen) at an investor’s conference – otherwise, we’d have seen some Regulation FD disclosures, since the company’s stock is listed on the NYSE. This seems to have been a one-stop rundown of what’s already been disclosed about the whole pipeline, but with opinions specifically solicited along the way– and the company’s not obliged to say what those opinions were or what they’re doing in response to them. GSK got a lot more previously unavailable information out of this process than the health care officials did.

How much, though, will this help? For one thing, I suspect that the officials didn’t say much that GSK didn’t know about what everyone wants for a new drug. They want it to work better than anything that’s currently on the market, with fewer side effects, and for less money. (There, that was easy). And predicting the future doesn’t always work too well. The medical landscape could always change by the time the drugs make it up to the regulatory stage. There will also be a lot more information (good and bad) about the compounds themselves by that time, much of which could make these earlier discussions moot. “Remember that oncology drug we were developing? Well, turns out that it doesn’t work against quite as many different tumors as we were hoping, but. . .” or “Remember that CNS drug we were telling you about back in ’08? Well, turns out that it also has this little cardiovascular thing going, too, and. . .” In the end, the drugs will do what they will in the clinic, and the company will have to bring what it has, not what the regulators asked for.

And even though companies are already supposed to be doing this kind of legwork, there are still some spectacular disconnects. Sanofi-Aventis, for example, did manage to get Acomplia (rimonabant) on the market in Europe (which is more than they ever managed in the US), but they didn’t get the national health care to pay for it. More recently, as in "yesterday", the UK's health care system just told Glaxo itself that they're not going to pay for Tykerb/Tyverb (lapatinib), because they don't see the benefit for the price. And when we’re talking about totally mistaken ideas about market size and acceptance, how can we not mention Pfizer’s Exubera?

Comments (10) + TrackBacks (0) | Category: Clinical Trials | Drug Development | Regulatory Affairs


COMMENTS

1. petros on July 8, 2008 8:21 AM writes...

The story of Tykerb and its price does raise the question as to what is a reasonable price for a small molecule synthetic drug?

There seems to be an increasing tendency for new anti-cancer drugs (eg lapatanib, imatinib, lenadolimide) to be priced at a comparable level to that of many recombinant products

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2. retread on July 8, 2008 10:03 AM writes...

Ah the joys of free health care. If you have a disease for which current treatment is poor or nonexistent and the monopoly player in your country (the national health service) refuses to pay for it, the drug won't be developed. Or if the drug exists you won't be able to buy it. On the other hand, look how cost-effective it is. This should be of great solace to you as your illness progresses.

As they always do, unfree markets limit choice.

Permalink to Comment

3. PG on July 8, 2008 11:03 AM writes...

Acomplia (rimonabant) is partially (35%) reimbursed by the french national heathcare system (Securite Nationale) since Mars 2007 for obese patient with type 2 diabetes.

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4. Hap on July 8, 2008 12:03 PM writes...

(OT) I'm sure that the plethora of choices will comfort the (53M?) people without health insurance - the money they're (or, rather, we, since if they can't pay, and they probably can't, hospitals and the federal government have to) spending on emergency rooms alone would probably subsidize a large portion of disease research, let alone what's left of the public health system. You have as much choice here as you can pay for - but for most people who aren't CEO's, that's not much.

The less snarky question would be whether the preventative health care that a public or inclusive insurance system would allow would free up enough money to pay for rare disease research - considering the overhead alone for insurance companies in the US (20%?) I would figure so, but I could be wrong.

May be the meeting is a PR move, to get the government to look more favorably at them - but the EU government probably doesn't care (they want what they want).

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5. The Pharmacoepidemiologist on July 8, 2008 4:06 PM writes...

The big pharma marketing departments are too busy trying to get DTC ads on the TV and figuring out how much skin can be shown in an ad to be bothered with doing real pharmaceutical marketing work, like assessing the market size for something like Exubra.

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6. Retread on July 9, 2008 8:17 AM writes...

Assuming there are 53M people without health insurance in the USA, this means that there are 247M with it. Whether or not the 247M should accept less choice for the benefit of the 53M is a classic political question, which logical argumentation will not solve. Fortunately, a democracy is the perfect place to muddle through to a (partial) solution, which is exactly what has happened.

Preventive health care is always thrown up as a way to reduce health care costs. It clearly hasn't worked against obesity, alcohol, cocaine, narcotics and smoking. It's like attacking the 'root causes' of crime (or anything) People who propose this never get their hands dirty.

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7. Hap on July 9, 2008 10:35 AM writes...

Funny, I thought it did work elsewhere - that's why we pay more in health care costs as a country but have less to show for it. We are substantially worse than most other countries on a par with us in lifespan and infant mortality (and infant mortality in particular does seem to improve with preventative care, and people do actually get it). It's hard to buy that America somehow lives a decadent enough lifestyle to account for our health outcomes (in the presence of far more spending) than, say the UK or France. Something other people is doing is working better (for all, not just for some) than what the US does. The only mitigating factor (particularly with drug development) is that we develop lots of things the rest of the world will use, but doesn't necessarily pay for. Probably doesn't explain all of the difference, though.

Also, in a democracy, everyone has a vote, not just the ones with cash. I think you're talking about some other form of gov't there.

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8. Anonymous on July 9, 2008 10:52 AM writes...

Ah the joys of free health care. If you have a disease for which current treatment is poor or nonexistent and the monopoly player in your country (the national health service) refuses to pay for it, the drug won't be developed. Or if the drug exists you won't be able to buy it. On the other hand, look how cost-effective it is. This should be of great solace to you as your illness progresses.

As they always do, unfree markets limit choice.

What utter rot. Imagine you have a disease for whcih current treatment is poor or nonexistent and the number of patients is tiny.

The free market says those few patients can just go die in peace; if that therapy were worth delivering then the disease would be more common.

After all, markets solve all, right?

Permalink to Comment

9. George2 on July 11, 2008 8:03 PM writes...

My health care proposal is simple and cheap:

generics for everyone financed through single-payer system funded by taxes.

Most common diseases can be treated quite well with drugs available as generics. With minimal amount of dollars we can provide 100% coverage to US citizens.

Those who can afford to buy brand name (more expensive / less safe) drugs should do so out of pocket or with private insurance.

Permalink to Comment

10. Kathy Phillips on September 3, 2008 9:28 PM writes...

I have been working in the healthfield since the early 1970's, and I feel there is more cures out there, that is not being regulated by the FDA. I feel it's a money making business, and for that there holding back alot of the cures for primary diseases as cancer and Ahlzheimers diseases. Why does France seem to be the country that comes up with so many reliable cures, but can't get approved here in the states. You tell me who runs this country, that money means more than peoples lives.

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